Building bonds in the market

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Updated: February 03, 2015 2:57 PM

How will you advance if you’re saddled with a commodity and limited production capacity?

How will you advance if you’re saddled with a commodity and limited production capacity? Brand the commodity. This could sound crazy, but that’s exactly what JK Paper did. A commodity like paper was selling, anyway. And was in short supply, since capacity additions were nearly impossible in the licence raj. Still, JK marketed a part of its produce as JK Bond paper, at a premium. Later, as photocopying came into vogue, it started the JK Copier brand. But these were branding exercises hanging essentially on product quality.

A real breakthrough for JK Copier came after it started a loyalty programme (LP) called Super Sitare for its 200 odd dealers ten years back. The programme was simple: dealers who sell JK Copier would get different ‘star’ status and redeemable reward points. The LP has worked wonders for the company in multiple ways. Its dealership network increased to 2,500. Sales became predictable. Demand and margins rose. Several brand extensions of JK Copier were launched at different price points. And in the end, JK Paper went in for a capacity expansion.

“A big advantage is that we could bring discipline in the entire marketing chain”, says Santosh Wakhloo, vice-president (marketing & sales). The loyalty programme allowed JK to track and analyse sales from the headquarters, since the LP software would let the company know who is selling, at what prices and to whom.

“We have outsourced 99.99% of the job to Evolve Brands (the agency handling the programme). We only do the discussions here”, says a smiling Wakhloo.

But LP is not for the weak-kneed. It doesn’t bring any tangible results immediately, like in a sales promotion event. “It’s not a short-term
solution. It’s a gradual brand building process, but a stronger process”, says  Wakhloo.

Over the years, JK has built a strong chain of loyal partners that it held steady even in “market fluctuations” and beat competitors who tried to wrest the market on price. “This concept really cliqued”, says Debasish Ganguly,  general manager (marketing and communications).

Evolve Brands’ founder director & COO Harish Motwani says typically a company spends 0.5% to 5% of its turnover on LP, depending on the volume, and SMEs can also run such programmes. He cites the example of an electrical goods company that has enrolled over 3,500 electricians in its loyalty programme.

“Once a company gets a set of partners/customers who buys from it, it brings down the overall marketing cost”, says Motwani, adding. “Without branding you can’t grow. Many companies that have started as SMEs have grown mutifold through branding.”

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