Please come to India, Dave. I want you to meet Rani!” It is amazing how the same invitation is viewed differently by the two dramatis personae in this case. To Karan Walia, Rani is the panacea to all his troubles in India and is the key to unlocking unbridled growth in the southern markets. The magic pill, the silver bullet!
On the other hand, to Dave Wilkins, Rani is a poor country cousin to the wonderful global portfolio that Elwoods has. It is, at best, a quick fix, a lazy solution offered by his Indian colleague. In his mind, there is no reason why Elsa, which has worked for the company across the world, cannot be redesigned to suit the needs of the Indian consumer and views the entire fascination with Rani that Karan has, as a distraction and believes that it is “off-strategy”!
So, who is right? I wish there was a direct answer — one that is unequivocal. There probably isn’t. Hence, let us try and examine the issue in greater detail.
Karan’s dilemma is not unique to this category — this is an issue that most MNC leads face when they enter India regardless of the segment that they play in. Here we are confronted with a very simple question to which we need an answer — remake/remodel Elsa to suit the needs for a pan-India audience or buy Rani and get a significant share in a market segment which is difficult to penetrate with the current offering? Simple, right? The reality is, a question that seems really easy to answer in isolation can seem very difficult once the lens of “context” is applied.
To me, the more pivotal question is: What is the role of India in Elwoods’ portfolio of countries that they operate in and hence what should their portfolio for products for India be?
Let us examine a few scenarios.
Scenario 1: India is a revenue driver for Elwoods and they want to win aggressively across categories, quickly.
This unfortunately is the zone where most of the companies entering India find themselves in. A land of 1.2 billion wherein any number divided by the huge denominator energises the uninitiated and they feel that it is a huge opportunity. In a swift set of moves, a set of headhunters are contacted, an organisation is created, a supply chain erected and a set of products in the existing portfolio is shipped in — ready to conquer the new frontier. Enter the Elsa FP 299 or the Plim Food Processor. And then they meet the ground reality of local competition (ala the queen of the South, Rani!) and don’t know how to react.
If Elwoods needs quick wins in India, then the marketing team needs to delve really deep into the strengths of the two brands — Elsa MGB and Rani.
The way I see it, Elsa is primarily suited to help the more affluent households in their non-regular chores. This is unfortunately not a sustainable competitive advantage. Karan himself points out that his own household does not use the machine regularly — it is used occasionally for carrot grating in winter. He also points out that it cannot cut pumpkin or bitter gourd in a way that they become “India-cooking” friendly. It also does not handle rice or dal! This clearly points to a deep malaise which, unless addressed, will make this product a very niche proposition for India.
On the other hand, Rani seems to have everything going for it. A great India (er... South) relevant performance, the right amount of power, fantastic after-sales service and great retailer recommendation. The two areas of concern, in my mind, are lack of aspiration and the inability to penetrate beyond the south.
Hence, if Elwoods is looking for rapid immediate growth then it has no option but to seriously look at buying Rani (of course, with the necessary due diligence) as it has a portfolio gap, which will limit its expansion in not just South but into heavy user middle and upper-middle class households across the country. If Rani is acquired, then the product team needs to look at ways of building in more aspirational elements for Rani (without losing the functionality) and at making Elsa’s functions more India relevant. Issues around channel segmentation needs to be addressed as it will be key to drive complementary strength of the portfolio. Rani’s foray into North can completely consume Elsa and hence it is very important to clearly look at consumer motivations and shopping behaviour by economic class and then create an easily understood and executable picture of success on ground. In essence, the conversation has to shift from Dave and Karan — who are both trying to protect their own turfs — to a wider conversation around the business.
Scenario 2: India is a long-term revenue driver for Elwoods and they want to build a profitable business at a consistent medium pace.
In this situation, the entire approach can change. As Karan points out, the current machine works very well in the markets where light grinding is required. His time will be well spent in ensuring that he puts in place a strong plan to recruit new users into his brand in these markets. For South, he can work in close conjunction with the product development team to create an Elsa variant that is sturdier. The freedom that he will enjoy in this case is the lack of mindless rush, which will allow him to do a detailed set of consumer immersions before he perfects a product for the South. There are a million examples of this from the FMCG category — that is, a lot of companies that sell powdered tea and coffee have different product compositions and use a varying degree of sweetness in the South vis-à-vis North.
However, in this case, it is extremely important to clearly define the milestones and a clear picture of success. Time after time, we have seen organisations running out of patience. Any news of Rani strengthening its position or any adverse news around Elsa’s inability to penetrate further into the Indian heartland sets the cat among the pigeons. The local management starts putting pressure on the global team saying that the portfolio is not good enough and buying Rani is the only option. The global team counters by insisting that a product that has worked all over the world must work in India as well and the inability of the team in India to create the requisite local linkages to the global portfolio is leading to sluggish performance.
All hell breaks loose, the blame game starts and hence there is a need to ensure that everyone is aligned on expectations and timelines.
In this scenario will Rani matter? Maybe. If Elwoods is not able to create a viable alternative in a span of three to four years, the conversation on acquiring Rani will still be relevant. However, it is important to ensure that Elwoods uses all possible options at its disposal before it considers the acquisition decision.
Scenario 3: India is profit-play for Elwoods and not a volume or high revenue play.
I have to admit that very few companies treat India in this manner. The mad adrenalin rush of seeing so many people on the streets and believing that each one is a potential buyer clouds the vision. However, if Elwoods does view India through the pure profit-play lens, Karan’s time is better spent in creating a range for the upper-middle and the affluent and in not worrying about local competition.
There could be a few other scenarios as well but, in my mind, these are the primary ones that surface in determining any entry or expansion strategy.
In sum, the way forward has to go beyond a conversation in a dimly lit restaurant in a European airport between two marketing professionals and has to be part of a business strategy dialogue. After that, both Karan and Dave will be able to rise above their individual turfs and take a decision which is appropriate.
Any reference to Rani or the queen takes me back to the seminal work of Lewis Carroll, Alice’s Adventures in Wonderland. Although the Rani in this case study does not remotely resemble the Red Queen and her “Off with the head” approach to countering global competition, both Karan and Dave should take inspiration from the conversation between Alice and the Cheshire Cat.
“Would you tell me please which way I ought to go from here?” asks Alice.
“That depends a good deal on where you want to get to,” says the Cat.
“I don’t much care where,” says Alice. “Then it doesn’t matter which way you go,” says the Cat.
This is the most critical decision for Elwoods. If they articulate their vision and purpose for being in India in a non-ambiguous way, the portfolio decisions will easily fall into place.
My only advice to Dave and Karan will be: See the bigger picture! And if it isn’t there, help create it jointly, collectively.
The writer is vice-president, marketing & commercial, Coca-Cola India and South West Asia
