Monday, 26 July 2010

Did you shop from Coca Cola Footware or Mercedes Benz book store?

Apple Inc. A word enough to keep the techno savvy world on its toes. Innovation is what you look for after hearing the brand name. McDonalds’: I M Loving it – first thought in mind, a burger with cheese slice peeping out from the circumference, Coco cola – comfort, lifestyle, enjoyment! Nokia, Google, IBM, Toyota, Disney, Intel, Mercedes Benz, Jaguar, Cisco, BMW, Honda, Nike, Sony, Citi and I can go on and on! Yes, these are world’s best of the brands and the brand name reminds sweet memories associated with the products. It is about lifestyle. Happiness. Comfort.

Would you like to buy clothes from Tata clothes Limited or Tata Apparel Unlimited? How about Maruti Book store? Microsoft Shoes? Did you try new Bata Laptops? You must have tried Philips Jewellery? Oh, how can you miss Accenture watches? Haven’t tried yet! How about Colgate coconut Oil? Amul Dantmanjal? Very effective manjan and keeps your teeth utter butterly deliciously white! I bet you must have tried Birla Milky Bar? I know you are planning to give your girlfriend an Audi diamond ring! I suggest you rather don’t even think of doing that. Neither would you get the girl nor would you get your diamond ring back. So what exactly do I want to say? Why I am trying to tarnish some of the world’s biggest and bestest brands! The case in point is Reliance Industries (Mukesh Ambani) and its brand extension strategy. Out of place to say the least!

Brand extension is a marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category. A company tries to do this to leverage the already created brand image. For example, LG – Television, Refrigerator, Mobile phone. The company has an image of high quality electronic durables. So brand extension helps it in establishing products in different product categories. Another example could be Park Avenue: Shirts, After Shave, Belts, Soaps and Razor. Consumers associate the image of a new product with an existing product under same brand.

Now, Reliance Industries, which requires no introduction, is usually associated with Petroleum, oil and refinery. The solid brand associated with execution, efficiency, propelling high growth for the economy. The brand extension of Reliance to ‘Reliance Fresh’ is in itself diluting the value of Reliance Industries. Reliance Digital – doesn’t connect with electronics. The dot on the letter ‘i’ in Reliance symbolises a drop of oil. How would Reliance digital appeal to techno savvy youth of the nation? It is difficult to associate same brand with as diverse businesses as oil, books, clothes and jewellery. Each product has different emotional appeal which a same brand cannot address. When we say Airtel, the fantastic Airtel music composed by AR Raheman, rings in our ear.

Products name should have emotional connect. Emotions drive us to buy more. No matter how many Levis Jeans somebody has, he would go for one more. A Nike shoe gives satisfaction to my legs. Apple iPhone gives a style statement to the users. Would you ever leave your home to shop from ‘Reliance Footprint’, a footwear concept, ‘Reliance Jewels’, a jewellery concept, ‘Reliance TimeOut’, a books, music & entertainment concept? There are the Cross Words, Westsides, Pantaloons, and Mobile Stores! Why would you want to indulge in shopping that won’t give you ‘that’ satisfaction! And Reliance offerings dosen't end here. ‘Reliance Living’, a homeware, furniture, modular kitchens, furnishings concept, ‘Trends’, an apparel & accessories concept, ‘Reliance Wellness’, a health, wellness & beauty concept, ‘iStore by Reliance Digital’, an exclusive Apple products concept!

I respect Mr Senior Ambani for pure vision, planning and execution. If he wants it, he does it! The big thinking! But sometimes you need to put emotions into product apart from money, reach and power. The brand extension ‘Reliance’ to clothes and book store won’t ever allow them to emotionally connect with people.

fOoD fOr ThOuGhT: The process of creation of a brand image sometimes takes decades. Possession of successful brands give people confidence. They see their projections in the brands they hold or possess. If the brand extensions have no advantage over competitive brands in the new category, then it will fail. Hope somebody from Reliance Industries is reading this!


  1. Diversification seems to be the mantra for Indian businessmen..
    One of the most succesful company is ITC. I really respect them for that.

    I am not good in business...but i guess the reason for diversification is indian businessmen are too frightened that they will go bankrupt some day if they have a single vertical

  2. Karan:

    These days every brand is opting for diversification. You say that it takes decades but just look in these outlets. I was surprised how people love anything new. Last month, passing by a Reliance footwear showroom, I was amazed to see it buzzing with so many people and the parking was a mess. Brand-loyalty is there amongst people who are a bit older but the younger generation laps it all up whenever something new is opened. The quality of course is not taken into consideration but 'new' matters.

    When people are ready for grabbing anything that comes their way. brands also don't think twice about diversification. But time has to prove the worth of the extended brands.

    Joy always,

  3. One Amul dantmanjan please?

    Btw did you know Justin Timerlake got a whopping 20 million from Mc Donalds for his single "I'm loving it"

  4. @Chocolate lover: :D

    @Jon: On the other hand, any businessmen diversifies into new industry, seeking bigger opportunities and higher growth. RIL's foray into broadband services is a perfect example.

  5. @Susan:
    When we talk about brand, it should convey the essence for which it stands. So much thought and views goes behind creating a brand, nurturing it. When I want sports shoes, Nike or Adidas are the showrooms I look for... There are many private labels but brand conscious segment wont bulge from there fav.
    Outlets are burgeoning these days because of huge consumer base and rising demand and apetite of people... but a 'Reliance Time Out' wont become what 'Crossword'is!

    We youth embrase 'new' initially but in the long run, looks for quality... :)

  6. @Purba: It surely will make your teeth utterly butterly deliciously white! Thats nice piece of info, I wasn't aware of that... thnx :)

  7. A case in point here is Reliance Trends. A retail mall like Globus, it doesn't even record 1/3rd of the footfall that Globus receives. Why would I buy from Reliance Trends when I can get what I want from the many shops on Hill Road and Globus? But more importantly why would I bother going to reliance when all my clothing needs are met elsewhere through well established brands!

  8. But why not? If they come out with good stuff, why not?

  9. When I was young there were very few brands and the word ' Cadbury' meant chocolate, 'Surf' washing powder and 'Colgate' was you buy stuff to just check it out!

  10. nice food for thought!
    "But sometimes you need to put emotions into product apart from money, reach and power"
    r u an economist?!!

  11. @Nishant Singh: Precisely yes.

    @Ana_treek: If they come out with good stuff, yes they stand a chance to make a mark. But who are the potential buyers? Who are the target audience? You create a brand and communicate the qualities of the product through it. You build a trust and reliable factor. Reliance Trends sounds like a store which stuff goods... it doesnt communicate to whom it is targeting and what it offering...

  12. @Nalini: Very true... Fewer choices, simpler was the life...

    @sakhii: Thnx a lot! I am a consultant but yes economics is an area that fasinates me!

  13. Nice post. lol

    "Everyone can do something but not everything"

  14. I agree that brand-name should connect with product. But Reliance has established itself hence I guess they wouldn't want to experiment with a name change! Also, a change in name would mean building the brand from scratch.



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