Companies

Brand loyalty on test as corporates venture into new product categories

Rashmi Pratap Mumbai | Updated on January 10, 2018 Published on September 11, 2017

More to leverage consumers’ spending abilities, existing dealer network



A sanitaryware company is now selling kitchen cooktops and chimneys.

A water purifier brand has launched noodle maker, juicer and bread-making appliances.

And a fan and switches brand is now also selling shavers, trimmers, hair dryers and other personal grooming products.

As consumer aspirations and spending abilities are rising, India Inc is leveraging its brand loyalty to increase revenues by entering new and unconnected product categories.

That is what prompted Hindware, which has been selling bathroom products for the last 57 years, to diversify into newer product segments.

“We had 60 million consumers, who were already using Hindware products. We felt we could extend the trust of our brand to touch their lives in kitchen and living rooms as well. Of course, the business consideration (revenue growth) was also there,” Rakesh Kaul, President and Chief, Consumer Business, HSIL (Hindware), told BusinessLine.

Hindware is not the only one cashing in on its brand loyalty. Kent RO, Havells India and Borosil are all testing the waters by venturing into newer categories.

Devangshu Dutta, chief executive at consultancy firm Third Eyesight, says: “We are a relationship-oriented society. If we trust a brand, we trust what the brand is saying to us even if it is an unrelated area.”

Mahesh Gupta, Chairman, Kent RO, which is best known for its water purifiers, said his company entered the kitchen appliances segment as it is an extension of brand Kent – which stands for purity.

“We will be wherever there is purity and it applies to our kitchen appliances also,” he said, clarifying that Kent will refrain from being part of the me-too category of toasters or cookers.

What helps these brand to extend themselves is a robust distribution network, besides a dedicated customer base.

“We are leveraging our existing dealer networks and also adding new ones. We are not averse to going to appliance networks as well,” says Gupta.

Kaul agrees that existing outlets have helped in leveraging the strength of Hindware as a brand.

“They are one of the key sellers for us now in chimneys, kitchen hobs, water heaters and water purifiers. Both consumers and dealers are well aware of the brand and it helps business,” he says.

Dutta says brand extensions help businesses to maximise the footprint.

“The marketing budget is also much better optimised for multiple categories and all the management effort also goes behind one brand,” he says.

Hindware has refrained from importing Chinese products and selling them here, though it would have been the easier route.

“It would have been easy to get into a trading model but we took a view that Hindware is a brand with differentiated products. So we design products in-house and get contract manufacturing done for air-coolers and kitchen appliances. Water heaters are produced in our plant at Dehradun,” he points out.

Kent too, is manufacturing vegetable cleaners, noodle makers, blenders and other products in-house.

However, says Dutta, there is always a risk that a consumer or audience may not accept the same brand in an unrelated category.

“But that risk is really undefined until you hit the market,” he adds. And that is a risk these companies are willing to take too.

As Kent’s Gupta says: “If the product is good, it will create its own market. We need to offer choices to people.”

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Published on September 11, 2017
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