During the third season of the Indian Premier League or IPL, millions of viewers across India were enticed with the possibility of a new life and to live it up, at least virtually. It may appear strange but the dream of the new is being built by the old. Older than the nation’s independent history, the soaps to aerospace engineering group, Godrej, introduced its own version of a virtual life. Modeled on the lines of Second Life, GoJiyo from Godrej is an attempt by the 112-year-old group to connect with India’s youth, the biggest consumers of today and of the foreseeable future.
This isn’t a one-off exercise. It’s a part of the strategy that began almost two and a half years ago when the Godrej group went for a makeover and introduced a new, fresh brand identity with distinct citrus, sky and ruby colours. ?The objective for the master brand relaunch was to make it contemporary and relevant to the demanding and youthful mindset of the Indian consumer,? said Tanya Dubash, executive director and president (marketing), Godrej.
Coincidentally the re-branding exercise of Godrej happened in the same year as the launch of India’s most successful commercial sports marketing venture, IPL. Seeing the potential of the property, the company used the high decibel event to the hilt each year. The first season introduced the new face of Godrej, the second saw the company telling the consumers its technological prowess with the aerospace commercial and the third, the launch of the virtual website.
?With the kind of viewership the IPL attracts, it presented the appropriate platform to showcase the wide range of Godrej offerings across the board. This also reinforced the very concept of a Godrej brand franchise which has been known but never emphasized in a cogent, concerted manner,? added Dubash. Though the company declined to share how much has been spent on the re-branding exercise, a look at the advertising expenditure of just one of the listed entities, Godrej Consumer Products Ltd (GCPL) indicates that the amount would be substantial. The advertising expenditure almost doubled in FY10 over FY09.
The house of Godrej is buzzing with energy, hungry for growth and being relevant to today’s consumer. The first half of this year has seen hectic activity at the company headquarters in Mumbai. The year began with the listing of Godrej Properties, the real estate company founded in 1990, which was followed up by overseas acquisitions. Currently 25% of the group’s revenues come from overseas. Going by the speed at which acquisitions have happened, it clearly indicates that the company is wanting to increase its revenues from overseas businesses. In the first half of this year, the company has made five acquisitions.
However, Godrej Group chairman Adi Godrej says all these deals coming through in the first quarter is pure coincidence.
?Part of the market research also showed that we need to reposition our strategy, what we offer to consumers and what we offer to employees. The positioning was one of higher growth. And that growth is to be achieved through organic and inorganic routes. It was a conscious strategy on market expansion and brand reposition,? said Godrej.
?It is what the company had outlined a year ago, of pursuing inorganic growth opportunities. The focus of GCPL is on the markets of Asia, Africa and Latin America and on three product categories, personal care, hair care and household care,? said Anand Shah, sectoral analyst with Angel Broking. This is what Godrej terms as the 3by3 strategy. In addition the company has also in place ?One Africa? strategy, which simply put means the whole continent as a land of opportunity. The company is applying the ?Hub & Spoke? model for Africa wherein expansion will take place through having one hub in west, east and central Africa and in Nigeria.
The Godrej group was once considered to be in the same league as that of the Tata’s and the Birla’s ? the two other generations-old business houses of India. But the group had lagged behind in recent years. That is now changing. ?They are catching up on the game. There is a new aggression which is visible in their communication and businesses,? said Shah. He further adds that the company has overtaken companies like Marico and Dabur. GCPL today is the second biggest FMCG (fast moving consumer goods) company in India, next only to Hindustan Unilever. After acquiring Indonesian company Megasari Makmur, it became the second largest insecticide maker in Asia outside of Japan. The company has now set the target of becoming the second largest in the world.
The company is categorising its product portfolio under five verticals ? master branded, platform branded vertical, sub brand vertical, endorsement vertical, and corporate assurance. The master brand vertical included products where the Godrej brand name takes prominence, this includes the locks. Platform branded vertical is where there is a unique translation of the concept of brighter living. Under this category are brands like Eon (consumer durables and electronics range) and Interio (the home products range). Then there are brands with which Godrej shares an equal space. These are clubbed under the sub brand vertical and include the likes of Cinthol. The endorsement vertical is where Godrej provides a calibrated support as in the case of Good Knight. And finally there are brands where the group only provides corporate assurance. So when a consumer buys the product Hit, there is little that the brand shares with the Godrej group, but she is assured of a quality product.
The launch of the master brand was an indication of things to come. Of the young generation in the family taking on a pivotal role and leading the transformation of the company. What needs to be applauded and indicates the intent behind the re-branding is the consistency with which the group has communicated the same. ?Most brands tend to bring about the change, carry it for six months and then get out. It has decided to be re-engaging, re-invigorating the brand over a period of time,? said Sanjeev Bhargava, chief operating officer, Draft FCB.
Having said that, some believe there are inherent risks when such a big change is brought about in one stroke with a brand that has been there for decades. There are those who think a staggered approach would have been a better option. ?Heritage brands must be very careful the way transition imaginary is used. From 0 to 10 is a big jump to take. You move from 0 to 2 to 4 to 8. Very few companies have the patience to do that,? said Harish Bijoor, brand strategy specialist. He sees the new Godrej homing in on the missed opportunities of the past.
Also, the company seems to go a bit overboard with its technological prowess through its ad campaigns. ?There is an anxiety that can be sensed from the outside. You play a small role in rocket sciences and through that portray your cutting edge technology. It comes across as stretching too much,? says Bhargava.
But the company says the approach has worked well for the company. ?Our own market research shows that this has helped the brand tremendously and the business performance has also been great,? says Adi Godrej.
The Godrej group’s brand portfolio comprises products which are legacy brands in themselves. Take for example, Godrej locks or bathing soap Cinthol. To an average consumer, Godrej meant the products. For the first time ever, it embarked on the journey to have a unique group branding which is visible with every product of the company. ?It was challenging. The new positioning is based on what were the common points and what were the divergent points,? says Ashutosh Tiwari, executive vice-president?strategy, Godrej Group.
Godrej worked with Interbrand, a leading international brand consultancy, to study the Godrej brand across employees, consumers, investors and business partners and came out with the new branding strategy. ? ‘Brighter Living’ was selected as the essence of our brand as it drew upon the universal insight of Indians being optimistic ? a belief that progress is possible, wanting to progress, wanting to experience progress and the lifestyle that it brings. This essence was also felt, empirically, to have very strong business linkages ? something that was even validated through research,? said Dubash.
The group is satisfied by the response it has received. ?What we have found is a humungous increase in the consumer perception as measured on the five parameters of awareness, resonance with our value, affinity, visibility and impact on consumer behaviour. Over the last 20-month period, the quantum of improvement has been more than 30%,? said Tiwari. Since the brand launch, sales have grown 10% more than the average weighted growth of the industry, he added. The company cites ORG data which indicates that while the industry compounded annual growth rate in all appliances category was 20%, Godrej stood at 26% for the last five years. The recent acquisitions have added a number of new brands?especially in hair care and insecticide space?to Godrej’s portfolio. ?There will be a cross fertilization of technology, brand and products?, says Adi Godrej on the integration.
The Godrej Group has indicated that it has completed the acquisition process for the time being and it now focus on consolidation. But initiatives on the branding side will continue. ?The Godrej Group would invest significantly in the Godrej master brand as part of a systematic plan for creating a strong Godrej brand franchise through strategies for product and brand development, retail channel strategy, communication and talent management,? said Dubash.