Youth is key for Godrej
The 113-year-old group is turning young to catch a new generation of consumers without shedding its core values of quality and trust.business Updated: Jul 26, 2010 01:46 IST
If a brand is doing well, growing year after year, why does it need to transform? That's the question Godrej must have asked itself before going for its corporate re-branding effort in 2008. Present in around 27 product categories with close to 100 products, brand Godrej suddenly donned vibrant colours while retaining its signature style in its logo at the start of the Indian Premier League 1 in 2008. See Graphics
As Adi Godrej, chairman of the Godrej Group put it: "Our effort is geared to address future consumers. We believe transformation should come when times are good and not when you are in a crisis. Otherwise, investments come under pressure. The Indian market and consumer are changing fast and we needed to address that." See Graphics
Consumer research also spurred the move — younger consumers were tending to see Godrej as "my parents' brand" or "my grandparents' brand." Godrej said: "We wanted to change this feedback to ‘this is my brand'. It drove our repositioning towards being a younger, more vibrant brand without diluting our core values of quality and trust."
He admitted that he was taken aback by the colours in the new logo – Interbrand was hired for its re-strategy – "though the signature remained the same. But I listened to the younger family members who felt it was good and would work for us. I think it has — consumer ratings have been excellent."
Vivek Gambhir, chief strategy officer, Godrej Industries, pointed out: "In five years' time, 70 per cent of India will be under 35 years of age. These consumers haven't grown up with Godrej and as their spending power grows, my brand and products must be relevant for them. How do we add sizzle to our products? That's our challenge." Vibrant products riding on technology and quality is the answer.
Adi Godrej believes that brand Godrej should stay focused on the middle and bottom-of-the-pyramid consumers. He admits that this is a big open debate in a company where the drive is to work together rather than in silos, to transmit the energy of the brand transformation across the group.
Tarun Arora, EVP, sales and marketing, Godrej Household Products and Godrej Consumer Products, observed, "Consumer aspirations are changing rapidly. Value for money is good, but we can also create value that we can charge for, which the consumer will consider worth paying more for. Besides, the same consumer may be operating with different mindsets on different products. The ability to straddle different consumer segments is critical."
For Godrej, whose products range from locks to homes, soaps to animal feeds to mission critical rocket engine components, effecting the brand transition must surely be challenging. Adi Godrej agreed: "It is work in progress. We have 480 million consumers in India who use at least one of our products. Airtel has about 200 million users."
Nabankur Gupta, founder, Nobby Brand Architects, observed: "Godrej's re-branding and all its efforts around that has created a positive impact. Consumers believe they are getting modern products on the baseline of the core Godrej values of quality, assurance and trust. Godrej has tremendous power of brand leverage."
While most of its products are still targeted at the middle and bottom end of the consumer pyramid, there are select propositions for the upper end. Godrej Nature's Basket, the new upper end foods retail that Godrej has launched in Mumbai (10 stores), will soon be launched in Delhi. Or the new furniture line, Interio, which offers upper end furniture.
Cinthol's new deodorants are upper end. Good Knight has climbed the pricing ladder with value added extensions too.
"It's all about providing more value to the consumer and commanding more value from the consumer. For example, an Interio dining set has a table with a hot plate in the middle. Or a sofa modeled on an airline seat with an integrated remote commander," said Ashutosh Tiwari, EVP, strategic marketing, Godrej Group.
Innovation for greater depth is key . "So from locks, we have advanced to security solutions; from cupboards to furniture; from refrigerators to appliances; and from hair dyes and soaps to personal grooming products," he said.
Adi Godrej added: "We have launched Chhotu Cool, the Rs 3,500 refrigerator that has no compressor but can give you cold water and can keep food fresh for longer. We are test marketing it."
He commented on Godrej's international business, which contributes about 25-30 per cent to turnover and is also affected by the rebranding: "In markets such as Indonesia, Argentina, South Africa and Uruguay, our per capita FMCG sales are higher than in India. Our foreign businesses are delivering faster growth."
The big focus is still on projecting and strengthening the corporate Godrej brand. In 2009, during IPL 2, Godrej leveraged its aerospace expertise through advertising to enhance the ‘advanced technology' perception for master brand Godrej.
Through Godrej Eon in refrigerators, airconditioners, washing machines, DVD players, microwave ovens and colour televisions, Godrej is talking technology, something IPL 3 showcased through ads this year.
The launch of GoJiyo (a Second Life kind of a social networking website) sometime back was a strong push towards catching and engaging younger consumers. GoJiyo has 1.7 lakh registered users and 1.3 million unique visitors within four months of operation. It has also gained stickiness with 12,000 Facebook fans. YouTube video views have crossed 2.1 lakh. Overall positive:negative sentiment is 5:1. GoJoiyo has also impacted consumer perception and intent to buy Godrej brands positively.
Launching GoJiyo, said Dave Evans, social media specialist and author of ‘Social Media Marketing: An Hour a Day' was a "smart move on their (Godrej's) part."
A senior marketing executive from the FMCG industry said: "Godrej is able to garner growth consistently and has had the courage to take risks in M&As — with both entry and exits — at the right time."