The centenarian French electricals giant Schneider wants to electrify the Indian market.
When Aaron Davis, the global chief marketing officer (CMO) of French electricals giant Schneider Electric decided to visit the electricals market in Delhi and meet with a few dealers to familiarise himself with the Indian market, he was under the impression that it would be another dealer meet-and-greet, on the lines of the hundreds of such meetings he had already had in dozens of countries worldwide.
It wasn’t. Davis was given a full 21-gun, Old Delhi-style welcome by the traders in Bhagirath Place, the crowded marketplace in Delhi’s hyper-congested Chandni Chowk area which is home to one of the largest electricals wholesale business centres in Asia. There were tilaks, garlands, and even a famous Chandni Chowk brass band, much sought after in the Capital’s wedding market, in loud attendance!
“It was amazing,” says Davis, “quite incredible!”
But Davis, a Schneider long-timer who took over as CMO in 2008, is not allowing the dazzle of the welcome fool him into thinking that ‘incredible’ India would be an easy nut to crack. Particularly for Schneider, a gigantic conglomerate with over 20 divisions and 100 companies in its fold, which operates in a mind-numbing array of markets and business segments including energy and infrastructure, industrial processes, building automation, and data centres and networks, as well as across the board in residential applications.
But despite this massive global presence, the French giant, founded in 1836 by brothers Eugène and Adolphe Schneider, has grown into a global energy management powerhouse with annual sales of over €21 billion and more than 110,000 employees worldwide, largely on the back of aggressive acquisitions. Between 1982 and 2010, the company had made as many as 53 acquisitions, and taken stakes in 11 more companies. This has given it a foothold in virtually every corner of the electricals and energy management space in virtually every market in the world – but brand Schneider is itself little known outside of Europe and to a certain extent, the US.
“We call Schneider the most successful company you have never heard of,” laughs Davis. “You may have heard about it maybe in preparation for a meeting but the vast majority of our brand equity has come from subordinate brands,” he admits. Even in India, Schneider products are sold under many names, from Luminous in the inverters and ceiling fans market to Digilink in networking equipment to Zicom in security systems and so on.
That’s about to change, says Davis. “We will be doubling our marketing spend in India this year,” he says, adding, “I think we will be quite noticeable in India. I think we have some interesting propositions on the retail side for sure.”
He declined to reveal numbers, but industry estimates would put a doubled ad budget at over $1 million for the year – most of which Davis says will be spent on building the corporate brand, something it has been pursuing worldwide for some time now.
“We realised we were global in scale, but were not bringing that global scale to market,” he says. For the past three years, Schneider worldwide has been building up an umbrella brand strategy.
So how does one position a company which manages everything from country-wide electricity grids to traffic and water, manufactures everything from defence equipment to light switches? What kind of a brand proposition can one offer?
“It’s not easy,” he admits. In fact, convincing customers within the company often proved as tough as convincing customers in the marketplace. “But,” he says, “as you bring an entity up that maturity curve, they realise ‘Wow! there are a lot more efficient ways to make an impact on the market than just creating a 200-page catalogue’.”
Though the value of a powerful brand is clear to everyone, the challenge still lies in creating a powerful brand position, particularly for a diverse conglomerate like Schneider. “I think first of all you have to find a positioning that is meaningful to the market, but is holistic enough to form an umbrella,” says Davis.
The position Schneider has taken is efficiency. “We can make your city more efficient, we can make your grid more efficient, we can make your house more efficient. So that is the theme of our new corporate campaign for next year. It is about transforming efficiency together, but you want to make sure that the partners, and the partner could be everyone from an electrician to a government official, the partners understand that nobody can solve any of these problems by themselves.”
That also means deciding which brands stay as independent entities, and which get subsumed into the Schneider umbrella. “When I started we had over a 100 entity brands,” admits Davis. But now, Schneider is busy consolidating them into what Davis says is a “very, very small set of portfolio brands” that have a well identified role in its profile.
Typically, if an acquired or local brand has market leadership position, it is allowed to continue. But in rapidly growing markets such as India or China, the approach is quite different.
“The Indian market actually reminds me of this famous show called Mad Men,” says Davis. The TV show chronicles the goings-on in the advertising world in the 1960s, at the beginning of the great consumer boom in the US. India is at the Mad Men kind of stage where new markets and new products are being created every minute. “You have more or less a very literate society that is interested in media. You have a very young society which means new techniques are coming online, social media are being embraced quite strongly, which is exciting for us,” he says, adding, “but you also see a real recognition among the Indian entrepreneurs that it is not just the multinationals that advertise anymore; you have to advertise your business as a local Indian entrepreneur alongside everybody else.”
That would mean a lot of tactical advertising, but also a lot of strategic advertising aimed at the longer term, for that ‘post Mad Men’ stage of buzzing creativity and instant launches and overnight exits. That includes targeting people who may become consumers several years in the future.
“In India, we have a very, very robust programme targeted for grade schools. It is called 'Conserve My Planet' and it has absolutely nothing to do with products or sales,” he says.
On the consumer behaviour side, the company has also been making some investments. “We have created the world’s largest online ‘energy university’ that teaches everybody from consumer all the way to a mid-level manager what are the things they need to know in order to become more efficient. So there is a lot to be done,” says Davis.
He says as a brand, Schneider is probably at a third of the value it should be, given its size and scale. So the effort is to get the consumer to identify with Schneider as a brand, regardless of where the engagement is happening. And when it comes to branding, one cannot afford to rest – even if you have 175 years of history behind you.
“Let us be clear,” he stresses, “consumers think about you a lot less than you think about yourself.”