Understanding how Indian brands survive in several product segments


There are now multinational brands in cellphones, in every segment of online marketing, organized retail, consumer durables, a vast number of consumer products and what have you. Yet, the local products have also held their own. Many are good Indian brands. They are very well known for their excellence in quality and value for money. Some of the strategies adopted by such companies are discussed in some detail in this article.

Introduction

Indian brands are present everywhere. There cannot be a single exception. They represent the spirit of Indian entrepreneurship. They represent the various ways in which they have conquered the imagination of customers across all classes and even countries. A glimpse of the strategies adopted by such companies or even establishments reveals that they have systematically gone about expanding the reach of their services by building very good competencies. More specifically, the focus here is a) Indian brands in consumer products b) Indian brands in consumer durables c) Indian brands in services d) Indian brands in hospitals and e) Indian brands in several emerging businesses.

Indian brands in consumer products

This is a very insightful and superb study for any interested MBA student. He or she has to just go to the nearest mini supermarket where one can feel and see the product and then buy it. He or she would be stumped to see at least five or six local brands giving a tough competition to the established brands. For example, even in pickles, in the whole of South India, there are four big brands -- Mamblam Iyers from Chennai, Sakthi Masala from Erode and the Aachi brand from Chennai and 777 from Chennai. Yet, one can find smaller packets of local brands of pickles neatly packed in small plastic covers. These are the local brands with bare minimum marketing costs. The retailer stocks them because they are much cheaper than the established brands. There is a big market for such products as the lower and middle classes simply lap these up. These are simple refill packs and can last for just four days. The quality and taste are good too. The profit margin may be less. The retailer stocks them for the big volumes generated.

Take sweets. Krishna sweets dominates Coimbatore, parts of Chennai and is present in other cities as well. Yet, there are local brands of what is called "paalgova" (a sweet made of sugar and condensed milk). The local brands dominate the scene as they are good and perceived as value for money. They come from the cottage industries. Shampoos, the local "bar" soap which gives tough competition to the likes of even the established RIN bar soap from Unilever limited, and even unbranded biscuits sold in the smaller retail shops are examples of competitors in the Indian scenario.

In fact, this is a pan-India phenomenon. This writer has seen this in Ahmedabad, in Ranchi and even in places like Trivandrum. There are several local brands done by the cottage industries. Lays, the famous potato chips brand which is sold like hotcakes in the metro cities faces huge competition from the hundreds of freshly prepared, coconut oil based chips in the city of Coimbatore. One has to see it physically to believe it. The taste is very good and the cost is also less. This is the secret of local brands. The customer gets to feel it. Most of the brands call themselves "hot chips". Period.

ITC is a superb example of an Indian company that has built a superb portfolio in biscuits by taking on the likes of Britannia. There is a product from ITC that simply matches every single product from Britannia. Yet the formidable reputation and the marketing prowess of ITC is what makes the Sunfeast brand a huge success. The Indian story will continue. There will be no end to such fierce competition. Organized retail cannot enter the smaller towns as the overheads will simply kill the industry. They will forever operate only in big cities. In the smaller towns and villages, the matter of convenience and personalized relationships will hold the key. There are shopkeepers who can open their shops after 1 PM-midnight to serve a customer who would want 100 mosquito coils to take care of guests in a local marriage hall. This is absolutely not possible in organized retail. The reason? The retail shop owner lives in his house, just behind the retail shop. Hundreds of local brands will survive in such environments.

Indian brands in consumer durables

Some two decades ago, the Japanese giant Suzuki was involved in a big spat with TVS Motors. It wanted the majority equity stake. The latter refused to play ball and instead brought out the foreign partner. The rest is history. TVS-Suzuki was gone. TVS Motors is today the third largest consumer durables company, selling very successful scooters and motorcycles brands and also exporting them. That this company belongs to the famous TVS group -- the largest South Indian conglomerate of South India, very well known for their quality, is a big plus.

Hero Motor Corp has grown from strength to strength after it broke up with Honda. Though Honda is also active in India, Hero still dominates the motorcycles market, since the quality is simply world-class. It also has a superb reputation for honesty and integrity. Blue Star is an Indian brand. So is Onida. And so is Havells. These are brands that have superb products in refrigerators and ceiling fans. These are brands that will simply dominate the Indian landscape for all times to come.

Titan watches is an Indian company. It belongs to the Tata group of companies. Its products are simply world-class. The secret is to manufacture products of very good quality. When the foreign competitors cannot come in so easily, the Indian company grows from strength to strength. There are so many competencies in production, marketing, supply chain management and the like. This is how the Indian companies start growing from strength to strength.

Indian brands in services

Based out of a small town called Kumarapalayam near the city of Salem in Tamil Nadu, is the superb KPN bus service. This brand is the single largest private sector operator of Omnibuses in India. Their buses are superbly maintained and the sleeper buses are very comfortable. Of course, their cost is also quite high. Unable to match the competition from this private sector operator. the Tamil Nadu Government has also introduced similar buses. Very recently, the Government has also reduced the prices of their night services.

However, KPN continues to grow. There has been just one ghastly accident some years ago. where save for one passenger, the entire lot of passengers were burnt to death. This has taught the operator several lessons. The drivers have been taught several tips on how to drive safely since then. The private sector operator does have competition from Praveen Travels and a smaller competitor called Rathi Meena. However, KPN is the undisputed market leader. KPN offers immediate cancellation services and takes off even if the bus is not full. ( this very rarely happens, though). The value-for-money offering has to be experienced to know the strength of the brand.

Cut to hotels. Saravana Bhavan from Chennai today has branches in UK, USA, Singapore, Dubai, and other countries as well. This writer has tasted the Dosa in Dubai and it tastes exactly the same as it would in T.Nagar, Chennai!! Behind such excellence is a big story of standardization. This group has drawn the attention of several Total Quality Management (TQM) experts. Since the preparation process is a trade secret, all that is known is the entire process is very much standardized throughout the world. This is no mean achievement. Adayar Ananda Bhavan, the nearest big competitor has followed the same route. It has diversified its reach outside Tamil Nadu. It has a presence even in Bangalore. The standardization process is almost similar.

Blue Dart and DHL dominate the courier industry for the specific reason that their Corporate clients do not mind paying the extra for timely delivery.

The success story of Sundaram Finance from the TVS group, which has a big fixed deposit portfolio is built on the traditional trust of the TVS group. Its services are totally computerized. In fact, there are thousands of senior citizens who park several hundreds of thousands of their life earnings with this group.

Indian brands in hospitals

The story of Indian branded hospitals is a superb case study in itself. There is this famous Apollo hospitals group from Chennai. Decades ago, when several children were burnt to death in a fire in a private school in the small town of Kumbakonam, the Chairman, Pratap Reddy, took on the mantle of nursing back to health all those children who survived the tragedy, free of cost. Many of these children have gone on to build their own careers. This group has a superb reputation for quality. The Sankara Netralaya Eye hospital in Chennai and the Arvind Eye Hospital from Madurai, have patients from around the world. Apollo gets patients even from the USA. The Narayani group from Bangalore has a similar reputation. These are big brands. Yes, they are very costly but the value for money is something that cannot be denied.

Indian brands in several emerging businesses

Zomato is a big Indian brand. The service is famous for its delivery practices. Good hot food from tie-up restaurants reaches customers in the metro cities. Swiggy is another such brand that is making deep inroads in every single market it operates in.

Such innovations in terms of serving the customers and delighting them will continue. There are now online services for every single need. For example, bankbazaar.com offers a huge range of services free for its customers. Its gets paid through the business it generates through its services. Since the customers are so large, there is a big market for such services. In the years to come, there will be online services for everything. One can easily track documents at any time. There are bound to be innovations galore in this business. The hundreds of start-ups n every in every single space is now mind-boggling.

Conclusion

There is bound to be a market for so many products and services in various categories as explained above. Indian products and services are no more known for their shoddy quality or service quality. The private sector participation in so many areas is a welcome sign. The economy also improves as there are too many businesses and each of these businesses has the potential to create both direct and indirect jobs. For instance, if the hotel business keeps booming, the downstream businesses like suppliers of vegetables, spices, purified mineral water, fruits and so on will also grow by leaps and bounds. The resulting cash flow that gets spent in the economy will bring in much better cash flow as well.


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