This was almost 25 years back when all of was familiar with
HMT watches. They really ruled the market and even I remember in their slogan
they called them as TIME KEEPER TO THE NATION.
And their advertising message said if you have the inclination we have
the time. And when they launched the
quartz brand they said if we you have the inclination we have the exact time. Here they were emphasizing the exactness to the
correct time a quartz watch is supposed to deliver. But in 1987 when the Tata’s
came to the market with Titan they came with lot of planning and a well thought
out strategy to rewrite the watch industry which they ultimately did so. And
within a matter of few years they dislodged HMT and just surged ahead by
bringing in variety and innovation in all their marketing efforts. Be it
distribution or product innovation they did it differently to only be the
undisputed king in the watch business. From a watch brand they have moved into
to a whole range of brand extensions and the latest being the launch of perfumes.
By the time we entered the 90’s with liberal policies we saw
several categories where private brands entered and started giving tough time
to the PSU brands. Let me recollect a few categories where private brands have
made deep inroads.
1.
Lubricants:
This category was primarily dominated by the PSU brands due to their strong
hold on distribution. As no private brands were allowed to sell their products
through petrol stations. But that did not stop from private sector to push
their products. Castrol was the first to aggressively market their product.
Their strong communication strategy helped them gain good visibility to get
into the consideration set. They used the bazaar trade for distributing their
products and also cleverly opened outlets opposite petrol pumps to make easy
availability of the product which gave the car owners one more choice apart
from what the fuel station was stocking. They kept constantly innovating and
improving their product offerings through strong R&D and became partners to
many OEM automobile manufacturers. Today the private sector must be holding all
combined, close to 40% market share in this market. We have several brands like
Gulf, Elf and Tide water that also had their own share in this market.
2. Insurance: Life insurance was synonymous with LIC. In
fact the lingo that was used is LIC kar leya…..Also since this PSU brand was
backed by government the credibility scores were very high which helped them to
gain loyalty as against the private
brand. But today desk research say’s that LIC has only 50% share and the
combined private insurance brands control the balance 50%. There are at least
10 brands which are fighting to get their pie in this highly competitive market
which has lot of government norms that one has to adhere to. Most of these
private brands have pumped in huge marketing spends to create awareness but
besides that they also bought in the use of online tool for people to buy
polices which is still lagging behind with the PSU brands. With the rapid
penetration of internet and a younger population that will rule the Indian
market these private sectors will have an upper hand to woo this new
generation?
3. Airlines: The Indian skies were ruled
by the Indian Airlines (Now Air-India). But over a period of time starting 90’s
we saw the downfall of the Indian Airlines as private operators came in. There
was huge shift towards private airlines and the result being that Air-India
only has 20% market share according to published reports. In the airlines
business service matters a lot and that’s where Air- India dipped very low to
surrender their market. Besides the constant staff and pilot issues also eroded
their equity over a period of time. Plus the continuous newness in the service
and the competitive pricing by the private operators never allowed Air- India
to regain their glory which they sat on for many years.
4. Telecom:
BSNL and MTNL were the household name in the wired connection when
it came to telephone. One had long waiting period to get a permanent
connection. At one point of time having a telephone was a luxury but starting
90’s with the advent of mobile connections it very soon became a necessity.
While both the PSU brands are also present in the mobile space but not sure
what is their market share. Nearly 85% market share is held by the private
brands. Here again technology and
aggressive marketing helped these private sector brands to hold the market with
lot of ease as there is no fight or competition from the PSU brands.
While red- tapism and vested political interest has been by
and large the deterrent for PSU brands to grow. We must also keep in mind that the mindset of
Indian consumers have shifted and changed in the last few years. The new breed
of Indian customers seeks value in whatever they buy and hence it is important
for both the PSU brands and private brands to get their value proposition
right. With internet within the reach
the narrowing of buying decisions have become easier as price comparison more
product information are being provided by many aggregators. Unless there is
huge overhauling done by PSU the story will not change and private brands will
just keep on cashing in.
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