Monday, December 19, 2005

Brands Bargain !

It was one fine afternoon when I took my bus to the city when I noticed a hoarding saying "Branded shirts for Rs 199...Buy one take one free...", so went the caption.

I sat thinking, branded shirts indeed. If we go and check it out, it will be the Astrogen and Nitrogen brands which we have never heard of. And there are takers for that and the sellers make good money.

Branding is the keyword here. Brand Management has been a subject in B-Schools and the P&Gs and HLLs of the world have positions called Brand Managers. They are supposed to create, grow, sustain and kill (if required) a brand. Their main job is to grow their brand, more often than not, by fooling consumers. (Recently a famous soap brand started calling that soap as 'beauty enhancer’ and no more a soap) They see to it that a customer is glued to their brand, remain loyal to their brand and thus create more value to the company, to use a business phrase.

If you really see, literally everything is branded. As per a study, an average person uses about 64 branded products everyday, from the time he gets up (toothbrush, toothpaste, soap, oil,..all are branded) till he or she sleeps.

The extent of branding is such that even the five elements of nature is now branded and sold in packs. In Costa Rica, people of different societal class use different brands of water to bathe: the upper class obviously use an expensive brand, middle class use a brand little lower and the lower class people end up using the least expensive brand !!

Air, which we thought was free for all, is not so. In Japan, we have to pay to breathe fresh air. After a trip of underground rail travel, people buy packaged air, oxygen basically, to breathe and to feel fresh. There is a company that does this great packaging, and claims a lot of R&D work has gone behind this initiative. Another fact is that only 20-25% of the air is practically used by the consumer, the rest escapes into the air, which the company effectively taps and reuses!! Similarly Earth and Fire are also branded.

Yes, if we look at the quality levels there is a difference in good brands and not so good brands. But the difference is not so much that we pay 3 or 4 times the actual cost. The premium brands, be it any product category, exploit the consumer simply by putting a high price tag on the product, by depicting a lady or by nonsense tagline, ("Are you in the loop" a recent one by a famous Denim wear company).

The marketers of these products very well know the Brand affinity is very much there in today's youth (well, youth is the main target of all the Brand Managers as 60% of India's population is below 30 years of age and older people are not so stupid to pay hefty sums for a brand tag).

It might be astonishing to find that most of the branded goods that we bought, the latest pair of Pepe jeans and that Nike Shoe that was purchased last week, doesn't even cost one fifth of the price. The company itself admits it; I've heard it from the people who run those companies. They are simply making money out of the Brand name. You pay for the Brand name, not for the product. It’s hard to digest, but true. So next time you feel that you need to purchase that branded shirt/jeans/shoe, just remember this, that’s all.

Happy Shopping!!

Gaalis and Thaalis are welcome.