Catalyst

With ‘STAR’ value, brands can become billionaires, too

Harish Bhat | Updated on July 23, 2020 Published on July 23, 2020

Ask any marketer for her list of challenges today, and one point inevitably comes up — how do I drive growth for my brand? This growth challenge is even more pronounced in today’s Covid-ised world. In this context, a recent study on Brand Footprints released by the Worldpanel division of data insights company Kantar has been insightful. The study talks of FMCG brands which have become billionaires of the marketing world by expanding their footprint.

Ten most chosen brands

According to the Brand Footprints study, the 10 most chosen FMCG brands in India are: Parle, Amul, Clinic Plus, Britannia, Ghadi Detergents, Tata, Aavin, Nandini, Colgate and Wheel. All of them are billionaires — they boast of more than a billion consumer reach points each. Parle, with 6 billion consumer reach points, is the biggest of them all. (A personal aside — my wife, an avid consumer of Parle-G biscuits, nodded her head quite happily when she heard this.)

Consumer reach points (CRP) is a powerful method of looking at a brand’s footprint and involvement in the life of consumers. It is the number of households which buy the brand in any given year, multiplied by the average number of times that each household buys that brand, across categories, during the year. So, if a brand is bought by 1 million households, and three times on an average by these households, then the brand has 3 million CRPs.

 

To achieve a billion CRPs takes a lot of effort. No wonder, then, that out of thousands of FMCG brands in India across segments, only 21 are billionaires as per this study. These billionaire brands have also achieved good volume growths by improving their CRPs.

So, how can a brand improve its footprint through enhancing its CRPs? Based on the Kantar study, and my own analysis, here are some India-specific pointers.

Absolute trust

For FMCG brands, trust has always played a critical role. Today, it is paramount. During this pandemic, health and wellness has assumed greater importance than ever, so households will gravitate towards brands they consider safe, clean and hygienic, as well as offer consistent quality. Hence, the successful billionaires of 2020 will be those brands that are able to convey this perception of absolute trust. In fact, we are likely to see significant shifts in brand footprints, based on this single, all-important factor.

Easy access

In India, creating easy consumer access to brands through excellent distribution reach has always been key to success. Not an easy task, given that the country is dotted with 12 million kirana stores, across large cities and far-flung corners. But addressing access has taken on a new urgency today, because the current pandemic is already leading to significant changes in shopping behaviour. There is an upsurge in online shopping for food and grocery products, consumers in high-rise apartments are teaming up to buy FMCG products which are then delivered at their doorsteps in bulk, and every consumer wants safe access to the products she needs. Consequently, major FMCG brands have already begun putting together alternative delivery and access mechanisms, including teaming up with the likes of Flipkart, Domino’s Pizza and Zomato. The contours of access are likely to change sharply in the new normal.

Small unit packs

 

Small unit packs, typically priced at ₹10 or ₹5 apiece, have been a mainstay of the Indian FMCG market. Indeed, this is how products such as branded shampoos, teas and namkeens have grown penetration. Now, there is fresh evidence that the brand billionaires of the Kantar study have achieved renewed mastery over their small pack strategies, across categories. Parle has for long been a leader on this front but, in the recent past, brands such as Ghadi detergent have also made inroads through their small packs. This year, with household disposable incomes coming under intense stress because of the pandemic, small unit packs will be even more critical. A question for marketers is — what exactly is small enough for your category?

Product range

Brands build increasingly deep footprints in the lives of consumers if they offer a wide range of relevant products, all tied up to their core idea. This is the reason why brands like Amul and Nandini — with a portfolio stretching across milk, yoghurt, cheese, ice-cream and dudhpedhas — are such strong billionaire brands. This is also why Dettol’s recent extension into the adjacent space of hand sanitisers is clearly in the right direction. With greater relevant range, brands deepen their meaningful involvement in the lives of consumers.

In conclusion, if Indian FMCG brands wish to become billionaires, or, earn their next billion, then there is a STAR they have to bear in mind — Small, Trust, Access and Range. Each spoke of this star will benefit from relevant innovation. Lockdown or no lockdown, it is always a nice challenge to aim for the stars.

Harish Bhat is Brand Custodian, Tata Sons. These are his personal views. He acknowledges valuable inputs from K Ramakrishnan, Managing Director, South Asia, Kantar World Panel, in the writing of this article.

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Published on July 23, 2020
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