“Private labels will rule the retail world”

PAUL MARTIN, GLOBAL SALES MANAGER, PLANET RETAIL

Recently, an interesting thing happened in the UK retail market. Tesco, regarded as the worldwide pioneer of own brand private labels, suddenly started introducing ‘phantom’ private label brands in its stores. For the first time, Tesco was abandoning its policy of only offering own labels under its own name. The move is important as Tesco has been at the vanguard of the three-tier private label strategy (‘good, better and best’ approach) which is now adopted by most of the world’s leading grocers.

This surely indicates that the growing power of retailers across the globe and their growing focus on private labels, which offer higher margins and a point of difference over rivals, means that private labels are becoming increasingly important in almost every market. In fact, in developed markets, private labels are moving beyond their original price and functional benefits, to more sophisticated tools for promoting retailers’ ethical credentials. Private labels generally need a highly developed retail environment to succeed with high levels of concentration, consumer trust in retailers and the presence of international players. For these reasons, the share of private labels is highest in Europe, where private label penetration has reached 53% in Switzerland. In contrast, the private label share in a fragmented market such as China is under 5%.

In immature retail markets, penetration of private labels tends to be generally lower. This is due to the fact that retail markets are usually quite fragmented, consisting of a large number of smaller retailers where price competition is less intense. Smaller retailers also generally have less control over the supply chain. Having a grip on the supply chain is an important requirement for launching private labels.

So keeping all these in mind, launch of phantom is a nice strategic move by Tesco. However, it remains to be seen how consumers will react. Will they be happy to see more variety or will they be even more confused now?

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

Kamal Gianchandani

IIPM Ranked No. 1 B-School In Global Exposre - Zee...

Kamal Gianchandani: on the other hand, is the man who micro-retails film content – via stores, online, home delivery service – under ADA’s youngest venture (four months old to be precise) Bigflix. Gianchandani, an MBA from Pune University and another former PVR Pictures employee, believes that Bigflix is a result of the “group’s vision to have comprehensive presence in filmed and non-filmed entertainment sector.” His total focus these days is on tapping the home entertainment market in India, which he believes is largely untapped. Sample this: Unlike in India, where theatrical revenues account for 67% of a studio’s revenues, domestic theatrical revenues account for only 18% for Hollywood studios. With growing relevance of alternate revenue streams like telecast rights, home and mobile entertainment, the share of theatres in media consumption is likely to stagnate. When that happens, Bigflix will be ready to net in the moolah. Gianchandani plans to spend a cool Rs.25 crore to build the brand Bigflix in this financial year and says that “over 40-50% of (his) time is spent on increasing numbers (adding more customers and clients) and the balance 50% time is spent on identifying gaps in service and improving them.” For now, the company is busy packaging its latest offering, of allowing users to download movies through their set top boxes for viewing.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Bausch & Lomb India eyes greener pasture and rolls out its new ad campaign. But will it succeed in its latest endeavour? Or will it lose out to competition? angshuman paul explores...

‘Eyes speak more than words’ and Bausch & Lomb (B&L) seems to be following this statement quite literally. This is also evident in their latest TVC, ‘Ankhon Ki Antakshari, Khelte Raho.’ Whether playing Antakshari will help B&L in the long run will depend on its consumers, but the million dollar question is, why is B&L suddenly upping its promotional activities. And if you look at the India story, B&L has ably steered its ads as a clinical and eye care company. So why has the company shifted its ad strategy from an informative one to the trendy type we are seeing today? 4Ps B&M analyses the shift in the promotional strategy of Bausch & Lomb Eyecare (I) Pvt. Ltd. and reveals to you, what’s propelling the eye-care company to target a new class of audience.

After completing one and a half decade in India, B&L commanded a whopping 70% market share of the Indian eye care market. Of course, conquering the market where contact lenses per se were considered a luxury fashion accessory, was not easy. But B&L did it through immense marketing resourcefulness and exceptional pluck. They rolled out a slogan coined as ‘Optics India 2000’ and by 2000 the company had in fact made a dent in the traditional glasses and spectacles market. But till 2000, B&L was perceived as a fashion accessory company rather than an eye care company. And this was primarily because of the company’s strong connect with Tom Cruise and Ray Ban. For globally, Ray Ban was under the umbrella of B&L. It was, however, much later in the year 1998 that B&L globally hived off its popular sunglasses venture to deepen its focus on its eye care business.

Globally, B&L wanted to position itself as an eye care company and the same sentiments were reflected in its India strategy also. So post 2000, the company’s ads paid more heed to establish B&L’s clinical eye care side, with a clear emphasis on the comfort side of soft lenses. Such strategy enabled the company to develop an edge and filled the gap delivered by the momentary setback laid by the hiving off of Ray Ban. According to Harish Natarajan, Managing Director, Bausch & Lomb Eyecare (I) Pvt Ltd., “Sunglasses was a big business for us. Without that we needed to focus more on eye care. We created a competitive edge for our soft lenses, which helped us create a strong market.”

Product innovation and promotional activities helped the Indian division of B&L to bounce back and make up for the losses caused after bidding adieu to Ray Ban and soon it conquered the market. But rather than enjoy the fruits of supremacy B&L soon had to contend with competition from Johnson & Johnson, which was slowly and steadily capturing the market with its positioning for the youth. Entry of new players like Fresh Look & Zeiss, which with their wide range of colour lenses were beckoning GenNext, were making a dent in B&L’s market. Their zealous effort was making contact lenses more popular as a fashion accessory, rather than an eye care solution positioning that B&L had. This really disturbed B&L, driving its market share southwards. Sources within B&L also confirmed to 4Ps B&M that at the beginning of 2008, B&L’s market share had declined by 20-30%.

Increasing market share and regaining its lost glory, became crucial for B&L. Work thus began for revamping B&L. Right from its campaigns, to its offices, everything had a facelift. The moment you step inside B&L’s office, a tangible zest can be felt in the air. Slogans like ‘If you don’t take care of your customer, someone else will’ is ubiquitous in the sprawling office. But that is not enough to cajole the consumer and they started a marketing research exercise to find a way to connect with the consumer. “We felt that there was a need to connect with the youth and for that we wanted to come out with new ads. Ads that will show the colourful side of B&L, but without compromising the brand image of the eye care company,” explains Natarajan. So promoting the brand as a fashion accessory was strictly ‘no’ and they rolled out ads to entice the younger generation. This was brilliantly done in the antakshari ad, where a young man tries to lure his girl with ‘Ankhon Ki Antakshari’ and conveys the comfort side of the product. Affirms Anurag Bhalla, Creative Supervisor, FCB Ulka, “The ad conveys the comfort side of the brand, showing that you can put it on a continuous basis, without any hassle. Compared to the earlier ads, the new ad is very trendy, yet never disturbs the image of the company as an eye care company.”

Apart from traditional advertising, B&L is also focusing on below-the-line activities like offering trial packs at a price easy on the pocket (earlier B&L never offered such trials). It’s hard to digest the fact, but such offers are even motivating FCB Ulka’s Anurag to go for contact lenses. But then why wasn’t he using it till now and using glasses (especially when he’s the creator of contact lenses ad)? “I need my glasses only to read, so to that extent I don’t put on glasses regularly. But yes the ads really convey how putting on contact lenses is very comfortable. Even now I am thinking to opt for contact lenses,” replies Anurag. To achieve their vision and to cash in on their earnestly generated goodwill, the ads are trying to woo not only GenNext, but also the glasses users. And soon, there won’t be just one but several Anurags who will be browbeaten (sweetly!) to go the contact lens way.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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