Corporate Branding - A New Paradigm for India

chillibreeze writer — Ankit Dhingra

In the 1970s, India was ruled by conglomerates, some of whom still wield significant power. The family-owned enterprises were, and still are, gigantic brands. They are still some of the biggest and most respected companies in 21st century India. We are talking about the TATAs, Ambanis (Reliance), Birlas, and the Godrej family.

But in the 1990s, the country saw the introduction of brands where the identity of the owner was smaller than the identity of the brand. No one knew who owned, manufactured or distributed the brands they touched and used many times each day. We knew Close Up as toothpaste, Ariel, Wheel and Surf as different detergents, Lifebuoy and Lux as different soaps, Coca Cola and Sprite as different soft drinks. The nature of their manufacturer, or the company owning the brand, wasn’t considered important given the low involvement associated with such Fast Moving Consumer Goods (FMCGs).

All this was soon about to change due to the ever increasing impact of external influences on the brand perception residing in the consumers’ mind. Now, the advertisements from the company weren’t the only source of information about a company. There were the news channels, the NGOs, the politicians, and even the spiritual gurus who had a view about things as important as cold drinks.

This led us to the stage where India had to embrace the concept of Holistic Branding, where the brand managers tried to manage all avenues of information a consumer was exposed to. This led to significant spending on Public Relation Departments, and also on Corporate Social Responsibility (CSR). CSR is the new buzz word for generating long lasting brand loyalty, as consumers not only want a better product, but also a better company behind it. Further, due to the nature of CSR, where only one corporate identity can be highlighted, its prudent for companies to associate their brands with the parent corporate. Hence, if Procter & Gamble launches a Rs. 1 crore child education initiative, ‘Shiksha’, it also makes big news about it, using its partner Sony Television, and all its friends in the media. This also includes signing brand ambassadors for supporting a cause.

Having built a responsible, Good Samaritan image, it was simple logic for the corporate to use some source bolstering (a phenomenon where the potential users assume positive traits for a brand and a product based on the information about the credibility of its owner). The trend started in India with Hindustan Unilever Limited (HUL) where all the television ads for its brands ended with a Unilever logo. Similar strategies were adapted by P&G, Coca Cola India, PepsiCo India, Godrej, Con Agra Foods, Parle Agro, among many others.

The case for Coca Cola India’s full fledged corporate campaign stemmed from multiple reasons. They were under attack for excessive pesticide content. This was based on tests performed by the Centre for Science and Environment (CSE), which released reports in 2003 and 2006, which were devastating for the Soft Drinks major. Spiritual gurus like Baba Ramdev were also taking a free shot at their products, and they had no deep connections with the consumers that would make them stick to the company’s brands.

This is when they realized that their social responsibility, as perceived by the masses, was much higher than what they had realized. This led them to focus on issues like carbon & water neutrality, rejuvenating old dry bawaris, and trying to portray a more caring, and humble image. All their brands were pompous, and hence, a separate campaign was designed to drive home the point. The success of such efforts still remains to be seen, but their plans to set up a separate division for its corporate social responsibility (CSR) activities with a corpus of $10 million sure seems to indicative of their long term stand.

Thus, we can conclude that today, due to multiple information sources and their potential threats, most brands could do well with some parental corporate branding. This makes much more sense affect for the corporate too, as the protests, the anguishes, the losses, and all the transactions are with and the corporate much more than the brands they own. Hence, today the corporate has to do it straighten out all what it does, and build a brand for its own self, and not just for the products it sells. Those who would succeed in doing it, are the ones who would succeed with all their brands. And those who don’t will always be susceptible to a CSE-like attack ruining their image, sales and profitability.

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—About our writer:

Ankit,

The Author is an engineer pursuing management from IIM Lucknow, and has a strong interest in Marketing, Branding, Strategy and Advertising. The 2nd Year student went for a summer training on an international assignment with one of the biggest global FMCG players. Other interests include travel, cricket and politics.

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