Lessons for Indian companies: Distinct and consistent positioning. Thums Up retained its “adventure positioning” for several years now. Its ads always featured action stars like Akshay Kumar and Mahesh Babu. Whether it was bungee jumping or jumping out of the window to get Thums Up, it was always “adventure”.
“The entrepreneur knows best” Ramesh Chauhan sold out. Was this the right decision? Could Thums Up have survived with the limited resources Indian companies typically have? Chauhan claimed in an interview that he couldn’t fight two big enemies. However, there are several Indian brands that survived competition from MNC brands. Nirma, Hero, Reliance and TVS are some examples. Conversely, Mafatlal’s Nocil sunk because of not selling out at the right time. In short, to exit or not is a difficult question.
Lessons for MNCs:
When to nurture, when to kill: no fundamentalism in brand-related matters A perpetual dilemma for an MNC is when to build a local brand and when to bring in a global one. A good strategy is to give comparable resources to both the brands, get them to fight it out in the market and allow the best brand to survive. Frito-Lay might do this to Uncle Chipps. Gold Spot has been replaced by Fanta but the fan mail on mouthshut.com seems to indicate that its constituency is intact. The lesson seems to be that there should no fundamentalism in brand-related matters. If a local brand has potential to grow it should be retained and nurtured.
Did you show an alternative?
MNCs headquartered in far off lands might be tempted to replace local brands. But do Indian CEOs protest enough? Sanjiv Gupta, ex-CEO of Coke India, strongly protested against Thums Up’s withdrawal and halted it. T. Thomas, head of HLL in the ’70s, launched a detergent cake much against the wishes of the HQ. But for his boldness, Rin would not have been launched. Indian CEOs need to protest and show a viable alternative for customers.
Lessons for both
Look for present and future substitutes “Who is my competitor?” This is a killer question in marketing. It is beguilingly simple but it somehow always manages to fox you. Sprite, a clear lime drink from the Coke portfolio, reportedly overtook Pepsi in the last quarter of 2008. The competition is no longer just between Coke, Thums Up and Pepsi but between cola brands and the clear lime brands.
What is the demographic, sociographic, psychographic shift that caused this? Movies never saw IPL as their competitor (though because of IPL matches, movie halls ran empty, especially when India played. As far as the customer is concerned, both were three-hour “tamashas”). The lesson is straightforward. Look for present and future substitutes. They can get your goat tomorrow, if not today.
Prof. Y. L. R. Moorthi (Marketing), IIM Bangalore.
