JANUARY 5, 2003
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Two Slab
Income Tax

The Kelkar panel, constituted to reform India's direct taxes, has reopened the tax debate-and at the individual level as well. Should we simplify the thicket of codifications that pass as tax laws? And why should tax calculations be so complicated as to necessitate tax lawyers? Should we move to a two-slab system? A report.


Dying Differentiation
This festive season has seen discount upon discount. Prices that seemed too low to go any lower have fallen further. Brands that prided themselves in price consistency (among the consistent values that constitute a brand) have abandoned their resistance. Whatever happened to good old brand differentiation?

More Net Specials
Business Today,  December 22, 2002
 
 
Use Consumer Insights

"Consumer research should be used to determine unsatisfied consumer problem. The branding strategy must address these problems profitably"
, CEO, Quadra Advisory

The first thing that MT paper should do is to get its executives to talk like businessmen, not like a bunch of university professors. Can you imagine someone in your office actually say 'there's integrity in words committed to paper'?

The problem is simple. The solution is not easy. Earning profits from commodity products is becoming difficult; and globalisation will ensure that it becomes even more difficult. No wonder, the premium segment grows at a healthy 15 per cent compared to uncut paper, which has a growth rate of 5 per cent and is under pricing pressure.

Branding of commodities is not new. Blended tea was branded over a 100 years ago; cooking oil 70 years ago, and within the last 20 years, we have seen the branding of salt, atta and, now in Delhi, the branding of vegetables, milk and sugar.

Chaudhuri must understand that his main job as Marketing Director is to create customers for MT Paper at a profit. He can only do so by differentiating MT Paper as a brand from others, and offering value to customers which is greater than what is offered by competitors. This would enable MT Paper to charge a price premium; yet provide additional satisfaction to its customers.

It is clear that both Rajavat and Chaudhuri instinctively feel the need for branding; so the question of whether the former should give the latter the go-ahead (to start a branding exercise) is in some ways rhetorical. MT Paper has really no choice.

What should they do? The first thing is to decide that MT will be a business that is consumer-led, rather than led by anything else-such as manufacturing capacity, or history, or even the chairman's opinion.

How does one do so? First, by developing 'consumer insights'. What are 'consumer insights'? Unsatisfied problems faced by the consumer in that category. Specialised consumer research can be used to determine these-which are business opportunities for MT. Then, the business must rank the solutions to the difficulties identified, in terms of potential profitability.

The business must look at its own capabilities to provide quick solutions to some of the consumer insights. These must represent the low hanging fruit, which should be the first priority in developing a brand. A multi-functional team should be put together to make this happen.

Finally, there must be a branding strategy developed on the basis of profitable solutions to consumer insights. This would impact the R&D policy, HRD, manufacturing strategy and the development of a comprehensive product and branding roadmap. It is not going to be easy, but it has just got to be done. I hope Chaudhuri is the man who can do it, and Rajavat will provide the necessary backing to these ambitious plans.

"Before devising communication strategies to create a brand image for MT, the management needs to fight against its commodity mindset"
, VP (Sales and marketing), JP Paper

The issue is not whether rajavat should give Chaudhuri the go-ahead for the launch of MT Infoyug and the 'Satyamev Jayate' campaign. Going the brand way to generate 'consumer pull' seems imperative. But the magnitude of the challenge needs to be understood. Creating a brand in a commodity-driven market entails the uphill task of overcoming market inertia. Before devising communication strategies to create a brand image for MT, they need to fight against their 'commodity mindset'. This will mean transforming a seller's market to a buyer's market by placing the end-user at the centre of all business activities. Even after that, creating 'consumer pull' is a mammoth task, as evident from Chaudhuri's peeve that most CEOs use his paper but are unaware of it. Paper is perceived to be a low-involvement category. But then, perhaps we should take inspiration from the classic ingredient branding case of Intel, which has become such a strong brand.

Chaudhuri is right in looking to differentiate the brand in the consumer's mind, thus moving beyond mere labeling. But they first need to look at brand relevance-something the consumer can relate to and rely on. Chaudhuri needs to bring forth the consumer's perspective. He needs to overcome the end consumer's indifference towards paper, for which he will need a synergistic 360-degree integrated marketing communication approach, involving packaging, promotion and distribution, with emphasis on retailing.

"A Relevant positioning strategy should be worked out, focusing on the benefit platform of non-fade-a 'crafted to last' brand of paper"
, Chairman & MD Samsika Marketing Consultants

In my opinion, consumers buy brands, not commodities. Brands are built in the minds and hearts of consumers. Rajavat should definitely allow Chaudhuri to go ahead with the brand-building process, but I do not agree with Chaudhuri's communication stance. It is based more on 'content' rather than the 'surface' on which the 'content' is written. The 'Satyamev Jayate' campaign-selling paper as the "brand for those who are on the side of fact, not fudge" and being a sign of the "courage of one's conviction"- is more appropriate for a newspaper, not for paper.

The first step for MT is to set out a marketing objective. Let's assume the objective is to build a brand that ensures sustainable growth of at least 30 per cent for the next three years, as well as to have a buoyant and healthy bottomline.

The brand strategy would have to include a mindset change in the management, away from commodity selling to brand marketing. Further, the brand strategy would have to include a full product portfolio as well as brand experience strategy focused on enhancing the writing experience. The marketing and sales department would have to look at the brand in a consumer-oriented manner.

Next, the marketing team would have to select a primary target segment, and a couple of secondary segments to be addressed accordingly. This would have to be done with a consumer product approach, whether it be the executive, student or literary segment. A relevant positioning strategy would have to be worked out, focusing on the benefit platform of non-fade-a 'crafted to last' brand of paper, which is a perennial paper with the promise of 'MT Paper-Fill It Up! Make it wordsworth.'

The word 'MT' sounds like 'empty', and that could be used as the creative key, inviting the consumer to make the best of the paper-and make it 'worthy' with words. This communication strategy would have to use mass media (print and television), and with a high brand recall, the consumers' intention to buy would go up.

The branding exercise would raise the paper's perceived value. The pricing strategy would have to be premium, and care has to be taken in having different stock keeping units (SKUs) with a balance between price and size. To ensure widespread availability, the sales and distribution network would have to be strong.

Lastly, regular research and consumer feedback would serve as vital inputs to the progress of the brand-building exercise. To conclude, Rajavat should give Chaudhuri the go-ahead to build a growth-oriented and profitable brand, but on the basis of my strategy.

"For a long term brand-building straegy, the company must roll out a communication plan based on its established virtues like stability and reliability"
, Group VP (Sales & Marketing), Ballarpur Industries

The paper business of the MT group is a classic case of a traditional Indian business house trying to grapple with changing times. Just embarking on a branding exercise or coming up with catchy slogans for advertising with little strategic meaning may not fetch the desired results.

For a long term brand-building strategy, the company should roll out a communication plan based on its established virtues-like its long history of stability and reliability. It should also educate customers on the impact that paper quality has on the image and quality of written communication for a business.

Entering a new segment like copier paper is the right way forward for the MT Group. It is not only a high-growth segment, but also opens a new market for the company other than conventional printing paper, which is plagued by price cycles.

An emotive campaign such as 'Satyamev Jayate' without any objective message will not work for a product category that is a blind spot in the consumer's mind. The branding for copier paper must be directed not only at corporates, but also at copy shops or jobbers, since they constitute a large market. The consumer campaign must carry a message on better aesthetics and longer life of paper, while the one directed at jobbers must address relevant concerns like better functionality in the copier machines, jam-free operation, less machine maintenance and so on.

 

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