What makes Apple achieve a turnover of $109 billion, and become the world’s most valuable company? And what’s common between Apple, Google, Canon, Cavincare, and Tata Tea? According to Vinita Bali, MD and CEO, Britannia Industries these are “insurgent brands”, who “challenge the status quo and create something new of value”.
“Unless incumbents think like insurgents, they would lose relevance over time,” she said, while delivering a lecture on “The Business of Brands” at the 31st Ayaz Peerbhoy Memorial Lecture, held in Bangalore, yesterday.
The lecture is jointly organised by MAA Foundation and Advertising Club Bangalore, in the memory of adman Ayaz Peerbhoy.
To illustrate her point, Bali drew comparisons between Apple and camera manufacturer Eastman Kodak. Both companies were valued at $10 billion in 2003. While, Apple had a turnover of $6 billion, Kodak had posted a turnover of $13 billion. About eight years on, while Apple overtook Exxon Mobil to become the world’s most valuable company, Kodak filed for bankruptcy.
Brands and business are inextricably linked
“You can have brands without businesses but there cannot be businesses without brands,” Bali went on to stress that the brand strategy must be aligned with the business strategy. “Brands are intangible assets, which enable companies to carry on long-term on a sustainable basis. Therefore, until brand objective is not integrated with business objective, it cannot create value for the company,” she said.
Companies like Apple and Microsoft are successful as they have integrated their brand strategy and business strategy. “They have paid attention to what consumers want,” she said.
To drive her point home, she gave some food for thought for marketers, with questions:
-- How does a business add to the value of a brand and how does the brand add to the value of a business’?
-- What do I do on a brand that translates into business?
Lazy marketing, lazy advertising
Bali also questioned the logic behind random and rampant celeb endorsements. Falling into the trap, she felt was lazy marketing. While, the Indian cricket captain, Mahendra Singh Dhoni endorses 24 brands, 16 brands fall in the lap of Bollywood actor, Shah Rukh Khan. “It is important to trace the idea behind the brand, the idea that brands live by and not just plug in a celeb to endorse any and every product,” she said.
She felt that advertisers and marketers should question the value that such endorsements add to a brand?
One example, where she feels that the campaign and the celeb fit well, is the Cadbury and Amitabh Bachchan association. She said that Bachchan was roped in at a time, when questions were being raised on the brand’s quality testing systems. “His (Bachchan’s) endorsement was a smart way of getting quality assurance back into the brand,” she added.
‘Brands are not about flashy ad campaigns’
Advertising should lead to sales, was Bali’s next lesson. “Unless it results in sales, there is no point in a flashy campaign or a brilliant idea,” she said. She gave an example of how influential writer and management consultant, Peter Drucker was once asked after a lecture: “What makes a good salesman?” His response, Bali said, was simple, “He sells.”
She gave examples of ad campaigns of Absolut Vodka, which were released even before the products were launched. These campaigns, “went on to be some of the most successful brand campaigns,” she said. On the other hand, Bali said are brands like Starbucks and Café Coffee Day, which have become “enduring and sustainable brands” without any communication.
Marketing has to re-invent itself
Bali felt that marketing is a field that is still perceived as art and intuition – hard to predict, quantify, or replicate. Considering competition has become more intense and ROI is looked at from every point of view, the Britannia’s MD & CEO stressed on the need for marketing to be a continual, disciplined process rather than a sporadic exercise. “The challenge is to get the right metrics – what is working and why and what is not working and why not?” she added.
She also cautioned against the first impulse of reducing advertising spends in a crunch situation. “Unless there is a conviction that the business can sustain itself despite reducing advertising, it is not wise to do so,” she said.