Racing to the finish line

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Wanted: CEOs from India

Golden Tobacco Company launched a new brand called Style in the early 1980s, at the beginning only in the western region. Its pack had a simple but stylish design with red and white as the dominant colours. Its blend was made up of mainly flue cured Virginia tobacco of medium grade but flavoured to heighten its taste. As a company, Goldten Tobacco had two specialities—one of them was deft usage of flavours in their blend formulations. Right from day one, this brand hit the hawa of success just like a gentle breeze for about two weeks, and ten suddenly it turned into a gale. Golden Tobacco’s marketing management was smart enough to sniff success, and commenced extending its distribution at a relentless pace, without any caution of a possible slow down owing to dissonance, or competitive reaction or different preferences in different markets. This kind of risk-taking was the second speciality of Golden Tobacco. Within a short time, this brand had hit a century and was taking business away from some of our brands particularly in the West.

About the same time, Vazir Sultan Tobacco, an affiliate of ours had meticulously developed and marketed an elegant brand, Charms King size, deftly positioned as the exponent of the then popular theme of freedom, liberation, fresh style and taste. The product, brand, position and campaign were in splendid consonance, crafted skillfully and jointly by Sunny Pillai, chairman and managing director, and BP Singh, marketing director of this company. The brand instantly caught the imagination of the youth of India, and was a runaway success in its test markets. In a planned way, its distribution was extended to cover the metro markets, and then more rapidly to other large towns. Its planned extension met with enthusiastic response, and soon it began to wean away smokers from some of our well-known and well- established brands.

In the same vein was the launch of red Regent Filter about which I have already mentioned earlier. It was also an instant success in the large Calcutta market, and its demand quickly spread to the eastern markets emulating the trends of Calcutta. This brand was soon posing a threat to our brands in these areas.

In all these three instances of successful competitive forays, we felt quite helpless, as we really had no relevant brands that could contain the rapid growth of these brands. We began to develop such brands, but building new brands was a time-consuming and hard task. It took us months before we were able to craft them to marketable proficiency. These were, Now to contain Style, Capstan Filter Kings to challenge Charms and Wills and Virginia to checkmate red Regent, but the time gap of our defencelessness was very worrisome and I experienced several sleepless nights.

It is another matter if your counter-action does not succeed fully. At least you have some satisfaction that you have engaged the rival and perhaps slowed down his brand’s advancement. But, if you have no ready weapons, then for some precious time, you sink into an abyss of inaction. You naturally feel bad being in this situation, but also a part of your sales force in the area of strong competitive activity tends to get demoralised and lose confidence in the ability of the core team to keep pace with competition. Besides, such doubts also arise in the mind of senior managers of other departments and divisions, and some of them can be quite uncharitable in their criticism.

After these three incidents, I vowed to myself that I would not allow such a situation to happen again. So, I made a simple decision to set up three ‘make-believe’ competitive teams, one for each competitive company, to figure out what kind of brands they would think they need and market them during the next three years, and in fact, take another step forward to think out as to what kind of brands we would need to counter them. I knew that some people would regard such an exercise as ‘mission impossible’, as I have commented earlier that every organisation hasa small number of shakerkhors (permanent doubting Thomases). The only way to deal with them was to ask them as to what would they do in such circumstances. Once questioned, they invariably shirked, avoided giving a direct reply and backed out.

We went ahead with this plan. The teams took up the challenge, and diligently applied their minds to explore the thinking of competitive minds for figuring out which kind of brands they would like to launch. Based on the reports given by these two teams, our product development group identified the need to develop nine brands to counter the likely competitive thrusts in the future. Over the next six months, these nine brands were fully developed and kept ready for launch within 30 days of notice. Thereafter, this method of being in the state of readiness to counteract competitive launches became a matter of regular practice in ITC.

Sometimes, these brands were also marketed to take advantage of opportunities even when there was not any competitive activity. I believe in keeping a bagful of brands ready for launch as an essential fortification of the market position.

Reprinted with permission from Pearson Education

Book: Marketing to Win

Author: Satish Mehta