You are here: Rediff Home » India » Business » Special » Features
Search: The Web
  Discuss this Article   |      Email this Article   |      Print this Article

India Inc's high-profile makeovers
Govindkrishna Seshan in Mumbai
 · My Portfolio  · Live market report  · MF Selector  · Broker tips
Get Business updates:What's this?
November 20, 2007
You won't find too many brand consultants speaking up in favour of brandname changes. They will tell you that all too often, the equity of the brand is higher than the value of a company's hard assets (think Coca-Cola, Google, Nestl� and you'll probably agree).

Besides, it's an expensive and arduous process, difficult to execute and implement, and the end result doesn't always satisfy everybody.

India Inc clearly doesn't share that view. There have been several, high-profile name changes in 2007 and interestingly, many of these have been corporate rebrandings, rather than consumer product name changes.

Hindustan Lever [Get Quote] became Hindustan Unilever; UTI Bank [Get Quote] is now Axis Bank and Hutch is Vodafone; there are Jet Lite (formerly Air Sahara) and Simplifly Deccan (Air Deccan); and even Birla Plus has migrated to UltraTech. What was the thinking behind these transformations? The strategist takes a look.

The renaming game

If rebranding is a process fraught with difficulty and poor success rates, why opt for it at all? Jet Airways [Get Quote] didn't really have a choice. When it acquired Air Sahara, the agreement between the two airline companies clearly required Jet to surrender the brandname within three months.

Air Deccan's transformation into Simplifly Deccan is also a result of Kingfisher Airlines picking up a 26 per cent stake in India's first low-cost carrier.

In fact, according to research in the US, mergers and acquisitions are the cause of over a third of all corporate name changes.

Birla Plus's brand migration to UltraTech is also a fallout of an M&A, but with a difference. When the Aditya Birla Group acquired L&T's cement division in 2004, it rechristened the market leader UltraTech.

A couple of years down the line, though, it faced a rather different problem. The group now had two large, powerful brands - UltraTech and the homegrown Birla Plus. Grasim Industries [Get Quote], which owns both brands, was duplicating its efforts - and expenses - in building these brands. Obviously, then, it made sense to migrate one to the other.

That solution wouldn't have worked for the airlines, though. Jet and Kingfisher are perceived as premium airlines, while the acquired brands are comfortably ensconced in the low-cost carrier (LCC) space. Well-defined brand identities that emphasised the difference in the offerings of both airlines were, therefore, critical.

One is better than two

For Grasim Industries, the decision to integrate its national cements brands was a no-brainer.

"Rather than invest in two brands, we decide to promote a single brand to save us duplication of efforts," says O P Puranmalka, group executive president, Grasim Industries and chief marketing officer, UltraTech Cement [Get Quote].

What wasn't as simple, though, was deciding which brand to keep: both UltraTech and Birla Plus were strong brands, with distinct identities and loyal customer bases. Neither had a pan-India presence, but between them, they covered the entire country.

Grasim roped in ACNielsen to help it make the choice. The consultant spoke with engineers, masons, architects and end-consumers and concluded that UltraTech was more likely to appeal as a national brand - it was seen as progressive and possessing cutting-edge technology. Besides, brand migration would be achieved relatively easily since the core proposition of both brands was superior quality.

Still, the fear of losing customers to rivals is everpresent. All communication on the UltraTech rebranding, therefore, bears the Aditya Birla group's logo - an effort to reassure consumers that nothing has changed, except the name.

"We are relying on the group's lineage and equity to make the transition smoother," points out Puranmalka. 

Same difference

Where Grasim is emphasising that the only change from the earlier Birla Plus is in the brandname, the two airlines are playing up the differences in the product offerings. They are hugely different, in any case.

Air Deccan built its business on dirt-cheap fares and no-frills operations, while Kingfisher refers to its passengers as guests and its services as aviation hospitality. "We were at opposite ends of the spectrum," admits Vikram Malhotra, head, marketing, Kingfisher Airlines.

Similarly, Jet's decision to acquire Air Sahara was driven by the higher growth rates in the low-cost sector (20-25 per cent, compared with 10-12 per cent in the full-service segment).

 "We wanted to be present in all categories. Hence we bought Air Sahara to enter the LCC segment," says Gary Kingshott, acting CEO, JetLite.

Interestingly, even as Jet and Kingfisher make it a point to keep their new acquisitions separate, they have been quick to use the stronger equity of their existing brands to support and bolster the newcomer's rebranding. That's good strategy, believe marketing consultants.

"By relying on their stronger brands, these companies have sent a positive message," says Harish Bijoor, brand consultant and CEO, Harish Bijoor Consults. "Consumers will see this as an upgrade in service and be willing to give it a try."

At Deccan, for instance, the old, joined-hands logo has given way to the kingfisher and ticket counters, aircraft, crew uniforms, boarding cards have all changed colour - from the earlier blue, white and yellow to Kingfisher's red and white. The association with the premium airline will help upgrade Deccan's image, hope executives from both companies.

Research conducted a few months before Air Deccan's relaunch as Simplifly Deccan had shown that while the airline was top-of-mind among LCCs, it was considered an operational failure - too many delayed and cancelled flights. Kingfisher, on the other hand, was perceived as having high service standards.

"The Kingfisher brand has huge equity and by lending parts of its image to Deccan, we are reassuring consumers," says Malhotra.

Ramki Sundaram, officiating CEO, Simplifly Deccan, shares his view. "Our new look is symbolic of the synergies we draw with Kingfisher. It will manifest in enhanced service efficiency and a better product offering, while affordable fares will stay," he declares.

There's a risk in the rebranding, though. "Kingfisher and Deccan have completely different brand propositions. Giving consumers the perception that they will get the same service on Deccan as they would on Kingfisher will dilute the latter's image," warns Unni Krishnan, country manager, Brand Finance. Kingfisher executives are aware of that danger.

That is why the full-service airline plans to raise its product offering another notch, to make the "experience" the brand differentiator between it and Simplifly Deccan.

Where the LCC will now provide an extended menu and complimentary water, Kingfisher plans to hold on-board food festivals, offer greater variety in in-flight entertainment (it has already increased the number of channels from four to six) and personal valet services.

"Anyone who flies both airlines will know the difference," says Malhotra.

Jet is playing out its rebranding of Air Sahara on similar lines. It is hoping for a ruboff from the Jet brand, but the name is about the only thing the two airlines have in common -  corporate colours, logo and crew uniforms are all different.

And where Jet offers a full-service airline, JetLite is a value carrier (a notch above LCCs) that offers only basic food and beverages. JetLite's crew has retained the saree worn by Air Sahara staff (different colours, though) based on customer feedback that low-cost travellers are more comfortable with traditional Indian clothing. "They are intimidated by crew in western outfits," says Kingshott.

Tell the world

No rebranding exercise is complete without a large-scale, seen-wherever-you-go, multimedia campaign. Industry estimates place the Hutch-Vodafone rebranding campaign at around Rs 100 crore (Rs 1 billion), while the UTI Bank-Axis Bank name change is believed to have cost the company Rs 50 crore (Rs 500 million).

That's the figure being quoted for the Ultratech brand transition as well. Grasim booked around 150-175 hoardings across 30 cities to announce the new name, apart from television commercials, print ads and point of sale material.

"We had to send the message to everyone - from businessmen from top business houses, to contractors, architects, masons and the public. That is why we needed a multimedia campaign," explains Puranmalka.

Simplifly Deccan also launched a high-decibel, 360-degree campaign to announce the rebranding, including teaser ads - in print, outdoors and on television - that mentioned ontime performance, destination choices and freebies.

The exception was JetLite's low-key launch. The company ran a narrow print and outdoor campaign, sticking to just four or five newspapers and select locations in eight cities. The rationale? "We have chosen to go with a soft launch because we want to first revitalise our processes, let our consumers feel the difference and then talk about it," explains Kingshott. "It is better than raising expectations and failing to deliver."

Tell them at home

Communicating the makeover to potential customers is essential, no doubt, but it is equally important to ensure buy-in from those actually implementing the change. "Rebranding is not just about putting up banners and hoardings to communicate a new brandname," cautions Bijoor.

"The brand needs to deliver its new identity at every touchpoint." That means employees have to ensure the brand is living up to the new promises it is making. JetLite and Simplifly Deccan are working towards that - Deccan has already stopped outsourcing ground staff functions, in a bid to better control performance and quality.

It has also initiated facilities like telecheck-in and roaming agents who issue boardings passes and serve water to passengers, to streamline operations and reduce delays.

While the airline CEOs were meeting and motivating employees, at Grasim Industries Puranmalka's team was also travelling across the country to ensure the brand migration went off smoothly.

The only difference being, the UltraTech team was speaking with distributors, wholesalers and retailers. "You can advertise all you want, but unless you meet the traders in person and allay their fears, you are sure to lose sales," says Puranmalka.

Powered by

More Specials
 Email this Article      Print this Article

© 2007 India Limited. All Rights Reserved. Disclaimer | Feedback