THE BRAND WAR
Indian brands now have to compete with the array of MNC brands. It is very difficult to identify even a handful of Indian brands that can be one up to the MNC brands listed. And, it is obvious that there is a good deal of inequality between Indian brands and MNC brands. In this article we are discussing in some detail on the comparative strengths of the MNC brands over the Indian brands The MNC brands will remain an uphill task for the Indian brands for quite some years to come.
MNC Brands Enjoy Several Strengths
The MNC brands enjoy several strengths such as:
* Deep pockets that support brand building over several years.
* Superior marketing/brand building skills.
* Ability to adapt to the local conditions
* Back up of superior technology
* Experience gained from operations in several markets around the globe.
Deep Pockets: The MNC build their brands in a systematic manner. They spend heavily on advertising. They also invest on distribution, which helps strengthen the brand further. They are also prepared to wait for a long period for reaping the dividends. The last one perhaps, is their strongest relative advantage. By the same token, the worst disadvantage of Indian brands vis-Ã -vis the MNC brands is that the former cannot wait for long for the flow of profits; their pockets are not deep.
The MNC are also able to launch new brands faster. They are also better equipped in renovating ongoing brands. This too is related to the high level of resources at their disposal.
Ability to adapt: The MNC also adapt their products, their brand positioning, as well as their pricing and advertising to suit local requirements. For example, in some cases, initially, the MNC brands were overpriced for the Indian market and failed to garner significant market shares. In some other cases, the MNC lacked products, which were suited for down market segment. But, the MNC have been learning quickly and adapting to the requirements of the Indian market. P&G, for example, moved down the value proposition curve, with extensions to its top end, Ariel Micro System. It launched Ariel Green at a 20% lower price and followed it up with the still lower-priced, Ariel Super Soaker. It offered the latter at a price that was just one-fourth of the premium brand Ariel Micro system.
Even in positioning and advertising, they try to adapt to the local requirements. The Korean companies, marketing refrigerators in the Indian markets, for example, try to sell their products on platforms like health and nutrition, which appeal to the Indian customer. Even their conditioners and microwave ovens dwell on the health aspect.
Ability to nullify the advantages enjoyed by Indian brands: It is not that Indian brands did not have any strength whatsoever. They did have some strength, but they were not durable against the MNC attack. For example, the Indian brands had the advantage of operating in the home turf; they were culturally closer to the consumer and they were well entrenched with strong distribution channels and a reasonable amount of brand patronage and loyalty. But, the MNC were able to easily nullify all such advantages enjoyed by the Indian brands.
Again, at least in a few select cases, Indian brands had the advantage of lower cost of production. Therefore, theoretically, they could compete on price. But, the trouble was that these brands were often perceived to be of a lower quality compared to the MNC brands, which whittled away the price advantage. Moreover, the MNC were able to narrow the cost/price differential and also redefine the quality standards. This way, they could improve the price-performance equation of their brands relative to the Indian brands. They often forced the Indian brands to upgrade and when the latter did so, their cost advantage disappeared.
Experience gained from several markets around the globe: The MNC as a class has the benefit of experience of operating in a variety of countries and cultures. They draw upon these resources while competing with the Indian brands. The MNC basically operate on the principle that no culture is alien.
Indian consumers have no particular affinity for Indian brands: Another relevant factor in this battle of brands is that the average Indian consumer does not seem to be guided by Be Indian-Buy Indian slogan. He has no hesitation to patronize the MNC brand when he sees an advantage. In fact, he seems to be keen to spend his rising disposable income on newer, world-renowned brands. What additionally favors the MNC brand is the perception in his mind that it has more quality.
In the last 2 or 3 years Indian Brands have become innovative to appeal to Indian customers and now one can say hat they are almost on par with the MNC. The innovation is in the form of Quality enhancement, advertising, Distribution channels, incentive to big buyers, special discount, 30 to 40% extra for the same price e.g: shaving creams, soaps, cosmetic products etc., Also in commodities like Rice the Indian brands are offering some other commodity free (1 kg sugar free for 10 kg of rice) or same commodity equal qty free during non peak seasons etc. Such flexibility with the speed of Indian brands the multinationals are not able to adopt at this juncture. May be they do it in future. The good thing out of all this is the Indian consumer is able to get better quality and at a very reasonable price.