Godrej Electronics Performance with Five Other Brand

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Makeover Magic

BRANDING

Makeover Magic


Old firms are changing their logos to create new markets


PIYA SINGH AND MEGHANA BIWALKAR

16 May 2008




On A New Path: Adi and Jamshyd

           Godrej have given their 110-year-old

           company an image makeover to

           attract the youth (Pic By Subhabrata

           Das)




Adi Godrej, chairman of the Rs 7,500-crore Godrej Group, runs his hair-colour-to-real-estate empire out of an old-
fashioned office building with ancient marble floors, wide staircases and a wood-panelled conference room replete with
lion-headed chairs that reflect the group’s century-old heritage. Still, what stands out in the room is contemporary
artist Anjolie Ela Menon’s work, which covers an entire wall. The renowned artist’s work is not the only
evidence of Godrej’s interest in the changing times. The opposite end of the room is dominated by a 42-inch
plasma screen displaying the new logo of the group in ruby, green and blue, representing energy, innovation and growth,
respectively, an attempt to rejuvenate the 110-year-old brand.
“The business environment has changed tremendously,” says Godrej who is investing over Rs 100 crore in
the rebranding exercise, including Rs 18 crore worth of advertising over six weeks during the Indian Premier League
cricket maches. “We thought it was time to refresh the brand and look for a fresh positioning that appeals to
younger customers.”
Godrej, however, is only one of many Indian corporate houses that is wooing the young by repositioning its brand. There
have been a flurry of brand re-launches, change in logos and repositioning across product categories from automobile
tyres to retail chains over the past five months.




Whether it’s the demise of the 25-year-old Ceat Rhino, the spanking new boxy black-and-white Shoppers Stop
signage or slimming clinic VLCC’s lush green and aqua blue logo for its skin and hair care products, Indian
consumers are being treated to a time-tested marketing strategy. “A brand is a bundle of associations just like a
product is a bundle of features. And, just as it is imperative to upgrade the features in a product over time, it is important
to upgrade brand associations. So, a change in logo, or the evolution of a brand’s identity shouldn’t really
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surprise us,” says Piyush Kumar, associate professor of marketing at the University of Georgia, who also consults
in the areas of brand strategy and teaches at ISB, Hyderabad.



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Targeting the Youth

That may be true, but Indian brands that have been around for several decades seem to have suddenly discovered the
elixir of youth. “Indian companies find that they are out of sync with their rapidly evolving consumers, and this is
compelling them to change,” says brand consultancy Ray+Keshavan’s Director Meeta Malhotra. The
consultancy has given a new look to over 20 logos since 2007, including Ceat, Shoppers Stop, Jammu & Kashmir Bank
and Arvind Mills.
Market research commissioned by Shoppers Stop revealed that while customers aged 18-30 years shopped at the chain,
they had problems associating with the brand. Similarly, in the case of Ceat, while in the 1980s and 1990s, tyres were
expected to be tough enough to deal with bad roads, customers no longer consider this as key in a purchase decision.
Ceat’s own research indicated that, with several new automobile models in the market and an improvement in
road conditions, younger customers are keener on performance. The surveys also found that the consumers felt that the
brand values were stagnant. “We don’t want to lose brand relevance with the youth,” says Arnab
Banerjee, Ceat India’s vice-president for sales and marketing. “If we didn’t take action now, we may
have faced some trouble in the future.”




           Imperatives For A Makeover




- The need to be more youthful

- To compete with global brands

- To upgrade within the segment brands operate in

- Making a shift from one product category to multiple categories

- In case of a merger or acquisition




The Bottom Line

Eventually, it’s all about the chase for the wallet, and younger customers have more money now to spend than
ever before. “Brands are following the money as the younger population is getting wealthier and companies
realise the need to take their brands to where the money is,” says Kumar. Having said that, he believes that
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brands typically seek a new identity for three key reasons.
First, and probably the most obvious factor that encourages the change is that Indian brands have to now face more
competition, especially from global players and, therefore, the legacy bundle of associations may not be appropriate any
more. Ceat is a good example where the No. 4 brand in terms of market share (after JK Tyres, MRF and Apollo) is
gearing up for international competition as there are talks of several new brands entering the sub-continent. As Ceat tries
to capture the imagination of the 20-something Indian consumer, its new logo is more youthful in deep blue and orange,
and with a simple and clutter-free design. There is an emphasis on the letter E, which represents raising the bar and
signifies energy. However, the company’s advertising campaign, which says “Change is inevitable”,
seems to lack a clear positioning. “MRF and JK Tyres have a strong association with motor racing,” says
Rajiv Arvind, 29, a motoring aficianado, “This has helped them connect with the youth. Ceat, on the other hand,
had built up its image with the Rhino and its tag line ‘Born Tough’. However, the new logo has diluted that
image. The new campaign doesn’t tell me much either except that the brand is changing.”
Repositioning

According to Piyush Kumar, the second reason why brands seek a new identity has to do with the need to upgrade the
segment in which they operate. Take Shoppers Stop’s recent attempt to move up the value chain, for instance.
“We’ve been trying to re-position ourselves from being perceived as a premium brand to a luxury
brand,” says Managing Director B.S. Nagesh. “The process started three years ago as we started stocking
merchandise from MAC, CK, GAP, Chanel and FCUK at our premium stores.” The home-grown retail chain is
also addressing the 18-25-year-old customer, which is more fickle and is familiar with global brands and benchmarks.
The chain has tried to make the shopping experience more contemporary with smartly-designed new uniforms for
employees, special areas in the trials rooms for keeping mobiles and wallets, and a nine-hour radio channel that pelts out
English music. Even the shop floor has new signage and improved access to stocks. The chain’s loyalty cards
look more upscale and so does the new hard-paper shopping bag that has images of international movie stars, such as
Marilyn Monroe and Audrey Hepburn. The changes have also extended to Shoppers Stop’s communication
strategy. The tag line has changed from ‘Shopping and beyond’ to ‘Start something new’.
“The new logo does give a very international feel to the store,” says Harshada Manjrekar, 30, a chartered
accountant by profession and a regular at shoppers stop.
Multi-tasking

Third, brand ambitions change over time as brands move from serving one product category to becoming multi-category
players. VLCC is one such company. It introduced its personal care range in 2005 that sold only at the VLCC centres.
The next step was to take these products into the market and sell them through various retail formats. In 2007, the
company conducted an audit regarding the product portfolio and its perception in the market. “We found that
though customers recognised the brand, they were ignorant about the fact that it offered products to suit skin and hair
problems,” says VLCC’s personal care CEO Harmeet Pental. Thus, the focus of its current re-positioning
exercise is to promote VLCC as a natural-product company that has solutions for skin, hair and other cosmetic problems,
too.
The company has launched a new logo for VLCC Natural Sciences and while the core brand VLCC is intact, the new
green logo represents ayurveda and herbal remedies. The brand is also planning to invest in more R&D to come up with
new solution-based products that will address common problems such as acne and hair fall. Several global brands have
managed this transition beautifully, whether it’s IBM repositioning itself from a hardware company to a global
consulting company, or Nike’s change in image from an athletic footwear brand to a complete sportswear brand.
Often, logos are changed and brands are given a new identity after a merger and acquisition. For instance, after British
telecom giant Vodafone bought a 67 per cent stake in telecom operator Hutchison-Essar last year, the logo was
changed. But Vodafone retained the pug as a mascot since it delivered on a strong brand association. Sometimes, there
are other factors that necessitate this change. For instance, UTI Bank was renamed Axis Bank last year as the bank was
not willing to accept terms and conditions (including royalty charges) from UTI AMC to use the name.
Tough Task

Whatever the motivation, launching a new brand identity is a challenging and time-consuming move that needs to be
followed up by delivering on the brand promise. It is also an expensive exercise (see table ‘The Old Meets The
New’ on page 67). It involves research at different levels, including workshops and interviews with senior teams to
understand their vision for the future, employee research that gives them a chance to voice their opinion anonymously,
consumer research, mystery shopping, retail audits and factoring in global trends and practices. Despite this, sometimes
new identities fail to impact sales. For instance, Dell in the US was a well-entrenched PC brand operating in a not very
lucrative market. It attempted to reposition itself as a consumer electronics brand. “However, the competencies of
the brand did not move in the same direction and the marketing exercise showed little impact,” says Kumar.
Indian marketers seem to be aware of this. Ceat is considering investments worth Rs 1,000 crore to develop new radial
tyres and speciality tyres to appeal to younger customers. Besides appealing to a younger audience by using interactive
sites such as Youtube and MySpace to gather feedback, it is trying to hire younger people, and organise salsa classes
and yoga at work. “Employees were emotionally attached to the Rhino,” says Banerjee. “Thus, it
required a lot of efforts to make them understand the reasons.”


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Phasing out the old brand and bringing in the new needs a streamlined programme that maximises return on investment.
Every interface needs to be re-configured and changed. “For large organisations, this is a huge
exercise,”says Malhotra. “Imagine changing the face of 3,000 branches for Canara Bank.” But if the
effort works, the payback is worth it.
As Paul Thachil, Chief Executive Officer (Dairy and Foods) Mother Dairy Fruit and Vegetable Private Ltd. puts it,
“Mother Dairy initiated a rebranding exercise five years ago. This coupled with market expansion, increased
distribution width and continuously providing innovative products across categories have helped us to achieve a growth
rate of 25 per cent over the last four years.” Parle, which re-launched its mango drink Frooti in 2005 to expand its
consumer base from mothers and children and repositioned the apple drink Appy to appeal to a more mature audience
(with champagne flutes on the product pack) in 2004, says Nadia Chauhan, Director (Marketing), Parle Agro, that both
the brands achieved high sales figures soon after the exercise. That’s what Godrej is banking on as he pays
several crores to change the face of a brand that has represented his family’s business interests for more than a
century.
Piya.Singh@abp.in

Meghana.Biwalkar@abp.in
(Businessworld issue 20-26 May 2008)




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