Brand Equity

H.R. COLLEGE OF COMMERCE AND

ECONOMICS,
CHURCHGATE, MUMBAI - 20.

PROJECT TITLE:
BRAND EQUTIY

SUBMITTED BY:
MR. KARAN DEEPAK GANDHI
ROLL NO. : 81

ACADEMIC YEAR 2005 - 2006

SEMESTER – V

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DECLARATION
I, Karan Gandhi, of HR College of commerce and economics of

T.Y.BMS (SEM - V) hereby declare that I have completed this

project on Brand Equity in the academic year 2005-2006.

The information submitted is true and the original to the best of our

knowledge.

Signature of the student

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 Brand Equity

CERTIFICATE
I, Mr.J.Venuraj , hereby certify that Karan Gandhi of HR

College of commerce and economics of T.Y.BMS (SEM-V) has

completed this project on Brand Equity in the academic year

2005-2006.

The information submitted is true and the original to the best of my

knowledge.

Signature of the project coordinator

Signature of the principal of the College/institutions

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TABLE OF CONTENTS
Executive Summary
Introduction
What is a Brand?
What can be branded?
Brand Power
What is Brand Equity?
Brand Equity & Market Share
Brand Equity V/s In Market Performance (Case Studies)
Measuring Brand Equity
Increasing Brand Equity
Building Brand Equity
Managing Brand Equity
Brand Image
Importance of Brand Equity
Laws of Brand Equity
Benefits of Brand Equity
Do’s & Don’ts of Brand Equity
Conclusion
Indian Brand Equity Foundation ( IBEF )

CASE STUDIES
McDonalds Case Study
Colgate – Palmolive (India) Case Study
TATA Case Study

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Executive Summary
The brand equity of a product cannot be known until & unless the
product is branded & has become known in the market. Brand Equity
follows branding.

Brand equity can be defined in many different ways. For a brand to be

strong it must accomplish two things over time: retain current
customers and attract new ones. To the extent a brand does these
things well, it grows stronger versus competition, and delivers more
profits to its owners.

Further, the importance of brand equity is that, by understanding how

brand equity drives market share, it is then possible to make use of
this knowledge in order to grow the market share of a brand.

Brand equity does not exist in nature, to be assayed like gold ore in
rock. It’s measurement depends on how you define it. The
measurement can be in terms of customers by way of quality , by
financial perspectives to help the financiers.

A brand equity is comprised of its loyalty rate & relative price as per
our definition thus using the measures given we can determine our
brand equity of the product & thus eventually it will help us in getting
solutions for increasing brand equity.
It is very essential to adopt the correct method to build a brand &
managing brand equity . a company who is unsuccessful to do will
have to bare losses.
There are many great marketers who have helped in giving a guideline
to managing brand equity which can be of a great help if the company
uses them diligently.

Brand Equity is important for three major reasons:

1. Brand Equity creates shareholder value
2. Brand Equity Building is a competency that can be mastered to
create competitive advantage
3. Brand Equity management creates an array of growth opportunities
for the business
thus it helps in increasing the overall profits of the firm . There are lots
of benefits of brand equity if a company can manage & build its brand
equity well & realize the importance of doing so.
There are laws of brand equity which are involved; if a company
follows the law sincerely it will always be in a surplus state. It jus has to
take care of the ‘do’s and don’ts of brand equity ‘

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India too have realized the importance of Brand Equity & thus have
established the Indian Brand equity Foundation. (IBEF)

In conclusion, brands must be carefully and constantly nurtured over

time. This is not a one shot deal; this is something that we have to be
in for the long run.

Introduction
The concept of brand is integral to the success of any given product.
But what measures a strong brand or the success of a brand? Is it high
market share, popular advertising, effective point of sale, or the ability
to command a price premium?

But before we get deeper into the subject of brand equity it is

necessary for us to know a few things like

• What is a brand?
• How is a product branded? & what products can be branded?
• What is the power of a brand?

Thus we will move along the subject after a brief description on the
above mentioned questions.

WHAT IS A BRAND?
Brands are an integral part of today's marketplace. Everywhere one
looks
there are brands, and strong brands are the most successful products
across a wide variety of product categories.
The quote `An orange is an orange, is an orange, unless, of course,
that
orange happens to be a Sunkist', a name 80 per cent of consumers
know and trust, gives an indication of what a successful brand does.
The two concepts- consumer knowledge and trust - sum up what
brands and brand equity develop; those are the issues that are at the
heart of the brand and of building a brand that has a good relationship
with the customer.

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The American Marketing Association defines a brand as: 'a name, term,
sign, symbol or design, or a combination of these, that identifies the
goods or services of one seller or group of sellers and differentiates
them from those of the competition.' The notion that a brand is
something that identifies the goods from one person, as separate from
the goods of another person, is a `historically-based' look at brands. It
is the notion of a 'mark' placed on a product to separate it from the
rest.
A brand however, is much more than this. A brand is a promise a
company makes to the customer, of what this product is going to
deliver. That is,how the brand is going to fit into the business of the
customer. The brand promise is a commitment by the organisation, as
making a promise to the customer is something that has to be followed
through. It is important that the organisation understands that by
making this brand promise, they have to live up to it. The creation of a
strong brand is something the company is going to have to commit to,
in order to make it work.

WHAT CAN BE BRANDED?

Many people ask whether everything can be branded, or if there are
types
of products that cannot be branded. People say, `Oh sure, you know,
consumer goods products; it makes a lot of sense to brand those. But
what about if I'm in hi-tech? What if I'm in medical marketing? What if I
have rational customers? Does the brand matter in this situation as
well?'
The research that has been done on this shows that, yes, branding
does
matter in these circumstances. Brands have been found to give an
important competitive advantage across a wide variety of industries. In
commodities, for example, Morton Salt is the most successful brand of

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salt with the most successful sales. It is however, mined from the same
mine as other brands of salt.
Novar is a high technology business-to -business company that builds
climate controls for large buildings. In the 1990s they were doing well,
but not outstandingly so. In 1999, they began a branding campaign
that involved a variety of strategies. They specifically rationalised
names, by choosing names that had meaning. They started to
concentrate on branding the sub-product as well as the Novar brand
itself They found that within the first seven months of their campaign,
they had a 26 per cent increase in profitability, which they attributed
to their branding.
What about medical products? Brands clearly have power in this
industry,
with over-the-counter products. For example, people know and trust
certain headache brands. Prescriptions have also clearly seen a big
change, where brands that are being built, are aimed at the consumer,
i.e. the end-user, rather than just at the intermediary level.. This is also
true for devices: Perclose and HP Ultrasound Monitors are examples of
brands that have been built in these areas and which haveadded to the
power of those products.
This is the basic idea of what a brand is, and an indication that brands
are important and relevant in different domains. But what is the basis
of this importance, and where is the brand's power within the
marktplace?

BRAND POWER

There are two real sources of power: One derives from the customers'
perspective and whether customers perceive that the brand provides
value and meaning. If they do believe it does, then the brand reduces
search costs, and this is important to consumers who lead busy lives,
and have too many choices to make. Brands help customers by
reducing the effort required to choose a good product. Once the initial

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search is completed by the consumer, and the consumer has built trust
and understanding in the brand, this may be carried through to an
extended product, which then cuts down the search process in the
extended category.

Trust in the brand also mitigates perceived risks. For example, if a

parent
has to go out in the middle of the night to buy a pain-killer for his child,
then the name, eg Tylenol, is going to be very helpful in that purchase.
They understand what they are getting, and they believe that it is a
less
risky choice because it is a brand they know. Thus, the brand also
helps
with interpretation, with processing and the confidence that people
have
in the choices that they make.

The brand also gives other benefits of self-expression. These

tend to apply more in the consumer goods, and business-to-business
realms.
In business-to-business, branding can be of great importance: for
example,
there is a professional food mixer called the 'Hobart' brand, which is
the 'Mercedes' of professional mixers. There is also the issue of
providing user satisfaction. The idea that `by using this particular
brand I am benefiting, because I know that I'm using the best. I know
that I'm using something that has quality and in which I have faith'.
From the marketer perspective, it can be seen that brands are very
important, because they are an effective way to secure a sustainable,
competitive advantage. The brand allows improved identification of the
product, and the likelihood of a repeat purchase. Brands are a real way
to build customer loyalty. They increase the ability to differentiate
products, within a line and apart from competitors. They allow for
segmentation, and enable a company to produce different brands for
different groups of customers. Brands provide a means for legal
protection - and this is an added protection for the particular bundle of
attributes on offer.

A very important part of branding is the facilitation of new product

introduction; the notion of 'extending'. The thing that allows you to
extend to a new territory, into a new country, is very often the brand
and the faith that people have in that.

Finally, the brand offers a source of financial return. The research on

the benefits of strong brands, looking across companies, shows that
companies gain greater loyalty because of brands. A strong brand

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makes people purchase it more often. It creates resistance to

competitive marketing action. This means that when the competitor
comes up with a new campaign, lowers the price, etc, a strong brand
will help the customer to stay with you. Larger margins can stem from
strong brands. Strong brands gain the ultimate in pricing.Strong brands
are able to raise their prices without having as many people switch,
but when a strong brand lowers the price, more consumers come in
than in the case of the less strong brand. When a strong brand makes
a mistake, people treat it with more leniency and with more kindness
than they do if it is a mistake from a weaker brand.

Thus it is important for a company to realize what product is important

for what kind of customer & in what kind of regions thus the brand
preference will differ from person to person, place to place & time to
time .Brand Equity determines the value & importance of the product
once the product produced is correctly branded & executed.

What is Brand Equity?

In lay terms, brand equity is the value that a consumer attaches to a
certain brand. Although brand equity can be measured tangibly by way
of certain indicators, a large component of the concept is intangible,
i.e. what perceptions and associations people have of a certain brand,

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and the familiarity of those brands in the mind of the consumer. The
diagram below illustrates how brand equity is made up:

From the diagram, it is evident that the sources that drive brand equity
(brand awareness, consideration and the factors associated with it) will
lead to certain outcomes. And the more powerful the sources are, the
more significant these outcomes will be. Thus, a strong brand loyalty
and ability to command a price premium will lead to resilience against
any negative short-term market factors. And this is why brand equity is
essential in assessing the performance of a brand: it has the potential
to secure the success of the brand against many variable in-market
factors.

Brand Equity is defined as follows:

 Brand equity represents the value (to a consumer) of a product,
above that which would result for an otherwise identical product
without the brand's name. In other words, brand equity represents
the degree to which a brand's name alone contributes value to the
offering (again, from the perspective of the consumer)."

Brand equity can be defined as three distinct elements:

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• The total value of a brand as a separable asset -- when it is sold

or included on a balance sheet. (Brand Valuation)
• A measure of the strength of consumers' attachment to a brand.
(Brand Loyalty)
• A description of the associations and beliefs the consumer has
about the brand. (Brand Description)

Brand Equity as Brand Value

Brand value involves actually placing a dollar or rupee value on a
brand name. The reasons for doing this are usually to set a price when
the brand is sold and also to include the brand as an intangible asset
on a balance sheet (a practice which is not used in some countries).
It is important to note that there is a significant difference between an
"objective" valuation created for balance sheet purposes, and the
actual price that a brand may get when sold.
A brand is likely to have a much greater value to one purchaser than
another depending on the synergy that exists. For acquisitions, the
value of a brand to a certain purchaser is often estimated through
scenario planning. This involves determining what future cash flows
the company could achieve if it owned and took advantage of the
brand.

Brand Equity as Brand Loyalty

Loyalty is a core dimension of brand equity and is a way to gauge the
strength of a brand. It represents a barrier to entry, a basis for a price
premium, and time to respond to competitive innovations. The variety
of measures used for brand loyalty usually is a combination of one or
more of the following:

• Price/demand measures--focus on a brand's ability to command a

higher price or make consumers less sensitive to price increases
than price increases for competing brands.
• Behavioral measures--focus on consumers' behavior.
• Attitudinal measures--focus on general evaluative measures such
as 'liking' or 'disliking.'
• Awareness measures--focus on identifying a brand as being
associated with a product category.

Brand Loyalty and Equity refer to the notion that some brands are
"stronger" or better than others.

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Brand Equity as Brand Description

Brand description, the final component of brand equity, concerns the
actual attributes of the brand. These attributes or associations are
major creators of brand loyalty. A wide variety of techniques exist for
matching consumer associations with perceptions of a brand. These
techniques can be both qualitative and quantitative. They work by
getting the respondent to link each brand with pictures or words.
These attributes then can be measured with multi-dimensional scaling
to position the attributes relative to one another.

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Brand equity and market share

Further, the importance of brand equity is that, by understanding how
brand equity drives market share, it is then possible to make use of
this knowledge in order to grow the market share of a brand.
Understanding the link between brand equity and market share will
thus assist marketers in which strategies are required to grow market
share.

The concept of brand is integral to the success of any given product.

But what measures a strong brand or the success of a brand? Is it high
market share, popular advertising, effective point of sale, or the ability
to command a price premium?

Very often only the market share of a brand is looked at as a means of

determining how successful the brand is. Although market share is of
importance in assessing the performance of a brand, its relationship
with brand equity is of great significance, as this relationship can be an
indication of the potential success of a brand, or alternatively can
direct strategy on how to attain such success. The following diagram
illustrates the relationship between brand equity and market share:

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Brand equity and market share are not always proportionate. As can
be seen from the diagram, the ideal place for a brand to be situated is
in the top-right quadrant. This shows that the brand is successful in
that it has a strong brand equity and high market share. However, this
may not always be the case. It is possible that a brand may have high
brand equity, but may not have an accordingly high market share (top-
left quadrant). In order to improve the market share of a brand in
cases such as this, regard must then be had to in-store issues such as
display, shelf space, distribution etc. Thus, understanding brand equity
plays an important role in that it gives an indication of how a brand's
performance can be improved.

Where there is low brand equity and a strong market share (such as
the bottom right-hand quadrant), the situation is extremely tenuous.
Although the picture may look good owing to the strong market share,
the reality is that, with weak brand equity, the product is vulnerable to
competitor or other in-market activity. Therefore, measuring only the
strong market share does not give the complete picture - brand equity
must also be considered, and by improving this, the full potential of the
brand can be secured.

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Brand Equity v/s In-Market Performance:

Strategies for Growth
A comparison of Brand Equity Indices – from ACNielsen | Winning
Brands – with in-market performance data reveals that Brand Equity
valuation can be a tangible and accountable measure for
understanding the extent to which Brand Equity drives market share.
Marketers can therefore develop strategies to build market share
based on strengthening the sources driving brand equity or other
marketing variables – such as distribution, pricing or targeting – that
may be impeding the brand’s in-market performance.
A comparison of the Brand Equity Indices of FMCG brands, as well as a
few in other industries, reveals that for most, their BEIs relative to the
competition are in proportion to the market shares for the category.
This demonstrates that brand equity is a strong driver of market share,
and the sources of brand equity – familiarity and brand associations –
should be examined to determine how share can be built.
However, in some cases, BEIs do not correlate with the brand’s in-
market performance, indicating there are factors other than Brand
Equity, eg distribution, pricing or targeting, that must be addressed to
build share.
Strengthen Sources of Brand Equity to Drive Market Share

Case Study 1: Food

Brand A should increase its distribution

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In the absence of brand equity valuation it could be concluded that

Brand A’s equity must be strengthened to increase market shares.
However, Brand A has stronger equity than Brand B, but lower
distribution, resulting in weaker market performance. Brand A should
maintain its familiarity levels and current positioning but increase its
distribution coverage.

Case Study 2: Multinational Personal Care Brand

Brand A should strengthen its brand image in Country X & familiarity in
Country Y

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All key brands in the category across two countries are multinational
with relative brand equity indices in proportion to market shares. In
both countries, Brand A must strengthen its equity to drive market
share. The relative importance of the sources of brand equity for the
category in both countries is fairly similar. In Country X, Brand A and B
are level on familiarity but A has negative 'old-fashioned' brand
associations. Brand A must focus on becoming more contemporary and
create a distinct positioning on associations that are strong drivers of
brand equity. In Country Y, however, Brand A has very low familiarity
and must focus on strengthening its awareness and brand
consideration.

Case Study 3: Baby Food

Brand A should leverage its equity and launch a low price line
extension

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Equity for Brand A is significantly stronger than for Brand C, but their
market shares are comparable. Brand A is priced at a 151% premium
over C, which results in a lower brand equity to market share ratio for
Brand A. Brand A has strong brand awareness and a distinctive image
on attributes that are important in the category, which drive its strong
brand equity. However, due to its price premium, its brand equity does
not translate into an equitable market share. Brand A can leverage its
equity and launch a lower price line extension to compete with Brand C
and increase overall brand share.

Thus the above three case study examples clearly shows the relevance
of brand equity in the market & its relationship with the market factors
in accordance with its in market performance affecting its overall
market share & company’s profits.

Measuring Brand Equity

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Brand equity does not exist in nature, to be assayed like gold

ore in rock. It’s measurement depends on how you define it.

Brand equity is a concept. It does not exist in nature in the manner

that the specific gravity of elements exists as a physical entity. It
cannot be assayed like the gold content in a piece of ore. Those who
argue that brand equity cannot be measured miss the essential point.
Its measurement depends on how it is defined. That definition must
have pragmatic value to a marketer of consumer products or services.
It should help improve marketing effectiveness and efficiency by
providing a yardstick with which to evaluate these things. Also, the
definition should reflect the role of the brand in the dynamics of
consumer choice in a competitive environment.

To its buyers, a brand is a promise

A brand is a symbol carrying with it certain associations and images. In

customer terms, a brand represents a promise. Its value to consumers
is that it reduces risk, saves time and provides reassurance.
Predictable results are the promise of a brand.
As long as a product or service meets a customer’s expectations with
no unexpected negative results, a buyer is likely to continue to buy the
brand. It is the customer-oriented definition of a brand that is at the
heart of the concept of brand equity. Thus it is a promise expressed in
the form of providing quality to its customers

Qualitative Measures: The Brand Equity Ten

The Brand Equity Ten are ten sets of measures grouped into five
categories, which attempt to gauge the strength of a brand. The first
four categories represent customer perceptions of the brand along the
four dimensions of brand equity- loyalty, perceived quality,
associations and awareness. The fifth includes two sets of market
behavior measures.

Loyalty

1. Price Premium: A basic indicator of loyalty is the amount a

customer will pay for a product in comparison to other
comparable products. A price premium can be determined by
simply asking consumers how much more they would be
willing to pay for the brand.

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2. Customer Satisfaction: A direct measure of customer

satisfaction can be applied to existing customers. The focus
can be the last use experience or simply the use experience
from the customer's view.
Perceived Quality and Leadership Measures

3. Perceived Quality is one of the key dimensions of brand

equity and has been shown to be associated with price
premiums, price elasticity’s, brand usage and stock return. It
can be calculated by asking consumers to directly compare
similar brands.

4. Leadership/Popularity has three dimensions.

First, if enough consumers are buying into the brand concept it
must have merit. Second, leadership often taps innovation
within a product class.
Third, leadership taps the dynamics of consumer acceptance.
Namely, people are uneasy swimming against the tide are a
likely to buy a popular product. This can be measured by asking
consumers about the product's leadership position, its popularity
and its innovative qualities.

Associations/ Differentiation Measures

5. Perceived Value: This dimension simply involves

determining whether the product provides good value for the
money and whether there are reasons to buy this brand over
competitive brands.

6. Brand Personality: This element is based on the brand-as-

person perspective. For some brands, the brand personality
can provide links to the brands emotional and self-expressive
benefits.

7. Organizational Associations: This dimension considers the

type of organization that lies behind the brand.

Awareness Measures

8. Brand awareness reflects the salience of the product in the

consumer's mind and involves various levels including
recognition, recall, brand dominance, and brand knowledge
and brand opinion.

Market Behavior Measures

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9. Market Share: The performance of a brand as measured by

market share often provides a valid and dynamic reflection of
the brand's standing with customers.

10. Price and Distribution indices: Market share can prove

deceptive when it increases as a result of reduced prices or
promotions. Calculating market price and distribution
coverage can provide more accurate picture of the product's
true strength. Relative market price can be calculated by
dividing the average price at which the product was sold
during the month by the average price at which all the brands
were sold.

To Financiers, brand equity = retained earnings.

There are several possible ways to measure brand equity in financial

terms.

Brand Equity Index Model

Under this model brand equity is calculated by multiplying the relative
price of the product by market share in units. The product is then
multiplied by a measure of loyalty or durability representing the
staying power of the brand.

Book or Replacement Values

Brand equity is estimated as the replacement cost of the brand over a
generic equivalent. A generic equivalent is a product that is sold only
on the basis of product attributes. Alternatively, replacement value can
be estimated as book value. The challenge with this latter method is
that marketing expenditures do not appear on the balance sheet. For
either method, replacement cost is difficult to estimate accurately.

Market Transactions
Brand equity is estimated by identifying comparable mergers or
acquisitions. The premiums paid for those companies are associated

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with the equity in their brands. Data is scarce for comparable M&A's,
however, and buyers could have paid more or less than the true value
of brands.

Incremental Cash Flow from Branding

Determining the cash flows of a brand and subtracting the cash flows
from unbranded product estimate brand equity. The estimation
challenge becomes more difficult as the product of interest belongs to
an increasingly differentiated category. For example, it is harder to find
a generic equivalent for cars than for cigarettes.

Discounted Value Of Future Earnings Projections

Brand Equity is evaluated by discounting the value of future earnings
projections and adding to the value the cost competitors would incur if
they duplicated the brand.

Price/Earnings Multiple
Multiplying current earnings by an estimate for P/E multiple yields an
equity price. The critical step is estimating the P/E multiplier. One
approach that has been taken is to measure brand strength by a
weighted average of seven factors. (Penrose, 1989) Next, the P/E
multiplier is estimated using and S-shaped relationship between brand
strength and the P/E multiple that is based on similarities to risk free
rates, industry rates, and other factors.

Value of Avoided Advertising

Advertising is a key tool for developing brand strength that
management can leverage into equity. Advertising can affect how
readily a consumer associates attributes with a brand, what brands

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consumers include in their evoked set, and other behavioral and

perceptual factors. The effect of advertising builds up over time and
leads to extending brands with greater ease and less cost. An estimate
of Brand Equity is the value of advertising avoided to achieve the
current level of performance.

To marketers, brand equity = retained customers

To a marketer, creating and maintaining brand equity can provide for

increased profitability, reduced vulnerability to competition, the ability
to charge premium prices, and a platform for introducing new to
market products carrying the brand name.

There is general agreement among marketing theorists that brand

equity is a composite of a brand’s image, its awareness level, and its
level of consumer preference. However, there is no generally agreed-
upon definition nor is there an accepted method for calculating the
value of brand equity. In the financial community, equity = retained
earnings. In the marketing community, a more relevant definition
would be: equity = retained customers

A brand’s equity is comprised of its loyalty rate and

its relative price

The proposed definition of brand equity is the aggregate value of the

purchases of customers who buy the brand repetitively. Its magnitude
is a function of their frequency of purchase, the extent of repetition
and the relative price they pay for the brand.

Relative price reflects the perceived value of a brand. A high relative

price (over 1.00) indicates that a brand’s buyers value it more than the
others in the category. Conversely, a low relative price reflects weak
brand “pull”. By using relative price in the calculation of brand equity,
we introduce the element of perceived value for the money.

This approach to equity will “credit” brands that are capable of

commanding premium prices among minority sized segments.

Relative price is expressed as the ratio of the average retail selling

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price of the brand to the category average. For example, for the
Canadian whiskey category, a leading brand’s relative price based on
1992 averages is 1.0; while that of a leading “super-premium” brand is
1.75. In the Gin category, a major import’s relative price is 1.26, a
leading domestic brand’s is .64 and another popular import’s is 1.23.

Loyalty rate is defined as the percent of category purchases of the

brand by people who buy the brand. For example, if Cognac brand “A”
buyers report that 65% of their cognac purchases are of brand “A”, its
loyalty rate would be .65. If people who buy scotch brand “C” report
that in the course of the past year, 40% of their scotch purchases were
of brand “C”, its loyalty rate would be .40.

Taking these two dimensions--loyalty rate and relative price--we

propose the equation: EQ = L x Prel where EQ = Brand Equity, L =
loyalty rate and Prel =relative price.
By giving equal weight to each of the variables, the formula allows for
the use of the equation as a barometer of marketing effectiveness, in
that increases in loyalty rate or relative price can be produced by
improvements in marketing effectiveness or efficiency

INCREASING BRAND EQUITY

We believe this approach to defining and measuring brand equity helps

to focus marketing strategy and make it easier to choose among
alternatives. If, for example, a major goal is to increase brand equity,
the marketing strategies and tactics to be used must either increase
brand loyalty or pave the way for a price increase while not losing a
significant number of customers.

Experience shows that brand loyalty can be strengthened in one of

several ways: increasing continuity of purchase via such techniques as
“frequent flier” or “frequent buyer” programs, “members clubs”,
“continuity promotions” that reward cumulative purchases; affinity
programs, that create identification between the users of a brand and
some recognizable organization, cause, lifestyle or movement.
Marlboro uses such programs prominently in its brand promotions;
brand differentiation, that creates real or perceived differences
between the brand and its competitors; presence marketing, that
increases the visibility of the brand as well as its salience, so that

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customers have less opportunity to even consider alternative brands

when they are in the marketplace for the product. Anheuser-Busch has
used this strategy effectively to keep its Budweiser brand at the top of
the category for years.

Increasing price can be an effective strategy if a large enough number

of the brand’s customers believe it will deliver value at the higher
price. We’ve known cases where increasing price has actually help to
build business. In one case, the managers of a small little known spirits
brand raised its price as a way of committing “brand suicide”. They
were amazed and delighted to see the brand’s sales increase shortly
thereafter. Thus emboldened, they raised the price again and saw
sales continue to rise. Today this brand is reported to be the biggest
profit contributor to the company’s stable and research shows its user
base to be very loyal.

Grey Poupon was successfully positioned atop the seemingly mundane

mustard category by a combination of premium pricing and adroit
advertising. Its equity is likely to be much greater (on a per case basis)
than its larger selling rivals.

Trading up can be an effective way to increase price while protecting a

brand’s original user base. This is accomplished by introducing a
justifiably more expensive line extension while continuing to offer the
“parent” product at the same price. The key word is “justifiably”, so
that the new entry does not denigrate the quality of the parent.

In sum, we believe that a brand is a promise made to its

customers and to its owners. Promises kept yield loyal
customers and will produce a steady stream of profits for
years to come. Brand equity is at its root the aggregate value
of the future purchases of its customers. And that is what
brand marketing must maintain and grow.

BUILDING BRAND EQUITY

The basis of brand equity lies in the relationship that develops between
a consumer and the company selling the products or services under
the brand name. A consumer who prefers a particular brand basically
agrees to select that brand over others based primarily on his or her
perception of the brand and its value. The consumer will reward the
brand owner with dollars, almost assuring future cash flows to the
company, as long as his or her brand preference remains intact. The
buyer may even pay a higher price for the company's goods or
services because of his commitment, or passive agreement, to buy the

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 Brand Equity

brand. In return for the buyer's brand loyalty, the company essentially
assures the buyer that the product will confer the benefits associated
with, and expected from, the brand.

In order to benefit from the consumer relationship allowed by

branding, a company must painstakingly strive to earn and maintain
brand loyalty. Building a brand requires the company to gain name
recognition for its product, get the consumer to actually try its brand,
and then convince the buyer that the brand is acceptable. Only after
those triumphs can the company hope to secure some degree of
preference for its brand.

Name awareness is a critical factor in achieving brand success.

Companies may spend vast sums of money and effort just to attain
recognition of a new brand. But getting consumers to recognize a
brand name is only half the battle in building brand equity. It is also
important for the company to establish strong, positive associations
with the brand and its use in the minds of consumers. The first step in
building brand equity is for the company to define itself and what it
hopes to represent for consumers. The next step is to make sure that
all aspects of the company's operations support this image, from its
product and service offerings to its marketing programs to its customer
service policies. When all of these elements support a distinctive
image of the company and its products in the minds of consumers, the
company has established brand equity.

Managing Brand Equity

Consistency is the key to successfully building and managing brand
equity. Having a long-term outlook and projecting a consistent image
of your brand to the customer will maximize the results of building

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 Brand Equity

brand equity. It is critical for managers to realize that brand equity can
have positive as well as negative effects on a product or company. In
the end, it is the customer that truly defines what brand equity means.
If management feels it is necessary to change the direction of a brand
or change a product it must be careful not to change too quickly. There
are many examples of companies that have changed a product or
brand too much or too quickly. On these occasions, consumers met
changes with adverse reactions. The most famous example is Coca-
Cola. They changed the formula of their flagship product Coke, and
consumers reacted so poorly to the new product that the old formula
was reintroduced and the new formula eventually was discontinued.
The consumer through the product experiences brand equity. The
product has certain attributes or characteristics that deliver the equity
to the consumer. If any of these attributes are changed or eliminated,
the equity delivered to the consumer is also changed.
Managing brand equity is a continual process with long-term
implications. Unfortunately, many brand managers are forced to focus
on short-term goals such as market share and profits. Many programs
that are implemented to boost short-term sales or market share may
be detrimental to the long-term viability of the brand. For example,
Proctor & Gamble has started to test market a program to move away
from using coupons to a system of every day low prices. This is, in
part, because consumers may become loyal to the coupon or
promotion and not to the product itself. Constant promotional
programs erode margins and eventually brand loyalty. Ultimately,
brand equity is damaged.
In 1988, Graham Phillips, Chairman of Ogilvy and Mather Worldwide,
said, "I doubt that many would welcome a commodity marketplace in
which one competed solely on price, promotion and trade deals, all of
which can be easily duplicated by competition. This would lead to ever
decreasing profits, decay, and eventual bankruptcy. About the only

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 Brand Equity

aspect of the marketing mix that cannot be duplicated is a strong

brand image." This quote clearly demonstrates the importance of
managing brand equity. In many categories, brand equity is the only
point of differentiation between products.
Many people may think that building and maintaining brand equity is
solely the responsibility of brand managers, but it is actually a cross-
functional team effort. Financial managers are important because they
can fully analyze the costs of maintaining and building brand equity.
For example, launching a new brand is extremely consuming in terms
of money and time. It may be more cost effective to extend a current
brand than introduce a new brand. Marketing research is critical for
many obvious reasons. It develops most, if not all, of the research and
data that companies will use for deciding strategic issues. Marketing
research can also help determine how brand equity is actually
measured. Once a definition of brand equity is established, the
responsibility of tracking

According to Keller, to maximize long-term brand equity,

managers must take 10 key steps:

1) Understand brand meaning and market appropriate products in

an appropriate manner.
2) Properly position the brand.
3) Provide superior delivery of desired benefits.
4) Employ a full range of complementary brand elements and
supporting marketing activities.
5) Embrace integrated marketing communications and
communicate with a consistent voice.
6) Measure consumer perceptions of value and develop a pricing
strategy accordingly.
7) Establish credibility and appropriate brand personality and
imagery.
8) Maintain innovation and relevance for the brand.
9) Strategically design and implement a brand hierarchy and brand
portfolio.

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 Brand Equity

10) Implement a brand equity measurement system to ensure that

marketing actions properly reflect the brand equity concept.

Brand Image

Images evoked by exposure to a named brand like brand personality,

brand image is not something you have or you don't! A brand is
unlikely to have one brand image, but several, though one or two may
predominate. The key in brand image research is to identify or develop
the most powerful images and reinforce them through subsequent
brand communications. The term "brand image" gained popularity as
evidence began to grow that the feelings and images associated with a
brand were powerful purchase influencers, though brand recognition,
recall and brand identity. It is based on the proposition that consumers
buy not only a product (commodity), but also the image associations of
the product, such as power, wealth, sophistication, and most
importantly identification and association with other users of the
brand. In a consumer led world, people tend to define themselves and
their Jungian "persona" by their possessions. According to Sigmund
Freud, the ego and superego control to a large extent the image and
personality that people would like others to have of them.
Good brand images are instantly evoked, are positive, and are almost
always unique among competitive brands.
Brand image can be reinforced by brand communications such as
packaging, advertising, promotion, customer service, word-of-mouth
and other aspects of the brand experience.
Brand images are usually evoked by asking consumers the first
words/images that come to their mind when a certain brand is

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 Brand Equity

mentioned (sometimes called "top of mind"). When responses are

highly variable, non-forthcoming, or refer to non-image attributes such
as cost, it is an indicator of a weak brand image.

Importance of Brand Equity

Brand Equity is important for three major reasons:

1. Brand Equity creates shareholder value

Building Brand Equity establishes a bond with consumers.

• Identifying, rationalizing, and taking steps to own the Brand

Promise can ensure that the brand is emotionally connected
with consumers.
• This establishes loyalty and commitment and therefore the
ability to command a premium price.
• Examples of Brands that have understood this include:

Brand Brand Promise

Pantene Healthy Hair
Dove Enhanced self-image through skin care
Heinz Ketchup (2001+) Ability to protect loved ones
Volvo Fun, family and entertainment
Nike Self realization through athletic activity

These brands have created long-term, consumer-preferred franchises

that deliver reliable streams of revenue and profit to their brand
owners.

2. Brand Equity Building is a competency that can be

mastered to create competitive advantage

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 Brand Equity

• Few brands manage their Equity consistently and at every

consumer touchpoint.
• Even fewer link their Brand Equity to marketplace and
financial performance indicators.
• Brand Equity often becomes a facet of the brand that is
misunderstood and under-used.
• Developing a process to consistently measure, plan and
develop Brand Equity is the true path to strong brands and
sustainable competitive advantage.

3. Brand Equity management creates an array of growth

opportunities for the business

• The process of defining the Brand Vision requires intense

consumer interaction. The very action itself reveals the
opportunities for the brand – both within the current business
category and in new categories and businesses.
• For example, Dove’s Equity of enhanced self-image through
skin care enabled the brand to extend from soap into
moisturizer and other beauty care categories (where growth
and margins are higher).

Virgin's Equity of a “Good deal for consumers” enabled the brand to

extend to categories as diverse as insurance, phones, airlines, and
even wedding

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 Brand Equity

Laws of Brand Equity

• The Law of Contraction: A brand becomes stronger when its

focus is narrowed. This does not imply carrying a limited product
line, but rather limiting and focusing a brand on only one type of
core product, which in Titan's case happens to be watches. Titan,
though possessed of a wide product line, has stuck to its focus. It
hasn't launched other types of products and stuck them with the
Titan name, which would have only gone on to cannibalize the
value of the core brand. As a result of this, Titan has developed
for itself an image of being "time-keeping experts" in the minds
of the consumers.

• The Law of Advertising: Once born, a brand needs to actively

advertise in order to stay healthy and maintain market share. If
done right, advertising is more of an investment than an
expense. Titan has implemented this by always maintaining a
high degree of visibility when it comes to its advertising. In
addition, it possesses one of the most recognizable ad-jingles in
the history of Indian advertising.

• The Law of the Word: Any brand worth its salt should strive to
"own" a word or words in the mind of the consumer. Examples of
such brands are Volvo, who owns the word "safety", Mercedes,
who own the word "prestige" and Coca-Cola, who own the word

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 Brand Equity

"cola". Titan, at least when viewed in the context of the Indian

watch market, seems to own the word "quality". Though
unsubstantiated by any formal market research, in an informal
survey we conducted among a sample of 30 people we know
(including friends, family, neighbors and acquaintances), 19 of
them, when asked what one word came to mind when they
heard 'Titan Watches' answered "quality". A further 8 answered
"Indian", another word that would do Titan absolutely no harm to
own in the minds of their prospects.

• The Law of Quality: Though quality is essential to the survival

and growth of any brand, the fact remains that brands are not
built by quality alone. The perception of the brand is as, if not
more significant than mere quality. It is here that Titan "scores".
As mentioned previously Titan more or less owns the word
"quality" in the minds of the consumers, thereby implying that it
is perceived as a quality product. Thus, it's actual quality, as well
as it's perception of being a quality product combine to work
towards building the strength of the Titan brand.

• The Law of the Name: In the long run, a brand is nothing

more than a name. The difference between products is thus not
so much between the products, as it is between their names, or
perceptions of the names. Seeing as how its name is perhaps the
most important element of a brand, we feel that this point
warrants a slightly more in-depth discussion.
Joe Marconi identifies 4 major factors to be kept in mind while
naming a brand:

1) It should suggest stability and integrity.

2) It should avoid negative imagery.
3) It should avoid acronyms, the use of which Ries and Trout call "the
no-name trap". (Perhaps the sole exceptions to this are BMW & IBM).
4) It should avoid anything-generic sounding (General, National,
Standard, etc), as this would not help in defining a brand's personality.

Let us see to what extent Titan satisfies these conditions. First of all,
the name 'Titan' itself comes from Greek mythology, and symbolizes
greatness, grandeur and power. Remember the Titanic? It is easy to
pronounce, as well as to remember. One only has to compare its name
to that of its biggest competitor, HMT to see how well thought out the
name Titan is. HMT, while being an acronym, expands out to
'Hindustan Machine Tools', a generic name if we ever heard one.
Asides from all these differences, the question of perception arises. A

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 Brand Equity

watch is a product, the purchase of which is perhaps driven more by

perception than anything else. What sounds more classy and
sophisticated? Titan or Hindustan Machine Tools?

• The Law of the Company: Brands are brands, and companies

are companies. There is a difference. Titan is owned by the Tata
Group, who though highly regarded in Indian industry are
associated more with heavy industries such as steel and truck
building, than with watch making. Chances are that no one would
buy a Tata watch (its name invoking the same, if not greater
reaction than an HMT). People would, however buy a Titan.

• The Law of Siblings: There is always a time and a place to

launch a second brand, but when this is done it should be
ensured that both brands have separate and distinct identities.
Each brand should be kept unique and special. When Titan
decided to diversify into the jewellery segment, they did not call
their new brand 'Titan Jewellery', inspite of the high standing of
the Titan name in the minds of the Indian consumers. To do so
would be to undermine the power of the Titan brand; this is that
of being “watch experts”. Hence, the jewellery was called
Tanishq.

• The Law of Shape: A brand's logotype should be well

designed, in order to fit the eyes. Visual symbols (again with the
possible exceptions of Nike's "swoosh" or Mercedes' 3-pointed
star) are highly overrated. The meaning lies in the words, not the
symbol. The Titan logo, though well recognizable (please refer to
the cover page in the rare event that you do, in fact actually NOT
recognize it) is always accompanied by the words "TITAN" in a
clear, crisp typeface-denoting power (through the use of capital
letters) and class at the same time.

• The Law of Color: A brand should use a colour and typeface

that is the opposite of its major competitor. For example, while
Coca-Cola stands for red and appears in running handwriting,
Pepsi stands for blue and appears in capital, modern looking
letters. Similarly, while HMT appears in small silver lettering,
Titan appears in capital letters, and is usually in black.

• The Law of Borders: Finally, a brand should know no borders

or boundaries. With a name that stands for Hindustan Machine
Tools, HMT would be hard-pressed to sell a single watch outside
Indian Territory. Such is not the case with the more globally

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oriented name, Titan. As mentioned previously, Titan is sold in

over 40 countries through marketing subsidiaries in London,
Singapore and Dubai.
Thus far, we have restricted ourselves to issues exclusively concerned
with the role of the brand in building brand equity. The fact however
remains that brand building is an exercise that requires effort in a
number of ways, many of them unrelated to the actual "brand" as
such. These could be related to the product's image, the company's
image, public perception of the parent company, and efficiency of
promotional measures, to name but a few.

The Benefits of Brand Equity

What are the benefits of strong brand equity? Well, strong brand equity
leads to, strong market share, customer loyalty, more favorable
response to price increases, less vulnerability to competitor activity,
brand extension opportunities, and communication messages which
reach the consumer. In attaining these benefits, strong brand equity
will ensure that a product is of an enduring nature. Ultimately, strong
brand equity will improve profitability.

To build a winning brand, therefore, is to understand the relationship

between brand equity and market share, and to leverage both to their
full potential. In so doing, a brand will be successful and sustainable in
the long term. It must be kept in mind that increasing market share
does not increase brand equity, whereas increasing brand equity
invariably leads to increased market share.

Do’s & Don’ts in Brand Equity

Define the core brand's position and value clearly:

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 Brand Equity

A product should be properly positioned and its value (which includes

price, quality and image) should be properly defined. As mentioned in
the section regarding the law of the word, the two words most highly
identified with Titan are “quality" and "Indian". These should thus be
emphasized upon. This is exactly what Titan has done, positioning it's
watches as high quality, Indian made watches, and emphasizing upon
it's value for money as well as it's classy image.

Don't neglect Public Relations:

Public Relations, or PR, are vital to the success and survival of any
brand. Unfortunately, its value as a brand building tool has more often
than not, been undervalued. Newsletters, event and entertainment
sponsorships, and other forms of PR help to define the personality of a
company or brand, positioning it as a good corporate citizen, and
someone nice to do business with. In keeping with India's
obsession with cricket, Titan has often sponsored cricket
tournaments, including the now legendary 1997 Titan Cup.
Titan also sponsors a number of popular television programmes, a
prime example of which is Star World's "The Practice".

Realize that promotions can be tricky:

Promotions ought to be used to create recognition and build brand

loyalty. Needless and irrelevant contests tend to shift the customer's
attention from the product being promoted to the prize being offered
(be it a trip to the US or a new car). A better (and far less expensive)
way to promote a brand would be to allow it to be used by other
companies in their promotional offers. Titan is currently being
offered by both Outlook magazine and Welcome Award (the
privileged customer programme of the Welcome Group chain of
hotels) in their various promotional offers. The most sensible and
effective forms of promotions are measures such as establishing a
privileged customer club offering customer points redeemable for
discounts and rebates. Titan has their own privileged customer club,
Titan Signet, which has an impressive 1.6 lakh members.

Always remember the USP:

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 Brand Equity

A USP (Unique Selling Proposition) is not only what gives the customer
a reason to buy the brand, but is also what helps him distinguish the
brand from its competitors. Titan's USP is two fold, and can perhaps
best be described in six words. "An Indian company offering
international quality". This works for Titan in two ways. First of all, it's
emphasis on 'international quality' successfully negates it's major
Indian competitor, HMT, who is still perceived as a company offering
solid and reliable, yet singularly unstylish and staid looking watches.
Secondly, with the plethora of foreign brands available in the country
today, Titan emphasis on being Indian enables it to effectively meet
their threat. Interestingly, while Titan has never actively promoted the
fact that its parent company is the Tata Group, at the same time it
has never really done much to hide the fact. Thus while capitalizing on
the Tata name; it has built its own identity as an Indian brand offering
high quality watches at prices significantly below those of comparable
foreign brands.

If you can't be first, be better:

Being the first entrant in any category earns pioneer status for a brand
and gives it the advantage of being the probable market leader. Such
was the case with HMT. However with its emphasis on its USP and
aggressive advertising, Titan convinced the market that it produced
the better product and thus destroyed HMT's near monopoly of the
Indian watch market.

Expand sensibly:

Extensions should always be logical and market driven and not mere
"product explosions". As the market environment changes with the
addition of say, greater competition, or changing customer wants and
perceptions, brand extension should be undertaken. It should not,
however be undertaken arbitrarily. When Titan entered the market in
1987, its main competitor was HMT, a company offering reliable and
economically priced watches. Titan thus started out being a company
offering a wide variety of models, most of which were priced
economically, with the added USP of being a more stylish alternative to
HMT. As times changed, however, so did Titan. With the growing entry
of foreign brands into the market, Titan continued to introduce sub
brand after sub brand to meet every new challenge. With the entry of
the "high performance" sports watch brands in the form of Tag Hauer,
Omega and Breitling, Titan introduced it's own line of chronographs

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 Brand Equity

priced significantly lower than the competition at a mere Rs. 5000-

6000. Similarly, to counter the entry of foreign, youth oriented "style"
brands such as Esprit and Swatch, Titan introduced the 'Fast Track' sub
brand, again priced extremely competitively.

Conclusion
Strong brands provide value and have a variety of benefits. To
customers,
brands provide direction, they provide reassurance. Brands reduce
risks
and they provide a way to self-express. To marketers, brands provide a
competitive advantage. They provide the means and the way of
differentiation. Brands provide a means for segmentation for different
markets, and a point of entry into new categories that are going to
bring greater financial return. Strong brands are based on a relevant
differentiated position. Without that, you cannot build a strong brand.
A variety of associations are linked to a strong brand. Sometimes we
can get carried away, saying This is the most important thing to
customers; this is what we should link', and we forget there needs to
be more than any one single association. If you look at strong brands,
they have a couple of very good sources of strength and a bigger
picture of what the brand means and how it is relevant to the
customer.

The associations that are built for the brand need to be based on
careful
and thorough analyses of the customers, of the competitors and of the
company.
It must be emphasised that the organisation must be committed to the
brand, both philosophically and financially. Only a small portion of
brand efforts will have a payoff in the short run. In fact, much of the
process of brand building will cost the organisation in the short run.
Branding is a long-run proposition that the organisation must be
committed to in order to live up to the brand promise that is made.
Strong brands arise from the thorough integration of the brand
throughout
the entire marketing mix. The three Cs of branding, are Consistency,
Clarity and Convergence. Everything has to work together to build
identified brand content.

Companies work hard building the strength of their brands - it is critical

to the ongoing brand management process to have meaningful and
actionable data-driven measures of these efforts.

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 Brand Equity

Building a brand, cultivating its strengths, pruning its weaknesses, and

making it more valuable to its owners is the bottom line job of
marketing. Everything marketing does should ultimately work in
concert to make a firm's brands more valuable. There are many
different tactics and strategies that go into strengthening a brand
name: advertising, promotions, public relations, and research and
development, to name a few. While companies use these and many
other methods to strengthen their brands' positions in increasingly
competitive markets, how can they measure the return on this work?
More precisely, how can a company determine the worth of one or any
its brands?
Putting the brand to a true test, the company can better judge how
much that brand is worth and how much opportunity for improvement
might exist.

Thus it is essential to determine the brand equity of the product in

order to acquire solutions to the above mentioned questions.In
conclusion, brands must be carefully and constantly nurtured over
time. This is not a one shot deal; this is something that we have to be
in for the long run.

One and a half decades into the process of economic liberalization and
global integration, India, today, is well established as a credible
business partner, preferred investment destination, rapidly growing
market, provider of quality services and manufactured products; and,
stands on the threshold of years of unprecedented growth.

Achievements. Successes. Growing consuming class driving demand.

Vibrant democracy. People who dare to dream. Indians and India have
a story to tell. IBEF collects, collates and disseminates accurate,
comprehensive and current information on India. In the overall nation
branding campaign for India, IBEF plays three well defined roles:

• Forum for brand vision development

• Co-ordinator of strategic marketing initiatives
• India Resource Centre

Board of Trustees

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 Brand Equity

Mr. S N Menon Mr. Ashok Kumar Mishra

Commerce Secretary Secretary
Ministry of Commerce & Industry Ministry of Tourism

Mr. Rajiv Sikri Ms Simran Bedi

Secretary (East) Director - Corporate Affairs
Ministry of External Affairs Media Transasia India Limited

Smt. Kavita Bhartia Mr. Salil Chaturvedi

Director Managing Director
Ogaan India Pvt Ltd Provogue India Limited

Ms Gitanjali Kirloskar Mr. Krishna Kumar

Chairperson Vice Chairman
India Japan Initiative Tata Tea Limited
Kirloskar Group

Mr. Suhel Seth Mr. Chetan Seth

Chief Executive Officer Managing Director
Equus Redcell Advertising Co Ltd Raas Intratech (P) Ltd

Mr. Darshan Singh Dr. Naresh Trehan

Managing Director Executive Director
Pan India Consultants Pvt Limited Escorts Heart Institute & Research Centre

Mr. Tarun Das Mr. Arun Maira

Confederation of Indian Industry Boston Consulting Group, India

Brand Development

Working with stakeholders from across a wide spectrum of business

and academia, IBEF follows a consultative and inclusive process in
developing contemporary global business brands for
India Inc.

India fastest growing free market democracy is

representative of the emergent realities in business and
industry. At the same time, it also conveys a cohesive
and unifying message about India's competitive
advantage, one that most people easily identify with.
The brand portrays the distinctive qualities of all things
Indian and has the dynamism to build an enduring
reputation in the competitive global arena.

This is India in the 21st century... Rapid all round growth…

Globalization… Leading on the Strength of Intellectual Capital and the
unbridled Spirit of Entrepreneurship...Democracy… the Permission and

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 Brand Equity

Right to be Different… the Synthesis of Structure and Non-linearity…

that together fuel the Quest for Knowledge and provide the Impetus to
Growth.

• 8.2% GDP growth in fiscal 2004

• Foreign exchange reserves of over US$ 120 billion
• Fastest growing population of workers and consumers
• Fastest growing telecom market
• Huge investments in infrastructure development

• Leadership in knowledge based industries

Served from India

Services exports from India - growing at more than

twice the global average presented a great
opportunity to IBEF to leverage Indian talent to
build a lasting legacy in overseas markets. IBEF is
set to launch a global communication campaign to
establish the Served From India brand in target
markets; highlighting the cost and quality
advantages of sourcing a variety of services from
India. Leadership in knowledge sectors has begun paying huge
dividends as India moves centrestage to claim a larger share of both
technology enabled and traditional services.

Brand Ambassadors

IBEF has set up a global network of Brand Ambassadors. Successful

individuals with the desire, ability and commitment to work with IBEF,
Brand Ambassadors, typically:

• Disseminate success stories in their communities

• Host and participate in occasional events
• Advise IBEF on communication strategies for particular markets
• Act as an outreach arm of IBEF, focusing on building the right
economic perceptions amongst media and business

Strategic Initiatives

IBEF sponsors and promotes mega events of

strategic importance that have the potential of
contributing significantly to India's brand equity.

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 Brand Equity

One such event has been the 1st ASEAN-INDIA CAR RALLY 2004, which
IBEF partnered as Premium Sponsor. Concurrently with the Rally, IBEF
launched an extensive print media campaign in the ASEAN countries
under the theme 'Opportunity India'.

IBEF also partners public and private organisations alike in projects

that help take the India message to different markets. Co-operative
arrangements are in place for the promotion of investment and trade
through effective communication of investment and success drivers to
the target audience.

As part of its overall campaign to build positive economic perceptions,

IBEF also undertakes the following activities:

• Builds an identity for Indian business as a unique blend of

tradition and modernity, rooted in values and ethics
• Forges links with opinion makers to keep India 'top of the mind'
in key industry segments
• Manages both domestic and international media effectively
through prompt and accurate information programmes to ensure
that the target business audience always gets the right message.

India Information Pack

A ready reckoner on India, the Pack is a quick look

through best that India has to offer, supported by
facts, figures and images.Perfect for those seeking to
make an India 'pitch' or access current and accurate
information on India, the Pack contains:

• India Brochure
• India Presentations
• India Posters
• India Film
• Articles & Images

IBEF frequently facilitates and manages India Information Pavilions at

Trade Fairs and Exhibitions across the globe. IBEF regularly partners
organisers of India-related events to improve the quality of information

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 Brand Equity

available for delegates and media on a range of business-related and

economic issues; the Foundation also lends support to individuals and
institutions to prepare presentations, reports and talking points on
India.Past resources and the India Information Pack can be found
online at www.ibef.org/brandindia.

Experience India Programme

To provide a better understanding of the change and transformation in

India, IBEF, in co-operation with CII, facilitates visits by policy
makers,venture capitalists, journalists, business delegations and
business school students.These visits typically include:

• Meetings with business leaders and policy makers

• Interactions with opinion leaders and news makers
• Visits to company sites, factories and BPO facilities
• Special events to expose the group to diverse aspects of the
society and culture of both urban and rural India
• Special visits to heritage sites like the Taj Mahal in Agra and
tourist destinations such as Goa and Rajasthan

Among others, IBEF has had the privilege of playing host to:

• Student groups from the Harvard Business School, Wharton

School of Business and MIT Sloan
• Senior Business Editors from overseas media groups
• Business Delegations from Fortune 500 companies
• A group of journalists from Germany supported by the German
Marshall Fund

Partners

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CASE STUDIES

CASE STUDY 1: McDonalds

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 What is McDonald’s?

McDonald’s is the world’s largest and best-known global leaders in

food service retailing, with more than 27,000 restaurants serving more
than 43 million customers a day in 119 countries. Approximately 80
percent of McDonald’s global restaurants are owned and operated by
independent franchisees. Yet on any day, even as the market leader,
McDonald’s serves less than one percent of the world’s population.
McDonald’s out-standing brand recognition, experienced management,
high-quality food, site development expertise, advanced operational
systems and unique global infrastructure position it to capitalize on
global opportunities.

 How it all started:

Dick and Mac founded the first McDonald’s restaurant in 1937 in a
parking lot in California. It did not serve burgers, had no happy meals
or a playground. The most popular item on the menu was the hotdog
and people ate either on outdoor stools or in their cherished new autos
while being served by teenage carhops.
MR. RAY KROC (1954) first franchisee appointed by Mac and Dick
McDonald in San Bernardino, California. The first McDonald’s built in
1940 by the McDonald brothers (Dick and Mac). Ray Kroc was the
founder of the McDonald’s Corporation. First day’s revenues-$366.12
and the McDonald’s Corporation was created. Quality, Service,
Cleanliness and Value (Q.S.C. & V.) became the company motto. The
100th McDonald’s opened in Chicago. Ray Kroc bought all rights to the
McDonald’s concept from the McDonald’s brothers for $2.7 million.
McDonald’s now has over 20,000 stores in 90 countries.
The company claims it serves 29 million people a day and that a new
store opens some- where in the world every seven hours.

History Of McDonald’s Brand

Mac and Dick McDonald established McDonalds brand in 1940 by using
their surname. In 1962, When Dick McDonald sent Kroc an illustration
of the McDonald family crest, Kroc had it added to the sign as a symbol
of quality, replacing Speedee, the boyish chef character that the
McDonald brothers had developed to designate the Speedee Service
System. When others insisted that the crest was gaudy, the search was
on for a more stylish corporate symbol. Turner fiddled with the logo,
based on the Cdl in the Cadillac insignia, and Schindler used that to
sketch a logo that pictured the slanted roofline of the store piercing a

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line drawing of the golden arches in the form, as it is seen world over.
In 1968, the roofline image was dropped and the McDonald’s name
was added to derive the current logo. Since then logo has not
undergone any major changes. The introduction of the Ronald
McDonald character later developed a human element in the
McDonald’s brand, and provided an instant link with children.

 Offering

A brand is an offering from a known source. McDonald’s carries many

associations in the minds of people: hamburgers, fun, children, fast
food, Golden Arches. These associations make up the brand image.

 Attribute

A Clean Fast Food Brand which tastes the same any where you eat in
the World.

 Benefits

You don’t have to stay hungry for a long time. McDonalds ready to eat
available

 Values

The World leader in Fast Food Restaurants.

 Culture

The brand represents culture of social gathering for families and groups.

 Personality

The World leader, A giant M.

 User

All kinds of consumers buy McDonald’s products irrespective of age, sex all over the
world. One can see all types of personalities in the McDonalds restaurant.
Strategy Of The Management In The Whole
Brand Life Cycle

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Our observation of McDonald’s Brand tell us that McDonalds as a Brand

is in its growth stage whereas, in countries like America and West
Europe it is on its way towards maturity. Following is the stage wise
development and growth of McDonalds Brand.

 1940’s (Introduction Stage)

Despite being a time when there was a hamburger store or a food
franchise on every corner in America’s cities, the business that Ray
was so fascinated with had customers lining up to buy hamburgers,
fries and milkshakes. McDonald brothers in their operation of business
found that they had developed a crude but effective method of
processing food in seconds. This fast food production, combined with
low prices and a limited menu was a run away success.

 1950’s (Development of McDonalds as a Brand)

McDonald’s success was stage on an illusive dream, which Mr. Ray
Kroc had. Despite being a time when there was a hamburger store or a
food franchise on every corner in America's cities, the business that
Ray was so fascinated with customers lining up to buy hamburgers,
fries and milkshakes. This fast food production, combined with low
prices and a limited menu could be duplicated across the country, and
he wanted to be the one to do it.

Mr. Ray Kroc felt that the operations of McDonalds could be replicated
in every franchise. He began developing exact specifications for the
ingredients so that the taste and cooking times would be consistent.
He then went on to develop precise systems that could be documented
to cover every aspect of how the business should be run from cooking
a burger and serving a customer, to washing the floor and emptying
the bins. Ray also knew that his systems needed to extend beyond the
internal operations of the business, and into the external design of the
buildings and how they were presented and maintained. This cloned
and consistent style would maximise the value of the McDonalds brand
through the buildings appearance.

Ray was so committed to perfection, that he set up his own laboratory

to develop the perfect fries. This was a revolutionary experience for
the hamburger industry, and was not seen by many as being
particularly necessary, including his business associates. This was the
success in selling franchises (McDonald’s early establishment as a
Brand)

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 1960’s (The real growth of McDonald’s Brand took off from

here)
Ray Kroc bought all rights to the McDonald's concept from the
McDonald's brothers for $2.7million in 1961.Ronald McDonald made his
debut (used as an Advertising tool) in 1963 which saw a new image on
McDonald’s brand building in the consumers mind in the form of a
human element in the McDonalds brand, and provided an instant link
with children. The rest as they say is history. There would be barely a
man women or child in the developed world who has not tasted a
McDonald’s product. Ray Kroc’s systems were so highly developed and
repeatable that a customer could eat a McDonald’s product, regardless
of which country they were in, and still experience the same taste and
service in a restaurant that was identical to any other in the world.

The growth of this brand has led to McDonalds becoming a global

brand example of that is in 1996; McDonald’s overtook Coca-Cola as
the best known brand in the world McDonalds has 48 percent of the
globally branded quick service restaurants and 63 percent of sales.

 List of acquisitions by McDonald’s that helped further

growth in the market.
• Owns Donatos Pizza with 148 outlets from Michigan to
Georgia
• 23 units of coffee bars in London called Aroma Cafe™
• Chipotle Mexican Grill, a fast growing chain of 56 burrito
shops
• 859 Boston Markets
• Equity stake in food.com

Figures to support growth of McDonalds:

World Wide Restaurants:
2002 2001
2000
U.S. 12,629 12,472
12,380
Europe 4,943 4,421
3,886

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Asia/Pacific 5,655 5,055

4,456
Latin America 1,789 1,405
1,091
Other 1,790 1,465
1,319
Total 26,806
24,818 23,132
Another proof of that is our Indian market, which has provided a good
boost to
McDonald’s advent into India.

 Future Growth:
The opportunities for McDonalds are truly global with a policy of
continuous innovation of product and service spreading the enormous
depth and breadth of the McDonalds brand, which is being well
received around the world.

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Brand Equity of McDonald’s

• In terms of corporate valuations McDonalds is valued at approx. US$39 billion.

• In Marketing terms:

Brand Awareness

The American awareness of McDonalds as a brand is very high. Today

McDonalds is a Global name, famous for its delicious burgers and
mouth watering French fries. The customer’s awareness of the brand
goes back to the earlier days when the McDonalds brothers had
decided to start off with the restaurant. The consistent taste of the Mac
meals is one of the reasons for uniformity in the product. Today the
brand is well known for its affordability and high quality standards.
Over the years the company has managed to live upto its image by
providing prompt service unfailingly, constantly improving the
standards of its burgers and providing entertainment to its target
customers mainly children who are always in the lookout for a fun filled
hour with Ronald McDonald the McDonald’s mascot. These critical
improvements have helped the brand to be popular among the millions
who visit the joint for a quick bite. One of the major recallers of the
brand is the golden arch of the McDonalds logo. The red sign with the
golden M is a symbol synonymous with burgers.

In a market like India, the brand is still in its infant stage. Launched in
1996, the company has done quite well for an initial beginning.
Catering to a customer base which is used to eating the many
delicacies offered by the Indian cuisine which is spicy unlike the
McDonalds burgers, the company has definitely faced a few rejections
from the consumer, but it was not long before the brand took over the
hearts of the younger customers, mostly the average urban teenagers
who found the place very happening and ideal for an evening with
friends.

Perceived Quality

In a recent survey conducted by a leading agency, it was found that in

India, although most of the McDonalds found the pricing of the product
quite high, but the perceived quality of the products were rated as high
as 4 or 5 out of a scale of 5. This shows that the company has been
able to live upto its high quality standards set through operational
excellence.

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Brand Loyalty

From a recent survey it has been found that an average American has visited at least one
of the many outlets in a city at least once in the last year. This can be directly related to
the brand loyalty of the customer. An average McDonald’s consumer visits the store at
least once a week.
CASE STUDY 2: COLGATE-PALMOLIVE
(INDIA)

Colgate-Palmolive is the World Leader in Oral Care with operations in

over 200 countries. Colgate – Palmolive (India) Limited is India's
leading provider of scientifically proven oral care products with
multiple benefits at various price points. The range includes
toothpastes, toothpowder and toothbrushes under the "Colgate" brand,
as well as a specialised range of dental therapies under the banner of
Colgate Oral Pharmaceuticals. These have become an essential part of
daily oral hygiene and therapeutic oral care in India. The Company also
provides a range of personal care products under the "Palmolive"
brand name. Being ranked as India's # 1 brand across all categories by
the A&M-MODE annual survey of India's Top Brands, it is always trying
to maintain its quality and aims at maximum
customer satisfaction. Colgate people working
around the world share a commitment to three
core corporate values: Caring, Global Teamwork
and continuous improvement

Colgate has been rated the #1 brand across all

categories in A&M's annual survey of India's Top
Brands conducted by Taylor Nelson SofreshMODE.
Powered by a rise in its brand 'POWER Score' from
53.91 in the last annual survey to 56.2 in 2001,
Colgate has been ranked the country's #1 brand
since the survey was introduced in 1992.

Eight out of nine times COLGATE has emerged as India's Top Brand.
The survey shows a very strong rural presence underlining the success
of Colgate's distribution and marketing Program.

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A Brief History Of Colgate

A Legend Is Born
The Colgate Story:
1806: William Colgate, sets up a starch, soap and candle business in
New York city.
1807: The company become Colgate 7 Smith with Francis Smith as
partner
1813: The company name changed to William Colgate & Co. with
brother Bowles Colgate as partner.
1857: The founder William Colgate dies and the company became
Colgate & Co.
1937: Colgate Palmolive incorporated in India, launches Colgate
Dental Cream and became the company dedicated to the oral health of
the nation. A commitment rewarded with satisfaction, trust and
goodwill of millions.
Today Colgate is India’s most trusted brand.
1937: Colgate-Palmolive (India) Pvt. Ltd. Was incorporated in 1937.
Introduced products that became market legends.
1937: Colgate Dental Cream was introduced.
1949: Colgate toothpowder and toothbrushes were launched.
1950: Palmolive shaving cream was launched.
1951: Halo shampoo was launched.
1952: Charmis cream was launched.

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1967: Manufacturing operations commenced at Sewri, Mumbai.

1972: Colgate introduced a truly refreshing product – Palmolive After
Shave Lotion.
1976: Colgate launched the “Young India Program”… bright smiles
become brighter.
1978: The Indian public was offered 60% equity in the company, with
shares being listed on the Bombay Stock Exchange. Colgate Palmolive
became a blue chip company on the Indian bourses.
1988: Colgate relocated its toothpowder plant to Waluj, Aurangabad.
1989: Colgate invests in a state-of-the-art manufacturing plant for
fatty acids and soaps at the same location. Also, Palmolive Extra Care
soap was launched.
1990: Colgate Gel was launched & brighter smiles followed. Also,
Palmolive Shave Foam was introduced.
1992: Colgate was rated as India’s No. 1 brand across all categories.
1993: Colgate Total – the most technologically advanced toothpaste
was launched. Colgate Palmolive USA reaffirms its commitment, by
raising its equity from 40% to 51%. Colgate was once again rated
India’s No. 1 brand.
1994: Colgate Calciguard was launched. Once again the Annual Board
Power Survey ranked Colgate No. 1 across all categories for the 3rd
succession year.
1995: Again No. 1 Brand for the 4th year.
1996: Colgate Oral Pharmaceutical products were launched in Asia-
Pacific region. This year, an ISO 9002 certification was awarded to
Aurangabad fatty acid, toilet soap and toothpowder plants. Again
ranked No.1 brand for 5th time.
1996: Colgate Palmolive entered a new category – household care,
with the launch of Axion dishwashing paste.
1997: Colgate Calciguard & Colgate Plus toothbrushes became the
first to receive the Indian Dental Association’s Seal of Acceptance.

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1998: Colgate ranked No.1 brand for the 6th time.

1999: Colgate was rated “India’s Premier Brand” by A&M Magazine’s
annual survey of India’s Top Brands. This was a decade in which
Colgate-Palmolive introduced the best of its products in India. The
Indian consumer was offered top-of-the-line products.

Brand Loyalty
How did it win consumers?
The success lies in the satisfaction, trust and goodwill of their
consumers. They believe, that they can best serve the needs of
consumers through a consistent, fair and sensitive consumers
communication program.
For that reason, Colgate has established Consumer Affairs in 31
locations around the world - many of them with toll-free 800#s. The
mission of Consumer Affairs representatives who answer these phones
is to:

 Listen and learn about consumers in a professional, consistent and

caring manner that exceeds their expectations so that they
experience satisfaction with their products, in all respects.

 Bring consumer feedback to the decision-making process at Colgate

to help improve existing products and develop new products that
will meet consumer needs.

The Consumer Affairs Department in India is staffed

with professional representatives who are
knowledgeable about Colgate-Palmolive products
and welcome the opportunity to hear from

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consumers. To benefit the consumer they have in place a Toll-free

number and helpline.

Environment
The protection of the environment and the health and
safety of our customers, our people and the
communities in which we live and operate is an integral
part of Colgate-Palmolive's mission to become the best
truly global consumer products company. We are
committed to conducting ourselves in a socially
responsible manner and to keeping our business
operations environmentally sound. It is our worldwide
policy to manufacture and market our products and
operate our facilities so that we comply with or exceed
applicable environmental rules and regulations. The
health and safety of our customers, our employees, and
the communities in which we operate must be
paramount in all we do.

These concerns have been translated into the following

guiding principles:

Products
Colgate-Palmolive will provide the public with safe and effective
products and will strive to produce products that have the lowest
practical impact on the environment.
Packaging
To reduce the impact of our product packaging on the environment, we
will work to improve the environmental compatibility of all our
packaging materials. Colgate endorses the worldwide hierarchy of solid
waste management: source reduction; recycling (including reuse);
incineration; and landfilling.

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Facilities
Colgate-Palmolive is committed to the health and safety of our
employees and the communities in which we operate, as well as the
protection of the environment. We will establish and maintain
programs for the operation and design of our facilities that meet or
exceed applicable environmental, health and safety laws and
regulations.

Business
Colgate-Palmolive will consider environmental, health and safety
issues in all significant business transactions, including acquisitions,
divestitures, discontinuance of operations, and entry into joint
ventures. We will also act in a responsible manner with respect to the
environmental protection of the lands under our management and
ownership.

Brand Equity

ATTRIBUTE
A very generic brand. The word Colgate has taken place of the word
toothpaste. Example: In Gujarat, people call Close-Up as Lal Colgate
(red toothpaste) and they call Colgate Dental Cream as White Colgate
(white toothpaste)

BENEFITS

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You don’t have to search for any other toothpaste.

VALUES
The three core values of Caring, Global Teamwork and Continuous
Improvement are put into action at work as well as in communities.
The results are better products and a better quality of life throughout
the Colgate world.

CULTURE
The Code of Conduct reinforces and enhances their corporate culture
and addresses issues of law, ethics and fairness in all their daily
business relationships.

PERSONALITY
Ranked 8 times as No. 1 Brand

USER
A 6 year young boy to 60 year old men in the family uses the brand.

LOGO
The face with a Colgate smile is the logo of the brand.
The face is shown as the globe with a Colgate smile
over it, this represents that the whole world should
smile using Colgate. This indicates a personal feeling in
the mind of the consumer and he is motivated to buy the product.

COLOUR
Colgate has its logo colour combination of red, blue and white colours.
They have not changed the colour combination from the beginning as
these 3 colours have left a mark (impression) in the mind of the
people.

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Code Of Conduct
Colgate people around the world have built a reputation
as a successful company with the highest ethical
standards. Through living our values of Caring, Global
Teamwork, and Continuous Improvement, and adhering
to the highest principles of integrity, honor, and concern
for the environment and others, they seek to:
 Provide safe and quality products of value to
consumers
 Increase shareholder value
 Offer opportunities for personal and professional
growth to all Colgate people
 Fulfill our corporate social responsibilities as a
member of the global community

CASE STUDY 3: TATA MOTORS

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Profile Of TATA Motors

Established in 1945, Tata Motors is India's largest and only fully
integrated automobile company. Tata Motors began manufacturing
commercial vehicles in 1954 with a 15-year collaboration agreement
with Daimler Benz of Germany. Since 1969, the company's products
have come out of its own design and development efforts.
Today Tata Motors is India's largest commercial vehicle manufacturer
with a 59-per cent market share and ranks among the top six
manufacturers of medium and heavy commercial vehicles in the world.

Area of Business
Tata Motors' product range covers passenger cars, multi-utility vehicles
and light, medium and heavy commercial vehicles for goods and
passenger transport. Seven out of 10 medium and heavy commercial
vehicles in India bear the trusted Tata mark.

Commercial vehicle business unit

The company has over 130 models of light, medium and heavy
commercial vehicles ranging from two tonnes to 40 tonnes, buses
ranging from 12-seaters to 60 seaters, tippers, special purpose
vehicles, off-road vehicles and defence vehicles.

Passenger car business unit

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The company's passenger car range comprises the hatchback Indica

and the Indigo sedan in petrol and diesel versions. The Tata Sumo, its
rural variant, the Spacio and the Tata Safari (the country's first sports
utility vehicle) are the company's multi-utility offerings.
The Tata Indica, India's first indigenously designed and manufactured
car, was launched by Tata Motors in 1999 as part of its ongoing effort
towards giving India transport solutions that were designed for Indian
conditions. Currently, the company's passenger cars and multi-utility
vehicles have a 16-per cent market share.
In addition to the growth opportunities in the buoyant domestic
market, the company is pursuing growth through acquisitions (it
acquired Daewoo Commercial Vehicles, Korea, in 2003) and alliances
(it has entered into a tie-up with MG Rover, UK, to supply 1,00,000
Indica’s to be badged as City Rover) in other geographies.

Environmental Responsibility
Tata Motors has led the Indian automobile industry's anti-pollution
efforts through a series of initiatives in effluence and emission control.
The company introduced emission control engines in its vehicles in
India before the norm was made statutory. All its products meet
required emission standards in the relevant geographies. Modern
effluent treatment facilities, soil and water conservation programmes
and tree plantation drives on a large scale at its plant locations
contribute to the protection of the environment and the creation of
green belts.

Exports
Tata Motors' vehicles are exported to over 70 countries in Europe,
Africa, South America, Middle East, Asia and Australia. The company

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also has assembly operations in Malaysia, Bangladesh, Kenya, South

Africa and Egypt.

Brief History of Tata Motors

It has been a long and accelerated journey for Tata Motors, India's
leading automobile manufacturer. Some significant milestones in the
company's journey towards excellence and leadership are given below:

1945 – 1966
Tata Engineering and Locomotive Co. Ltd. was established to
manufacture locomotives and other engineering products. Steam road
roller introduced in collaboration with Marshall Sons (UK). Collaboration
with Daimler Benz AG, West Germany, for manufacture of medium
commercial vehicles. Research and Development Centre set up at
Jamshedpur. Exports begin with the first truck being shipped to Ceylon,
now Sri Lanka..

1971 – 1989
Introduction of DI engines. First commercial vehicle manufactured in
Pune. Manufacture of Heavy Commercial Vehicle commences. First
hydraulic excavator produced with Hitachi collaboration. Production of
first light commercial vehicle, Tata 407, indigenously designed,
followed by Tata 608 &Tatamobile 206 - 3rd LCV model.

1991 – 1995
Launch of the 1st indigenous passenger car Tata Sierra. TAC 20 crane
produced. One millionth vehicle rolled out. Launch of the Tata Estate..
Launch of Tata Sumo - the multi utility vehicle. Launch of LPT 709 - a
full forward control, light commercial vehicle. Joint venture agreement
signed with M/s Daimler - Benz / Mercedes - Benz for manufacture of
Mercedes Benz passenger cars in India. Mercedes Benz car E220
launched.

1996 – 2004
Tata Sumo deluxe launched. Tata Sierra Turbo launched. Tata Safari -
India's first sports utility vehicle launched. Indica, India's first fully
indigenous passenger car launched. 115,000 bookings for Indica
registered against full payment within a week. Commercial production
of Indica commences in full swing. Launch of CNG buses.Indica V2
launched - 2nd generation Indica. 100,000th Indica wheeled out.
Launch of CNG Indica. Launch of the Tata Safari EX Indica V2 becomes
India's number one car in its segment. Exits joint venture with Daimler
Chrysler. Unveiling of the Tata Sedan at Auto Expo 2002. Launch of the

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Tata Indigo. Tata Engineering signed a product agreement with MG

Rover of the UK. Launch of the Tata Safari Limited Edition. The Tata
Indigo Station Wagon unveiled at the Geneva Motor Show. On 29th
July, J. R. D. Tata's birth anniversary, Tata Engineering becomes Tata
Motors Limited. Tata Motors unveils new product range at Auto Expo
'04.Tata Motors and Daewoo Commercial Vehicle Co. Ltd. sign
investment agreement. Indigo Advent unveiled at Geneva Motor Show.
Tata Motors completes acquisition of Daewoo Commercial Vehicle
Company. Sumo Victa launched. Indigo Marina launched. Tata Motors
lists on the NYSE.
Leveraging the Tata brand
The Tata Finance controversy notwithstanding, Tata Sons is making a
concerted attempt to shift focus from a commodity-oriented
conglomerate to a brand-oriented corporate group.

It is an image that has stuck to the Tata Sons conglomerate all these
years. But now the image is in for a makeover. Put differently, the
winds of change are blowing within the organisation's formidable
corridors. The corporate's portfolio is changing from 40-50 per cent
commodity orientation to an equal percentage of brand orientation.

The ambitious branding exercise being undertaken by the Tata Sons

group would include primarily steel, salt and trucks. The perception of
Tata Chemicals, for example, is hardly that of a marketing company.
But Tata Salt, marketed by Tata Chemicals, ranks upfront as a leading
FMCG brand in most consumer surveys, besides, of course, being the
market leader among branded salts.

The marketing makeover exercise is on in full swing.

The moment of reckoning for Brand Tata may have just arrived.

About four years back, some amount of the Tata brand value was
estimated at Rs 3,800 crore. The company has extrapolated that to
arrive at the Rs 10,000 crore figure - and that a couple of years back.

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Consumer perception
Tata’s set to unleash global branding drive

The $11.2 billion Tata Group is planning to unleash a major global

branding initiative.

Tata Sons, the group has selected some key foreign markets to
introduce a brand building drive to give effect to the group’s vision of
becoming a major global brand.

Tata Motors has forayed into the UK markets, TCS has a presence in US
and south-east Asian countries.

The Tata group has fared well on the twin brand values of
‘emotionality and relevance.’

The perception that Tata group companies are not as aggressive as

competitors is gradually changing. It is now also perceived as a more
youthful brand, despite being a 100-year old brand.

Tata Motors is known as a low-cost manufacturer, not necessarily a

high-quality one. The company is looking to provide value for money—
or more car per car.

In fact, Indica has never been rated highly by JD Power, which conducts
consumer-based surveys. In its latest 'initial quality study' in December
'03, Indica was placed fifth, second from the bottom, among the
premium compact cars with 237 problems per 100 vehicles. Wagon R
topped the list with 118. A caveat though: this survey takes into
account actual problems as well as perceptions. Another indicator: for
the UK market, the City Rover has been spruced up quite a bit. Apart
from cosmetic changes like a new bumper and grille, it has different
engine diagnostics and comes with airbags and anti-lock brakes. In

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addition, the City Rovers are petrol-driven, unlike the diesel models
that form an overwhelming share of Tata Motors' India sales.

But even the diesel models of Tata Motors are in for fresh competition.
Hyundai has launched the diesel version of Accent, which it claims is
superior as it has the latest microprocessors-based common rail direct
injection (CRDi) technology that supposedly increases fuel efficiency
and reduces pollution. It also plans to have diesel options for its
forthcoming compact model, Getz, as well as Santro. Maruti, which
imports the engines for its diesel Zen and therefore doesn't find it
viable to make more than 500-900 vehicles a month, is also thinking of
tying up with a global manufacturer for diesel technology.

Revitalizing Brand Tata

The Tata group has launched a deliberate and comprehensive effort to
re-energise its 124-year-old brand equity, and to connect with youth.
Catalyst takes a look at how this is being done.

For the Rs 49,000-crore Tata group, Tata Open tournament T2 held at

Chennai which is sponsored by the TATA is just one visible face of a
deliberate and comprehensive effort to re-energise the 124-year-old
Tata brand. With 80 group companies and its share of controversy and
failures in recent years, the group is still among the most respected
and trusted brands in the country. But it is only recently the group
began a concerted effort to protect and enhance its brand, which it
acknowledges as its "most important asset," and which was valued at
over Rs 10,000 crore four years ago.

"The Tata brand represents assurance, reliability, a sense of

nationalism (and) value for money, irrespective of the product -
whether it is a wrist watch, tea, salt, a piece of software or a car," said
R. Gopalakrishnan, Executive Director, Tata Sons Ltd. "When you have
an asset that size, you have to ensure that whatever you do enhances
the asset's value, and also make it more relevant and contemporary on
a continuous basis," adds Romit Chaterjee, Vice-President - Corporate
Affairs, Tata Services.

In recent years, the group has designed a common logo, centralised its
media buying and PR operations, devised a system for group
companies to pay a fee for using the Tata name, and has aligned itself

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with vehicles that contemporarise the brand and connect with the
youth. The group has committed Rs 300 crore over the next five years
to target the younger demographic.

Towards this end, the Brand Equity Business Promotion Fund was
created about four years ago; a Tata-name company, like Tata Steel,
pays 2.5 per cent of its revenues to the fund, and a non-Tata name
company, like Voltas, pays 0.01 per cent. The money is used to
consistently enhance the brand image.

The group also undertook extensive research a few years ago; every
six months, a brand track study, by Pathfinders, tracks brand
perception vis-à-vis five other major corporate brands, among 5,000
respondents in 13 cities. The study plots the Tata brand against the
others on two metrics, affinity (how close the brand is to the consumer,
and how warmly it is perceived) and relevance (how relevant the brand
is to the consumer's life). On both parameters, the Tata brand has
risen steadily in value since December 2000, when the study was first
commissioned, and continues to be ahead of the other brands.

Two of the primary findings of the research were that the Tata brand is
not perceived as youthful, and that it is not into technology in a big
way. So there is a concerted effort to connect with the youth, and to
communicate its involvement with technology.

According to TATA’s young people are the "consumers, stakeholders

and employees of tomorrow," and to connect with them, the group
uses contemporary media such as the Internet and SMS, and events
and personalities.Its stake in the Barista chain, for example, provides a
popular venue to connect with the desired demographic, and the group
has done interactive sessions with ace driver Narain Karthikeyan, a
brand endorser, at sports bars and pubs in some cities.

Their research indicated that the three most effective vehicles to reach
the youth are movies, music and entertainment, and sports. Movies
were ruled out - although Marg, a Tata group company makes
documentary films - but the group has associated with select music
and entertainment events: it has sponsored a Shakti concert and one
dedicated to Bob Dylan, and considers them big successes.

The group also signed a three-year title sponsorship deal for India's
only ATP tournament, beginning 2002.It also signed on India's F-1
aspirant, Karthikeyan, to endorse some of its brands, including Titan's
Fastrack. The $400,000 Tata Open provides a platform for a host of
Tata products and services, including Titan, the Taj group of hotels,
Tata Indicom and Trent's Westside.They are trying to exemplify the

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`Tata One World' concept more and more, so any marketing activity is
thus an integrated effort. A combination of Tata and MTV is
undertaken in order to make themselves relevant to the younger
generation.The two have a deal to do some programmes on the Tata
Open tournament.

In tennis and motor racing, the group has found very strong
personality matches according to TATA. Formula Motor racing is about
speed, energy, aggression, and fighting against tough international
competition; tennis, too, is about speed, dynamism, aggression, and
slugging it out against international competition in the tournament.

Another focus is B-school campuses, where the group is emphasising

greater interactivity with students, and raising its profile as an
employer. It sponsors the annual inter-collegiate event, Confluence, in
IIM-A, and the Business Leadership Award; its senior managers also go
on lecture tours and present case studies of group companies as this is
where they are going to get our future employees thus ensuring the
Tatas are in the consideration set, along with the consultancy firms
and foreign banks.

In ORG-MARG's recent `Campustrack' survey of most preferred

employers on B-school campuses, Hindustan Lever, Infosys and
McKinsey headed the list of 48 corporates; Titan, Tata Engineering and
Tata Steel were among the companies at the other end. However the
Campus Recruiter Index for the Tata group has improved since the last
time, particularly for TCS, Tata Administrative Services and Tata
Engineering, according to ORG-MARG.

The Tata group was rated highly on the parameters of "good standing
in the market" and "large-sized company," and found to lag in the
aspects of compensation/salary package, and international postings
and overseas travel. "By all accounts, the image of a youthful, techie
corporate seems to belong to TCS and, to some extent, to Tata
Administrative Services. There is still some way to go before we can
say this about the group as a whole," says ORG-MARG.

Internally, too, there has been a concerted effort to create a sense of

synergy and belonging among the group companies. On the group's
Intranet, there are forums for secretaries, HR managers, CFOs and
others to share knowledge and best practices across companies and
regions. The flip side of the coming together of the companies is that a
negative fallout, like the Tata Finance debacle, can impact the image
of the other group companies.

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On the communications front, the group has integrated its activities:

Media Edge is the group's AOR for media buying, and Vaishnavi
Communications handles PR for the largest group companies. Brand
experts say the Tata group is on the right track: today, the brand
stands for trust and integrity, optimism and a dogged spirit to move
ahead.

Although the group has been seen as an ageing patriarch, or a fuddy-

duddy one But, with its increasing consumer focus, its realisation of the
value of the Tata brand name, and its new product and service
initiatives, there is "a sea-change from the `we also make steel' days:
this is the new energy that is driving the group forward. Indeed, the
company's Web site informs: "The Tata name is a unique asset
representing leadership with trust. Leveraging this asset to enhance
group synergy and becoming globally competitive is the route to
sustained growth and long-term success."

Bibliography
While working on this project I visited some of the companies
and they gave me some information. However to support the same I
have done some of the research work from the following:

Text Books:

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 Managing Brand Equity – David A Aaker

 Strategic Brand Management- by Jean-Noel Kapferer
 Brand Equity & Advertising - edited by David A. Aaker, Alexander
L. Biel

Newspapers and Magazines.

 Times of India
Supplement – Brand Equity
 Economics Times
 Business Standard
 Brand Equity ( magazine )

Various websites were also visited such as,

• www.brand-equity.com
• www.businessweek.com/innovate/brandequity/
• www.netmba.com/marketing/brand/equity/
• www.ibef.org
• www.economictimes.indiatimes.com
• www.biz-community.com
• www.biz360.com
Also visited websites of McDonald’s, Colgate – Palmolive & Tata
for case study research.

Acknowledgements

Working on the project on Brand Equity has been an incredible experience for me. For
this very wonderful experience i would like to thank a lot of people without whose co-

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operation and support working on this marketing project would not have been so
pleasurable and interesting.

Firstly, I would sincerely like to thank Mr.J.Venuraj General Manager - Marketing of

ASKRaymond James, for taking out some of his valuable time from his busy schedule to
answer my queries regarding the project.He was extremely supportive and patient. Thus,
he was a great help and enlightened me due to his depth of knowledge on the topic and
goldmine of information.

And last but not least our Head Co-ordinator of BMS in our college Prof. Gehna
Hingorani for her guidance and help in this field whenever required. If it was not for their
encouragement and support, this project would never have been possible and I would
have been deprived of a vast treasure of knowledge.

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