Brand Hierarchy


By
Lal Saraj
Nithin Raj Y.S
Ranjeet George Mathew
Sivaprakash C.S
S2 MBA
Institute of Management in Kerala
Thiruvananthapuram
E-mail:
nithinrajys@yahoo.com
 


Coca-Cola started life in 1886 as a soda fountain beverage. A typical local or store brand, it spread to other outlets rapidly. Bottling was not an initial priority. In fact, two attorney bought the bottling rights for most of the US for a handsome $ 1.

Nokia was originally a brand of paper and cardboard. It pre-dates Coke, tracing its origins back to 1865. Today it is the world's eighth most valuable brand worth $24 billion (Coke No.1 at $67 billion). The company was in paper; it is still in the communications business.

All brands have small beginnings. Even in these days of simultaneous global launches, there is an enormous amount of test marketing earlier. In India, cities like Hyderabad, Vijayawada, and areas like Lokhandwala in Mumbai are happy hunting grounds for the test marketing fraternity. Sometimes new brands spend as much as a year out there before they are taken regional or national.

So is there a hierarchy in brands? At the bottom is the store brand or the private label (a very localized brand). Then comes the regional brand, followed by the national brand and the global brand.

The store brand needs the least investment and the global brand the highest. Given the same core product, the global brand cost the most. An obvious corollary: the margins on store brands are the least.

Is there also a natural progression from a store (local) brand to regional, national and finally global? What does it take to move from one orbit to the other?

It is an increase in energy level and really need three inputs. First is the communication input, which means advertising, promotions, etc. Then is the availability input, which is essentially distribution. Finally, it is the unpredictability input.

Unpredictability is what will make a new brand successful against the already entrenched. The P&G s of the world are prepared for the ordinary and the common place. They take a hard knock when they don't know what hit them. The surprise could be in price.

It could be in distribution. Would you think of getting salt with your morning newspaper? The Dainik Bhaskar group, which has launched the highly successful Bhaskar salt, can do that because it owns the No.1 Hindi daily in India.

It could be in advertising. French Connection United Kingdom was a tired old fashion house. Then it started advertising under its acronym FCUK, and turned a loss of 5 million pound in 1992 into a profit of almost 39 million pound last year.

Progress never comes overnight. Everyone has to climb the ladder step by step. There are several Indian brands that are doing it. Anchor is going global. Bajaj Auto, Tata motors and Raymond are already there, albeit in a small way. The challenge for India today is to turn from an outsourcing center to a producer of India-owned branded goods.
 


Lal Saraj
Nithin Raj Y.S
Ranjeet George Mathew
Sivaprakash C.S
S2 MBA
Institute of Management in Kerala
Thiruvananthapuram
E-mail:
nithinrajys@yahoo.com
 

Source : E-mail April 25, 2005

 
 

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