The dilemma in this case is by no means rare. Stripped of the brand names and storyline, the marketing posers are essentially two — is there a segment/need that requires a product model that is not in current line-up and can that segment be accessed by existing brand or needs a new one?
It is too easy, and often expedient to quickly mimic a competitor’s successful model’s specifications and address a gap in portfolio line-up. And also too easy to see benefits of marketing efficiency to also conclude that riding on existing brand with an appropriate moniker should pretty much do it. Except that, close on the heels of the first two questions and a solution such as this one will come the third one — of investing behind its commercial success and the returns on that investment as well. Let us look at the issues that seem to be characterising choices in this case.
1) There is the MNC brand versus Indian brand. The company has knowledge that “MNC brands were being bought by different kind of households”. Then, there is Jahnavi’s first reaction, “Rani?” as well as the narrative that describes the Walia kitchen. A kitchen that was expanded in size with island clearly points to someone who enjoys and wants to spend time on cooking and is setting it up as such not as a workshop for chores. And in that kitchen, the modern Elwood appliances sit on the island while where cooking is taking place, there is first Sumeet and then, its replacement (mistakenly a pass-off brand in this story).
2) There is the performance for Indian food. First, the expectation of powerful motor (delighted reaction “Oh, 750 watts!”) and then, the results delivered (“Oooh, is she swingin’!” “And how quickly the rice was ground!”) and overturning of preconceived notion (“I don’t believe this!”) at the first demonstration of that performance.
3) There is the attitude towards materials. Plastic versus steel. Steel, the long standing Indian material of choice for pretty much everything versus the new plastics. Natural metal versus artificial plastic and its related connotations.
4) And underlying above two, is the choice of industrial ruggedness versus delicate sleekness (regarding Elwoods: “Your mixies are good for milk shakes when kids come home” and regarding Sumeet/Suneeta “Zyada der bhi chal jata hai”).
5) And finally user interface (regarding Sumeet/Suneeta, “There is no this and that to get it working” versus confusing numbering of buttons). Elsa’s personality like a stylish memsaab also suggests knowledge and care in handling versus Rani, which serves and supports, and is an extension of self (“noisy worker like me”) and not difficult to understand.
There is finally one other question of Rani’s market footprint. Clearly, the brand has travelled outside its home territory of Andhra and not just nearby but all the way to Kolkata — suggesting that it seems to be fulfilling something uniquely for coastal cuisine along the Bay of Bengal besides Karnataka. Is rice grinding, as done by Jahnvai as the first task, critical and the deciding test for mixer- grinder-blenders (MGBs)?
There may also be a belief around expertise — a brand built by those who know Indian cooking and specialists in just that versus kitchen appliances from a company that makes TV, fridge, coffee machines, etc.
In this household itself, there is an indication that Suneeta and Elwoods were not perfect substitutes. Both existed and seemed to be doing different things. And it is not just a wattage issue. It is a total experience issue that is a combination of the five issues discussed earlier.
How should Elwoods decide?It is useful to list all possible choices (mutually exclusive, collectively exhaustive) before being tempted to choose what looks like the right one. For example, here are some in this particular case.
a) Choose to participate with equivalent model, and ride on Elwoods national brand and retail footprint to make inroads into Rani’s share.
b) Choose to participate with differentiated model — match the grinding performance (key test), but everything else (sleek design, etc.) to match Elwoods existing range.
c) Acquire Rani, and leverage nationally to generate returns on acquisition.
d) Or choose not to participate: Serving the market served by Rani, will require investing in a significant platform at multiple levels even at just an sku level, and product development efforts to beat existing leader in an area that’s not current expertise is not a straightforward task.
In this story, Elwoods clearly does not have the credentials or expertise to be able to take Rani head on with an equivalent model in Rani markets. But is there a market outside coastal states that Rani hasn’t exploited? If yes, then gains and investments in a) versus c) become the basis for decision between those choices. The time saved and the certainty of having an existing experience that works versus uncertainty in time and cost of creating one of own is a big factor that tilts choice in favour buying Rani. And clearly Rani wins customers from Day 1 — pre-use there was scepticism, but once usage began, Jahnavi’s switch from being a sceptic to a fan was pretty rapid, suggesting powerful marketing efficiency in demonstrations and word-of-mouth.
Point b) is a testable idea and can be prototyped. It probably has a better match with existing manfacturing and may be possible in shorter time and development expense. And there may be a segment that while needing the powerful grinding would prefer the rest of the sleek stylish experience that Elwoods is known for. This could be a parallel project to determine both technical feasibility as well as size of segment that could be attracted — parallel to examining M&A, for example.
For c) to work, Rani has to be willing to sell at a price on which reasonable returns can be made. There is clearly no benefit in this case of buying share as there are no synergies between Rani’s business model and Elwoods. Thus the belief in being able to grow Rani beyond existing markets (and not at risk to Elwoods) must be significant. Or headroom in existing markets that Rani has not been able to tap and Elwoods can. And then, an understanding and ability to preserve the elements that make Rani successful because it is different. It is clearly built with different engineering design and sensibilities than Elwoods products so keeping the development team independent for a period would be key to not destroying this.
In the Karan-Dave conversation, Karan argues passionately about many things, uniqueness and variety of cuisines and selling to cuisines, using women in the selling efforts, why a certain kind of service model is needed. Global positions in MNCs are tuned to looking at proven models to leverage with speed and scale around the world and are always aware there are local niches that may be insufficiently interesting for a global player. A local market on the other hand will see the local opportunity much larger relative to their market than any global role holder would. Such gaps in assessment of a situation cannot be filled through just conversations. In most cases, mere conversations will never overturn an MNC headquarter’s choice of global standard versus local difference as first choice for an appliance application. Karan’s selling strategy to Dave needs to be more immersive and comprehensive.
If Karan wants to win over Dave, he should create experiences that build appreciation on cuisine. Instead of meeting in an Irish bar, have that beer in an open kitchen with a chef who can show preparatory steps for home cooking, product demonstrators that demonstrate appliance performances for those steps, for example. Instead of saying buying Rani is the only option, also demonstrate why other options are weaker in outcomes, or less likely to succeed. This should include scenarios of investment and likely returns based on consumer reaction to prototypes in other options.
Then, either video capsules like Jahnavi’s experiences (sceptic to fanhood conversion with Rani versus remaining unconvinced with Elwoods options) or, better still, home visits with these products and seeing reactions first-hand. Then, there may be a better, a more productive talk with global leadership and even a successful sale of an idea.
The writer is COO, Strategic Marketing for Godrej Group of Companies
