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The 3 least successful brand launches

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January 18, 2006 08:00 IST

Here's a closer look at India's least successful brand launches.

1. Hyundai Tuscan: Driving off-road

Hyundai hasn't done enough to change customer perception of its Rs 10-lakh plus vehicles -- which is why the Tucson has suffered. 

Last year, Hyundai's Santro Xing won the Derby for the most successful relaunch. This time, however, the company has a loser in the Tucson ("Too-sawn"), its crossover sport utility vehicle (SUV), which Derby respondents rated as the most unsuccessful brand launch of 2005.

Fifty-eight per cent of those polled considered the Tucson to be not successful, with 8 per cent considering it the least successful launch. Why hasn't the Tucson been able to make an impact?

Hyundai already had a full-fledged SUV in the Terracan (Rs 21 lakh -- Rs 2.2 million) when it launched the Tucson in April 2005. The company says the aim to rollout a softer SUV, which merges the luxury and comfort of a sedan and the build and feel of an SUV, at around Rs 15 lakh (Rs 1.5 million) was to consolidate its position in that space.

"Between Rs 10 lakh (Rs 1 million) and Rs 20 lakh (Rs 2 million) [for Terracan] there was a huge space where consumers were looking to invest to upgrade to vehicles like SUVs. We needed a vehicle to meet the aspirations of customers who had the desire to own an SUV but not the money to invest in the Terracan. The Tucson, which was then our latest offering worldwide, was our answer for that category," says Sanjeev Shukla, marketing manager, Hyundai Motor India.

Industry watchers say the rollout of the Tucson appears to be driven by the success of the Honda CR-V, again a sedan-cum-SUV in the Rs 14-15 lakh (Rs 1.4-1.5 million) range, which was launched in 2003, and sold some 1,600 units in 2004, gaining a market share of 35 per cent in the segment.

They believe Hyundai wanted to gain an edge in this market by offering features and comfort similar to the CR-V but in a diesel (CRDi) version, which neither the CR-V nor most other SUVs were offering.

Says the editor of an auto magazine, "Differentiating itself with a diesel engine was a good strategy. But then people wanted a Honda with a diesel engine rather than a Hyundai. Although the Tucson can in no way be said to be inferior to the CR-V, be it performance or technology, consumers have very strong perceptions about Honda products, compared to Hyundai, in such segments."

Agrees Tilak Swarup, research editor, Supplier Business, a UK-based auto-component magazine, "Most consumers still don't look upon the Tucson and other Hyundai offerings in higher segments as premium products."

Compared to the CR-V, which sold 1,518 units between April and December 2005, the Tucson sold 1,020 units. While the industry doesn't find the numbers impressive, Hyundai says it is satisfied with Tucson's performance.

Says Shukla, "The Tucson is a completely built-up vehicle. We sell as many as we import and there are always orders for the Tucson. The Terracan and Tucson are low-volume cars; more than profits, their presence largely helps in giving a brand equity to the mother brand."

The other key reason why the Tucson hasn't been a branding success, analysts point out, has been the low-key advertising, which was limited to a few ads (both print and TV) after the launch. Points out auto analyst Tutu Dhawan, "The brand recall for an average consumer is very low.

Many haven't heard at all about the Tucson. Even the ad, which talks about the spirit of adventure around an American Indian theme in Tucson, in Arizona, doesn't appeal to the Indian consumer." Defends Shukla, "Since the Tucson is a low-volume car we are not into mass advertising. We do direct marketing and one-to-one communication focused on target customers."

The bottomline for the Tucson: Hyundai needs to rev up its marketing and advertising for the brand, and perhaps as Swarup points out, leverage the diesel advantage by selling the Tucson at lower price-points than the CR-V.

2. Zee Sports: Poor reception

In a land where cricket is king, even the Zeebras couldn't stop Zee Sports' slide down Derby ratings.

This picture's looking a bit grainy. Zee Sports didn't have too many takers in the annual Brand Derby. Over 45 per cent of the respondents felt the television channel was not successful, making it the second-worst performer in this round of the Derby. "Zee Sports hasn't done anything special," was the frequently-heard gripe.

That's not quite true, but we'll get to that. First, consider what could be wrong with the latest "flower" in Zee Network's bouquet. In a word, cricket. Or rather, the lack of it. "Cricket is the Trinity -- it is the creator and destroyer of sports channels," declares Meenakshi Madhvani, managing partner of media auditing firm Spatial Access Solutions.

The numbers bear that out: a single series of international cricket, in which India is playing, can draw in revenues of close to Rs 170 crore (Rs 1.70 billion). The next popular sports -- Formula 1 racing and football -- are way back in the stands in terms of revenue: Rs 20-25 crore (Rs 200-250 million) and Rs 10 crore (Rs 100 million), respectively.

But when Zee Sports was launched in June 2005, it didn't have the rights for live broadcast of any cricket event. Says Gaurav Seth, vice president, marketing, Zee Sports, "We would love to have as much cricket as possible, but the problem is availability. By the time we entered the market, most telecasting rights were already booked."

Which is probably why Zee Sports didn't make a song and dance about its launch. Its first campaign consisted of just 20 hoardings in Mumbai and Delhi, along with a few banners on trade sites. The major promotion had to wait until August when the channel acquired the telecasting rights for the Afro-Asian cricket series played in South Africa.

Meanwhile, Zee Sports used the time to scout around for other avenues of growth. "We realised we had to own a property for a long term, nurture it and then gain from it," says Seth. That's when the channel hit upon football. The channel has now acquired the telecasting rights of all football matches of the All India Football Federation for the next decade.

It's making good use of that opportunity. It forked out over Rs 1.8 crore (Rs 18 million) on promotions for the Federation Cup in October. Apart from disk jockeys, fire throwers, jugglers and fashion models, that included the Zeebras -- a squad of cheerleaders, complete with short skirts and pompoms.

Radio promotions, hoardings and print campaigns exhorted football fans to "come cheer for Indian football with the Zeebras." "We were targeting SEC A and B men in the 15-34 age group, so we thought adding some glamour would make it more appealing," explains Seth.

It did work: according to a survey by Zee, 68 per cent of the 2,000 men interviewed during the series said they had come to watch the Zeebras.

Still, cricket is the Holy Grail. And with the telecast rights to Indian cricket for the next four years to be decided soon, Zee Sports' quest is still on.

Meanwhile, its December broadcast of the India-Sri Lanka test series dominated television ratings for the month -- Zee Sports was ahead of Ten Sports, ESPN and Star Sports, no mean feat (source: TAM Peoplemeter System). Says Himanshu Mody, business head, Zee Sports, "We have close to 15 per cent of the market. For a channel that's only six months old, that's a commendable job."

Media observers say Zee Sports earlier cricket telecasts haven't exactly stood out for originality and innovative presentations. Sony Entertainment Television bringing in Mandira Bedi as a non-sports commentator during the 2003 World Cup is held up as the standard by many experts -- it helped draw in a whole new audience, which meant new sources of advertising revenue. "If you fail to make a connection with the consumer by not being innovative, it can prove expensive," points out marketing consultant Deepali Naair.

What has already proved costly for Zee Sports is the absence of a brand-building exercise. A campaign had been planned some weeks ago that communicated how the channel stood out from the crowd, but Seth says it had to be cancelled because "a cricket series came up." Zee Sports has a clear picture when it comes to priority.

3. Dove Bodywash: Ruffled feathers

If the bird's looking a bit frazzled, it's with good reason. Dove Body Wash has been trying to lather up the personal wash market ever since its launch, but with little noticeable success.

If the bird's looking a bit frazzled, it's with good reason. Dove Body Wash has been trying to lather up the personal wash market ever since its launch, but with little noticeable success.

In fact, the senior marketing professionals surveyed for the annual Brand Derby gave the product a clear "can do better" report: 43 per cent said the brand was not successful, while just 5 per cent felt it had been very successful. The saving grace: no one named it as their choice for "least successful" brand launch of the year.

Dove Body Wash's performance isn't reflective of its parent, though. Hindustan Lever Limited launched Dove soap in India more than 10 years ago and the brand is now worth Rs 33 crore (Rs 330 million).

The imported, "ultra-moisturising" body wash is a premium brand extension, available in one variant and a standard, 250 ml pack. It was launched in end-2004 in the metros and other select cities, and is slowly expanding its presence across the country.

Says HLL vice president, skin, Ashok Venkatramani, "We launched Dove Body Wash as we believe that Indian consumers have evolved and are ready to experience superior bathing formats such as liquids."

The market doesn't quite bear that out, though. There are two other brands in the organised body wash market -- Lux and Palmolive -- apart from countless brands in the grey market. But a dipstick survey of large-format and smaller stores in Mumbai showed that while the larger stores manage to sell about eight or nine variants of body wash (any brand) in a day, smaller outlets sell one only every two or three days.

Body wash accounts for less than 1 per cent of the Rs 4,700-crore (Rs 47 billion) organised personal wash market. According to IRS 2005 R2, MRUC & Hansa Research, soap is the personal hygiene product for 91 per cent of Indians. That doesn't leave much room for body wash.

Some other companies seem to realise that. Godrej Consumer Products, for instance, markets its body gel only in international markets, saying India is not yet ready for such products. Points out Rakesh Sinha, vice president, marketing, "Body wash is suited for houses that have running water and showers; most Indian houses lack such amenities."

It doesn't help that Dove is more expensive than the other two brands: Rs 120 for 250 ml, compared to Lux (Rs 70) and Palmolive (Rs 90). Since its June 2004 launch, Lux has built up mass appeal, especially after it started offering a loofah free with the product. Now Dove is trying the same offer.

A smaller pack size may be a better idea, point out market analysts. It would encourage consumers to try the product and may help widen the market. Another option that could have been explored is to have launched the product as a face wash.

The parent Dove beauty bar is used mainly on the face, and Indians as a rule place more importance on skincare for the face, rather than the body. Of course, points out one analyst, per capita consumption of face wash has to be necessarily lower than body wash. So it may not be a financially viable extension.

Ultimately, brand extensions are workable in developed markets. Points out market analyst Anand Halve, "All brands struggle to extend their franchise through line extension. Given the cost and temptation, it's best to introduce the range in a mature market."

What could work is to take the brand beyond its current communication of rich moisture content and exfoliation. Agrees Ashish Mishra, head, strategic planning, Mudra, "There hasn't been any compelling reason for the consumers to drive purchase in India."

Dove Body Wash has no print or TV campaigns, only point-of-purchases displays and in-store promoters who tom-tom the benefits of body wash over soap. In India, consumers need to be educated on the use and benefits of body wash over soap. HLL's Venkatramani agrees.

"That is the only way to attain growth in this category," he says. It would also help if consumers were aware of the product -- 21 per cent of Derby respondents ticked a "don't know" against Dove Body Wash.

Part IV: The methodology

Amit Ranjan Rai, Govindkrishna Seshan, and Meghana Biwalkar in New Delhi / Mumbai