Brand building as important as achieving volumes through pricing

    MUMBAI: The concluding session of the Brand Summit was titled - 'CEOs round table conference,' which was moderated by Hanmer and Partners managing director Sunil Gautam. The CEOs that comprised the panel were Motorola India general manager South West Asia (personal communications sector) Percy Batliwalla, Planet M CEO Ajay Mehra, ITC Ltd's (Greetings, Gifting and Stationery) Chand Das, Foster's Pradeep Gidwani and ING Vyaysa Life MD and CEO Frank Koster.




The topic for this session was 'Brand building OR Achieving volumes through pricing.' All speakers stressed on the fact that this was the biggest paradox as both go hand in hand and it was not an either / or situation. Batliwalla accentuated that if a brand wants to be a global player then it cannot be a niche player and that it was very important to be a global brand. "What people want is low prices and more features and hence it is not about one or the other, both brand building and achieving volumes through pricing are equally important," he said. The key was to know what the consumer wants since change is the only constant. "This quarter, the industry will sell close to 150 million cell phones and this needs to be achieved through pricing and also by brand building since both are necessary to survive in this competitive market," he elucidated..



Mehra on the other hand, traced the success story of Planet M music store, which is one of its kinds. He reiterated what Batliwalla said, "It is not an either / or situation but there has to be emphasis on both at different occasions." Brand building is an inescapable reality and it brings familiarity and association from the consumer. "The music industry," he said, "is de-growing each year by 20 per cent but we are in this business because product is a commodity and distribution is highly fragmented."



Branding in music retail stores is crucial to build the store brand and advertising helps in the number of footfalls and drives in the right customers. Said Mehra, "Music is now 65 per cent of the business we do and 19 per cent of turnover of all music companies is from Planet M." A lot of events at Planet M like artists' visits and music launches make the brand proposition of Planet M come alive. It also has a music community center which undertakes constant events and workshops. The store has 74 outlets across India and six per cent of all music is sold to them.

Das, on his behalf also agreed to what the other speakers said about brand building and achieving volumes through pricing being equally important. What ITC did in the greeting cards segment was build their own network with new service norms and incentives to the retailers with their dynamic product matrix. They built variety by covering all sender-recipient relationships, hence building their brand. "We combined brand building with volume driven tactics through pricing. At retail stores 50 per cent of the shelf space was given to us with branding elements and signage support. We gave additional discounts to retailers who agreed to our terms and hence we got more visibility. Our strength was really with the mass market and so we collaborated with multi brand outlets," said Das. The result was that they covered over 300 stores in 18 months and ITC became the number two in the greeting cards segment with 20 per cent market share in three years' time.

Gidwani, unlike others spared the audience his brand's (Fosters) success story and instead gave remarkable examples of other brands' successes in building their brands via promotions and also through pricing. A good example was that of the Indian answer to Levis in the jeans segment - that of Ruf and Tuf. He said that Ruf and Tuf built their brand via actor Akshay Kumar by using him in the promotions and ad campaigns, while at the same time also prolifically emphasised on their price being very low. This was very crucial since India is a very price sensitive country.

Coming to the issue of pricing again, Gidwani said, "Pricing can clearly be used to build a brand. But on the other hand, discounting is like a bribe. A brand is something that has a relationship with a customer. Can you briber and build a relationship? Therefore, discounting won't work in the long run in customer relationship and hence brand building is very important too."

Koster, the last speaker for the day, said that in the financial sector brand building and pricing go hand in hand. He gave an example of how his company had bought a bankrupt Bearing Bank in the Dutch but it had worked for their bank as that bank had a good reputation and hence when people came to ING, they were impressed with the fact that it had bought Bearings. This brought intangible brand value to ING which was incomparable.

Thus, the conclusion for the day was not surprisingly that brand building and achieving volumes through pricing go hand in hand and are equally important for any brand.

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