Squeezed by large Indian companies on one side, and cheap imports on the other, few regional brands make it big.

By Debojyoti Chatterjee

Sabeena isn't Tamil for dish cleaning powder, yet customers in some parts of Tamil Nadu use it sweepingly, to indicate anything from Vim to Pril. Torino isn't Kannada for aerated beverage, but that's what some customers in Karnataka say when they want a Fanta or a Mirinda.

For those not in the know, Sabeena and Torino are regional brands. One thrives, the other is dead, but both have wormed their way into popular vern-vocabulary. There are several ways to define a regional brand. The classical definition is the one you'll encounter if you're speaking to transnational-execs like Gunender Kapoor, HLL's director in-charge of the Foods business: ''A regional brand meets the need specific and unique to a particular region. This, however, shouldn't be confused with a national brand that makes slight alterations to suit a regional bias.''

The prevalent interpretation of a regional brand, though, spans everything from a brand whose reach is limited by the resources at the disposal of the company that owns it, to one whose range is constrained by its very provincial appeal.

The granddaddy of regional brands is Cantheridine, a hair oil brand that belonged to Bengal Chemicals. The company was founded in the early 1920s by Acharya P.C. Ray, a Professor of Chemistry who told the world that water had two parts hydrogen and one part oxygen, and satirist Rajshekhar Basu, rated by the Bengalis of the world as a refined version of p.g. Wodehouse. Today, Cantheridine, and its stable mates, Phenyle domestic cleaner and Basanta Malati cleansing milk, can no longer be found on shop shelves; the company itself is now a PSU; and its factory in a Kolkata suburb lies in a state of disrepair.

Not all regional brands die. Some, like Nirma go national with a fair degree of success; a few, like Calcutta Chemicals' Margo end up as part of the larger portfolio of a transnational; some others continue to flourish as regional brands; and most simply stagnate. Nirma the detergent began life as an unbranded offering Karsanbhai Patel would sell door to door. In stage two, it became a strong regional brand. And thanks to some effective advertising and a smart pricing strategy, it effected a painless shift to being a dominant national brand.

And, of course, not all regional brands are, well, regional. In the late 1970s, when researchers at HLL's Andheri facility came up with the idea of a fairness cream called Fair & Lovely, they had little idea of the potential of the brand. Today, Fair & Lovely is one of the largest skin-care brands in the Unilever portfolio, and is exported to 30 countries. The regional brands this dispatch is concerned with aren't owned by multinational corporations; they're owned by small or medium-sized companies; and the majority is not in great shape. Capricious customers who can now pick from a larger choice-set, the onslaught of foreign brands-post the removal of quantitative restriction on imports-and aggressive and acquisition-minded big fish are just some of the problems they face.

Under Seige

The list of regional brands under siege is long. In western India, Society Tea has to live with plateauing sales and in eastern India, Boroline and Keo Karpin are takeover targets. Owned by a family-controlled company, G.D. Pharmaceuticals, based in Kolkata, Boroline used to be a household name and an utilitarian product that was used as a cosmetic, an antiseptic, and a burn-salve. The brand is still going strong, but the Dutta family that runs G.D. Pharma is finding it difficult to compete with transnationals like J&J and Reckitt & Colman. The Duttas are tight-lipped about a possible sale of the brand to the Burmans of Dabur, but the cost of maintaining a pan-Indian distribution network for a product portfolio that essentially comprises one offering, does seem a bit of a waste.

The Deys who own Keo-Karpin are firm that their brand is not for sale. But yes, admits, Kishore Chakraborty, Account Director at McCann Erickson, the advertising agency that handles the brands advertising, ''Competition-HLL and Marico are both aggressive players in the hair-oil market-is telling. Keo-Karpin is a strong brand and there is no way it's up for sale. But yes, it is under pressure.''

There are reasons behind the phenomenal (and sometimes short-lived) run of regional brands across India, reasons that Jagdeep Kapoor, the CEO of Samsika Consulting, rattles off like a poet reciting a favourite rhyme. ''One, India is culturally diverse and consumers feel the need for offerings, that cater to regional preferences. Two, regional brands can offer the promise of value, thanks to lower overheads. Three, some regional brands boast a legacy that runs back several decades. Four, the sheer number of people living in a geographical limit make a regional brand viable. And five, since consumer profiles across a region are fairly homogenous, local companies can build regional brands using local advertising media.''

All good reasons, and they haven't vanished overnight. But stagnant markets are forcing larger national-level companies, both transnational and Indian, to micro-segment their markets, and offer regional variants to mop up incremental volumes. And now courtesy the easing of quantitative restrictions on imports, the Bejois of the world - the subject is a fruit-based beverage popular in certain southern Indian markets-will have to live with not just Real and Tropicana, but also Sunpokka and Berri.

The Strategic Dilemma

Some regional brands are more than willing to take on competition. The clutch of hairwash and skin-care brands that are part of the Chennai-based CavinKare's portfolio, is a case in point. The company's CEO, C.K. Ranganathan believes going national is the logical strategy for a regional brand as long as there is a compelling marketing argument for it. ''Of course, there are some products like Meera Kundakai Rasam (a hairwash powder built around a traditional formulation) which is targetted exclusively at the Andhra market.'' For every Ranganathan, though, you'll find a Kamath. One of Mumbai's best-known ice-cream brands, Juhu Natural (referred to as Naturals) is the brainchild of R.S. Kamath of Kamath's Ourtime Icecreams. In the past 18 years, the company has managed to build equity purely through word-of-mouth. That's not the only thing Kamath has built: he now has 18 outlets in Mumbai and one in Pune. But the man isn't keen on venturing out.

It isn't business-sense that prevents brands like Naturals from going national. Jimmy Rana is the CEO of the Nagpur-based Dinshaw Frozen Foods which has dominated the local market for icecream and other milk products since 1913, and his philosophy, like that of CEOs of larger companies, is laced with concepts like customer satisfaction and innovation. ''If you do not innovate, your products will get commoditised overtime. Innovation is the key to consumer delight.''

And it certainly isn't the lack of marketing skills holds regional brandsfrom going national. Time and again, local players have demonstrated an ability to enter the market at the right time with the right product. B.P. Agarwal of PriyaGold Biscuits launched his offerings in 1993, when he realised that there were no branded low-priced alternatives to biscuits from the stables of Britannia and Parle. Realising that a product-innovation was required to crack the vast rural market, Agarwal recently launched a pack (of four) at a price point of Re 1.

The regional-perspective of brands like Naturals and Dinshaws can be attributed to ambition, rather, the lack of it. ''The reason several regional brands have not crossed the Rubicon is that their owners aren't ambitious enough. And maybe, they do not realise the potential of their brands," says Tarun Rai, Senior Vice-President and General Manager, HTA. Only now, he adds, they will face competition from transnational-brands.

Regional brands, following the drift of Rai's argument, can go national. And are several-Hero Cycles, Nirma-that have done so successfully. But there are some, like Gits Food Products' Gits brand of processed foods, that do so only to see rivals gobble up the market they've created. Still, it's Hobson's choice for the owners of regional brands. If they stay regional, they'll face competition from the regional variant of national brands and cheap imports; if they try and go national, they may over-leverage their meagre resources. But as CavinKare has shown, it doesn't take rocket science to go national. ''Extrapolate the model that worked in one region in spirit, not letter,'' advises Suhel Seth, CEO, Equus Advertising. And that's what regional brands must do if they wish to survive. If they don't, they'll probably end up being just words. 

-With additional reporting by Abir Pal, Aparna Ramalingam, & Nitya Varadarajan
  

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