How Patanjali uses modern brand strategy to grow past Colgate and challenge P&G, Unilever
The undoubted benefits of a single-brand strategy.
How severe is this problem? Till a few years ago, Nestle marketed over 8,000 brands in 190 countries. Unilever had 1,600 brands across 150 countries and P&G was a bit of laggard with just 250 brands in 160 countries.
But even P&G thought that was a hundred too many, and announced a cull of its brand portfolio down to ‘just’ 150 in 2014.
But in today’s over-branded, over-communicated world, even that may be 149 brands too many.
Each brand requires its own marketing and promotional budget, its own brand management team.
But cutting it down to 1 brand makes life so much easier.
You were ready to try Google Maps – because you were used to Google Search. You eagerly waited for the Apple iPhone – because you love your Apple iMac – or were a fan of the Apple iPod.
Every product, in fact, becomes an advertisement for every other product made by the same company. Drastically reducing your required marketing spend by some 80% or more.
So, build just one brand. Let the positive rub-off of that glow on everything product you sell under that brand.
Sure, one could argue that having different brands insulates you if something goes wrong with one.
If Maggi went wrong, it shouldn’t affect Nestle’s other brands.
But it actually did: You know Maggi made for a small share of the company’s revenues – but one hit on one brand’s reputation side-swiped the entire company as you’ll see in this stock price chart.:
So what else did Patanjali gain?
It’s harder for a sales guy to go and tell a retailer – listen, please stock Lux and Sunsilk and Dove and Lifebuoy and Close Up. And easier for one to go up to the man and say – hey just stock Patanjali – and carry our Salt and Rice and Shampoo and Soap and whatnot. The man believes he is doing you one favour, not five.
So distribution is easier. And that’s a key win.
Consumer recognition is much better too. The lady who goes to the shops says, “Hey, this is that Patanjali stuff. I tried the rice, it was okay. Let me try the shampoo too. It seems to be reasonably priced.” As easy as that.
Of course, the products need to live up to the billing. But in this day and age, that’s not very difficult.
After all, HUL and P&G don’t manufacture their own products – they contract it out to smaller firms. And you can be more than reasonably sure of quality of product in this day and age when you outsource it to someone who makes soaps and shampoos and toothpastes for all the brands.
So what should your brand strategy be?
The fewer brands the better. And ideally, just one brand, please. And don’t get creative with sub-brands. Be as generic and descriptive as you can when it comes to sub-brands or variants.
Don’t make it Lux Supreme if you want to say Lux Extra Creamy. Extra Creamy says it better than yet another word for the consumer to remember.
Tesla Model 3 is fine. It’s much better than Toyota Innova Crysta 2.4 GX 7 STR. (Yes, that’s really a name.) How much do you really expect the consumer to remember?
Sony Phone 6.4 tells me it’s probably a good big-screen phone much better than Sony Experia Z Ultra 4G ever will. Yes, that’s really a name too.
Doing one brand well in this over-communicated world is hard enough. Let alone you thinking you have the money and time to establish a second or a twenty-second brand.
And don’t worry too much about traditional thinking on line extensions too. If Google can do maps and going to space under the same brand, I’m sure the consumer will let you do rice and oil and toothpaste under the same name.
She’s already let a non-MBA in orange robes do that. So there’s room for you to follow in those footsteps!
You may also read this article on LinkedIn