What is Brand Equity?
There is no universally accepted definition of brand equity. The term means
different things for different companies and products. However, there are several
common characteristics of the many definitions that are used today. From the
following examples it is clear that brand equity is multi-dimensional. There are
several stakeholders concerned with brand equity, including the firm, the
consumer, the channel, and some would even argue the financial markets. But
ultimately, it is the consumer that is the most critical component in defining
brand equity. Brand Equity is defined as follows:
Brand equity represents the value (to a consumer) of a product, above that
which would result for an otherwise identical product without the brand's
name. In other words, brand equity represents the degree to which a brand's
name alone contributes value to the offering (again, from the perspective of the
Brand equity can be defined as three distinct elements:
The total value of a brand as a separable asset -- when it is sold or included
on a balance sheet. (Brand Valuation)
A measure of the strength of consumers' attachment to a brand. (Brand
A description of the associations and beliefs the consumer has about the
brand. (Brand Description)
Brand Equity as Brand Value
Brand value involves actually placing a dollar or rupee value on a brand name.
The reasons for doing this are usually to set a price when the brand is sold and
also to include the brand as an intangible asset on a balance sheet (a practice
which is not used in some countries).
It is important to note that there is a significant difference between an
"objective" valuation created for balance sheet purposes, and the actual price
that a brand may get when sold.
A brand is likely to have a much greater value to one purchaser than another
depending on the synergy that exists. For acquisitions, the value of a brand to a
certain purchaser is often estimated through scenario planning. This involves
determining what future cash flows the company could achieve if it owned and
took advantage of the brand.
Brand Equity as Brand Loyalty
Loyalty is a core dimension of brand equity and is a way to gauge the strength of
a brand. It represents a barrier to entry, a basis for a price premium, and time
to respond to competitive innovations. The variety of measures used for brand
loyalty usually is a combination of one or more of the following:
Price/demand measures--focus on a brand's ability to command a higher
price or make consumers less sensitive to price increases than price increases
for competing brands.
Behavioral measures--focus on consumers' behavior.
Attitudinal measures--focus on general evaluative measures such as 'liking'
Awareness measures--focus on identifying a brand as being associated with a
Brand Loyalty and Equity refer to the notion that some brands are "stronger" or
better than others.
Brand Equity as Brand Description
Brand description, the final component of brand equity, concerns the actual
attributes of the brand. These attributes or associations are major creators of
brand loyalty. A wide variety of techniques exist for matching consumer
associations with perceptions of a brand. These techniques can be both
qualitative and quantitative. They work by getting the respondent to link each
brand with pictures or words. These attributes then can be measured with
multi-dimensional scaling to position the attributes relative to one another.
Qualitative Measures: The Brand Equity Ten
The Brand Equity Ten are ten sets of measures grouped into five categories,
which attempt to gauge the strength of a brand. The first four categories
represent customer perceptions of the brand along the four dimensions of
brand equity- loyalty, perceived quality, associations and awareness. The
fifth includes two sets of market behavior measures.
1. Price Premium: A basic indicator of loyalty is the amount a customer will
pay for a product in comparison to other comparable products. A price premium
can be determined by simply asking consumers how much more they would be
willing to pay for the brand.
2. Customer Satisfaction: A direct measure of customer satisfaction can be
applied to existing customers. The focus can be the last use experience or
simply the use experience from the customer's view.
Perceived Quality and Leadership Measures
3. Perceived Quality is one of the key dimensions of brand equity and has
been shown to be associated with price premiums, price elasticity’s, brand
usage and stock return. It can be calculated by asking consumers to directly
compare similar brands.
4. Leadership/Popularity has three dimensions. First, if enough consumers
are buying into the brand concept it must have merit. Second, leadership often
taps innovation within a product class. Third, leadership taps the dynamics of
consumer acceptance. Namely, people are uneasy swimming against the tide are
a likely to buy a popular product. This can be measured by asking consumers
about the product's leadership position, its popularity and its innovative
Associations/ Differentiation Measures
5. Perceived Value: This dimension simply involves determining whether the
product provides good value for the money and whether there are reasons to
buy this brand over competitive brands.
perspective. For some brands, the brand personality can provide links to the
brands emotional and self-expressive benefits.
organization that lies behind the brand.
Brand awareness reflects the salience of the product in the consumer's
mind and involves various levels including recognition, recall, brand dominance,
and brand knowledge and brand opinion.
Market Behavior Measures
Market Share: The performance of a brand as measured by market share
often provides a valid and dynamic reflection of the brand's standing with
Price and Distribution indices: Market share can prove deceptive when
it increases as a result of reduced prices or promotions. Calculating market
price and distribution coverage can provide or more accurate picture of the
product's true strength. Relative market price can be calculated by dividing the
average price at which the product was sold during the month by the average
price at which all the brands were sold.
There are several possible ways to measure brand equity in financial terms.
Brand Equity Index Model
Under this model brand equity is calculated by multiplying the relative price of
the product by market share in units. The product is then multiplied by a
measure of loyalty or durability representing the staying power of the brand.
Book or Replacement Values
Brand equity is estimated as the replacement cost of the brand over a generic
equivalent. A generic equivalent is a product that is sold only on the basis of
product attributes. Alternatively, replacement value can be estimated as book
value. The challenge with this latter method is that marketing expenditures do
not appear on the balance sheet. For either method, replacement cost is difficult
to estimate accurately.
Brand equity is estimated by identifying comparable mergers or acquisitions.
The premiums paid for those companies are associated with the equity in their
brands. Data is scarce for comparable M&A's, however, and buyers could have
paid more or less than the true value of brands.
Incremental Cash Flow from Branding
Determining the cash flows of a brand and subtracting the cash flows from
unbranded product estimate brand equity. The estimation challenge becomes
more difficult as the product of interest belongs to an increasingly differentiated
category. For example, it is harder to find a generic equivalent for cars than for
Discounted Value Of Future Earnings Projections
Brand Equity is evaluated by discounting the value of future earnings
projections and adding to the value the cost competitors would incur if they
duplicated the brand.
Multiplying current earnings by an estimate for P/E multiple yields an equity
price. The critical step is estimating the P/E multiplier. One approach that has
been taken is to measure brand strength by a weighted average of seven factors.
(Penrose, 1989) Next, the P/E multiplier is estimated using and S-shaped
relationship between brand strength and the P/E multiple that is based on
similarities to risk free rates, industry rates, and other factors.
Value of Avoided Advertising
Advertising is a key tool for developing brand strength that management can
leverage into equity. Advertising can affect how readily a consumer associates
attributes with a brand, what brands consumers include in their evoked set,
and other behavioral and perceptual factors. The effect of advertising builds up
over time and leads to extending brands with greater ease and less cost. An
estimate of Brand Equity is the value of advertising avoided to achieve the
current level of performance.
Managing Brand Equity
Consistency is the key to successfully building and managing brand equity.
Having a long-term outlook and projecting a consistent image of your brand to
the customer will maximize the results of building brand equity. It is critical for
managers to realize that brand equity can have positive as well as negative
effects on a product or company. In the end, it is the customer that truly defines
what brand equity means.
If management feels it is necessary to change the direction of a brand or change
a product it must be careful not to change too quickly. There are many examples
of companies that have changed a product or brand too much or too quickly. On
these occasions, consumers met changes with adverse reactions. The most
famous example is Coca-Cola. They changed the formula of their flagship
product Coke, and consumers reacted so poorly to the new product that the old
formula was reintroduced and the new formula eventually was discontinued.
The consumer through the product experiences brand equity. The product has
certain attributes or characteristics that deliver the equity to the consumer. If
any of these attributes are changed or eliminated, the equity delivered to the
consumer is also changed.
Managing brand equity is a continual process with long-term implications.
Unfortunately, many brand managers are forced to focus on short-term goals
such as market share and profits. Many programs that are implemented to
boost short-term sales or market share may be detrimental to the long-term
viability of the brand. For example, Proctor & Gamble has started to test market
a program to move away from using coupons to a system of every day low prices.
This is, in part, because consumers may become loyal to the coupon or
promotion and not to the product itself. Constant promotional programs erode
margins and eventually brand loyalty. Ultimately, brand equity is damaged.
In 1988, Graham Phillips, Chairman of Ogilvy and Mather Worldwide, said, "I
doubt that many would welcome a commodity marketplace in which one
competed solely on price, promotion and trade deals, all of which can be easily
duplicated by competition. This would lead to ever decreasing profits, decay, and
eventual bankruptcy. About the only aspect of the marketing mix that cannot be
duplicated is a strong brand image." This quote clearly demonstrates the
importance of managing brand equity. In many categories, brand equity is the
only point of differentiation between products.
Many people may think that building and maintaining brand equity is solely the
responsibility of brand managers, but it is actually a cross-functional team
effort. Financial managers are important because they can fully analyze the
costs of maintaining and building brand equity. For example, launching a new
brand is extremely consuming in terms of money and time. It may be more cost
effective to extend a current brand than introduce a new brand. Marketing
research is critical for many obvious reasons. It develops most, if not all, of the
research and data that companies will use for deciding strategic issues.
Marketing research can also help determine how brand equity is actually
measured. Once a definition of brand equity is established, the responsibility of
Images evoked by exposure to a named brand like brand personality, brand
image is not something you have or you don't! A brand is unlikely to have one
brand image, but several, though one or two may predominate. The key in brand
image research is to identify or develop the most powerful images and reinforce
them through subsequent brand communications. The term "brand image"
gained popularity as evidence began to grow that the feelings and images
associated with a brand were powerful purchase influencers, though brand
recognition, recall and brand identity. It is based on the proposition that
consumers buy not only a product (commodity), but also the image associations
of the product, such as power, wealth, sophistication, and most importantly
identification and association with other users of the brand. In a consumer led
world, people tend to define themselves and their Jungian "persona" by their
possessions. According to Sigmund Freud, the ego and superego control to a
large extent the image and personality that people would like others to have of
Good brand images are instantly evoked, are positive, and are almost always
unique among competitive brands.
Brand image can be reinforced by brand communications such as packaging,
advertising, promotion, customer service, word-of-mouth and other aspects of
the brand experience.
Brand images are usually evoked by asking consumers the first words/images
that come to their mind when a certain brand is mentioned (sometimes called
"top of mind"). When responses are highly variable, non-forthcoming, or refer to
non-image attributes such as cost, it is an indicator of a weak brand image.
Laws of Brand Equity
The Law of Contraction: A brand becomes stronger when its focus is
narrowed. This does not imply carrying a limited product line, but rather
limiting and focusing a brand on only one type of core product, which in Titan's
case happens to be watches. Titan, though possessed of a wide product line,
has stuck to its focus. It hasn't launched other types of products and stuck
them with the Titan name, which would have only gone on to cannibalize the
value of the core brand. As a result of this, Titan has developed for itself an
image of being "time-keeping experts" in the minds of the consumers.
The Law of Advertising: Once born, a brand needs to actively advertise in
order to stay healthy and maintain market share. If done right, advertising is
more of an investment than an expense. Titan has implemented this by always
maintaining a high degree of visibility when it comes to its advertising. In
addition, it possesses one of the most recognizable ad-jingles in the history of
The Law of the Word: Any brand worth its salt should strive to "own" a word
or words in the mind of the consumer. Examples of such brands are Volvo, who
owns the word "safety", Mercedes, who own the word "prestige" and Coca-Cola,
who own the word "cola". Titan, at least when viewed in the context of the
Indian watch market, seems to own the word "quality". Though unsubstantiated
by any formal market research, in an informal survey we conducted among a
sample of 30 people we know (including friends, family, neighbors and
acquaintances), 19 of them, when asked what one word came to mind when
they heard 'Titan Watches' answered "quality". A further 8 answered "Indian",
another word that would do Titan absolutely no harm to own in the minds of
The Law of Quality: Though quality is essential to the survival and growth
of any brand, the fact remains that brands are not built by quality alone. The
perception of the brand is as, if not more significant than mere quality. It is here
that Titan "scores". As mentioned previously Titan more or less owns the word
"quality" in the minds of the consumers, thereby implying that it is perceived as
a quality product. Thus, it's actual quality, as well as it's perception of being a
quality product combine to work towards building the strength of the Titan
The Law of the Name: In the long run, a brand is nothing more than a
name. The difference between products is thus not so much between the
products, as it is between their names, or perceptions of the names. Seeing as
how its name is perhaps the most important element of a brand, we feel that
this point warrants a slightly more in-depth discussion.
Joe Marconi identifies 4 major factors to be kept in mind while naming a
1) It should suggest stability and integrity.
2) It should avoid negative imagery.
3) It should avoid acronyms, the use of which Ries and Trout call "the no-name
trap". (Perhaps the sole exceptions to this are BMW & IBM).
4) It should avoid anything-generic sounding (General, National, Standard, etc),
as this would not help in defining a brand's personality.
Let us see to what extent Titan satisfies these conditions. First of all, the name
'Titan' itself comes from Greek mythology, and symbolizes greatness, grandeur
and power. Remember the Titanic? It is easy to pronounce, as well as to
remember. One only has to compare its name to that of its biggest competitor,
HMT to see how well thought out the name Titan is. HMT, while being an
acronym, expands out to 'Hindustan Machine Tools', a generic name if we ever
heard one. Asides from all these differences, the question of perception arises. A
watch is a product, the purchase of which is perhaps driven more by perception
than anything else. What sounds more classy and sophisticated? Titan or
Hindustan Machine Tools?
The Law of the Company: Brands are brands, and companies are
companies. There is a difference. Titan is owned by the Tata Group, who though
highly regarded in Indian industry are associated more with heavy industries
such as steel and truck building, than with watch making. Chances are that no
one would buy a Tata watch (its name invoking the same, if not greater reaction
than an HMT). People would, however buy a Titan.
The Law of Siblings: There is always a time and a place to launch a second
brand, but when this is done it should be ensured that both brands have
separate and distinct identities. Each brand should be kept unique and special.
When Titan decided to diversify into the jewellery segment, they did not call
their new brand 'Titan Jewellery', inspite of the high standing of the Titan name
in the minds of the Indian consumers. To do so would be to undermine the
power of the Titan brand; this is that of being “watch experts”. Hence, the
jewellery was called Tanishq.
The Law of Shape: A brand's logotype should be well designed, in order to fit
the eyes. Visual symbols (again with the possible exceptions of Nike's "swoosh"
or Mercedes' 3-pointed star) are highly overrated. The meaning lies in the words,
not the symbol. The Titan logo, though well recognizable (please refer to the
cover page in the rare event that you do, in fact actually NOT recognize it) is
always accompanied by the words "TITAN" in a clear, crisp typeface-denoting
power (through the use of capital letters) and class at the same time.
The Law of Colour: A brand should use a colour and typeface that is the
opposite of its major competitor. For example, while Coca-Cola stands for red
and appears in running handwriting, Pepsi stands for blue and appears in
capital, modern looking letters. Similarly, while HMT appears in small silver
lettering, Titan appears in capital letters, and is usually in black.
The Law of Borders: Finally, a brand should know no borders or
boundaries. With a name that stands for Hindustan Machine Tools, HMT would
be hard-pressed to sell a single watch outside Indian Territory. Such is not the
case with the more globally oriented name, Titan. As mentioned previously,
Titan is sold in over 40 countries through marketing subsidiaries in London,
Singapore and Dubai.
Thus far, we have restricted ourselves to issues exclusively concerned with the
role of the brand in building brand equity. The fact however remains that brand
building is an exercise that requires effort in a number of ways, many of them
unrelated to the actual "brand" as such. These could be related to the product's
image, the company's image, public perception of the parent company, and
efficiency of promotional measures, to name but a few.
Do’s & Don’ts in Brand Equity
Define the core brand's position and value clearly:
A product should be properly positioned and its value (which includes price,
quality and image) should be properly defined. As mentioned in the section
regarding the law of the word, the two words most highly identified with Titan
are “quality" and "Indian". These should thus be emphasized upon. This is
exactly what Titan has done, positioning it's watches as high quality, Indian
made watches, and emphasizing upon it's value for money as well as it's classy
Don't neglect Public Relations:
Public Relations, or PR, are vital to the success and survival of any brand.
Unfortunately, its value as a brand building tool has more often than not, been
undervalued. Newsletters, event and entertainment sponsorships, and other
forms of PR help to define the personality of a company or brand, positioning it
as a good corporate citizen, and someone nice to do business with. In keeping
with India's obsession with cricket, Titan has often sponsored cricket
tournaments, including the now legendary 1997 Titan Cup. Titan also sponsors
a number of popular television programmes, a prime example of which is Star
World's "The Practice".
Realize that promotions can be tricky:
Promotions ought to be used to create recognition and build brand loyalty.
Needless and irrelevant contests tend to shift the customer's attention from the
product being promoted to the prize being offered (be it a trip to the US or a new
car). A better (and far less expensive) way to promote a brand would be to allow
it to be used by other companies in their promotional offers. Titan is currently
being offered by both Outlook magazine and Welcome Award (the privileged
customer programme of the Welcome Group chain of hotels) in their various
promotional offers. The most sensible and effective forms of promotions are
measures such as establishing a privileged customer club offering customer
points redeemable for discounts and rebates. Titan has their own privileged
customer club, Titan Signet, which has an impressive 1.6 lakh members.
Always remember the USP:
A USP (Unique Selling Proposition) is not only what gives the customer a reason
to buy the brand, but is also what helps him distinguish the brand from its
competitors. Titan's USP is two fold, and can perhaps best be described in six
words. "An Indian company offering international quality". This works for Titan
in two ways. First of all, it's emphasis on 'international quality' successfully
negates it's major Indian competitor, HMT, who is still perceived as a company
offering solid and reliable, yet singularly unstylish and staid looking watches.
Secondly, with the plethora of foreign brands available in the country today,
Titan emphasis on being Indian enables it to effectively meet their threat.
Interestingly, while Titan has never actively promoted the fact that its parent
company is the Tata Group, at the same time it has never really done much to
hide the fact. Thus while capitalizing on the Tata name; it has built its own
identity as an Indian brand offering high quality watches at prices significantly
below those of comparable foreign brands.
If you can't be first, be better:
Being the first entrant in any category earns pioneer status for a brand and
gives it the advantage of being the probable market leader. Such was the case
with HMT. However with its emphasis on its USP and aggressive advertising,
Titan convinced the market that it produced the better product and thus
destroyed HMT's near monopoly of the Indian watch market.
Extensions should always be logical and market driven and not mere "product
explosions". As the market environment changes with the addition of say,
greater competition, or changing customer wants and perceptions, brand
extension should be undertaken. It should not, however be undertaken
arbitrarily. When Titan entered the market in 1987, its main competitor was
HMT, a company offering reliable and economically priced watches. Titan thus
started out being a company offering a wide variety of models, most of which
were priced economically, with the added USP of being a more stylish alternative
to HMT. As times changed, however, so did Titan. With the growing entry of
foreign brands into the market, Titan continued to introduce sub brand after
sub brand to meet every new challenge. With the entry of the "high
performance" sports watch brands in the form of Tag Hauer, Omega and
Breitling, Titan introduced it's own line of chronographs priced significantly
lower than the competition at a mere Rs 5000-6000. Similarly, to counter the
entry of foreign, youth oriented "style" brands such as Esprit and Swatch, Titan
introduced the 'Fast Track' sub brand, again priced extremely competitively.
Case study on McDonald’s
What is McDonald’s?
McDonald’s is the world’s largest and best-known global leaders in food service
retailing, with more than 27,000 restaurants serving more than 43 million
customers a day in 119 countries. Approximately 80 percent of McDonald’s
global restaurants are owned and operated by independent franchisees. Yet on
any day, even as the market leader, McDonald’s serves less than one percent of
the world’s population. McDonald’s out-standing brand recognition, experienced
operational systems and unique global infrastructure position it to capitalize on
Name: Ray Kroc Founder of McDonald’s
MR. RAY KROC (1954) first franchisee appointed by Mac and Dick McDonald in
San Bernardino, California. The first McDonald’s built in 1940 by the McDonald
brothers (Dick and Mac). Ray Kroc was the founder of the McDonald’s
Corporation. Brothers Mac and Dick McDonald opened the first speedee Shakes
and Burgers drive-in called McDonald’s in 1953 in St Bernardino, California.
They were persuaded to sell the name to milkshake salesman, Kroc, who opened
the first store of the McDonald’s Corporation in 1955 in DesPlaines, Illinois.
McDonald’s now has over 20,000 stores in 90 countries.
The company claims it serves 29 million people a day and that a new store
opens some- where in the world every seven hours. Kroc died in the 1980’s but
he has his own shrine in the Corporation’s headquarters with video-audio
hooks-ups so that he can answer trainee managers questions from the grave.
His widow, apparently a billionaire, is still alive and resides in La Jolla,
A Brief History Of McDonald’s
Dick and Mac founded the first McDonald’s restaurant in 1937 in a parking lot
in California. It did not serve burgers, had no happy meals or a playground. The
most popular item on the menu was the hotdog and people ate either on
outdoor stools or in their cherished new autos while being served by teenage
carhops. The first McDonald’s drive-in was built in 1940 by the McDonald
1954 – 1968
Ray Kroc became the first franchisee appointed by Mac and Dick McDonald in
San Bernardino, California. Ray Kroc opened his first restaurant in Des Plaines,
Illinois (near Chicago). First day’s revenues-$366.12 and the McDonald’s
Corporation was created. Quality, Service, Cleanliness and Value (Q.S.C. & V.)
became the company motto. The 100th McDonald’s opened in Chicago. Ray
Kroc bought all rights to the McDonald’s concept from the McDonald’s brothers
for $2.7 million. Hamburger University opened in Elk Grove, near Chicago.
One billion hamburgers sold.
The 500th restaurant opened
The 500th student graduates from Hamburger University
Ronald McDonald made his debut
McDonald’s net income exceeded $1 million.
Filet-o-Fish sandwich introduced. McDonald’s Corporation went public. Per
earning ratio varies from 10 to 22 during year; stock price range, 15 - 33.5.
McDonald’s listed on the New York stock exchange on the 7th May. The first
restaurants outside of the USA opened in Canada and Puerto Rico. The Big Mac
was introduced. The 1,000th restaurant opened in Deslaines, Illinois.
1970 – 1980
McDonald’s restaurant in every US state. Ray Cesca (Director of Global
Purchasing of the McDonald’s Corporation) has admitted that when McDonald’s
opened stores in Costa Rica in 1970, they were using beef from cattle raised on
ex-rainforest land, deforested in the 1950™s and 1960™s. New countries Virgin Islands, Costa Rica. The Egg McMuffin sandwich was test marketed in
the US as McDonald’s first break fast menu item. McDonald’s Japanese
President, Den Fujita, stated it the reason Japanese people are so short and
have yellow skins is because they have eaten nothing but fish and rice for two
thousand years; so if we eat McDonald’s hamburgers and potatoes for a
thousand years we will become taller, our skin become white and our hair
blonde. New countries - Japan, Holland, Australia, Germany, Panama, Guam.
Assets exceeded $500 million and sales surpassed $1 billion. A new McDonald’s
restaurant opening every day. New countries - France, El Salvador. The 2,000th
restaurant opened in Des Plaines, Illinois. The Quarter Pounder was introduced.
McDonald’s Golden Arches Restaurants Limited founded in UK as a joint
businessmen; one British, one American. New country - Sweden. Egg. McMuffin
introduced. The 3,000th McDonald’s restaurant was opened in Woolwich (south
east London) in October, the first in the UK. The Company’s first Drive-Thru
opened in Sierra Vista, Arizona. New countries – Hong Kong, Bahamas,
Nicaragua. Fred Turner becomes Chairman, Ray Kroc Senior Chairman, and Ed
Schmitt becomes President. Broadcast advertising appeared in UK cinemas.
McDonald’s first UK TV advertisement was broadcast. 4,000th store opened in
Canada. New countries - Switzerland, New Zealand. Largest restaurant opens with 334 seats. New countries - Ireland, Austria. Breakfast menu introduced,
nationally in America. The 5,000th restaurant opened in Kanagawa, Japan and
it made US $1 million in its first year. Sundaes introduced in USA. New
countries - Brazil and Singapore. The 6,000th restaurant opened in Munich.
After workers in a store in Detroit (USA). First floating restaurant on a steamer
in Missouri. 1,000th international restaurant opened.
1981 – 1990
New countries - Spain, Denmark and Malaysia. Geoffrey Guiliano, a main
Ronald McDonald actor, quit and publicly apologized, stating it brainwashed
youngsters into doing wrong. I want to say sorry to children everywhere for
selling out to concerns that make millions by murdering animals. 7,000 th
restaurant opened in Washington DC. McDonald’s was responsible for food
poisoning outbreak caused by Coli bacteria, which affected 47 people in Oregon
and Michigan, USA. Egon Ronay calls McDonald’s burgers ‚uninspiring.
Breakfast was introduced to the British menu. The McDonald’s Corporation
became sole owners of McDonald’s in the UK. The Company is named
McDonald’s Hamburgers Limited. Introduction of Chicken McNuggets in USA.
New Hamburger University campus opens in Oak Brook, Illinois. Founder Ray
Kroc dies. 50 billionth hamburger sold. Ronald McDonald Children’s Charities is
founded in his memory to raise funds in support of child welfare. McDonald’s
now serves 17 million customers a day - equivalent to serving lunch to the
entire population of Australia and New Zealand. If McDonald’s lined up all the
hamburgers sold since 1955, they would: Circle the equator 103.75 times;
Reach to the moon and back 5 times.
Drive-Thru restaurants opened in UK at Fallowfield, Dudley, Neasden and
Coventry. Four workers in Madrid who had called for union elections were
sacked by McDonald’s. The company was forced to reinstate the workers after
the labour court ruled that the dismissals were illegal. The 200th UK restaurant
opened in Ipswich. McDonald’s became the first UK restaurant group to
introduce nutritional information, throughout the country, for the benefit of
customers. McDonald’s sponsored the Child of Achievement Awards. CFCs
ceased to be used for most of McDonald’s Styrofoam packaging. 300th UK
restaurant opened in Dagenham, Essex. McDonald’s is listed on the Frankfurt,
Munich, Paris and Tokyo stock exchanges. Michael Quinlan is appointed
Chairman and Chief Executive Officer. The UK company’s name was changed to
McDonald’s Restaurants Limited. McDonald's opened in Pushkin Square and
Gorky Street, Moscow. McDonald's opened at a UK airport at North Terminal,
Gatwick. The first Ronald McDonald House opened at Guy's Hospital, London.
1991 – 2000
The 150th Ronald McDonald House opened in Paris. McDonald's opened in
Beijing, China. The 400th UK restaurant (and first in Northern Ireland) is
opened in Belfast. McDonald's opens in Hampstead (North London) despite
strong opposition from local residents. McDonald's opened in a railway station
at Liverpool Street, London. The 400th UK restaurant (and first in Northern
Ireland) is opened in Belfast. McDonald’s opens in Hampstead (North London)
despite strong opposition from local residents. The first McDonald’s at sea
opened aboard the Silja Europa, the world’s largest ferry sailing between
Stockholm and Helsinki. 500th UK restaurant opened in Notting Hill Gate,
London. First UK operated restaurant on a ship opened on the Stena Sealink
ferry ‘Fantasial’ sailing between Dover and Calais. Restaurants opened in
Bahrain, Bulgaria, Egypt, Kuwait, Latvia, Oman, New Caledonia, Trinidad and
United Arab Emirates, bringing the total to over 15,000 in 79 countries on 6
continents. McDonald’s celebrated twenty years of operating in the UK. On 15th
April, there were international protests to mark the 40th anniversary of the
opening of the world’s first store of the McDonald’s Corporation. February 16th
10am, the McSpotlight website was launched. The Vegetable Deluxe lunch was
launched in the UK. McDonald’s opened stores in India. McDonald’s and Disney
announced a deal giving McDonald’s exclusive rights to use characters from
Disney films in its promotions around the world for 10 years. Commentators
called it the biggest global marketing alliance yet devised. McDonald’s opened a
store in Belarus, its 100th country. The movie star Robin Williams turned down
a million-pound offer to advertise McDonald’s. Chicago, IL, July 25, 2000 McDonald’s Corporation, through eMac Digital, a company recently formed with
Accel-KKR, formed electronic Foodservice Network (EFS Network), a company
that will operate an independent B2B marketplace to facilitate sales and
purchases to the foodservice industry and will help maximize Internet-based
efficiencies and savings for its participants across the entire supply chain.
History Of McDonald’s Brand
Mac and Dick McDonald established McDonalds brand in 1940 by using their
surname. In 1962, When Dick McDonald sent Kroc an illustration of the
McDonald family crest, Kroc had it added to the sign as a symbol of quality,
replacing Speedee, the boyish chef character that the McDonald brothers had
developed to designate the Speedee Service System. When others insisted that
the crest was gaudy, the search was on for a more stylish corporate symbol.
Turner fiddled with the logo, based on the Cdl in the Cadillac insignia, and
Schindler used that to sketch a logo that pictured the slanted roofline of the
store piercing a line drawing of the golden arches in the form, as it is seen world
over. In 1968, the roofline image was dropped and the McDonald’s name was
added to derive the current logo. Since then logo has not undergone any major
changes. The introduction of the Ronald McDonald character later developed a
human element in the McDonald’s brand, and provided an instant link with
A brand is an offering from a known source. McDonald’s carries many
associations in the minds of people: hamburgers, fun, children, fast food,
Golden Arches. These associations make up the brand image.
A Clean Fast Food Brand which tastes the same any where you eat in the World.
You don’t have to stay hungry for a long time. McDonalds ready to eat available.
The World leader in Fast Food Restaurants.
The brand represents culture of social gathering for families and groups.
The World leader, A giant M.
All kinds of consumers buy McDonald’s products irrespective of age, sex all over
the world. One can see all types of personalities in the McDonalds restaurant.
Strategy Of The Management In The Whole Brand Life
Our observation of McDonald’s Brand tell us that McDonalds as a Brand is in
its growth stage whereas, in countries like America and West Europe it is on its
way towards maturity. Following is the stage wise development and growth of
1940’s (Introduction Stage)
Despite being a time when there was a hamburger store or a food franchise on
every corner in America’s cities, the business that Ray was so fascinated with
had customers lining up to buy hamburgers, fries and milkshakes. McDonald
brothers in their operation of business found that they had developed a crude
but effective method of processing food in seconds. This fast food production,
combined with low prices and a limited menu was a run away success.
1950’s (Development of McDonalds as a Brand)
McDonald’s success was stage on an illusive dream, which Mr. Ray Kroc had.
Despite being a time when there was a hamburger store or a food franchise on
every corner in America's cities, the business that Ray was so fascinated with
customers lining up to buy hamburgers, fries and milkshakes. This fast food
production, combined with low prices and a limited menu could be duplicated
across the country, and he wanted to be the one to do it.
Mr. Ray Kroc felt that the operations of McDonalds could be replicated in every
franchise. He began developing exact specifications for the ingredients so that
the taste and cooking times would be consistent. He then went on to develop
precise systems that could be documented to cover every aspect of how the
business should be run from cooking a burger and serving a customer, to
washing the floor and emptying the bins. Ray also knew that his systems
needed to extend beyond the internal operations of the business, and into the
external design of the buildings and how they were presented and maintained.
This cloned and consistent style would maximise the value of the McDonalds
brand through the buildings appearance.
Ray was so committed to perfection, that he set up his own laboratory to
develop the perfect fries. This was a revolutionary experience for the hamburger
industry, and was not seen by many as being particularly necessary, including
his business associates. This was the success in selling franchises (McDonald’s
early establishment as a Brand)
1960’s (The real growth of McDonald’s Brand took off from here)
Ray Kroc bought all rights to the McDonald's concept from the McDonald's
brothers for $2.7million in 1961.Ronald McDonald made his debut (used as an
Advertising tool) in 1963 which saw a new image on McDonald’s brand building
in the consumers mind in the form of a human element in the McDonalds
brand, and provided an instant link with children. The rest as they say is
history. There would be barely a man women or child in the developed world
who has not tasted a McDonald’s product. Ray Krocs systems were so highly
developed and repeatable that a customer could eat a McDonald’s product,
regardless of which country they were in, and still experience the same taste
and service in a restaurant that was identical to any other in the world.
Apart from having a visible brand by using red and yellow color. The colors red
and yellow have been shown to induce hunger. Most of McDonald’s restaurants
are decorated in the colors red and yellow.
The growth of this brand has led to McDonalds becoming a global brand
example of that is in 1996; McDonald’s overtook Coca-Cola as the best known
brand in the world McDonalds has 48 percent of the globally branded quick
service restaurants and 63 percent of sales.
List of acquisitions by McDonald’s that helped further growth in the
Owns Donatos Pizza with 148 outlets from Michigan to Georgia
23 units of coffee bars in London called Aroma Cafe™
Chipotle Mexican Grill, a fast growing chain of 56 burrito shops
859 Boston Markets
Equity stake in food.com
Figures to support growth of McDonalds:
World Wide Restaurants:
Another proof of that is our Indian market, which has provided a good boost to
McDonald’s advent into India.
The opportunities for McDonalds are truly global with a policy of continuous
innovation of product and service spreading the enormous depth and breadth of
the McDonalds brand, which is being well received around the world.
Brand Equity of McDonald’s
In terms of corporate valuations McDonalds is valued at approx. US$39
In Marketing terms:
The American awareness of McDonalds as a brand is very high. Today
McDonalds is a Global name, famous for its delicious burgers and mouth
watering French fries. The customer’s awareness of the brand goes back to the
earlier days when the McDonalds brothers had decided to start off with the
restaurant. The consistent taste of the Mac meals is one of the reasons for
uniformity in the product. Today the brand is well known for its affordability
and high quality standards. Over the years the company has managed to live
upto its image by providing prompt service unfailingly, constantly improving the
standards of its burgers and providing entertainment to its target customers
mainly children who are always in the lookout for a fun filled hour with Ronald
McDonald the McDonald’s mascot. These critical improvements have helped the
brand to be popular among the millions who visit the joint for a quick bite. One
of the major recallers of the brand is the golden arch of the McDonalds logo. The
red sign with the golden
M is a symbol synonymous with burgers.
In a market like India, the brand is still in its infant stage. Launched in 1996,
the company has done quite well for an initial beginning. Catering to a customer
base which is used to eating the many delicacies offered by the Indian cuisine
which is spicy unlike the McDonalds burgers, the company has definitely faced
a few rejections from the consumer, but it was not long before the brand took
over the hearts of the younger customers, mostly the average urban teenagers
who found the place very happening and ideal for an evening with friends.
In a recent survey conducted by a leading agency, it was found that in India,
although most of the McDonalds found the pricing of the product quite high,
but the perceived quality of the products were rated as high as 4 or 5 out of a
scale of 5. This shows that the company has been able to live upto its high
quality standards set through operational excellence.
From a recent survey it has been found that an average American has visited at
least one of the many outlets in a city at least once in the last year. This can be
directly related to the brand loyalty of the customer. An average McDonald’s
consumer visits the store at least once a week.
Case Study on TATA MOTORS
Profile Of TATA Motors
Established in 1945, Tata Motors is India's largest and only fully integrated
automobile company. Tata Motors began manufacturing commercial vehicles in
1954 with a 15-year collaboration agreement with Daimler Benz of Germany.
Since 1969, the company's products have come out of its own design and
Today Tata Motors is India's largest commercial vehicle manufacturer with a 59per cent market share and ranks among the top six manufacturers of medium
and heavy commercial vehicles in the world.
Area of Business
Tata Motors' product range covers passenger cars, multi-utility vehicles and
light, medium and heavy commercial vehicles for goods and passenger
transport. Seven out of 10 medium and heavy commercial vehicles in India bear
the trusted Tata mark.
Commercial vehicle business unit
The company has over 130 models of light, medium and heavy commercial
vehicles ranging from two tonnes to 40 tonnes, buses ranging from 12-seaters to
60 seaters, tippers, special purpose vehicles, off-road vehicles and defence
Passenger car business unit
The company's passenger car range comprises the hatchback Indica and the
Indigo sedan in petrol and diesel versions. The Tata Sumo, its rural variant, the
Spacio and the Tata Safari (the country's first sports utility vehicle) are the
company's multi-utility offerings.
The Tata Indica, India's first indigenously designed and manufactured car, was
launched by Tata Motors in 1999 as part of its ongoing effort towards giving
India transport solutions that were designed for Indian conditions. Currently,
the company's passenger cars and multi-utility vehicles have a 16-per cent
In addition to the growth opportunities in the buoyant domestic market, the
company is pursuing growth through acquisitions (it acquired Daewoo
Commercial Vehicles, Korea, in 2003) and alliances (it has entered into a tie-up
with MG Rover, UK, to supply 1,00,000 Indica’s to be badged as City Rover) in
Tata Motors has led the Indian automobile industry's anti-pollution efforts
through a series of initiatives in effluence and emission control. The company
introduced emission control engines in its vehicles in India before the norm was
made statutory. All its products meet required emission standards in the
relevant geographies. Modern effluent treatment facilities, soil and water
conservation programmes and tree plantation drives on a large scale at its plant
locations contribute to the protection of the environment and the creation of
Tata Motors' vehicles are exported to over 70 countries in Europe, Africa, South
America, Middle East, Asia and Australia. The company also has assembly
operations in Malaysia, Bangladesh, Kenya, South Africa and Egypt.
Brief History of Tata Motors
It has been a long and accelerated journey for Tata Motors, India's leading
automobile manufacturer. Some significant milestones in the company's journey
towards excellence and leadership are given below:
1945 – 1966
Tata Engineering and Locomotive Co. Ltd. was established to manufacture
locomotives and other engineering products. Steam road roller introduced in
collaboration with Marshall Sons (UK). Collaboration with Daimler Benz AG,
West Germany, for manufacture of medium commercial vehicles. The first
vehicle rolled out within 6 months of the contract. Research and Development
Centre set up at Jamshedpur. Exports begin with the first truck being shipped
to Ceylon, now Sri Lanka. Set up of the Engineering Research Centre at Pune to
provide impetus to automobile Research and Development.
1971 – 1989
Introduction of DI engines. First commercial vehicle manufactured in Pune.
Manufacture of Heavy Commercial Vehicle commences. First hydraulic excavator
produced with Hitachi collaboration. Production of first light commercial vehicle,
Tata 407, indigenously designed, followed by Tata 608. Introduce of the
Tatamobile 206 - 3rd LCV model.
1991 – 1995
Launch of the 1st indigenous passenger car Tata Sierra. TAC 20 crane
produced. One millionth vehicle rolled out. Launch of the Tata Estate. Joint
venture agreement signed with Cummins Engine Co. Inc. for the manufacture of
high horsepower and emission friendly diesel engines. Launch of Tata Sumo the multi utility vehicle. Launch of LPT 709 - a full forward control, light
commercial vehicle. Joint venture agreement signed with M/s Daimler - Benz /
Mercedes - Benz for manufacture of Mercedes Benz passenger cars in India.
Joint venture agreement signed with Tata Holset Ltd., UK for manufacturing
turbochargers to be used on Cummins engines. Mercedes Benz car E220
1996 – 2004
Tata Sumo deluxe launched. Tata Sierra Turbo launched. 100,000th Tata Sumo
rolled out. Tata Safari - India's first sports utility vehicle launched. 2 millionth
vehicle rolled out. Indica, India's first fully indigenous passenger car launched.
115,000 bookings for Indica registered against full payment within a week.
Commercial production of Indica commences in full swing. First consignment of
160 Indicas shipped to Malta. Indica with Bharat Stage 2 (Euro II) compliant
diesel engine launched. Utility vehicles with Bharat 2 (Euro II) compliant engine
launched. Indica 2000 (Euro II) with multi point fuel injection petrol engine
launched. Launch of CNG buses. Launch of 1109 vehicle - Intermediate
commercial vehicle. Indica V2 launched - 2nd generation Indica. 100,000th
Indica wheeled out. Launch of CNG Indica. Launch of the Tata Safari EX Indica
V2 becomes India's number one car in its segment. Exits joint venture with
Daimler Chrysler. Unveiling of the Tata Sedan at Auto Expo 2002. Petrol version
of Indica V2 launched. Launch of the EX series in Commercial vehicles. Launch
of the Tata 207 DI. 2,00,000th Indica rolled out. 5,00,000th passenger vehicle
rolled out. Launch of the Tata Sumo'+' Series. Launch of the Tata Indigo. Tata
Engineering signed a product agreement with MG Rover of the UK. Launch of
the Tata Safari Limited Edition. The Tata Indigo Station Wagon unveiled at the
Geneva Motor Show. On 29th July, J. R. D. Tata's birth anniversary, Tata
Engineering becomes Tata Motors Limited. 3 millionth vehicle produced. First
City Rover rolled out. 135 PS Tata Safari EXi Petrol launched. Tata SFC 407 EX
Turbo launched. Tata Motors unveils new product range at Auto Expo '04. New
Tata Indica V2 launched. Tata Motors and Daewoo Commercial Vehicle Co. Ltd.
sign investment agreement. Indigo Advent unveiled at Geneva Motor Show. Tata
Motors completes acquisition of Daewoo Commercial Vehicle Company. Tata LPT
909 EX launched. Tata Daewoo Commercial Vehicle Co. Ltd. (TDCV) launches
the heavy duty truck ‘NOVUS’, in Korea. Sumo Victa launched. Indigo Marina
launched. Tata Motors lists on the NYSE.
Leveraging the Tata brand
The Tata Finance controversy notwithstanding, Tata Sons is making a concerted
attempt to shift focus from a commodity-oriented conglomerate to a brandoriented corporate group.
It is an image that has stuck to the Tata Sons conglomerate all these years. But
now the image is in for a makeover. Put differently, the winds of change are
blowing within the organisation's formidable corridors. The corporate's portfolio
is changing from 40-50 per cent commodity orientation to an equal percentage
of brand orientation.
The ambitious branding exercise being undertaken by the Tata Sons group
would include primarily steel, salt and trucks. The perception of Tata
Chemicals, for example, is hardly that of a marketing company. But Tata Salt,
marketed by Tata Chemicals, ranks upfront as a leading FMCG brand in most
consumer surveys, besides, of course, being the market leader among branded
GeneratioNow kind of image makeover is round the corner for the Tata brand.
The Tata brand is perceived as rather middle-aged. And while the Tata brand
has a fuddy - duddy image, the trust and maturity association with the brand
Mentioning the `contact points' the Tata brand touches, Tata Salt touches 400
million contact points, 500 million through Tata Tea, seven million through
Titan watches, one million through vehicles, and two lakh through Tata Nova the group's Internet business. The group's telecom business is expected to add
another six million customers.
The marketing makeover exercise is on in full swing.
The moment of reckoning for Brand Tata may have just arrived.
TRUCKS, steel, chemicals, cars, tea, salt, watches, mobile services, infotech and
That is a complex and mammoth portfolio by any standards. And it obviously
adds up to formidable brand equity.
"Tata remains the most valuable brand in the country.
It is second only to the Taj Mahal." The estimated worth of the Tata brand is
about Rs 10,000 crore.
About four years back, some amount of the Tata brand value was estimated at
Rs 3,800 crore. The company has extrapolated that to arrive at the Rs 10,000
crore figure - and that a couple of years back.
Tata’s set to unleash global branding drive
The $11.2 billion Tata Group is planning to unleash a major global branding
Tata Sons, the group has selected some key foreign markets to introduce a
brand building drive to give effect to the group’s vision of becoming a major
Tata Motors has forayed into the UK markets, TCS has a presence in US and
south-east Asian countries.
The Tata group has fared well on the twin brand values of ‘emotionality and
The perception that Tata group companies are not as aggressive as competitors
is gradually changing. It is now also perceived as a more youthful brand, despite
being a 100-year old brand.
Tata Motors is known as a low-cost manufacturer, not necessarily a high-quality
one. The company is looking to provide value for money—or more car per car.
In fact, Indica has never been rated highly by JD Power, which conducts
consumer-based surveys. In its latest 'initial quality study' in December '03,
Indica was placed fifth, second from the bottom, among the premium compact
cars with 237 problems per 100 vehicles. Wagon R topped the list with 118. A
caveat though: this survey takes into account actual problems as well as
perceptions. Another indicator: for the UK market, the City Rover has been
spruced up quite a bit. Apart from cosmetic changes like a new bumper and
grille, it has different engine diagnostics and comes with airbags and anti-lock
brakes. In addition, the City Rovers are petrol-driven, unlike the diesel models
that form an overwhelming share of Tata Motors' India sales.
But even the diesel models of Tata Motors are in for fresh competition. Hyundai
has launched the diesel version of Accent, which it claims is superior as it has
the latest microprocessors-based common rail direct injection (CRDi) technology
that supposedly increases fuel efficiency and reduces pollution. It also plans to
have diesel options for its forthcoming compact model, Getz, as well as Santro.
Maruti, which imports the engines for its diesel Zen and therefore doesn't find it
viable to make more than 500-900 vehicles a month, is also thinking of tying up
Revitalising Brand Tata
The Tata group has launched a deliberate and comprehensive effort to reenergise its 124-year-old brand equity, and to connect with youth. Catalyst
takes a look at how this is being done.
A FAMILY of four made its way out of the stands at Chennai's Nungambakkam
tennis stadium on Day 3 of the Tata Open tournament. Outside, T2, the cheery
ball-shaped mascot, was sitting with some other youngsters; seeing the two
kids, he sprang to his feet, came up to them, held out his hand and called out,
"Hi there." The kids stepped back warily, but were quickly won over; he shook
their hands, asked for their names, and then gave them a high-five before
For the Rs 49,000-crore Tata group, T2 is just one visible face of a deliberate
and comprehensive effort to re-energise the 124-year-old Tata brand. With 80
group companies and its share of controversy and failures in recent years, the
group is still among the most respected and trusted brands in the country. But
it is only recently the group began a concerted effort to protect and enhance its
brand, which it acknowledges as its "most important asset," and which was
valued at over Rs 10,000 crore four years ago.
"The Tata brand represents assurance, reliability, a sense of nationalism (and)
value for money, irrespective of the product - whether it is a wrist watch, tea,
salt, a piece of software or a car," said R. Gopalakrishnan, Executive Director,
Tata Sons Ltd., at a press conference. "When you have an asset that size, you
have to ensure that whatever you do enhances the asset's value, and also make
it more relevant and contemporary on a continuous basis," adds Romit
Chaterjee, Vice-President - Corporate Affairs, Tata Services.
In recent years, the group has designed a common logo, centralised its media
buying and PR operations, devised a system for group companies to pay a fee for
using the Tata name, and has aligned itself with vehicles that contemporarise
the brand and connect with the youth. The group has committed Rs 300 crore
over the next five years to target the younger demographic.
"Every brand needs to keep reinventing itself to keep up with the times - and a
long-pedigreed company, especially, may fall into the trap of not constantly
reinforcing the brand," says Madhuri Sapru, General Manager - Brand, Tata
Services. "Over the last few years, the world has really opened up with
globalisation, and there has been a change in people's mindsets. So it is
necessary to re-evaluate where we stand," she says.
Towards this end, the Brand Equity Business Promotion Fund was created
about four years ago; a Tata-name company, like Tata Steel, pays 2.5 per cent of
its revenues to the fund, and a non-Tata name company, like Voltas, pays 0.01
per cent. The money is used to consistently enhance the brand image, Chaterjee
The group also undertook extensive research a few years ago; every six months,
a brand track study, by Pathfinders, tracks brand perception vis-à-vis five other
major corporate brands, among 5,000 respondents in 13 cities. The study plots
the Tata brand against the others on two metrics, affinity (how close the brand
is to the consumer, and how warmly it is perceived) and relevance (how relevant
the brand is to the consumer's life). On both parameters, the Tata brand has
risen steadily in value since December 2000, when the study was first
commissioned, and continues to be ahead of the other brands, Chaterjee says.
Two of the primary findings of the research were that the Tata brand is not
perceived as youthful, and that it is not into technology in a big way. So there is
a concerted effort to connect with the youth, and to communicate its
involvement with technology, Sapru says. "There's been a lack of communication
rather than a lack of activity," she clarifies.
Talking to the youth is really the need of the hour, says Sapru, who came on
board about two-and-a-half years ago. "A person above 30-40 years of age has
been growing up with the Tata brand, and has many touch-points with a Tata
product or service, so the associations are far stronger," she says. "But today, it
is a very brand-driven universe, and we need to ensure that amidst all the noise
made by other brands, the perception of the Tata brand stays the same with the
Young people are the "consumers, stakeholders and employees of tomorrow,"
and to connect with them, the group uses contemporary media such as the
Internet and SMS, and events and personalities, Chaterjee says. Its stake in the
Barista chain, for example, provides a popular venue to connect with the desired
demographic, and the group has done interactive sessions with ace driver
Narain Karthikeyan, a brand endorser, at sports bars and pubs in some cities.
Their research indicated that the three most effective vehicles to reach the youth
are movies, music and entertainment, and sports. Movies were ruled out although Marg, a Tata group company makes documentary films - but the
group has associated with select music and entertainment events: it has
sponsored a Shakti concert and one dedicated to Bob Dylan, and considers
them big successes. The group will continue to associate with "contemporary
classics, or contemporary legends" relevant to the Tata brand, Chaterjee says.
The group also signed a three-year title sponsorship deal for India's only ATP
tournament, beginning 2002. Last year, it also signed on India's F-1 aspirant,
Karthikeyan, to endorse some of its brands, including Titan's Fastrack. The
$400,000 Tata Open provides a platform for a host of Tata products and
services, including Titan, the Taj group of hotels, Tata Indicom and Trent's
Westside. "We are trying to exemplify the `Tata One World' concept more and
more, so any marketing activity is an integrated effort," Chaterjee says. "Tata
and MTV is an unusual kind of combination, but this is how we are making
ourselves relevant to the younger generation." The two have a deal to do some
programmes on the Tata Open tournament.
In tennis and motor racing, the group has found very strong personality
matches, Chaterjee adds. Formula Motor racing is about speed, energy,
aggression, and fighting against tough international competition; tennis, too, is
about speed, dynamism, aggression, and slugging it out against international
competition in the tournament, he says.
When IMG, which owns and manages the ATP tournament, approached the Tata
group after ITC pulled out of the sponsorship deal, the Tata management "asked
all the right questions and were very diligent and straightforward," says Ravi
Krishnan, Managing Director, IMG/TWI - South Asia and Senior International
Vice-President, IMG. Given that this is a high-profile sporting event with a
global, youthful image, it helps the company establish its new brand identity
and reach a different audience. "The biggest annual global sporting event in the
country and one of the biggest brands in the country - it's a very good fit,"
Krishnan says. "From the point of view of audiences, its employees, its sales
force, the Government and the bureaucracy - the event brings the brand closer
Another focus is B-school campuses, where the group is emphasising greater
interactivity with students, and raising its profile as an employer. It sponsors
the annual inter-collegiate event, Confluence, in IIM-A, and the Business
Leadership Award; its senior managers also go on lecture tours and present
case studies of group companies. "This is where we are going to get our future
employees from, so we want to ensure the Tatas are in the consideration set,
along with the consultancy firms and foreign banks," Chaterjee says.
In ORG-MARG's recent `Campustrack' survey of most preferred employers on Bschool campuses, Hindustan Lever, Infosys and McKinsey headed the list of 48
corporates; Titan, Tata Engineering and Tata Steel were among the companies
at the other end. However, Indian-family owned businesses in general did not
fare <90,0><90>as well as multinationals, and the Campus Recruiter Index for
the Tata group has improved since the last time, particularly for TCS, Tata
Administrative Services and Tata Engineering, according to ORG-MARG.
The Tata group was rated highly on the parameters of "good standing in the
market" and "large-sized company," and found to lag in the aspects of
compensation/salary package, and international postings and overseas travel.
"By all accounts, the image of a youthful, techie corporate seems to belong to
TCS and, to some extent, to Tata Administrative Services. There is still some
way to go before we can say this about the group as a whole," says ORG-MARG.
However, Chaterjee points out, the Tata group has climbed several notches in
just a year, by making the brand "more relevant and more interesting as a
potential employer in terms of what we stand for." Also, in the wake of the
dotcom bust, qualities such as job stability and pedigree of the company have
become more important, Sapru adds.
Internally, too, there has been a concerted effort to create a sense of synergy
and belonging among the group companies. On the group's Intranet, there are
forums for secretaries, HR managers, CFOs and others to share knowledge and
best practices across companies and regions, Sapru says. The flip side of the
coming together of the companies is that a negative fallout, like the Tata
Finance debacle, can impact the image of the other group companies, too,
warns Ramanujam Sridhar, CEO of brand consultancy, brand-comm.
On the communications front, the group has integrated its activities: Media
Edge is the group's AOR for media buying, and Vaishnavi Communications
handles PR for the largest group companies. Brand experts say the Tata group
is on the right track: today, the brand stands for trust and integrity, optimism
and a dogged spirit to move ahead, says R. Sridhar, Partner, IDEAS-RS. "What is
interesting is that some of the old Tata values are still there, but they don't
make them weak or come in the way of progress," he says.
Indeed, while the 15-30 year demographic is in sharp focus, there is no desire to
alienate older audiences, who continue to be valued customers, Sapru says. "We
are not trying to suddenly become the Pepsi of the manufacturing world - we
just also want to talk to the employee, the customer, and the decision-maker of
Brand-comm's Sridhar points out that the group has perhaps been seen as "an
ageing patriarch, or a fuddy-duddy." But, with its increasing consumer focus, its
realisation of the value of the Tata brand name, and its new product and service
initiatives, there is "a sea-change from the `we also make steel' days: this is the
new energy that is driving the group forward." Indeed, the company's Web site
informs: "The Tata name is a unique asset representing leadership with trust.
Leveraging this asset to enhance group synergy and becoming globally
competitive is the route to sustained growth and long-term success."
Case Study on Colgate – Palmolive (India)
Colgate-Palmolive is the World Leader in Oral Care with operations in over 200
countries. Colgate – Palmolive (India) Limited is India's leading provider of
scientifically proven oral care products with multiple benefits at various price
points. The range includes toothpastes, toothpowder and toothbrushes under
the "Colgate" brand, as well as a specialised range of dental therapies under the
banner of Colgate Oral Pharmaceuticals. These have become an essential part of
daily oral hygiene and therapeutic oral care in India. The Company also provides
a range of personal care products under the "Palmolive" brand name. Being
ranked as India's # 1 brand across all categories by the A&M-MODE annual
survey of India's Top Brands, it is always trying to maintain its quality and aims
at maximum customer satisfaction.
Colgate people working around the world share a commitment to three core
corporate values: Caring, Global Teamwork and Continuous Improvement.
Colgate has been rated the #1 brand across all categories in A&M's annual
survey of India's Top Brands conducted by Taylor
Nelson SofreshMODE. Powered by a rise in its brand
'POWER Score' from 53.91 in the last annual survey
to 56.2 in 2001, Colgate has been ranked the
country's #1 brand since the survey was introduced
Eight out of nine times COLGATE has emerged as India's Top Brand. The survey
shows a very strong rural presence underlining the success of Colgate's
distribution and marketing Program.
The Colgate anthem plays on …………
It makes me feel so good
Yes I know it should
Doesn’t matter how hard the quest
With Colgate-Palmolive I’m the best!
Stick together in every fight
Face the future smiling bright
Raise your hands so all can see
Number one’s the place to be!
We’re right on top
We’ll touch the sun
We’re right on top
We’re proud to be No. 1
We proved our mettle all throughout
We’re a great team without a doubt
Our success and you’ll agree,
Is because Colgate –Palmolive means You & Me!
I can take charge,
Of any problem, however large
Never mind about the rest,
With Mera Colgate, I’m with the best!
The C-P anthem voices the pride and sense of belonging, Palmolivers feel
towards the company. Developed as part of the Employer Branding initiative
(taken up by the Employer Brand team), the anthem was penned as part of the
communication campaign for the Best Place To Work (BPTW) survey. The main
objective of the anthem is to provide the “ organizational glue” which bonds
fellow C-P members and evokes feelings of pride in the company. The anthem
has received a favourable response from the employees and is played on all
significant occasions when the entire team gathers together. It has already been
sung with gusto at the Intercoms and the launch of conclusion of the BPTW
It is a unique way of communicating the messages of pride and belonging while
encouraging Palmolivers to give their best. The anthem also stirs up and
motivates people by reinforcing the message of teamwork in facing challenges
and achieving goals.
A Brief History Of Colgate
A Legend Is Born
The Colgate Story:
1806: William Colgate, sets up a starch, soap and candle business in New York
1807: The company become Colgate 7 Smith with Francis Smith as partner
1813: The company name changed to William Colgate & Co. with brother Bowles
Colgate as partner.
1857: The founder William Colgate dies and the company became Colgate & Co.
1937: Colgate Palmolive incorporated in India, launches Colgate Dental Cream
and became the company dedicated to the oral health of the nation. A
commitment rewarded with satisfaction, trust and goodwill of millions.
Today Colgate is India’s most trusted brand.
1937: Colgate-Palmolive (India) Pvt. Ltd. Was incorporated in 1937. Introduced
products that became market legends.
1937: Colgate Dental Cream was introduced.
1949: Colgate toothpowder and toothbrushes were launched.
1950: Palmolive shaving cream was launched.
1951: Halo shampoo was launched.
1952: Charmis cream was launched.
1967: Manufacturing operations commenced at Sewri, Mumbai.
1972: Colgate introduced a truly refreshing product – Palmolive After Shave
1976: Colgate launched the “Young India Program”… bright smiles become
1978: The Indian public was offered 60% equity in the company, with shares
being listed on the Bombay Stock Exchange. Colgate Palmolive became a blue
chip company on the Indian bourses.
1988: Colgate relocated its toothpowder plant to Waluj, Aurangabad.
1989: Colgate invests in a state-of-the-art manufacturing plant for fatty acids
and soaps at the same location. Also, Palmolive Extra Care soap was launched.
1990: Colgate Gel was launched & brighter smiles followed. Also, Palmolive
Shave Foam was introduced.
1992: Colgate was rated as India’s No. 1 brand across all categories.
1993: Colgate Total – the most technologically advanced toothpaste was
launched. Colgate Palmolive USA reaffirms its commitment, by raising its equity
from 40% to 51%. Colgate was once again rated India’s No. 1 brand.
1994: Colgate Calciguard was launched. Once again the Annual Board Power
Survey ranked Colgate No. 1 across all categories for the 3rd succession year.
1995: Again No. 1 Brand for the 4th year.
1996: Colgate Oral Pharmaceutical products were launched in Asia-Pacific
region. This year, an ISO 9002 certification was awarded to Aurangabad fatty
acid, toilet soap and toothpowder plants. Again ranked No.1 brand for 5th time.
1996: Colgate Palmolive entered a new category – household care, with the
launch of Axion dishwashing paste.
1997: Colgate Calciguard & Colgate Plus toothbrushes became the first to
receive the Indian Dental Association’s Seal of Acceptance.
1998: Colgate ranked No.1 brand for the 6th time.
1999: Colgate was rated “India’s Premier Brand” by A&M Magazine’s annual
survey of India’s Top Brands. This was a decade in which Colgate-Palmolive
introduced the best of its products in India. The Indian consumer was offered
A very generic brand. The word Colgate has taken place of the word toothpaste.
Example: In Gujarat, people call Close-Up as Lal Colgate (red toothpaste) and
they call Colgate Dental Cream as White Colgate (white toothpaste)
You don’t have to search for any other toothpaste.
The three core values of Caring, Global Teamwork and Continuous Improvement
are put into action at work as well as in communities. The results are better
products and a better quality of life throughout the Colgate world.
The Code of Conduct reinforces and enhances their corporate culture and
addresses issues of law, ethics and fairness in all their daily business
Ranked 8 times as No. 1 Brand
A 6 year young boy to 60 year old men in the family uses the brand.
The face with a Colgate smile is the logo of the brand. The face
is shown as the globe with a Colgate smile over it, this
represents that the whole world should smile using Colgate.
This indicates a personal feeling in the mind of the consumer and he is
motivated to buy the product.
Colgate has its logo colour combination of red, blue and white colours. They
have not changed the colour combination from the beginning as these 3 colours
have left a mark (impression) in the mind of the people.
How did it win consumers?
The success lies in the satisfaction, trust and goodwill of their consumers. They
believe, that they can best serve the needs of consumers through a consistent,
fair and sensitive consumers communication program.
For that reason, Colgate has established Consumer Affairs in 31 locations
around the world - many of them with toll-free 800#s. The mission of Consumer
Affairs representatives who answer these phones is to:
Listen and learn about consumers in a professional, consistent and caring
manner that exceeds their expectations so that they experience satisfaction with
their products, in all respects.
Bring consumer feedback to the decision-making process at Colgate to
help improve existing products and develop new products that will meet
The Consumer Affairs Department in India is staffed with
Colgate-Palmolive products and welcome the opportunity to hear
from consumers. To benefit the consumer they have in place a Toll-free number
The protection of the environment and the health and safety of our
customers, our people and the communities in which we live and
operate is an integral part of Colgate-Palmolive's mission to become
the best truly global consumer products company. We are committed
to conducting ourselves in a socially responsible manner and to
keeping our business operations environmentally sound. It is our
worldwide policy to manufacture and market our products and
operate our facilities so that we comply with or exceed applicable
environmental rules and regulations. The health and safety of our
customers, our employees, and the communities in which we operate must be
paramount in all we do.
These concerns have been translated into the following guiding principles:
Colgate-Palmolive will provide the public with safe and effective products and
will strive to produce products that have the lowest practical impact on the
To reduce the impact of our product packaging on the environment, we will work
to improve the environmental compatibility of all our packaging materials.
Colgate endorses the worldwide hierarchy of solid waste management: source
reduction; recycling (including reuse); incineration; and landfilling.
Colgate-Palmolive is committed to the health and safety of our employees and
the communities in which we operate, as well as the protection of the
environment. We will establish and maintain programs for the operation and
design of our facilities that meet or exceed applicable environmental, health and
safety laws and regulations.
Colgate-Palmolive will consider environmental, health and safety issues in all
discontinuance of operations, and entry into joint ventures. We will also act in a
responsible manner with respect to the environmental protection of the lands
under our management and ownership.
Code Of Conduct
Colgate people around the world have built a reputation as a
successful company with the highest ethical standards. Through
living our values of Caring, Global Teamwork, and Continuous
Improvement, and adhering to the highest principles of integrity,
honor, and concern for the environment and others, they seek
Provide safe and quality products of value to consumers
Increase shareholder value
Offer opportunities for personal and professional growth to
all Colgate people
Fulfill our corporate social responsibilities as a member of