Karan Walia stood by the door looking at the many groups forming on the work floor. There they stood, assortments of marketing and sales and brand managers, head-shaking, agitated gesticulations, and expressive expressions. He knew the subject was Rani.
A funny thing had happened. The minute word spread among the product and brand teams that Dave Wilkins had given Karan a ‘solid’ hearing, agreed with many points and was favourably inclined towards Rani, that his nod to start negotiations was just an e-mail away, the esteem for both Rani and Elwoods’ white goods went up among the employees first. That a foreign company should buy an Indian brand made Elwoods look good. That Rani was under the gaze made it look good. At the head office, most had not even heard of Rani. These folks now thought highly of Elwoods for having seen/detected gold in Rani which they had seen as a village bumpkin — noisy, garish, unsophisticated. Even backward. Some went even as far as saying, “I have always said Indian products are Indian products finally. Pure gold. What do these MNCs have?” Once the discussion went down that road, every MNC product was thrashed.
But those in the front benches, the product heads, the brand managers… all became aware and conscious that they would be asked to present their views on Rani. Some of these had declared Rani as crass and not good looking and so forth. But now that the elusive Dave Wilkins had ‘seen’ the inner gold in Rani, all those attributes actually blurred.
Rani now became queen.
Dave visited many markets to see the brand performance, consumer attitudes and so forth. Consumer loyalty translated to market shares to profits. Dave saw great percentage in the channel loyalty for Rani’s range of appliances.
When Dave saw the brand in real life, he was startled. “It is obviously bright and um… well, not international.” Dave was struggling to deal with the bright orange and purple colours that Rani wore. But to his credit, he observed, “I can see that the Indian consumer is more concerned with performance than looks.”
Karan: I have been walking into homes in villages, towns. They like these bright colours. Down South, people do not really invest in pretty kitchens the way they do elsewhere. Cooking is sacred religion for most Indian women even today and in the non-urban homes, the kitchen is austere — not ostentatious. A spot of colour comes from branded products like jams and pickles and cooking appliances, if at all. The fundamental Indian kitchen is a drab looking place — it is all stone and hardly any wood. Have not seen cupboards but there are wall-to-wall stone or granite shelves, set off by an array of well arranged and Vim scrubbed steel and brass pots, pans, katoris and glasses. Kitchens are not the source of beauty but have to be centres of hygiene. In such a place, there is just a basic two-burner gas stove atop a green or black granite or cuddapah platform. So, the kitchen ends up looking dark. In such a place, the woman of today seeks reds and blues to brighten the place.
While international was tossing the strategy around, a difference of opinion was brewing at home. Home managers, while they lauded Elwoods International for seeing merit in Rani, began to lay claim to their international premiumness and tag. “We have a certain premiumness attached to our brand equity. Should we not take a price increase on Rani for a perceived premiumness?”
Gradually everyone was opining and suggesting and strategising for good measure. “Why don’t we change the looks of the brand? In our stable what we have are all so elegant and poised. Rani sticks out….”
Loyalists in the commercial department also argued: “Ok, so you want to buy Rani for growth. But when your sales goes up, it would be clear to me that all I did was move the sales figures from their P&L to my P&L. How is that our growth?”
Another: Buying Rani is only strategic, does not speak for our intention to be in India. We are merely buying market share. But that is only Elwoods’ money power, not innovation. Whatever the growth, it belongs to Rani .... not Elwoods.
Amarinder (who worked closely with Karan in product development):
Before brand strength I think business strength is pertinent and that is what the company is trying. Rani is part of that intent to strengthen the business.
Channi Varia: All’s well, but I do think we must change Rani’s looks, her colours. The core brand equity of my mother brand is key. Rani will piggy back on my equity and in the process rubbish Elsa’s equity!
Please understand, our design sensibilities are different. Our brand architecture has clearly laid out rules, prescriptions.
Nakul Naik: Janardhan (Head of Marketing) has clear parameters for brand profitability. So, over a period of time, we must take a price increase on Rani, and to match that hike, I will improve its appearance, make it more sophisticated, introduce some premium variants to make it a premium brand, and you know what, I have a great plan. We will stretch the brand not only to the middle class but also to the upper class and make it a brand for everyone. If Rani is going to be an Elwoods brand —correct na? — we have to bring her up.
Karan later heard out Amarinder’s “ramblers’ report” and said, “Question does not arise. Rani will stay as she is. What ‘garish’? But that was what the consumer set was buying; if I take that away, I am judging the consumer’s preference!”
But soon, it became the talk of Elwood. Karan found it remarkable how everyone latched on to the looks and not her equity and everyone now had subtler and subtler ideas for making Rani ‘look good’. Presently, ‘name change’ occupied centre stage when ‘colour change’ did not get votes from product management.
“Name change karo, shape change karo…. Let us have a combo name — Elsa-Rani ?”
Karan laughed. “Why do they want to change the name? Name change nahi hoga. Oh, so they think it will endorse Elsa’s expertise and brand value? Let’s not kid ourselves…Rani already has her own equity. Why add Elsa to her and suffocate the original equity of Rani?”
Manager 1: Elsa has to stay shoulder to shoulder… you forget that is the buyer/owner brand.
Manager 2: Don’t get too intense. Rani has her own spot under the sun, we should not disturb that.
the house was divided. ‘Change her name’; ‘Don’t change her name; Change the colour; Oh, no, don’t change the colour’; ‘We must take a price increase’; ‘Oh, never do that, bad strategy…’ Some insisted, if we are buying Rani then people must know that she is now part of the bigger Elwood brand. Global endorsement must be there. There must be a migration plan. It must be known as Elsa-Rani.
Ideas flew around like pollen in spring. Everyone took ownership for Elsa and most put Rani in the dock. “We will say Rani but next to it let the Elwood logo appear. Elsa chhota, Rani bada….”
Manager 3: No, no, then, where is the benefit? ‘Rani’ chhota, Elsa bada… As Rani’s association with Elsa improves, we can make it equal also.
But there were those who had stronger views, “Rani has so much equity in the South and East. If you do all this, you will upset the balance in the South! Other variables will be affected. She is seen as ruler and the lesser brands are currently not asserting. But if you now present her as Elsa’s brand, won’t they rise up against her? She will take a lot of trolling from other local brands for her foreign partnering!”
Manager 4: I agree, Rani’s market image will take a beating first and then, her market shares. And we will be left holding the baby and the bath water.
Vineet (laughing): What idiom is that? Ha ha. But if you do ‘Rani from Elsa’ for North and West (because Elsa sells better there), what do you think people will make of the ‘Rani’ name?
Channi: It means nothing other than a girl’s name; so this is what will happen: You will have to first spend to create an equity for Rani per se, launch her as an entity, talk about her antecedents or why she is with you…. Isn’t that a whole different trip? That means a new campaign investment.
If Karan sought to keep out of all the rambling and argument, he was mistaken. They sent him e-mails warning him of things he was not seeing. The argument now heated up.
Vipul: Waittaminit! The whole idea of this buying is so that our Elsa gets a foothold in these markets. Then, why are you protesting that we should not change the name? What is the whole business purpose of buying Rani if it is not going to help Elwoods get a foothold in these markets? Name to change karna hi padegaa!
Now the ripple grew larger and was felt in the regions so that Regional Heads began to fret, write to Karan and before long they started their own
WhatsApp group: Elsa-Rani Destiny.
RM South: You have to add the Elwood name so that the association develops and sticks in the consumer mind. Arre, think of my situation. Here I am unable to sell the Elwoods toaster and coffee grinders in my market and now you are foisting a local competitor on my face and asking me to adopt her, market her but I cannot attach the Elwoods surname? What happens to my dignity? If Rani is entering the Elwoods family she must bear our surname! I want the market to know WE bought Rani and my other Elwoods stocks must begin to sell, please! Isn’t that why we are buying Rani? Otherwise Rani will start selling hotter with the new parenting and Elwoods will remain a non-starter!
RM East: Correct, correct… otherwise it will be that Rani came to Elwoods to sell better.
Ha ha ha… yaar, this is crazy, now I need a beer!
Suddenly all that Karan had been positing as his arguments for Rani were being challenged. Amarinder who fielded the flood of e-mails and calls looked at Karan and said, “That is a deluge…”
Karan: All this will happen. As long as she is your girlfriend, people are happy to say she is nice. Say you are bringing her home and all kinds of anxieties will surface.
Amarinder: What an insight, Sirji!
Now RM North began to think. It was no more about Elsa gaining entry into weak markets; it was also about Rani occupying space!
RM North: Panga hai…. (it is a messy challenge). In the North, Rani-wani nothing will sell. Rani is a footwear brand; pressure cooker brand. Can you see how she is already entering a very diluted equity? The weightage of Elsa has to remain bigger in the North. Hence, how much investment will he allow us for brand building?
(Then, after some thought, he wrote again) “Listen guys, I am already having a bad time keeping this market afloat. I don’t reach home before 10 p.m., do you know? I am not ready for a pointless panga. Bad enough trying to push Elsa; now you add Rani to my basket and make me work more to launch her?
RM South: Kyon, why should that be your problem?
RM North: Arre, have you thought how much investment is needed to build Rani-familiarity in the other regions? I am already being chided for exceeding budgets on Elsa! The solution was so simple — Karan only needs to give me a hardy mixie and I will put Elsa name on it and sell. You want market right? I will give you market. Put ‘The New Hardy mixie from Elwoods’ tag on Rani and call it Elsa… Howzzat?
RM West: Mera socho, I have a mixed-bag market. Western region markets adjoining Karnataka, there Rani will sell. But in Gujarat and west Maharashtra, nothing will sell. Worse, Rani will not impact Mumbai. Ok, the Matungas and Chemburs may get excited. More than that, I don’t see scope. For me, to invest in the marketing of Rani and fight for shop visibility in Chroma, Home Centre, Shoppers Stop… I need a brand that excites the north and other Indians too!
RM South: How can you say that? Mumbai, Pune are all hot for MGBs
RM West: Yaar, I am having a bad time fighting with the good urban looks of Philips, Kenwood, Morphy Richards, Kitchen Aid. They look very prominent in a store. In between these maha-stars, you will come and keep a Rani… I am very confused. My investment will be more than commensurate. I will need to pump into marketing and sales far more to create brand awareness, to balance both brands and their respective needs. Kaise karoonga?
RM WEST went into deep thought. After lunch he posted an aggressive, “Strip the name, put the Elwood name, but in small print say, this is the erstwhile Rani from Karnataka. So, upfront it will be Elwood and fine print will say the Rani of the South has now become the Rani of Elsa. But branding on the product should be clearly Elsa, Elwood.”
That week, Karan held a conference call with Dave, Janardhan Titus, India marketing head and Duleep Simha, Country Head, India. He also added some key stakeholders from sales and marketing.
Dave laughed when he read the excerpts from all these chats and e-mails that Amarinder extracted for him. “If the idea is to use the brand name of Elsa in the North and Rani in the South and East, then what is the economic benefit of paying so much to buy a brand?” said Dave.” If after all the money spent you will stick the Elsa name on Rani, why buy Rani?
“Ok, to this limited audience I ask, if there is something you will change, what is that?
Ira: The colour. Orange and purple are totally not becoming of Elwoods. Our colours are so clearly black and white, at best steel. I mean… how do we even say Rani lives with us?
Amarinder: To my mind, this is the reason why Elsa is not being bought. She is too sleek looking, too sophisticated. People are feeling alienated. If you want to change her personality then what is the point? Rani has to remain Rani. You are a marketing person and you need to understand this: Rani is liked for who she is, how she looks and what she does AS SHE IS today. If you buy a zebra and remove the stripes, then you will be left with just a donkey
na?
Dave (laughing): I like that metaphor! But it is true and I have seen this happen often. People buy brands and keep changing it, integrating it, tweaking it, strip it of its personality…… then they fail. I have often wondered why buy a brand in that case.
Radha Reddy (Head of MR): I am not very sure if this is going to work well Dave. I fear there can be an erosion of the Elsa name/ equity. If a hardy mixie comes with the name of Elsa and/or the name Elsa comes before Rani (as in Elsa-Rani) in the South — taking all kinds of arguments that have been put forth so far, given that the Rani brand personality is so different, have you considered the dilution of Elsa’s equity to protect which you are buying Rani?
Karan: How do you mean?
Radha: The brand may come across as confused… what has Elsa got to do with Rani, will be the question in consumers’ minds. You take a hardy machine from the south and market it in the north with the name Elsa on it and say hardy machine from the south — aren’t you immediately making a statement about the other not-so-hardy Elsa from Elwoods? I call that an ouch-statement. You don’t foresee there will be a dissonance? These things are not apparent immediately but over time they lead to brand confusion.
Amarinder: Sounds very theoretical. How will you measure it?
Radha: My question too, how will you measure the erosion?
RM-North: One way to do it is to keep the two brands separate in retail too. I feel it will help to not launch Rani models with Elsa name in the North and not put Elsa name on the Rani models in the south. Don’t use fusion brand names.
Nothing was resolved. Away from the con call, Radha told Karan, “It is never too late. Can we map both brand equities before acquiring the brand? Brand equity of Rani all over India and Elsa in South — so that we know what the relative equities are, how much we should pay…
Karan: We don’t have time.
Channi: How are we even saying that Elsa’s brand equity is lower than that of Rani? But for the South where Rani is unusually spiked, Elsa’s equity is higher in the rest of India.
Radha: How? How do you arrive at that conclusion? Where are your numbers? Let’s not talk in the air!
Vipul: How does anyone know? And let’s face it, Rani has zero equity outside India, what about that?
Not just India, Eastern Europe had some grand ideas too. Dave’s regional appliance head for Eastern Europe, Erina Beridze, said, “Why don’t we do a price modelling on the lowest model in stick blenders and toasters, replace the brand name with Rani, change the colour make it orange and sell them in the East and South as Rani? These products will get new users. Once the product enters their homes, we can market the higher models in these categories. This will benefit the Elsa products in that region!
“Look Dave, Rani is a limited range brand. If we can increase that range to take on our products whose adoption in the south markets has not picked up, then it is a win-win! Our turnover increases, Rani gets more visibility, India gets a better MGB and Elsa enters more homes. And where Elsa is selling well, take the Rani products and put on the Elsa name… win this way — and that! Vsyo raadi! (All are happy!)
As a parting shot, Karan said, “Clearly you are not seeing that Rani is different and that is the difference we want in our portfolio!”
Later he confided to Amarinder, “I feel I have unleashed a monster. Erina has fanciful ideas and Dave has not shot it down. If he is buying into that, then it is bad news. I want to buy Rani, but this slant in the discussions is not auguring well…
If on the back of my idea, they add all this, I will get nailed for all their sins as well… Where are we headed yaar?!”
Also read: To Buy Or Not To Buy | Get Into The Cockpit!casestudymeera@gmail.com
