chapter no: 04 conceptual frame works of indian...

A Study of Branding Strategies of Indian Brand In Personal Care FMCG with special Reference to Maharashtra. 2015

Chapter No: 0 4 Conceptual Framework of Indian and Multinational brand FMCG in personal care Strategies. 57

Chapter No: 04 Conceptual Frame works

of Indian & Multinational Brand FMCG

Personal Care Strategies.

4.01 Introduction:

4.02 Branding Strategies in India:

Branding strategies.

Company name.

Individual Branding.

Attitude Branding and Iconic Brands.

"No-brand" Branding.

Derived Brands.

Brand Extension and Brand Dilution.

Multi-brands Strategy.

Private labels.

Crowd Sourcing Branding.

Nation Branding.

4.03 FMCG sector In India and Indian Branding Strategies of

FMCG Personal Care Products:

Consumer Products

The Indian care Market.

The Indian Soap Industry.

Indian Shampoo Market.

Trapping the Rural Market.

Competitive Product Strategies for rural Markets.


Chapter No: 0 4 Conceptual Framework of Indian and Multinational brand FMCG in personal care Strategies. Page 158

4.04 Multinational Branding Strategies of FMCG Personal Care

Products:

4.05 Brand Equity Perception:

4.06Akaer Equity Frame Work:

4.07 Review of District to be studied:

Parbhani:

Jalna:

Nashik:

Ahmednagar:

Aurangabad:

4.08 Reference:



4.01 Introduction:

The FMCG Sector is growing due to liberal policy of Government

towards this sector. The Foreign Direct Policy encourages the Investment

in this sector. The low entry barrier in this sector also increases the scope

of Investment for the exploitation of Indian urban and rural market which

is unorganized in personal care FMCG. To sustain in Indian market it is

necessary to understand the branding strategies both for Indian as well as

Multinational and here the researcher tries to reveal in details about

branding strategies.

4.02 Branding strategies In India:

Branding strategies:

A branding strategy helps establish a product within the market and

to build a brand that will grow and mature in a saturated marketplace.

Making smart branding decisions up front is crucial since a company may

have to live with the decision for a long time. The following are

commonly used branding strategies:

Company name:

In this case a strong brand name (or company name) is made the

FMCG for a range of products (for example, Marico) or a range of

subsidiary brands (Nirma or Godrej in India).

Individual Branding:

Each brand has a separate name, putting it into a de facto

competition against other brands from the same company (for example,

Kool-Aid and Tang are both owned by Kraft Foods). Individual brand

names naturally allow greater flexibility by permitting a variety of



different products, of differing quality to be sold without confusing the

consumer's perception of what business the company is in or diluting

higher quality products.

Attitude Branding and Iconic Brands:

This is the choice to represent a larger feeling, which is not

necessarily connected with the product or consumption of the product at

all. Companies that use attitude branding include: HUL, P &G, and

Marico. Iconic brands are defined as having aspects that contribute to the

consumer's self-expression and personal identity. Brands whose value to

consumers comes primarily from having identity value are said to be

"identity brands.” Some brands have such a strong identity that they

become "iconic brands" such as Lux, Nirma.

"No-brand" Branding:

Recently a number of companies have successfully pursued "no-

brand" strategies by creating packaging that imitates generic brand

simplicity. "No brand" branding may be construed as a type of branding

as the product is made conspicuous through the absence of a brand name.

"-----?

Derived Brands:

Some suppliers of key components may wish to guarantee its own

position by promoting that component as a brand in its own right. For

example, Intel, positions itself in the PC market with the slogan (and

sticker) "Intel Inside.”



Brand Extension and Brand Dilution:

The existing strong brand name can be used as a vehicle for new or

modified products. For example, many fashion and designer companies

extended brands into fragrances, shoes and accessories, furniture, and

hotels. Frequently, the product is no different than what is already on the

market, except it has a brand name marking. The risk of over-extension is

brand dilution, which is when the brand loses its brand associations with

a market segment, product area, or quality, price, or cachet.

Multi-brands Strategy:

Alternatively, in a very saturated market, a supplier can

deliberately launch totally new brands in apparent competition with its

own existing strong brand (and often with identical product

characteristics) to soak up some of the share of the market. The rationale

is that having 3 out of 12 brands in such a market will give a greater

overall share than having 1 out of 10. Procter & Gamble is a leading

exponent of this philosophy, running as many as ten detergent brands in

the US market. Cannibalization is a particular problem of a multi-brands

strategy approach, in which the new brand takes business away from an

established one which the organization also owns. This may be

acceptable (indeed to be expected) if there is a net gain overall.

Private labels:

Also called own brands, or store brands, these have become

increasingly popular. Where the retailer has a particularly strong identity

this "own brand" may be able to compete against even the strongest brand

leaders, and may outperform those products that are not otherwise

strongly branded. Individual and organizational brands .These are types



of branding that treat individuals and organizations as the products to be

branded. Personal branding treats persons and their careers as brands.

Faith branding treats religious figures and organizations as brands.

Crowd sourcing Branding:

These are brands that are created by the people for the business,

which is opposite to the traditional method where the business creates a

brand. This type of method minimizes the risk of brand failure, since the

people that might reject the brand in the traditional method are the ones

who are participating in the branding process.

Nation Branding:

This is a field of theory and practice which aims to measure build, and

manage the reputation of countries (closely related to place branding).

4.03 FMCG sector In India and Indian Branding strategies of

FMCG personal care products:

The Indian FMCG sector is the fourth largest in the economy and

has a market size of US $13.1 billion. Most of the product categories like

jams toothpaste, skincare, shampoos etc .In India low per capita

consumption as well as low penetration level, but the potential for growth

are huge.1

The personal care category has the largest number of brands, i.e 21

inclusive of Lux, Lifebuoy, Fair & lovely, and ponds. There are 11 HUL

brands in the 21 aggregating Rs 3,799 Crore or 54 percent of the personal

care category. In the shampoo category, HUL clinic and sunsilk is at the

top 100, Clinic nearly doubles the size of Sunsilk.



Dabur is among the top five FMCG companies in India and is an

herbal specialist with a turnover of Rs 19 Billion in 2005 -06. Dabur has

brands like Dabur Amla, Dabur Chywanprash, Vatika, Hajmola, and

real. Marico is a leading Indian group in consumer products and services

in global Beauty and wellness space.

* The Indian hair care market generated total revenues of $ 1.4 billion in

2009 representing compound annual growth rate (CAGR) of 15.4 percent

for the period spanning 2005-09.

*The soap and detergent industry covers laundry and toilet soaps and

synthetic detergents in the form of liquids, powders and bars. These are

consumer products and their quality, price, marketing and distribution

network determines the success of the units is the sector. The

manufacture of detergents and toilet soaps has been deli-censed.

* The Indian personal care market is estimated to be worth US $ 4 Billion

(approx Rs20, 000 Crore) This includes Bath and shower products, Hair

care, skin care, cosmetics, Fragrances and Deodorant’s. Bars soap has

growth of 5 percent per annum over last 5 Years. India’s GDP unlike that

of other emerging developing countries has a bigger consumer percentage

than investment. This is because India economic model has not followed

the traditional export growth model of the other countries in Asia like

china. This makes India more resilient to external shocks like the Lehman

crisis and provides a more domestic orientation to growth. India has a

competitive consumer goods market with a number of domestic and

International companies competing in multiple markets and segments.

FMCG Companies have been expanding rapidly in the Indian market and

are set to grow to the next level as India’s middle class grows bigger and



bigger and the existing middle class becomes richer. India’s FMCG

stocks from a great defensive investment class. They not only have

“defensive” characteristics but also growth as well. India’s FMCG sector

is expected to grow by more than 100 percent in the next 5-6 Years as

more and more consumers move from unorganized part to the Industry to

the organized industry. Though competition has been fierce in India’s

Non Discretionary consumer goods Industry with the P &G and unilever

price war in the detergent segment, the industry has seen it share of

winners with Nestle. These stocks trade at high multiples justified with

their very high returns, strong brands and low investment requirements.

ITC Ltd – with a market capitalization of Rs 137,000 Crore, ITC is

one of India’s foremost private sector companies, and growing in

personal care too.

HUL-is India’s largest FMCG Company with categorized business

like soaps, detergents, shampoos, skincare, toothpastes, deodorants,

cosmetics, Tea, coffee, packed foods, ice cream and water purifiers. With

a market capitalization of Rs 61,000 crores, the company is a part of the

everyday life of millions of consumers across India .The company earned

revenue of Rs 5000 crores with a net profit margin 12 percent. Its parent

company Unilever, which holds about 52 percent of the equity . Its

portfolio includes leading households brands such as Lux, Lifebuoy, Surf

Excel, Rin, Wheel, Fair& lovely, Pond’s Vaseline,Lakme, Dove, Clinic

Plus sunsilk,Pepsodent,Closeup,Axe,Brooke Bond,Bru,Knorr,Kissan,

Kwality wall’s and pure it.



Dabur India- Dabur India Ltd is the fourth largest FMCG Company

in India with market capitalization of Rs 16,000 crores. Dabur operates in

key consumer products categories like Hair Care, Oral Care, Skin Care,

Home care, & Foods. For the past 125 years, the company has been

dedicated to providing nature based solutions for healthy and holistic

boundaries. Dabur specializes in Ayurvedic products Janam–Ghutti &

gripe water. Hajmola, Glucose D & Pudinhara. It earned revenue of Rs

900 Crore & a profit margin of 14 percent Dec 10.

Colgate Palmolive (India ) Ltd- with Rs 11,000 crores as the

market capitalization & Rs 500 Crore revenues with a net margin of 11

percent in December 2010. Colgate Palmolive Ltd is a truly global

company serving Hundreds of millions of consumers worldwide. Started

as a small soap & candle company, the company is now 200 years old.

Colgate is well known for it. It has also diversified its business into

personal care & home care, Professional care trusted by dentist across the

country.

Godrej Consumer Products Ltd- Rs 350 Crore 18 percent is a

leader among India’s FMCG companies, with leading Household and

Personal care products. The major brands are GOOD knight, Cinthol,

Godrej No 1, Expert, Hit, Jet, are household names across the country,

with Rs 11,000 crores as the market capitalization, the company is largest

marketers of toilet soaps in the country and is also leaders in hair colors

and household insecticides. It owns International brands and trademark in

Europe, Australia, Canada, Africa, and the Middle East. Godrej has also

recently acquire Tura ,a leading medicated brand in west Africa.Megasari



Group, a leading household care company in Indonesia and Issue Grou,

Argencos, two leading hair colorant companies in Argentina.

MaricoLtd - Marico is a leading Indian Group in consumer

Products and services in the global beauty and wellness space. Marico

products and services in hair care, skin care, and healthy foods generated

a turnover of about Rs 26.6 billion during 2009-10. The company has a

market capitalization of Rs 8,000 crores.Marico market well known

brands such has parachute, Suffola, Sweekar, Hair & care , Nihar, shanty

, Medicare, Revive,Manjal,Kaya, Aromatic, Black Chic.Maricos Brands

and their extensions occupy Leadership positions with significant market

shares in most categories- coconut oil, Hair oils,Post wash hair care, Anti-

lice Treatment ,Etc.

Marico is also present in the Skin care solution segment through

Kaya skin clinics in India, Middle East and Bangladesh

Consumer Products:

Soaps:

The product categories can be classified into three segments;

premium (Lux,Dove ), popular (Nirma, Cinthol), and economy (Nirma

Bath,Lifebuoy). The price differential between the premium and economy

segments is about 2X. The popular and economy segments accounts for

about 4/5ths of the entire market for soaps. Penetration of toilet soaps is

high at 88.6 percent. However per capita consumption levels remain low

India’s per capita consumption of soap at 460 gm per annum is lower

than that of Brazil at 1,100 gm.



Distribution Network:

Soaps are available in percent million retail outlets in India, 3.75

Million of which are in the rural areas. Therefore availability of these

products is not a problem. 75 percent of India’s population is in the rural

areas; hence about 50 percent off the soaps are sold in the rural markets.

Growth:

Rural demand growth is expected to occur mainly with consumers

moving up towards premium products. But in the past, the proportion of

premium soaps to economy soaps has not changed much, in volume

terms. This is because as some consumers move up the value chain with

increase is disposable incomes, some consumers move down looking for

cheaper substitutes as price moves up. This has been the case especially,

as growth in soap prices has generally outpaced overall consumer

inflation 2

Personal care products:

The annual value of personal products business in India, Including

oral care, hair cares and skin cares products, is currently estimated to be

Rs 54.6 bn. The rising income levels have led to rising aspirations on the

part on Indian Consumers. These factors have been the catalysts in the

exponential growth rate in the personal product category over the past

five years.

Personal care products are divided into 6 Categories

1. Hair care- Oils.

2. Hair care – Shampoos.

3. Skin Care.



4. Cosmetics.

5. Feminine Hygiene.

6. Hair Care –Oils.

The market is huge valued to be 6 billion. Due to the varied

consumption habits of consumers across the country, where coconut oil

and edible are interchangeably used, the size of the market is growing at

an impressive 6 -7 percent in volume terms despite the high penetration

level Usage of Hair oil is a typical Indian traditional habit. It is perceived

to offer benefits of nourishment, hair strengthening, faster and better

growth, and reduce the problem of falling hair. There are two types hair

oil available in the market; Coconut oil and non greasy perfumed oil.

Coconut oil comprises 2/3 rd of the total market and the balance

comprises the non greasy perfumed oil.

Usage of hair oil is an everyday habit with 50 percent of the

population out of which some perceive that massaging the head with hair

oil has a cooling impact. The penetration of hair oil is fairly high at

around 87 percent and evenly distributed among the urban and rural

areas.

Hair care –Shampoos:

The shampoo market in India is valued at Rs 4.5 billion with the

penetration level at 13 percent only. The market is expected to increase

due to lower duties and aggressive marketing by players shampoo is also

available in a sachet, which is affordable and makes up to 40 percent of

the total shampoo sale. The Indian market is characterized by a twin –

benefit platform: cosmetic and anti-dandruff. It is basically an upper



middle class product, as more than 50 percent of the consumer use

ordinary toilet soap for washing hair.

While the awareness level is high, the penetration level is very low

even in the metros which are only 30 percent. Urban markets account for

80 percent of the total shampoo market. The penetration level is rapidly

increasing due to decline in excise duty, which was 120 percent in 1993

to 30 percent currently.

Skin care:

The skin care market is at a very nascent stage with basic

requirements of the consumers being protecting the skin from cold and

dryness in winter, and improving fairness of the skin. Most of the product

categories are niche segments. While the awareness rate is high in both

urban areas accounting for 60 percent and rural areas accounting for 30

percent the penetration level is low for both. This is because of

apprehensions that usage of skin care products may benefit in the long

run due to chemical contents. Many households prefer to use traditional

and natural homemade product. Since the market is at a very nascent

stage with very low penetration levels, the growth rates are expected to be

higher at 24-255 over the next five years. New players such as Avon and

Oriflamme have entered the market with the natural ingredient benefit

platform, which could further spur Growth.

The Indian Cosmetic Industry is defined as Skin care, Hair care ,

Color Cosmetics ,Fragrances and oral care segment which is growing by

7 percent according to analysis of sector. The emphasis of the herbal

cosmetic has been on the spectacular growth of the herbal and Ayurvedic



beauty product business as conveyed by beauty expert Shahnaz Husain

who was the first to Introduce the concept of Auryvedic cosmetics to the

world in 1970.The Indian Cosmetics industry has emerged as one of the

unique industry holding huge potential for further growth. In 2009 it

registered sales of INR 356.6 billion despite the global economic

recession. Indian cosmetic Industry has mainly been driven by improved

purchasing power and rising fashion consciousness of the Indian

population and Industry players spending readily on the promotional

activities to increase consumer’s awareness and to develop their products.

The Indian cosmetics market which traditionally strong hold of a

few major Indian Players like Lakme, and Ponds has been a lot off

foreign entrants to the market within the last decade. India is a very price

sensitive market and the cosmetics and personal care product companies,

especially the new entrants have had to work out new Innovative

strategies to suit Indian preferences and the budgets to establish a hold on

the market and established niche market for them.

According to analysis and figures given by the confederation of

Indian industries( CII) ,the total Indian beauty and cosmetic market size

currently at Us $ 959 million and showing growth between 15-20 percent

per annum. The overall beauty and wellness market that includes beauty

services stands at about us $ 2680 million according to CII estimates. The

size of Indian cosmetics Industry globally is $ 274 billion, while that of

Indian cosmetic Industry is $ 4.6 billion. The current size of Indian

cosmetic Industry is approximate US $ 600 million. Among these fastest

growing segment is color cosmetics, accounting for around US $ 60

million of the market. Industry sources estimate a rapid growth of 20



percent per annum across different segments of the cosmetics industry

reflecting with an increasing demand for all kinds of beauty and personal

care product. Growth in the Indian cosmetic industry has come mainly

from the low and medium priced categorized that account for 90 percent

of the cosmetic market in terms of volume. Costs for importing other

products are much higher than producing it in the country. India usually

allows the entry of imported cosmetics without any restrictions but the

average Import tariff on cosmetics product is currently very high at 39.2

percent.

The Indian hair care market:

It is mainly dominated by the hair oil segment, which constitutes

over half of the overall market. Perfumed oil (Cooling oils, light oils, and

heavy amla Oils) and coconut oil comprises the main segment of hair oil

market while others account for minimum share in the market.

Consumption pattern of hair oil differs across different regions of the

country. Coconut oil is very popular in southern regions, while people in

the north prefer others such as Sesame, rapeseed, etc. Although the

market is convent ally dominated by the women’s segment, Men are fast

emerging as a separate consumer category. In the current scenario , the

market is witnessing a tremendous change in buying pattern of the men’s

segment, as growing young generation are looking for care and styling

products catering to their specific needs. Consequently, industry players

are also introducing various products to meet the growing Male buyers

demand.



Hair Oils:

The hair oil market is valued at 6 billion. Hair Oiling is a major

niche in the hair care segment. Unlike market abroad, India has a large

number of consumers whose hair care expenditure also includes hair oil.

The penetration level of hair oil is around 87 percent. Around 50 percent

of the population uses hair oil every day. The growth rate of hair oils in

rural India is faster than the growth rate in urban India.

Hair gels:

Hair gel markets segment is at a primary stage and not many local

brands are available in India. Hair gels or creams are mainly used for Hair

grooming by men and is used as a fashion accessories. The market

penetration of hair gels or creams is very low, and is limited to a small

section of urban market.

The Indian Soap Industry

It includes about more than 700 companies with combined annual

revenue of $ 17 billion. Major companies in the Industry include P & G.

Unilever. The Indian soap industry is highly concentrated with the top 50

companies holding almost 90 percent of the market .The market size of

the global soap and detergent market size was estimated to be around 31

M tone in 2004, which is estimate to grow to 120 m tone in coming years.

Toilet soaps account for more than 10percent of the total market of soap

and detergents. In Asia, the countries like china and India are showing

rapid growth in the toilet soap section. Market share of body was

estimated to be around 2 percent in 2004 and showing signs of healthy

growth in this market. Indians soap market is Rs 41.75 billion.


Chapter No: 0 4 Conceptual Framework of Indian and Multinational brand FMCG in personal care Strategies. 3

Indian Soap Industry volume is Rs 4800 –Crore. For purpose of

gaining a competitive edge, Indian companies are now relaunching their

brands with value- additions to woo consumers across India .For instance,

Hindustan Level Ltd. (HUL) has recently launched a host of toilet soap

brands which include Lifebuoy, Lux Breeze and Liril- with value

additions. Also is in the process of rolling out “ Ayush’ Ayurvedic soap.

These are to meet the evolving need of customers. One of the factors

which affect the demand of soaps is the penetration, which the products

have in market. In case of soaps this has not been a major issue as the

penetration in the rural area is as high as 97 percent for overall India. In

terms of market share for Indian soap. Industry the data indicates that

HUL had a market share of 64 percent in the soap market, followed by

Nirma at 16.8 percent and Godrej at 4.4 percent. Nirma in northern share

21 percent. The largest contributors HUL and enjoys 2/3 rd share. Lux

and Lifebuoy have held the sway of the market for almost fifty years.

Some of top leading companies soap,

In the Rs 4,800-crore Indian toilet soap, market, the lead players

include:

*HUL.

*Godrej Consumer Products Ltd.

*Wipro Consumer Care.

Personal Wash (Soaps): The personal wash can be segregated into-

*Premium- Lux, Dove.

*Economy- Nirma Bath, Lifebuoy

*Popular- Nirma, Cinthol



The price of the premium segment product is twice that of

economy segment products. The economy and popular segments are

4/5ths of the entire soaps market. The penetration level of toilet soap is

88.6 percent .The toilet soaps market is estimated at 530,000.TPA

including small imports where the brands and a large number of small

brands. The popular brands include Lifebuoy, Lux, Cinthol Liril,

Rexona, and Nirma. Premium soaps are estimated to have a market value

it is as much as 30 percent .The Indian Soaps Industry includes about 700

companies with combined annual revenue of about $17 billion. 70

percent of Indian’s population resides in the rural areas and around 50

percent of the soaps are sold in the rural markets. The market is littered

over with several, leading national and global brands and a large number

of small brands, which have limited markets. The popular and premium

brands include Lifebuoy, Lux, Cinthol, Liril, Rexona and Nirma. Toilet

soaps, despite their divergent brands are not well differentiated by the

consumers. It is, therefore, not clear if it is the brand loyalty or

experimentation lured by high volume media campaign, which sustain

them. A consequence is that the market is fragmented. It is obvious that

this must lead to a highly competitive market. Toilet soap, once only an

urban phenomenon, has now penetrated practically all areas including

remote areas. The incremental demand flows from population increases

and rise in usage norms impacted as it is by a greater concern for hygiene.

Increased sales revenues would also expand from up graduation of quality

or per unit value. As the market is constituted now, it can be divided into

four segments: Premium, popular, Discount and Economy soaps.

Premium soaps are estimated to have a market volume of about 80,000

tones. This translates into a share of about 14 to 15 percent. However, by

value it is as much as 30 percent.



Indian shampoo market

At a time when most FMCG categories are inching, along

personal product shampoos is a high priority area for major players such

as Hindustan Lever, The current size of the shampoo is in Crores .

Unlike other FMCG categories such as soaps and detergents, which boast

of a penetration level of more than 90 percent , shampoo remain a low

penetration category. Industry estimate that the urban market penetration

of shampoos is a modest 36 percent .The major players in hair shampoo

category are HUL, Marico, and Dabur India.

The Shampoo market is divided into two

1) Cosmetic.

2) Anti- dandruff.

For a market with high potential, the shampoo market in India is

dominated by just a few players. From scores of brands five years ago the

shampoo market has now been whittled down to handful. HUL with 65

percent volume share dominates the market with brands such as Sunsilk,

Clinic plus and clinic all clear, Cavin Kare Ltd., with brands such as

Chik and Nyle follows with a 19.8 percent volume share .3

P & G is the only large player in this category with brands such as

Pantene Pro V and Head & shoulders’ & G discontinued it shampoo

operation of manufacturing from 2000.HUL ‘s long established ties with

retailers and its extensive distribution reach probably acts as an entry

barrier for new entrants. Cavin Care Ltd business of shampoo has grown

faster than the overall market .The market had a set back up almost to ten

months between Jan to Nov 2000 Due to perception that shampoos



contain harsh chemicals that could damage hair, high price and the view

that the shampoo is more of a glamour product rather than Hygiene.

Therefore the marketers adopted the strategies to lower the price by

making experiments on low packing over a decade. Almost to the tune of

50 paise sachet by Chik shampoo. Which helps the brand to expand to

40percent? While HUL acknowledge on Innovation and introduce lux

shampoo 50 paise version.

Which restrict margin expansion for the players? Marketers have

tried to add a utility value to shampoos by offering functional benefits.

Anti- dandruff shampoo represents this attempt. Clinic plus, one of the

first Anti –dandruff brands, is the largest shampoo brand today, with a

market share of 31 percent HUL experimented with different versions of

sunsilk for dry, normal, and oily hair. P & G head & shoulders Menthol

and pentene lively clean also offer functional benefits to users. Since

these add-ons enable brands to command a price premium over the plain

shampoos, this strategy could aid both volume and margin expansion.

An herbal shampoo was launched by Cavin care have been some of

the early entrants in the Indian herbal shampoos market. This product

claim to use traditional Indian herbs such as Shikakai, soap nuts, amla as

ingredients and have been success. Nyle harbor which accounts 10

percent volume share. Due to high price herbal shampoos 90 percent is

sell in urban only while synthetic still rule over rural area. Meanwhile

Dabur also introduced Vatika Herbal shampoo with low price. Godrej

launched with hair color Godrej color glosses shampoo, for users with



colored hair. Then thereafter many local as well as multinational brands

started producing Ant-dandruff shampoos.

We still see that HUL turnover penetrated to rural market through

scheme as NREGA( National Rural Employment Guarantee act) rural

consumers are upgrading to aspirational products like face wash , Hand

wash etc

Statistics reveal that while the number of rural consumer earning

about a Rs 60 a day would come down to 250 Million from 400 million

by 2020. The number of consumers earning Rs 250 a day would have

captured from 50 Million to 250 Million. These represent a huge

opportunity for marketers to increase their rural presence. According to

report of Nielsen’s Jan/Feb 2011 HUL market share in shampoo segment

declined by 1.3 percent points to 47.3 percent while P & G gained 2.4

percent with a market share of 17.7 percent. Dabour on the other hand

gain 0.8 percent capturing 6.7 percent in the estimated Rs 3000 Cr in

2011 and Rs 5000 Crore till 2014.The heavily spend on advertising to

remove the perception on Indian Minds regarding using of shampoo in

last one year of 2011 and 2012.

We see that HUL spent around Rs 2140 Crore on Advertising and

other promotional campaign,4 it was much more than its net profit of Rs

1,736.83 Crore for the same period.

We see that Lux and Lifebuoy have held the sway of the market

for almost fifty years. While the former brand remained the preserve of

the high end rich customers, Lifebuoy ruled the roost with health



conscious users as a hygienic soap. While pears has dominated as high

profile specialty soap, HUL has traditionally focused on rural market

where around 700 million people or 70 percent of India’s population live

in more than 7,00,000 villages with a population less than 1500. So as to

service rural market HUL It tries with 3A’s (Availability, Awareness, and

Attitude)

Extending availability:

Data on rural consumer buying behavior indicates that the rural

retailer influences 35 percent of purchase occasions therefore sheer

product availability can determine brand choice, volumes and market

share. Project streamline conducted by HUL’s into Maharashtra.

Influencing affordability:

The project streamline focused on extending distribution. It was

restricted to raising penetration and awareness levels to village having

less than 2000 population. The model triples physicals reach, double

communication reach, creates a platform for influencing attitude changes

and raising Incomes.

HUL is tying up with Non-Governmental organizations, United

Nations Development program and voluntary organizations to propagate

health and hygiene message. Which creates a channel to raise awareness

of its brands and catalyze affluence in rural India?

Enhancing awareness:

HUL has been utilizing events such as fairs and festivals etc. as

occasions for brand communication. Cinema vans shop –fronts, walls and



wells are other media vehicles that we have utilized to heighten brand and

pack visibility. We see that consumption is negligible as compared to

urban population say 10:1. The distribution was supported by explanation

of product usage and a video show, which was interspersed with product

communication. Thus we see awareness is generated of its product

categories and the availability of affordable pack. Consumers were also

made aware of the superior benefits of using our product vis- a Vis their

current habits and the affordable packs sizes on offer. The project thus

successfully addressed issues of awareness, attitude and habits.

Nirma:

Nirma success is based on the premise of consistent and effective

delivery of value for money equation to our customers. These benefits

along with betterment in the areas of distribution, packaging, advertising

will ensure steady growth for Nirma in future. Nirma’s low cost strategy

appears to have become a fashionable mantra, even among large Indian

group. Nirma pioneered a lower cost manufacturing method. Which is

helpful where consumers are price conscious? And due to these it’s

giving multinational run for their money. Nirma invested Rs 3.8 billion in

a plant that makes linear alkyl benzene, a key ingredient for Nirma

detergent. Nirma is setting up another plant to produce a second

ingredient’s used in making his cleaning product: soda ash. The Rs 10

billion factory will make 420,000 tones of soda ash each year, iodized

salt, another commercial commodity, is a byproduct.

Godrej soaps:

Godrej is currently the number three player, volume wise in the

industry. Cinthol its flagship brand has recorded since the past few years



decline in its sales. This has led to high sale in terms of value of 24

percent by competing vigorously in the marketplace. A correction in the

prices of inputs resulted in better margins in the soaps business as

compared to the previous year. Godrej has come out with a number of

innovative consumer and trade offers.

The highlight was the launch of Fair glow which is the first

innovative break through soap offering in the Indian market for many

years. The product meets a stated need of the consumer at no extra cost or

effort and has met with universal acceptance by the trade and consumers.

Sandal and natural variants of no.1 soap launched keeping with the rising

popularity of ‘natural’ variants in the soap industry. Renewed focus on

institutional sales and sales to Canteen, Stores, and Department led to

growth in sales value in this segment.

Godrej has the distinction of being the first company in the world

to develop technology to make soap with vegetable oils, way back in

1930. It is also manufacturing for other players in the industry. Contract

manufacturing of toilet soaps registered a 20 percent volume growth but

grew by only 7 percent in value terms to Rs 618 million. Godrej makes

Rexona and Dettol for Reckitt & Colman of India and Johnson’s baby

soap for Hindustan Lever. And yet only half of its capacity of 70,000

tones is being used.

Youth power is becoming increasingly evident in villages. Rural

youth bring brand knowledge to the households. This has forced several

companies to change the focus and positioning of their products and



services towards this segment that is growing in absolute number and

relative influence.

Trapping the rural market:

Many companies having marketing expertise are focusing on rural

markets as there are opportunities to market brands, various different

products and services as rural markets are lucrative than urban areas.

Rural markets are growing faster and form the target group for various

consumer goods.

1. Intensive competition in urban markets has resulted in increase in

costs but not high market share and profits.

2. Traditionally farmers have treated agriculture as a way of living and

they produce just enough quantities to meet their family

requirements. Many progressive farmers have increased the yields of

crops by following modern agricultural practices.

3. Increase in rural income and saving has led to green house cultivation

of flowers and vegetables, mushroom cultivation, development of

industries such as cotton ginning and spinning mills, paddy

processing units etc.

4. With a very large consumer base rural markets have tremendous

potential.

5. The rural markets are highly scattered over a wide geographical area

and therefore that marketers have huge potential markets for

promoting products and services.

6. The village retailer is the link between the rural consumer and

manufacturer. He plays a major role in introducing new products in

rural markets.



Competitive product strategies for rural markets:

1. Branding strategy :

Branded goods comprise 65 percent of sales in villages today.

The share of non- branded goods is shrinking dramatically. Brand names

make products familiar and evoke possessiveness.

2. Customer value strategy:

As they are price sensitive. They are more concerned about

functional benefits of the products and the value for money they pay.

3. Innovation strategy :

Some companies choose to develop products especially to meet

rural market needs.

4. Spurious good strategies :

Spurious products, generally marketed by the unorganized, low

end entrepreneurs somehow make their way into the market and eat away

the large chunk of corporate marketer’s profits. The imitations will

resemblances that dupe the gullible consumer.5

5. Packaging strategies :

To enter the rural market innovative packages are necessary to add

value to the premium products. Small packs and combo packs have

became a major attraction in rural India.



6. Brand strategies :

A company may introduce several brands in a product –line

with different features to appeal to different categories in the same

customer group.

7 Co- Branding strategies:

Today, we find offers with two or more brands of the same

company or different companies. When a marketer offers one brand with

another brand of the same company or another company, such offers may

gain image for the brand.

Companies or brands which adopted various strategies to lure the

rural markets are Nirma, Lifebuoy, Tata Tea, Coca –cola, Mahindra &

Mahindra, Kelvinator, Fair Glow, Colgate Etc.

According to NCAER estimates that around half of items sold in

these Meals are FMCG products and consumer durables.

4.04 Multinational Branding strategies of FMCG personal

Care products:

Branding is an integral part of the business building process. Large

corporations spend hundreds of millions of dollars building their brands.

Brands have become the most valuable asset within any enterprise,

quintessential zing the knowledge, the art, the science, and the work of

each person in each work day, making them the ultimate symbol of much

that is good and true and beautiful within our global economy. In time,

Brands began to penetrate beyond the corporate world. The impact of

branding in the business building process of FMCG companies in India



was also witnessed two decades back. The Indian FMCG sector is the

fourth largest sector in the economy with an estimated size of Rs.1, 300

billion. The sector has shown an average annual growth of about 11

percent per annum over the last decade.

Here an attempt to understand the concept and roles of branding

strategy in the business building process of FMCG companies. For the

better and in-depth understanding, case studies of four MNCs in the

FMCG sector in India are studied. The branding strategies of top four

MNCs i.e. P&G India, HUL, Colgate-Palmolive India and Amway India,

especially in the body care products among FMCG product are analyzed

in details. In the new emerging scenario, brands are becoming the most

valuable assets that a business can possess.

Brands are wealth generators of the twenty-first century. When

products are not differentiated in the factories, they are differentiated in

the consumers’ minds. Brands are capable of transforming mundane

products into objects of desire. Accordingly, the market value of a

business is determined by the number and types of brands it holds.

Brands create identifiable streams of earnings for a firm. Firms like HUL,

Amway India Ltd, P&G India and Colgate-Palmolive are not highly

valued because of tangible assets they hold. Rather their value is dictated

by the power of their brands. Brand power is nothing if none of the

customer following it enjoys.

It has been observed that companies start with one product but over

time- as they accumulate manufacturing and marketing capabilities they

tend to become multi-product. As the number of products handled by a



company increases, it raises certain questions; what kind of branding

relations would they have among themselves? Companies differ in their

approaches to branding. Western companies seem to favors product

branding while the companies in the east practice mega-brand approach.

A company can choose from a variety of branding strategies. Product

branding is driven by customer logic. Each product is given a distinct

brand name. Line branding is targeted at a market segment. It seeks to

appeal to them with a concept. Usually lien brands offer complementary

products and hold them together under a common concept. For example

HUL adopts line branding in some case. Range brands extend beyond

product complementary. Rather, the products under the range brands

emanate from some area of expertise or competence. A range brand can

have apparently dissimilar products but all of them share a common

expertise. Umbrella branding means promoting all products under a

common name. It is favored because of economies, but this approach is

highly deficient from the viewpoint of customers’ logic. Firms cover

brand because of their wealth generating power. They are new generation

assets. Different MNCs adopt different branding strategies depending

upon their vision and goal. Some MNCs adopt multiple strategies for

branding for various categories of products but some companies adopt a

single strategy for the variety of products as a branding strategy.

4.05 Brand equity perception:

Brand equity is normally used by most organizations as a measure

of how strong the brand is. Brand equity has been considered in many

contexts, Aaker (1991)6, defines brand equity from a consumer

perspective of brand loyalty, awareness, perceived quality and brand

image whilst other authors such as Farquhar (1989)7 define brand equity



from a financial perspective (added value endowed by the brand).

Because brand equity is so important for marketers, many invest millions

in marketing activities that are meant to increase it; however there seem

to be no link between brand equity measures and financial performance.

Many organizations track brand equity consistently in order to ascertain

consumer satisfaction, awareness and loyalty amongst other things.

Although this is a good practice, it does not add value if this information

is not shared with the rest of the organization especially the executives.

According to Ambler (2003)8, there is a big difference between

measuring brand valuation, market share and brand equity and more often

than not most companies focus on brand valuation rather than brand

equity. Brand equity is the asset itself whilst brand valuation measures

what the asset is worth. It is therefore logical to put measures in place to

track how the asset (brand equity) is performing. In essence, building

strong brand equity can influence future consumer behavior and therefore

increase the value of a brand (Ambler, 1995)9. According to a survey on

top 100 most valuable global brands 2009, knowing a brand‘s value is

important as it enables business leaders, investors and other stakeholders

to make better decisions such as the return on investment in marketing

initiatives (Millward Brown, 2008). The brand value is calculated based

on the intrinsic value of the brand derived from its ability to generate

demand and is based on customer opinion (brand equity) and financial

performance (Mill ward Brown, 2008). This therefore supports the view

that brand equity tracking is important to ensure that the value of the asset

is sustained. A study conducted by Hong-bum, Woo & Jeong (2003)10,

on the effect of consumer based brand equity on firm‘s financial

performance, they concluded that a lack of brand equity in hotel firms can

damage potential sales flow and that strong brand equity can cause a



significant increase in revenue. These findings were based on the fact that

consumers base their choice of hotel and how much they are prepared to

pay on key factors such as: brand loyalty, awareness, perceived quality

and brand image all of these which are key components of measuring

brand equity.

From the discussion above, it is evident that brands are the heart of

any business and if well managed, they can help increase the firm‘s

financial value however the question is how many organizations are

focusing on the short term (sales and market share) versus long term

(investing in brand building activities that will drive long term growth

and thus creating sustainable financial growth value of the firm).

Brand equity is another concept that is closely related to branding

and brand management. The concept of brand equity was invented in

1980‘s and only gained popularity in the 1990‘s (Aaker, 1991). It is

therefore still a relatively new and complex concept that is often difficult

to describe. The steadily growing literature contains several often

divergent viewpoints on the dimensions of brand equity, the factors that

influence it, the perspectives from which it should be studied, and the

ways to measure it. However, there is agreement among researchers on

the general definition of the concept. Brand equity is defined as the

marketing effects or outcomes that accrue to a product with its brand

name compared with those that would accrue if the same product did not

have the brand name (Aaker 1991; Dubin, 1998; Farquhar 1989; Keller

2003; Leuthesser 1988).



Ambler (2003: 281), defines brand equity as an important

intangible asset for the company, it can be seen as the reservoir of results

gained by good marketing but not yet delivered to the profit and loss

account Yoo, Donthu & Lee (2000)11, define brand equity as the

difference in consumer choice between a branded and unbranded product

given the same level of product features. Aaker (1991) defines it as a set

of assets and liabilities connected to a brand that add to or detract from its

value to the customer and to the business and creating brand equity

profile involves the identification of the various customer associations

with a brand and levels of customer awareness and loyalty that set it apart

from competitors. Leiser (2004), concur and adds that all those

associations (positive, negative and neutral) evoked from customer

experience with a brand combine to create the brand‘s equity. Because

brand equity is such a complex subject, it can be viewed from a variety of

perspectives. Motameni and Shahrokhi (1998)12, highlights that although

brand equity is generally viewed from two perspectives such as:

marketing decision making and financial perspective, there is a need to

view brands from a global perspective especially since successful

maintenance of global image and recognition translates into hard

currency in international business as is the case with the likes of

McDonald‘s and Coca Cola. Marketing decision includes aspects such as

awareness, loyalty, quality and propriety brand assets with an aim of

improving efficiency of the marketing process. Financial decision on the

other hand involves financial market, value based techniques (Motameni

and Shahrokhi, 1998). Best (2005), defines brand equity the way the term

equity in business is normally defined as depicted in figure 2.02 below.

According to Best (2005)13 in a business, the owners equity is the value

of the owner‘s holdings in the company and is determined by the



difference between what a company owns in assets and what a company

owes in liabilities, therefore the larger the ratio of assets to liabilities the

greater the owner‘s equity. Brand equity can also be assessed the same

way and to calculate brand equity one must simply subtract the total

brand liability score from the total brand asset score (Best, 2005).

Brand equity can also be used to distinctly separate selling from

marketing as in essence selling seeks an immediate order for a product

and aims to increase the revenue line of a profit and loss account

immediately whilst marketing invests resources before it expects to reap

the rewards (Ambler, 2003). Brand equity has become the most valuable

asset for many companies. Kohli and Thakor (1997)14, make a very good

point by highlighting that consumers do not buy jeans but buy Levi‘s and

no one buys corn flakes but Kellogg‘s and furthermore, the strength of

the brand names have resulted in acquisitions amounting to billions for

the following companies:

Nestle acquired Perrier for $2.5 billion.

Phillip Morris acquired Kraft for $13 billion.

Nabisco was sold for over $25 billon.

According to Ambler (2003) there is also a distinct difference

between the asset (brand equity) and what the asset is worth (brand

valuation). Brand equity also plays an important role in increasing the

value of the business and companies pay good money for these assets

(Ambler, 2003; Motameni and Shahrokhi, 1998). Aaker (1996) highlights

that there are four major assets through which brand equity generates

value and these are: brand name and awareness, brand loyalty, perceived

quality and brand associations.



Because of the value that brand equity adds for shareholders, it is

still surprising that there are still debates as to whether brand equity

building activities are important or not and as a result companies that are

focused on short term gains do not perceive brand as important assets. By

viewing brands as assets, companies are better able to put their brand

building expenditure in context with the value that those brands deliver

(Davis, 2002)15.

According to Yoo et al (2000), there are several dimensions of

brand equity and any marketing action has the potential to affect brand

equity because it represents the effect of accumulated marketing

investments into the brand. Furthermore, brand name recognition with

strong associations, perceived quality of product, and brand loyalty can

be developed through careful long-term investments. In a study to

examine selected marketing mix and brand equity, Yoo et al (2000),

recognized that there are two types of marketing management efforts

from a long term perspective of brand management namely: brand

building activity and brand-harming activity. It was observed that

frequent use of price promotions is a typical example of brand-harming

activity whilst high advertising spending, high price and distribution

through retailers with store images and high distribution intensity are

good examples of brand-building activity. The results of regular price

cutting can negatively affect brand equity as a perception is created that

product quality has been compromised. In their recommendations, Yoo et

al (2000), suggests that managers should avoid frequent price cuts or a

consistent low price strategy because they lower perceived quality and

product image.



From the above discussion, it is evident that brand equity is a major

marketing asset of many firms and that it can be used to drive long-term

growth and deliver value for shareholders. Although brand equity plays a

significant role in increasing shareholder value, it is important that

measures are put in place to track it. It is a well known fact that what is

not measured is not managed and therefore tracking and measuring brand

equity assist in creating brands that consistently deliver on their promise.

As brand equity is an intangible asset, most people struggle to quantify it

however various tools are available that have been used effectively by

many organizations to measure brand equity. An attempt to define the

relationship between customers and brands produced the term ``brand

equity'' in the marketing literature. The concept of brand equity has been

debated both in the accounting and marketing literatures, and has

highlighted the importance of having a long-term focus within brand

management. Although there have been significant moves by companies

to be strategic in the way that brands are managed, a lack of common

terminology and philosophy within and between disciplines persists and

may hinder communication. Brand equity, like the concepts of brand and

added value has proliferated into multiple meanings. Accountants tend to

define brand equity differently from marketers, with the concept being

defined both in terms of the relationship between customer and brand

(consumer-oriented definitions), or as something that accrues to the brand

owner (company-oriented definitions). It has been simplified that the

variety of approaches, by providing a classification of the different

meanings of brand equity as: The total value of a brand as a separable

asset when it is sold, or included on a balance sheet; A measure of the

strength of consumers' attachment to a brand; A description of the

associations and beliefs the consumer has about the brand.



The first of these is often called brand valuation or brand value, and

is the meaning generally adopted by financial accountants. The concept

of measuring the consumers' level of attachment to a brand can be called

brand strength (synonymous with brand loyalty). The third could be

called brand image, though used the term brand description. When

marketers use the term ``brand equity'' they tend to mean brand

description or brand strength. Brand strength and brand description are

sometimes referred to as ``consumer brand equity'' to distinguish them

from the asset valuation meaning.

Brand description is distinct because it would not be expected to be

quantified, whereas brand strength and brand value are considered

quantifiable. Brand value may be thought to be distinct as it refers to an

actual or notional business transaction, while the other two focus on the

consumer. There is an assumed relationship between the interpretations of

brand equity.

The brand equity chain very simply, brand description (or identity

or image) is tailored to the needs and wants of a target market using the

marketing mix of product, price, place, and promotion. The success or

otherwise of this process determines brand strength or the degree of brand

loyalty. A brand's value is determined by the degree of brand loyalty, as

this implies a guarantee of future cash flows.

It has been considered that using the term brand equity creates the

illusion that an operational relationship exists between brand description,

brand strength and brand value that cannot be demonstrated to operate in

practice. This is not surprising, given that brand description and brand



strength are, broadly speaking, within the remit of marketers and brand

value has been considered largely an accounting issue. However, for

brands to be managed strategically as long-term assets, the relationship

needs to be operational within the management accounting system. The

efforts of managers of brands could be reviewed and assessed by the

measurement of brand strength and brand value, and brand strategy

modified accordingly, Whilst not a simple process, the measurement of

outcomes is useful as part of a range of diagnostic tools for management.

Whilst there remains a diversity of opinion on the definition and basis of

brand equity, most approaches consider brand equity to be a strategic

issue, albeit often implicitly It has been suggested that managers of

brands choose between taking profits today or storing them for the future,

with brand equity being the store of profits to be realized at a later date.

This definition of brand equity distinguishes the brand asset from

its valuation. This approach is intrinsically strategic in nature, with the

emphasis away from short-term profits. Davis (1995) also emphasizes the

strategic importance of brand equity when he defines brand value (one

form of brand equity) as the potential strategic contributions and benefits

that a brand can make to a company.'' In this definition, brand value is the

resultant form of brand equity in , or the outcome of consumer-based

brand equity. Keller (1993)16 also takes the consumer-based brand

strength approach to brand equity, suggesting that brand equity represents

a condition in which the consumer is familiar with the brand and recalls

some favorable, strong and unique brand associations.

Hence, there is a differential effect of brand knowledge on

consumer response to the marketing of a brand. This approach is aligned



to the relationship described earlier, where brand strength is a function of

brand description. It has been related that brand equity to added value by

suggesting that brand equity involves the value added to a product by

consumers' associations and perceptions of a particular brand name. It is

unclear in what way added value is being used, but brand equity fits the

categories of brand description and brand strength as outlined above.

Leuthesser (1988) offers a broad definition of brand equity as: the set of

associations and behavior on the part of a brand's customers, channel

members and Parent Corporation that permits the brand to earn greater

volume or greater margins than it could without the brand name.

Marketers tend to describe, rather than ascribe a figure to, the outcomes

of brand strength. It has been suggested that brand equity increases the

probability of brand choice, leads to brand loyalty and ``insulates the

brand from a measure of competitive threats.'' Aaker (1991) 17suggests

that strong brands will usually provide higher profit margins and better

access to distribution channels, as well as providing a broad platform for

product line extensions. Brand extension is a commonly cited advantage

of high brand equity, Keller and Aaker (1992) suggesting that successful

brand extensions can also build brand equity. Loken and John (1993) and

Aaker (1993) advise caution in that poor brand extensions can erode

brand equity. Farquhar (1989) suggests a relationship between high brand

equity and market power asserting that: The competitive advantage of

firms that have brands with high equity includes the opportunity for

successful extensions, resilience against competitors' promotional

pressures, and creation of barriers to competitive entry. This relationship

which indicates that there can be more than one outcome determined by

brand strength apart from brand value. It should be noted that it is argued

by Wood (2000)17 that brand value measurements could be used as an



indicator of market power. Achieving a high degree of brand strength

may be considered an important objective for managers of brands. If we

accept that the relationships highlighted in are something that we should

be aiming for, then it is logical to focus our attention on optimizing brand

description. This requires a rich understanding of the brand construct

itself. Yet, despite an abundance of literature, the definitive brand

construct has yet to be produced. Subsequent discussion explores the

brand construct itself, and highlights the specific relationship between

brands and added value. This relationship is considered to be key to the

variety of approaches to brand definition within marketing, and is

currently an area of incompatibility between marketing and accounting.

The between brand equity and market power.

The question of the short-term effectiveness of sales promotions (or

lack of it) is particularly important for brands with a high level of

customer-based brand equity (from now on, referred to as high-equity

brands) because of concerns about the long-term effects of sales

promotions on brand equity Existing analytical models argue that, in such

a situation, the high-equity brand should price discount in order to capture

the buyers of the private label (Rao 1991)18. However, empirical evidence

on the effectiveness of sales promotions for high and low-equity brands is

mixed.

While some studies found that higher-quality brands gain more

from a price cut than lower quality brands (Blattberg and Wisniewski

1989), others found the opposite (Bronnenberg and Wathieu 1997)19.

Keller‘s (1993) defines the brand equity as it states that consumers are

more responsive to the marketing mix of brands with high levels of brand



equity. Blattberg and Wisniewski (1989)20provide empirical evidence of

the higher promotion elasticity of high-quality brands in the case of a

duopoly between brands of differing perceived quality. There are also

theoretical arguments supporting the leveraging impact of brand equity

on benefit congruency. Compared to high-equity brands, low-equity

brands do not provide as many benefits (utilitarian or hedonic) and are

bought because of their lower price. Low-equity brands should therefore

be less sensitive than high-equity brands to the congruency between their

weaker benefits and those of the promotion. Prior research provides

evidence supporting this assertion.

The cross-promotion asymmetry documented by Blattberg and

Wisniewski (1989) implies that monetary promotions should be less

effective for the low-equity utilitarian brand despite their benefit

congruency because of their incapacity to attract the price insensitive

buyers of the high-equity brand. The loss aversion argument that explains

the cross-promotional asymmetry for monetary promotions applies to

non-monetary promotions as well. Non-monetary promotions should be

less effective for the low-equity hedonic brand than for its high-equity

counterpart because the buyers of high-equity brands are more reluctant

to trade down in hedonic product benefits (a loss) than buyers of low-

equity brands are to trade up (a gain). Perhaps because coupons and

temporary price reductions are the most common form of sales

promotions, most research has assumed that monetary savings is the only

consumer benefit of sales promotions. Consequently, while many studies

have examined the costs of promotion usage, comparatively few have

examined their benefits to the consumer.



It has been concluded that:

1. Sales promotions can provide consumers with an array of hedonic and

utilitarian benefits beyond monetary savings. Hedonic benefits include

value expression, entertainment, and exploration. Along with simple

monetary savings, utilitarian benefits also include product quality and

shopping convenience.

2. Non-monetary promotions provide more hedonic benefits and fewer

utilitarian benefits than monetary promotions. All benefits, except

quality, contribute to the overall evaluation of monetary and nonmonetary

promotions. However, each type of promotion is primarily evaluated

based on the dominant benefits it provides.

3. For high-equity brands, sales promotions are more effective when they

provide benefits that are congruent with those provided by the product

being promoted. Specifically, monetary promotions are more effective for

utilitarian products than for hedonic products. Conversely, non-monetary

promotions are relatively more effective for hedonic products than for

utilitarian products. In this research Definition of brand equity given by

Aaker has been taken as working definition of Brand equity, as it is a

consumer oriented definition of Brand equity.



4.06 Aaker equity Frame work:

The Aaker equity framework gives Brand Equity frame work21.

Chart No 4.01 Aaker equity frameworks

Source: Kevin lane Keller, “Strategic Brand Management”

Above Mentioned sources have been considered to measure Brand Equity

perception namely, Brand Loyalty, Brand Awareness, Perceived Quality.

B

R

A

N

D

E

Q

U

I

E

T

Y

Brand Loyalty

Brand Awareness

Perceived Quality

Brand Associations

Other Proprietary Brand Assets

Reduced marketing costs, Trade Leverage Attracting new customer Create awareness Reassurance Time to respond to

Anchor to which other Association can be attached Familiarity – Liking Signal of substance/commitment Brand to be considered

Reason to buy, Differentiate/Position, Price, Channel Member interests, Extensions

Help process/Retrieve Information, Differentiate/Position, Reason to buy, Create positive Attitude/feelings, Extensions

Competitive Advantage

Provide value To customer by Enhancing customers Interpretation Or Processing of Information Confidence in The purchase decision Use satisfaction

Provide value to firm by Enhancing Efficiency & Effectiveness of Marketing Program *Brand Loyalty *Prices/Margins *Brand Extensions *Brand Leverage *Competitive Advantage



4.07 Review of district to be studied:

Parbhani:

Parbhani district earlier also known as Prabhavatinagar, is one of

the eight districts in the Marathwada region of Maharashtra State of India.

From 1596 to 1724, most of the present territory of the district was

divided between Pathri and Washim sarkars of Berar Subah of the

Mughal empire . In 1724, after the battle of Sakharkheda, it went under

the Nizam rule. Following the re-organization of the states in 1956,

Parbhani along with the other districts of Marathwada became part of

Bombay State. On May 1, 1960 when Maharashtra state was formed, it

became a part of it22. The state capital of Mumbai is to the west; Parbhani

is well connected by road to other major towns in Maharashtra and also in

the neighboring state of Andhra Pradesh. Parbhani is a major railway

junction connecting Andhra with Marathwada. It is also known as a store

of Jowar in Marathwada. In the field of education the Parbhani is known

for the famous Marathwada Agricultural University which is very helpful

for the peoples residing all around. Parbhani district covers an area of

about 6250.58 km2. The district is divided into 9 administrative Sub-units

(Tahsils)-Parbhani, Gangakhed, Sonpeth, Pathri, Manwath, Palam, Selu,

Jintur, and Purna.According to the 2011 census Parbhani district has a

population of 1,835,98223, roughly equal to the nation of Kosovo24 or the

US state of Nebraska25 This gives it a ranking of 259th in India (out of a

total of 640) . The district has a population density of 295 inhabitants per

square kilometer (760/sq mi) . Its population growth rate over the decade

2001-2011 was 20.18percent. Parbhani has a sex ratio of 940 females for

every 1000 males and a literacy rate of 75.22 percent.



Parbhani has been described as the land of saints, as several saints

have been associated with Parbhani including like Janabai from

Gangakhed. The famous mathematician Bhaskarbhatt was from Bori in

Parbhani district. The river Godavari flows through this district.

Jalna:

Jalna district is an administrative district in the state of Maharashtra

in western India. Jalna town is the district headquarters. The district is

part of Aurangabad division. The district occupies an area of 7718 km². It

has total 970 villages. The district is bounded on the north by Jalgaon

district, on the east by Parbhani and Buldhana districts, on the south by

Beed district and on the west by Aurangabad district. The district is

situated at the central Maharashtra, in the north Marathwada region. It is

one of the 8 districts of Marathawada region. The district has moderately

to gently sloping undulated topography. The Northern part of the district

is occupied by the Ajanta and Satmala hill ranges. Jalna was formerly a

part of the Princely State of Hyderabad and after the Indian independence

in 1947, became part of Aurangabad district.

On 1 May 1981 the new district was formed by carving out Jalna,

Bhokardan, Jafrabad and Ambad talukas (Sub-division) of Aurangabad

district and Partur taluka of Parbhani district. The district is divided into

two sub-divisions, Jalna and Partur. These are further divided into eight

talukas: Jalna, Ambad, Bhokardan, Badnapur, Ghansavangi, Partur,

Mantha and Jafrabad. The district was formed during the reign of chief

minister Abdul Rehman Anatul. According to the 2011census Jalna

district has a population of 1, 958, 483, 27 26roughly equal to the nation of



Lesotho or the US state of New Mexico. This gives it a ranking of 237th

in India (out of a total of 640). The district has a population density of

255 inhabitants per square kilometer (660/sq mi). Its population growth

rate over the decade 2001–2011 was 21.84 percent Jalna has a sex ratio of

929 females for every 1000 males, and a literacy rate of 73.61 percent.

Nashik:

Nashik formerly it was known as Gulshanabad and it is important

historically, myth logically, socially and culturally city. Known for the

temples on the banks of the Godavari and it has historically been one of

the holy sites of the Hindu and Muslim religion. It is one of the four cities

that host the massive Sinhastha Kumbh Mela once every twelve years.

After the fall of the Satavahana empire, the Abhiras or Ahirs ruled in the

north east and the Chutus in Maharashtra and Kuntala The Puranas state

that ten Abhiras ruled for, 67 years. The Nasik inscription peaks of king

Madhuriputra Ishvarasena the Abhir and a son of Shivadatla. This

dynasty originated in A. D. 249-50, an era called Kalachuri or Chedi in

later times.27

In Kritayuga, Nashik was 'Trikantak', 'Janasthana' in Dwaparyuga

and later in Kuliyuga it became 'Navashikh' or 'Nashik'. Classical Sanskrit

poets like Valmiki, Kālidāsa and Bhavabhuti have paid rich tributes here.

In 150 BC Nashik was the country's largest market place. From 1487

A.D, the province came under the rule of Mughal and was known as

Gulshanabad. It was also home of Emperor Akbar who wrote at length

about Nashik in Ein-e-Akbari. It was also known as the 'Land of the

Brave' during the regime of Chhatrapati Shivaji Maharaj.



In April 1818, during the British rule, Nashik once again regained

its importance. The British fell in love with the beauty of the city and

developed it, including building the golf course, which was one of the

largest in Asia. Nashik is surrounded by nine hills, namely: Durga,

Ganesh, Chitraghanta, Pandav, DingerAli, Mhasarul, Pathanpura and

Konkani. This city with hills surrounding it has lakes which add to its

beauty. In 1869 the region came to enjoy unbroken peace. In 1869 Nashik

was made a full-fledged district with its present talukas. With the return

of peace Nashik flourished and prospered. Reasons, political, religious, as

well as commercial led to its rapid development. With the construction of

the railway, from Bombay to the north-east, very near the city, religious

minded devotees were attracted to the town in ever increasing numbers

where they made their purchases of various artistic & useful articles. This

made Nashik a great trade centre where artisans skilled in manufacturing

utensils & smiths excelling in workmanship in silver & gold crowded to

ply their trade.

Under Maratha rule, they advanced sums to finance military

campaigns of feudal Sardars and in their later times their Pedhis gradually

began to finance the flourishing trade in metal ware and fabrics as well as

in grapes and onions. However, the revolutionary activities at Nashik

continued. It was during this time that 'Abhinav Bharat ' was formed. The

young Nashikites were influenced by the speech of Lokmanya Tilak

given on the 26th of August 1906.

Vinayak Damodar Savarkar:

Through 'Abhinav Bharat', successfully organized underground

movement against the British rule.



Ahmednagar:

The town Ahmednagar was founded in 1490 by Ahmad Nizam

Shah on the site of a more ancient city, Bhingar. With the breakup of the

Bahmani Sultanate, Ahmad established a new sultanate in Ahmednagar,

also known as Nizam Shahi dynasty.

It was one of the Deccan Sultanates, which lasted until its conquest

by Mughal emperor Shah Johan in 1636. Aurangzeb, the last great

Mughal emperor, who spent the latter years of his reign, 1681–1707, in

the Deccan, died in Ahmednagar and his burial at (khultabad) near

Aurangabad in 1707, and a small monument marks the site.

Maharani Ahilyabai Holkar was born on 31 May 1725 in Chondi village

of Jamkhed taluka in Ahmednagar district.

Military base

Ahmednagar is home to the Indian Armoured Corps Centre &

School (ACC&S), the Mechanized Infantry Regimental Centre (MIRC),

the Vehicle Research and Development Establishment, (VRDE) and the

Controller ate of Quality Assurance Vehicles (CQAV). Training and

recruitment for the Indian Army Armoured Corps takes place at the

ACC&S. Formerly; the city was the Indian base of the British Armies

Royal Tank Corps / Indian Armoured Corp, amongst other units. The

town houses the second-largest display of military tanks in the world and

largest in Asia. 28

As of 2011 Indian census, 29 Ahmednagar had a population of

347,549. Males constitute 53 percent of the population and females 47

percent. Ahmednagar has an average literacy rate of 84 percent, higher



than the national urban average of 79.9 percent. 30 10 percent of the

population is under 6 years of age.

1. Ahmednagar Fort - Built by Ahmed Nizam Shah in 1490, this is one

of the best-designed and most impregnable forts in India. As of 2013,

it is under the control of the military command of India. Oval in shape,

with 18-metre-high walls and 24 citadels, its defense system includes

a moat 30 meters wide and 4 to 6 meters deep. Rehekuri Blackbuck

Sanctuary: This is situated in Karjat taluka in Ahmednagar district.

The area of the sanctuary is 2.17 km2.31

2. Pimpri Gawail- is a village in Parner taluka in Ahmednagar district. It

is located about 25 km away from Ahmednagar and it is well known

for the watershed development and agribusiness activities. This village

has done very basic work in the rain water harvesting trough Deep

CCT structures and groundwater regulation and management. Farmers

self Help groups of the villages formed Producer Company for the

value addition of their agricultural commodity. This village has

conserved environment through participatory approach.

3. Mahatma phule krishi vidyapeeth, Rahuri , Mahatma Phule Krishi

Vidyapeeth is an agricultural university at Rahuri, named after an

activist and social reformer of 19th century—one of four agricultural

universities in the state.32

4. Ahmednagar city have air connectivity by Seaplane service. The port

for Seaplane is located at Mula Dam water reservoir, 30 min away



from Ahmednagar City. The service offered by Maritime Energy Heli

Air Services Pvt. Ltd. (MEHAIR) from 22nd September 2014.

Ongoing Flight is available from Juhu, Mumbai to Mula Dam. The

service will now enable the large number of pilgrims traveling to the

holy sites of Meherabad, Shirdi and ShaniShingnapur to travel quickly

and conveniently to their destinations.

Aurangabad:

Malik Ambar made it his capital and the men of his army raised

their dwellings around it. Within a decade, Kharki get a populous and

imposing city. Malik Ambar cherished strong love and ability for

architecture. Aurangabad was Ambar's architectural achievement and

creation. However, in 1621, it was ravaged and burnt down by the

imperial troops under Jahangir. Ambar the founder of the city was always

referred to by harsh names by Emperor Jahangir. In his memoirs, he

never mentions his name without prefixing epithets like wretch, cursed

fellow, Habshi, Ambar Siyari, black Ambar, and Ambar Badakhtur.

Malik Ambar died in 1626. He was succeeded by his son Fateh Khan,

who changed the name of Kharki to Fatehnagar. In the same year, the

Moghal viceroy Khan Jahan Lodi, advanced on the city, but retired to

Burhanpur on being bribed by the Nizam Shahi Commander, Hamid

Khan. With the capture of Daulatabad by the imperial troops in 1633, the

Nizam Shahi dominions, including Fatehnagar, came under the

possession of the Moghals. In 1653 when Prince Aurangzeb was

appointed the viceroy of the Deccan for the second time, he made

Fatehnagar his capital and called it Aurangabad. Aurangabad is

sometimes referred to as Khujista Bunyad by the Chroniclers of

Aurangzeb's reign.



In March 1666, accompanied by a body of 1,000 select troops,

Shivaji arrived at Aurangabad on his way to Agra Safshikan Khan, the

governor of Aurangabad, treated him with scant respect. For this act, he

was severely reprimanded by Jai Singh and made to pay a courtesy call

on Shivaji In 1668, the city nearly became a scene of a conflict between

the imperial troops under Diler Khan, and those commanded by Prince

Muazzam, the viceroy. In 1681, after plundering Burhanpur, the Marathas

assembled in the neighborhood of the Satara hills in order to attack

Aurangabad. The plan was, however, abandoned on hearing of the arrival

of the viceroy, Khan Jahan Bahadur. In the same year, Khan Jahan

Bahadur erected a wall around Aurangabad to protect it against surprise

attacks of the Marathas. It was done at the order of the Emperor, and cost

rupees three lakhs. Two years later, the Emperor himself arrived at

Aurangabad.



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