Expert Zone
Straight from the Specialists
So how much is Kodak worth now?
(The views expressed in this column are the author’s own and do not represent those of Reuters)
Kodak, one of the world’s best-known brands, is disappearing. Its products are obsolete; the company didn’t manage to change quickly enough.
Everybody loves the brand but nobody buys the stuff anymore. Business editors everywhere in the world are writing the same obituaries: how lovely and how sad.
Anybody over 35 has fond memories of Kodak — the film, the cameras, the festivals, the holidays, fun and mementos and memories: all recorded for generations to come.
So if the brand is so well-known and so well-loved, why doesn’t somebody buy it and bring it back to life? Surely all the so-called brand valuation experts with their complex econometric measuring data would be delighted — for a fee — to put some kind of a price on it. Maybe Kodak’s long-time competitor, Fuji — still, incidentally, thriving — might want it.
Well, we still don’t know whether Fuji or Apple or Microsoft or even Rupert Murdoch, with his tarnished News Corp brand, might snap it up. With all that tweeting and twittering and blogging and googling, kodaking would fit in just nicely.
“Didn’t you get it? I kodaked you.”
Why do we buy what we buy?
(The views expressed in this column are the author’s own and do not represent those of Reuters)
Let’s cut out all the marketing jargon and adspeak. Consumers (that means people, you and me) try to buy rationally, on price – it’s cheaper, on quality – it lasts longer, on service – they won’t let you down when things go wrong. And sometimes it is genuinely possible to make rational choices when we buy things. Mostly though it isn’t anymore, because products and services are increasingly similar in their rational characteristics. If they are poorer quality or more expensive than a direct competitor, they die.
What’s the difference between the fuel from Bharat Petroleum, Indian Oil and Hindustan Petroleum, in price, quality and service? There isn’t any. So the only rational choice for us is which is the most convenient fuel station.
With fuel, you don’t even get the illusion of rational choice, but in most sectors there is a bit of an effort. Mobile phone operators fight over price, so-called levels of service and special offers of equipment all mixed up with tariffs. And we consumers jump from one to another in a rather dissatisfied kind of way.
In cars, it’s pretty much the same. Price for price, at each level of the market, there is not much difference between Maruti Suzuki, Honda and the rest of them. They look pretty much the same. They perform in the same way — doing the job quite well. Service from dealers is pretty similar. And discounts matter a lot. So apart from going to the dealer who gives me the best margin, how do I choose?
Well, how about emotion? Do I like the car better? The higher up the value chain you go — the more important ‘Do I like it?’ becomes. Do I want to be seen in it? What does it do for me? How does it affect my image?
Let’s not pretend these emotions don’t matter, we all know they do — for all of us. So how would it work?
I think we Indians are extremely value-conscious. We somehow don’t see a point in buying something for a premium; I suppose finding and getting the best deal kinda gives us a kick. We somehow take great pride in our no-nonsense attitude to making our purchases – from vegetables in the bazaar to cars in glitzy showrooms.
I remember taking a friend (supposedly “expert” in cars) with me to a car showroom in Mumbai. I set my heart on a sexy sedan the moment I saw it. My friend then studiously compared that sedan with a small car on various features such as engine power and mileage and leg room and floor height (or something of that sort) and so on and concluded that the small car would give me more value for money in the long run. Besides, he claimed, it would be a pain to park my sedan in Mumbai. When I finally decided to buy the small car, he proudly declared that I just saved myself from looking like a fool!
That’s the typical middle-class Indian consumer for you. Pragmatic, sensible, no-nonsense… That’s the lesson car manufacturers, especially the foreign ones, must learn if they want to compete successfully in the Indian market.
The world’s greatest logo
(The views expressed in this column are the author’s own and do not represent those of Reuters)
Whenever I’m interviewed about branding I almost always get asked: “What is the world’s greatest logo?” By which I suppose the interviewer means, what is the world’s most recognised brand?
Well, a brand isn’t a logo. A logo is literally a symbol, a symbol of what the brand stands for. Of course, there are some symbols, or logos, that are full of meaning, which represent a universal idea recognizable in all human societies. But many of the world’s greatest and most memorable logos have no intrinsic meaning at all — they simply are the visible manifestation of the core idea behind the brand.
And there’s one logo in particular that encapsulates this. It’s the Red Cross.
Over the last 150 years or so, the Red Cross has become the ultimate symbol of an organisation that stands for humanity. In its behaviour in battle zones and elsewhere, the Red Cross is so completely vulnerable, neutral and defenceless that it has become virtually invulnerable. You just don’t attack the Red Cross.
It’s the great global brand — the exemplar of what a brand should be. And yet, as far as I know, not one of those drearily predictable brand valuation organisations has even recognised its existence, let alone attempted to put a price on it.
Why? Because, like so many great brands, its true value is incalculable — it is literally priceless.
WOW I never thought of the Red Cross as an LOGO.
It was just something that i thought existed from the beginning of the time, who would have guessed that after I saw this video [ http://youtu.be/ppLEbAaXFZU ] I would search for “great logos” and come to this site to learn something new….It’s just mind-blowing
Why no McDosa?
(The views expressed in this column are the author’s own and do not represent those of Reuters)
The whole world now knows that India has arrived. It isn’t just Infosys and TCS. Tata is the largest manufacturer in Britain with Jaguar Land Rover and Corus — not to speak of Tetley. Bajaj exports a significant proportion of its motorcycle output to Africa — and so on. Indian companies are finally starting to make a significant impact on the global scene.
So what about the global High Street? There’s a McDonalds but why is there no McDosa? I know I’ve raised this before in this column — but I simply don’t understand it. The whole world loves Indian food. There’s nowhere you can go in Europe and very few places in the United States where you can’t find a restaurant which purports to be Indian — even if in reality it’s Bangladeshi.
I was in Rheims the other day — a medium-sized French city with a wonderful market and a beautiful cathedral where the French kings were traditionally crowned. Rheims is in the heart of the champagne country; so in every restaurant and cafe the thing is to have a ‘coupe de champagne’. Naturally, right in the middle of all this is a very busy ‘restaurant indien’, complete even with champagne bar, and the locals love it — champagne and tikka kebab — wonderful.
So, if Indian food is so popular and Indian entrepreneurs are so courageous and successful, why is there no Indian worldwide restaurant chain? It isn’t that Indians don’t understand hospitality. Indian hotel chains like Taj and Oberoi are amongst the world’s best — and they are busy expanding internationally too.
It just seems to me there’s a real gap in the market for an Indian worldwide restaurant chain.
India has the food, it has the knowledge, it has the experience, it has the finance. Now Indian entrepreneurs — get on with it.
First impressions and beyond
(The views expressed in this column are the author’s own and do not represent those of Reuters)
If you walk down a quite narrow and almost absurdly overcrowded street in Mumbai’s former financial district, Fort, you’ll come across an undistinguished building about 100 years old. It’s called Bombay House. This is the home of Tata.
Fort is no longer fashionable as a business district and Bombay House hasn’t changed its name to Mumbai House. The building is old, respectable, dignified and, above all, unpretentious. In other words, it’s classic Tata.
So the first impression you get when you walk into Bombay House is that you are dealing with a company that’s been around for a long time, that knows who it is and knows where it’s at and doesn’t need to boast about it. You can find out where you have to go quite quickly and everyone’s office, however senior they are, is modest but workmanlike. The way Tata presents itself in its head office is the way it is. And that’s really important. First impressions matter.
How different that is from so many other first impressions one gets. In India, so many of the buildings that companies live in are half built — and, therefore, half derelict — full of barriers and security guards who aren’t sure whether they are there to welcome you in or keep you out. Overall, they make an extremely disagreeable impression. It’s only when you get past all that stuff that you can go into the building and meet with the people you are supposed to be dealing with.
We always remember the impact that something makes on us the first time. Restaurants and hotels know this. That’s why they take so much trouble to orchestrate their public places, especially the reception areas.
But, beyond first impressions, which are so memorable, the totality of the environment really influences the way we, as outsiders, feel about the organisation. Even more important, it influences the way people who work inside the organisation feel about it too. Sometimes, the offices of senior people you meet are pleasant, efficient and friendly.
Brand architecture – one name or several?
(The views expressed in this column are the author’s own and do not represent those of Reuters)
You may be sitting at the airport drinking a Kingfisher beer while you are waiting for your Kingfisher flight. Maybe in a year or two you will be able to stay at a Kingfisher resort and talk to your friends on a Kingfisher mobile network.
The Kingfisher brand is growing. Vijay Mallya obviously loves it. Where else is he going to take Kingfisher and how far can he stretch it? Probably, if he can manage it, quite a long way. But he has to be careful how he uses it. He has a few other businesses which aren’t called Kingfisher, both in India and globally. Mr. Mallya owns Whyte & Mackay, a venerable Scotch whisky company. Whyte & Mackay has several brands, single malts like Dalmore, Isle of Jura and Fettercairn, as well as Glayva liqueur and Vladivar vodka, and none of them are called Kingfisher.
Why? Because when he bought Whyte & Mackay, he bought some very valuable brand names and if he chucked these out and called everything Kingfisher, he wouldn’t be in the Scotch whisky business very long.
Most companies in the drinks business own a portfolio of brands and don’t use their corporate name with final consumers. Diageo has Johnny Walker, Guinness, Gordon’s and about fifty other brands — but it doesn’t use its corporate name on any of them. You can’t get a glass of Diageo. Each of these brands has its own niche; some compete with each other, they don’t appear to be related to each other — and their individuality is a large part of their strength.
Many luxury goods companies operate under a similar policy. LVMH has Louis Vuitton, Hennessy, Moet Chandon, Loewe and a whole raft of other brands; each presents itself independently — many compete with each other. What happens in the back office is different but, publicly, they compete.
Hindustan Lever, also, until quite recently never used their corporate name on any of their brands. Every Unilever brand — such as Liril, Brooke Bond, Surf, Pepsodent, Pond’s Lakme — was quite separate and distinct. Sometimes they competed with each other. Relatively recently though, they’ve started putting the ‘U’, which is the corporate mark, on all their brands in order to indicate that each brand is related to the other and that each is backed by the House of Unilever, the corporate whole. That’s called endorsement and it’s being adopted increasingly on the basis that customers are better informed and want to know where what they are buying comes from.
Making your mind up in India
(The views expressed in this column are the author’s own and do not represent those of Reuters)
When I tell people at a dinner party in London that I’ve just been to India — which I sometimes do because I’m frequently in India and I lived in Mumbai once — people very often say to me, ‘Oh, how wonderful! I went there once. India’s so spiritual isn’t it?’ So I reply ‘Well, it probably is, but not the bits I go to’. By which I mean Mumbai, Delhi, Bangalore and all that — bustling, busy, commercial and industrial India isn’t remotely spiritual. Or am I missing something?
I work all over the world. I notice how patterns in business vary between one country and another. I love working in India and I love being in India but it can drive you potty. Spiritual? No. Frustrating? Definitely. I don’t just mean the appalling infrastructure and the absurd bureaucracy, I mean behaviour patterns inside corporations.
What I notice most startlingly about clients and potential clients in India is not spirituality but chaos sometimes leading to indecision. Are they indecisive because they are chaotic and trying to do too many things at the same time or are they seeking spiritual guidance? It sometimes takes literally months for people to make their minds up to go ahead with things. Now why is this? Is it because the chaos leads to timidity? Certainly not.
On the contrary, Indian companies are self-confident and aggressive. Is it because everybody argues with everybody else? Yes, partly. But it isn’t only that. I’m not really sure why it is. The tendency to procrastination seems to pervade everything, starting a job, agreeing to a fee, agreeing to the strategic thinking, agreeing to the visualisation of the work, agreeing to the implementation programme. All of that seems to take an enormous amount of time. It makes life very difficult.
And then when it’s finally agreed, it has to be ready NOW. Tomorrow is too late. It’s true we’ve been arguing about it (whatever it is) for three months — but we need it AT ONCE.
Every national pattern is idiosyncratic. In Germany, for example, people are not quick to make their minds up but, once they do, they get on with it. American companies, especially the big ones, are meticulous, decisive, go by the rule book. Everything has to be analysed and quantified, sometimes till it’s half dead, but at least you know where you are. In France, you have to understand the internal politics — what’s going on behind what appears to be going on.
so so so so so so (completely) agree with the author of the write up….it can be totally annoying to do business in india..not only does decision making take time (sadly enough people are scared to take ownership) but also trying to haggle over money overlooking the value the business gets is overlooked. sad it is…and spiritual india is a myth made by international media – come and see the state of our politicians – hogging for media time doing everything else but developing the nation – going on a fast is the latest trend 
and if by chance the politician is taken behind bars, they are released after couple of hours citing health issues and then the media follows that and writes about it – very disturbing all of this
Family businesses and the brand
(The views expressed in this column are the author’s own and do not represent those of Reuters)
I’ve had a lot to do with family businesses, in India of course, but also in Britain, Spain and quite a few other places. In fact, I come from a family business. My father was head of a transport business and all his brothers (my uncles) and, maybe more important, all the brothers’ wives were in it too.
The wives didn’t work in it, of course, not in those days, but they were pretty good at being involved (and sometimes stirring up trouble — ‘he earns more than you’ or even ‘his office is bigger than yours’). The trouble with family businesses is that not every member of the family is suitable material. It isn’t just an issue of intelligence; it also has to do with motivation, temperament, age and a whole variety of other factors.
I had a very good friend who became head of a large family business and he was haunted by the idea of heredity. Would he have been good enough for the job if it hadn’t been for his name, he thought? The business was publicly quoted, the family only had a protected minority interest but, in the end, it was taken over and he left. Thrown out? Not quite; but he wasn’t welcome to stay. Look at the Murdochs today. It seems to be a repetition of the same old story.
Family businesses often split apart. Brothers and cousins take their parts of the business in different directions. Some are successful, others flounder and they often keep the same name or one so similar that it confuses everyone. ‘No, it’s not that Shree Ram, it’s the other one!’
Is that a way to carry on a business? If you are going to break away, make another business, you are going to do things differently then you must have another name and a quite different brand.
You can’t keep pretending that you are the original and that the others are imitations — it just doesn’t make any kind of sense. It’s confusing and, ultimately, self-destructive.
What’s in a name?
(The views expressed in this column are the author’s own and do not represent those of Reuters)
So, Mamata Banerjee, the new chief minister of what is currently known as West Bengal, is proposing to change its name.
A couple of weeks ago they were thinking of changing from West Bengal to Bengal, a recommendation which we at Saffron made to the previous Communist government a few months ago. Now it appears that the new government is considering a new name, which is likely to be Paschimbanga, apparently pronounced Poschimbongo. Banerjee’s own preference was said to be for Bangabhumi.
The whole point of this exercise is to make people living in Bengal feel good about their state and also to attract investment. Since a significant proportion of people in Bengal don’t speak Bengali, it doesn’t seem to be very helpful to introduce a name which is, first of all, in Bengali and, secondly, sounds like somewhere quite other.
In addition to all that, Bengal has enough problems attracting direct investment without people being confused about where it is. Haven’t they got enough issues to deal with already?
A few years ago — I can’t recall how many — Bombay changed its name to Mumbai; Madras became Chennai and so on. But I still keep on hearing stories about tourists arriving at Chhatrapati Shivaji Airport in Mumbai and thinking they have come to the wrong place.
Names linger. Old ones don’t go away that easily. You can’t just throw Bombay out of the window. It just won’t go. New names don’t get adopted that easily either. Who talks about Bengaluru? Nobody I’ve ever met. I wouldn’t advise anyone to spend any time in Silicon Valley talking about Bangalore in that way. Nobody will know what they’re talking about.
The ‘Made in India’ effect — it’s time for McDosa
(The views expressed in this column are the author’s own and do not represent those of Reuters)
The Apple iPod has a cutesy little legend on the back which reads ‘Designed in California, Made in China’. Well, the implication of that is quite clear — we in California do the clever stuff and they just stick it together. If it was made in France or Germany, the Apple people certainly wouldn’t be quite so dismissive. ‘Engineered in Germany’ perhaps, or ‘Designed with French flair’.
There’s no doubt that the country of origin effect in certain sectors has a real edge. There’s a cosmetic company in Poland called Dr. Irena Eris; in a quotation from the UK’s Guardian the founder says, “We made a mistake by putting Polish on the packaging. Polish products still have a poor reputation in the west. It’s not like in France where you can stick ‘Made in France’ on the side and people will want to buy it.”
The fact of the matter is that, for some countries and some products, country of origin puts extra money on the price. BMW is German — everybody admires German engineering, so you pay extra for that. L’Oreal makes it quite clear that it comes from Paris. You pay a bit more for that too.
So, what about India? Well, traditionally the issue has been that many Indian products were, one way or another, emulators of products from other countries. Thums Up, now owned by Coca Cola, was originally designed to compete with it at a lower price.
The implication being that, even if it wasn’t quite the Real Thing, at least it was a bit cheaper — nearly the Real Thing — so to speak. And it’s still the case that lots of Indian companies use Italian or English or German or Scottish sounding names on the products they make and brand. Is this because they think they will be able to charge more for the product with a foreign name? Or because they have still some kind of inferiority complex about being seen to be Indian? Or is it just because they haven’t thought it through?
But it doesn’t have to be like this. We’ve seen in the software industry how companies like Infosys and TCS can turn Made in India into an advantage — better product, competitive price. Maybe other sectors of the Indian marketplace should think a bit more carefully about how they do this kind of thing.
Trenchant commentary as always, Wally. I totally agree with your argument that a brand can only be as strong as the underlying business that it supports. That is why the whole “brand as a separate asset on the balance sheet” is such a misguided notion. Brands cannot exist in isolation from the products/services that give them meaning and value to customers. For that reasons, brands are better thought of as multipliers on the performance of the underlying business.
BTW The Economist ran a similar piece contrasting the divergent fates of Kodak and Fuji that contained the excellent observation of the fallacy of “competing through one’s marketing rather than taking the harder route of developing new products and businesses.”