Friday, January 25, 2008

TVS, where dost thou go? (Part-2)

Part-1 ended like this:

With so much working against it and without a lot of money, how is TVS gonna survive this onslaught by the biggies? By focussing and by choosing its category and by being the first in that category. If there's no defined category left empty, then it had better create and define a new category and be the first there. How?

So, how does TVS create a new category? And what could this new category be?

Hero Honda led the foray in the big/premium bikes segment by launching the 150cc CBZ. Around that time, Bajaj had just about decided that it wasn't scooters for them; bikes were their future. Hero Honda was all over the place with its economy bikes; Bajaj was also present in that segment but was only a challenger at best with little success. The premium segment had just been created. Yamaha's 2-stroke performance bikes were losing ground to external factors and were being phased out. So the premium segment was all open and so was the performance segment too. For a while, in the Indian context, think of premium and performance segments as one (for obvious reasons). But back then these were the only prominent segments. What did Bajaj do? While the premium segment was still in the making it launched the Bajaj Eliminator - a 175cc cruiser. Very soon it launched, 150cc and 180cc Pulsars. Thankfully for Bajaj, it wasn't doing anything great in the economy segment. While Eliminator got drubbed with the launch of Yamaha Enticer, the former combined with the Pulsars did enough to place Bajaj as a high-end bikemaker.

In branding, it's always easy to bring a high-end brand to lower levels but mighty tough to make the lower-end brand a high end one. Bajaj hadn't established itself so well in any segment, so when it did something worthwhile at the higher-end, it was perceived accordingly. Hero Honda, on the other hand, suffered partially because of its strong association with economy segment. However, the biggest clincher for Bajaj was the fact that it launched a 180cc variant of the Pulsar; bigger than 150cc CBZ. That built the brand Pulsar. Other elements like price and fuel-efficiency played their part. In other words, the competition was repositioned. CBZ was outclassed.

Can TVS Apache outclass the Pulsar? Pulsar has variants like 150cc, 180cc, 200cc and 220cc. If TVS makes 160cc Apache RTR, it doesn't threaten the Pulsar dominance in anyway. It's simply surviving as a competitor; not calling shots as a leader. Pulsar is perceived as the first to the pole in 150cc to 220cc market and Bajaj has focussed unwaveringly on this segment. Needless to say Pulsar is touted as the brand to aspire for instead of the Karizma which was the first mover but suffered with the strong Hero Honda tag attached to it.

TVS needs to do more. Can it reposition Pulsar by quickly introducing a 250cc or 300cc bike before Bajaj introduces one? If TVS manages to do so, it will be the one to call the shots and therefore be perceived as a leader at par or a little ahead of its competitors. Therefore, option-1 for TVS is to be the first to launch a higher end bike in the range 250cc to 300cc.

Let's get to the option-2 through some pictures. Have a look at these bikes which are ruling the markets right now. Observe the common elements in design:

Hero Honda Karizma 225

Sporty, right?

Hero Honda CBZ Xtreme

Sporty, right?

Hero Honda NXG

Sporty, right?

Bajaj Pulsar 180

Sporty, right?

Bajaj Pulsar 220

Sporty, right?

Bajaj Discover

Sporty, right?

Bajaj XCD

Sporty, right?

Bajaj Platina

Sporty, right?

TVS Apache

Sporty, right?

TVS Star City

Sporty, right?

TVS Flame (will be seen soon on roads)

Sporty, right?

Can design be a differentiator? In bikes, definitely! All the bikes have fairing of some sort, the tank extends from headlight to the tail. Machines seem covered. The bikes exude sportiness, much like the bikes seen in races.

What should TVS do? Bring in 'naked' bikes. Yes, much like RD350 and RX100 that became the flag-bearers for Yamaha. Since they are no longer there in the market, TVS has the ground ready to conquer. In fact, it might be a gold-mine if looked at with serious intent. These bikes could exude street-sport, not track-sport. Got the point? That's option-2.

Any other option? Yes, Bajaj is emphasizing that Avenger is a 'trip' bike. All Royal Enfield bikes are 'trip' bikes. While these cruisers are fighting the battles for the highways, can TVS look at the city-roads? Which means, TVS should launch city-cruisers. Yes, and call them city-cruisers'. Alternatively, TVS can make bikes for easy-riders and leave sport-riders for other players.

It really is now or never for TVS. Are you listening?

Wednesday, January 23, 2008

Thomas Scott is no bang!

For starters, Thomas Scott is a men’s clothing brand. From what one can gather – based on their advertisements and their retail outlets – it is meant to serve in the office-wear and formal-wear category.

Who is Thomas? Is he a Scott? Well, then who is Peter? Is he from England? Yes, you’ve got the drift. There’s Peter England. So there’s Thomas Scott. A me-too brand. Though it’s difficult to understand what the reference to Scotland means any which way... Did the brand managers or marketing managers consciously even think of the hint of Scotland in the name? Is it just my figment of imagination? Whatever, the name’s pretty indicative. What it means is still unclear. A battle lost even before it started.

Having talked of names, there are other brands too which sound like personal names of some Englishmen- John Miller (private brand found at Pantaloons) and John Players (brand introduced by ITC and endorsed by Hrithik Roshan). These brands have struggled to garner any significant chunk of the market after all the money they’ve spent. I’ve heard people say, “I am wearing a Zodiac” but not “I’m wearing a John Players” and therefore, my conclusion.

There are other brand names – the successful ones - based on personal names. Allen Solly. Louise Philippe. Van Heusen. These names might not carry much power in themselves but they are catering to well-defined segments.

Allen Solly – Friday Dressing
Louise Philippe – Regal Crest (Reference to Kings)
Van Heusen – Power Dressing

What about Peter England? Reasonably priced office wear for young male executives.

So, what about Thomas Scott? The ads say “Attention is inevitable”! Yes, I did pay attention to the ad! Another message in the ad is “A retail group venture of Bang Overseas Ltd.”! Is it? Thanks for informing. So now?

What about John Miller? What about John Players? Does anybody know?

There are many other men’s garment brands which draw inspiration from European names.

Fritzberg. Heidelberg. Oxemberg. Indicative of Swedish-German origins.

Oxford. Cambridge. Reference to English Universities!

Alright. You want great sounding names. European names sound great. Europe is known for great fashion designers and great designs. But then, when you want to sell to masses, you have to stand for something. Unfortunately, you have personal names which sound great but they have neither any intrinsic reference to a definite segment nor have they been consciously attached to definite segments by the marketers.

Bang Overseas Ltd. has come out with an IPO. Going by its marketing strategy in India, it isn’t a great long term bet at the moment. Because marketing is business and business is all about focus. Thomas Scott hasn’t found its focal point yet.

Friday, January 11, 2008

TVS, where dost thou go? (Part-1)

Here's a list of big players in the biking arena. If you are just given a few words to describe what each of these bike-makers stand for as brands, your list might look like this (in alphabetical order):

Bajaj - Exciting bikes
Hero Honda - Economy & Reliable bikes
Honda - ? (Scooters perhaps or perhaps....)
Suzuki - ? (Well, they make 125cc bikes and they've launched 125cc scooter too but...)
TVS - ? (Very likely scooterrettes and they are also making good bikes which can be called performance bikes but... Oh, well they make economy bikes too but...)
Yamaha - Performance bikes

You might agree that Hero Honda stands for economy and reliable bikes. That explains their failure in premium-segment bikes.

You'll debate on the descriptions given for Bajaj and Yamaha. Doesn't Bajaj stand for 'performance'? Yamaha doesn't have anything related to 'performance', then how can it be described as such? I'll clarify these questions by asking a few questions in turn.

Yamaha hasn't launched anything that can closely called as 'performance bike'. Right? Right. But if it does launch something in the range of 150cc to 200cc, will you go rushing to the 2-wheeler dealers? Yes. Why? Because you might think, finally, Yamaha has launched a performance bike. Current understanding is such that higher-end bikes are supposed to mean that. Yamaha's heritage has been just about performance in this country.

Bajaj, on the other hand, has been producing bikes which perform but not at the cost of hurting the biker's pockets. Let me explain the point again.

Take two 150cc bikes - one from Bajaj and the other from Yamaha. Assume your intention is to buy a performance bike. Which one will you buy given a free hand? Most likely, the latter. Now, put a few constraints; you want a performance bike but reasonably priced and with decent fuel-efficiency. Which one would you go for? Bajaj, isn't it? So Bajaj is 'exciting'. Yamaha is 'performance'. Yes, that's the power of the brand. In spite of doing practically nothing for almost a decade, the brand owns that word (if not the category) and that's its biggest asset.

Only three brands have defined the segments clearly. The other three aren't interested in defining but they are interested in fighting hard in the battlefield! Wow!

I would like to think for the best underdog in the Indian biking arena. TVS. But why TVS? It is the third biggest bike marketer in the country, behind Hero Honda and Bajaj but ahead of HMSI, Yamaha and Suzuki. The first two are making tonnes of money, in hundreds of crores. The last three are Japs and are sitting on huge successes, global reputations and of course, loads of money to splurge even when they would make losses. TVS, the odd man, made a profit of just a few crores on their hundreds of crores of sales. As exciting as the biking industry is in this country, it also requires lots of money to put into R&D and new product launches. In such a scenario, TVS looks to be in trouble in spite of good bikes. And that's because its space in the India biking industry isn't defined. Churning good or superior products isn't a problem. But if those good products are in the category where there are established leaders, then you have little to gain .

TVS is spread too thin. It makes Star City in the economy segment. Star claims better mileage than Splendor but sells in the ratio 1:10. It has Apache in the 'exciting' segment but Pulsar seems to outsell it 5:1. It makes scooterrettes (where it has been fairly successful with Scooty and its upgrades) but fights against the likes of Honda. In fact, Scooty was earlier defined as a proper scooterrette but these upgrades have only taken it closer to the scooter category where Honda has dominance. Another strategy which could force the company downhill. TVS also has Victor GLX and Flame in the premium commuter 125cc bikes segment where it fights with Bajaj (which is leading the pack currently with a lot of innovation), Suzuki, Hero Honda, HMSI and Yamaha. With so much working against it and without a lot of money, how is TVS gonna survive this onslaught by the biggies?

By focussing and by choosing its category and by being the first in that category. If there's no defined category left empty, then it had better create and define a new category and be the first there. How?

Tuesday, January 8, 2008

Peter England, who?

The other day I met a friend who holds the distributing rights for one of India's very well-known garment brand Peter England. On the occasion of an alumni meet, he had set up a display kiosk for Peter England ELITE at Entrepreneurship Development Institute of India.

Talking about brands and branding strategy, in response to a rather skeptical remark regarding the fate of ELITE by one of our friends, he retorted, "Do you know how much it takes to create a new brand in the market? Rs500 crores!"

I agree. You would also agree. However, it isn't just about money. Or if marketing managers think that branding is just an easy way of minting money, then brands are doomed and consequently, companies too.

Peter England has been around for many years now, perhaps at least a decade. What is Peter England? One would say an inexpensive and smart formal/office wear brand for young male executives. Then what's Peter England ELITE? Well, it is likely to be expensive formal/office wear brand for young male executives.

Okay, so what is Peter England after launching Peter England ELITE? It is expensive and smart and inexpensive formal/office wear for young male executives! Add to the confusion; ELITE is just one of the latest extensions of the brand. Read the story below. This little article published in THE HINDU is worth reading:

Aditya Birla Nuvo’s Peter England Fashions and Retail Ltd is to launch Peter England family stores housing men’s, women’s and kids’ wear and accessories by mid-next year, said Mr Aloke Malik, President.

“The work for the stores is in progress and we might finalise something by December. We will open a limited number of large format mid-value stores of 10,000 – 15,000 sq. ft. and want to leverage the equity of Peter England,” he said.

The store is targeted at age-band of zero to 35 years and will house the company’s brands in segments where they have a manufacturing facility. For kids’ wear, it might have to outsource the garments, he added.

“We have an aggressive retail expansion plan and aim to grow in quality as well as additional stores,” said Mr Vikram Rao, Business Director, Textiles & Apparels.

Peter England forayed into the premium and sub-premium segment of shirts, with Peter England Elite, targeted at young office goers.

Aggressive ad campaigns are in the loop to promote this new range through outdoor media, print, on ground methods and the Internet, said Mr Venkataramani K, Brand Director, Peter England. Ranging from Rs 995 to Rs 1,395, the shirts and trousers of Peter England will be available in its flagship and select retail outlets. The new brand is concentrating on the mid-priced aspiring customer.

The first phase of Peter England Elite is being launched in Delhi, Mumbai, Bangalore, Pune and Nagpur, while countrywide distribution will be in place by next 6-8 months.

The company garnered revenues of Rs 270 crore in the current fiscal and plans to create a Rs 500-crore Peter England brand within the next 3-4 years, said Mr Malik.

Fantastic! What grand plans! Make a Rs270 crore brand into Rs500 brand in 4 years. Wow! How? Leveraging the equity of Peter England... And how is that? Have a look at what the messages include: 1. Aggressive retail expansion 2. Grow in quality 3. Additional stores 4. Peter England family stores housing men’s, women’s and kids’ wear and accessories 5. The store is targeted at age-band of zero to 35 years and will house the company’s brands in segments where they have a manufacturing facility 6. For kids' wear, it might outsource the garments...

Helloooooo! It's unbelievable. Whoever asked the marketing managers and brand managers to meddle with Peter England... Ask a common male office-goer about Peter England and he might tell you what it is - inexpensive and smart formal/office wear brand for young male executives. After all the strategy given in the article, what will Peter England be? A family retail store with expensive/ inexpensive, economy/sub-premium/premium formal/office wear for young male office goers, with some garments for women and with some garments for kids and with some accessories also! Imagine! How creative and multi-faceted!

It's an amazing story of how a brand created with so much focus and such clear definition over almost a decade is now being torn apart left, right and center. Excuse? Leveraging the equity! Make it Rs500 crore brand! Sir (Management/CEO at Madura Garments), you might want to do anything with it but Peter England's gonna mean the same thing as it has meant to consumers. If you force a change, do so at your peril. Short-term you might raise consumer's interest and curiosity and perhaps your sales, medium-term or long-term you are gonna kill what the brand has so strongly stood for and lose your ground as well as leadership to more focussed and opportunistic competitors in a growing market. Let Peter England be what it is. You want to capture other segments, do so by launching a new brand or wait till it is an opportune time to launch something new. Meanwhile stay with Peter England (the way it has always been), Allen Solly, Van Heusen and Louise Philippe and enjoy the fruits.