brand extensions - ril
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Group 6Akanksha Singh 0911004 Saurabh Chandra 0911047Sumit Kumar 0911057 Arvind Choudhary 0911085Bhawna Jain 0911301 Ganeshram K 0911309Shikha Rawat 0911344
RELIANCE INDUSTRIES LIMITED
EAST INDIA HOTELS
b2b
b2c
Core CompetenciesFocus on capital intensive industries in which success turns on the ability to get around regulators & competitors
Time and cost effective completion of complex & advanced technology projects
Unmatchable ability to manage relations with the government
Brand Identity - RILRIL as a Product
RIL as Organization RIL as Person RIL as
Symbol
Largest polyester yarn and fibre producer in the world Among the top ten producers in the world in major petrochemical products Very strong backward integration
Positive effect on operating margins and interest costs and decreased the Company's exposure to cyclicality of markets & raw material prices.
Perceived as a B2B brand Jamnagar Brand
Reliance Industries Limited - A-Z of Petrochemical
Brand Identity - RILRIL as a Product
RIL as Organization RIL as Person RIL as
Symbol
Fortune Global 500 company Largest private sector company in India (3% of India’s GDP)An empire that other corporate houses aspire to becomeAggressive yet Patient! Shrewd Observer Opportunistic – Telecom in 1999, Retail in 2006
Reliance Industries Limited – Dynamic, World Trotting, Pukka Gujarati!
Brand Identity - RILRIL as a Product
RIL as Organization RIL as Person RIL as
Symbol
50 year old Male Westernizing Gujju Politician
Reliance Industries Limited – Dominant & Arrogant – a Road Roller!
Three faces of Ambani *1) Unique, Larger than life –
A Brand name2) A schemer, a first class liar &
has no values in life3) Napoleonic –
Has a more sophisticated political brain, a dreamer & visionary
* Source: Ambani & Sons by H. McDonald
Brand Identity - RILRIL as a Product
RIL as Organization RIL as Person RIL as
Symbol
Simple Font – “no nonsense, we mean business”Circle around the drop signifying “end-to-end petrochemical”
Or with its entry into Retail and other segments – “fluid brand with an ability to extend everywhere”
Reliance Industries Limited –Growth is Life
Reliance Retail Limited•Inception : 2006. Now, network of 660 stores.• Presence : 85 cities across 14 states. • In two formats: • Value - Reliance Fresh, Reliance Mart, Reliance Super• Specialty - Reliance Digital, Reliance Trends, Reliance Timeout, Reliance
Footprint, Reliance Wellness, Reliance Jewels
Brand Identity - RRLRRL as a Product
RRL as Organization
RRL as Person
RRL as Symbol
• First thing that comes to mind – Reliance Fresh and Reliance Mart • Value format: daily household needs• Reliance Fresh: a neighborhood concept• Reliance Mart: an all under one roof supermarket concept• Reliance Super: a mini-mart concept
• Specialty Format:• Reliance Digital: consumer durables & information technology concept• Reliance Trends: apparel & accessories concept• Reliance Wellness: health, wellness & beauty concept• Reliance Footprint: footwear concept• Reliance Jewels: jewellery concept• Reliance Time Out: books, music & entertainment concept• Reliance AutoZone: automotive products & services concept • Reliance Living: home ware, furniture, modular kitchens, furnishings
Reliance Retail Limited – Everything you need for a happy home at
Low cost, Value for Money
Brand Identity - RRLRRL as a Product
RRL as Organization
RRL as Person
RRL as Symbol
• Lot of muscle power – strong backing by the parent company• Rapid expansion• Entry with a bang • Strong back end operations including supply chain• Local orientation • Value for money
Reliance Retail Limited – Smart and Swift – zooming in and grabbing space for itself
Brand Identity - RRLRRL as a Product
RRL as Organization
RRL as Person
RRL as Symbol
• 30 - 35 year old• Female• Educated• Ensures all your needs are met.
Reliance Retail Limited – Mentally strong, Indian housewife
Brand Identity - RRLRRL as a Product
RRL as Organization
RRL as Person
RRL as Symbol
•All logos have a similar pattern• The names are written on a red back ground – Aggressive• The ‘Reliance’ name is prominent & the font and symbol are the same as RIL – To eliminate confusion & establish strong parent backing• The second name however truly depicts the category
eg, “Fresh” is in green font while “Jewels” is in golden font• Only print ads – Harping on great offers, low cost and value for money
Reliance Retail LimitedAapki Khushi, Hamari Khushi
Basis of Fit
RIL RRL
Original Product Class:
Petrochemicals
Extended Product Class:
Retail
Strategic Fit: Diversified portfolio – Risks hedged.
User Type:Not common. Extended
into B2C
Symbol:Gets them closer to “aam aadmi” brand
Skills (Project Management, Lobbying)Assets (Capital Base)
Complements – Petroleum Retail (Separate SBU. Not part of RRL)
RRL’s PlanSees opportunity of 2000-5000 storesChallenge: “Scaling to do it fast and to replicate as we scale”.• Intends to renew a rapid expansion drive to compete with street markets• First plans to expand in tier I and tier II cities, before entering tier III and
tier IV cities and towns. The plan for rural India is to begin with sourcing the produce before entering the front-end in retail.
• Currently buys from farms, fields, vegetable mandis and suppliers• Contract farming plan will be activated once the required scale is reached• Efficiencies of scale: price points as low as Rs. 99 in its apparel brands to
compete with street market prices• Top management – “Indians spend mostly on streets which is our main
competition. We intend to bring those shoppers to RRL”• True Baniya – Willingness to supply private labels to other retailers.To compete with the kirana stores
– Will start home deliveries of groceries – “As we keep going down the strata, our hypermarkets will keep getting
smaller,” (average kirana store is 175 sq. ft in size)
Retail, like its core businesses, is definitely a business where they can scale significantly and quickly.
Business Hotels Leisure Hotels Cruises 5 Star HotelsThe Oberoi, New Delhi
The Oberoi Amarvilas The Oberoi Vrinda
AgraThe Oberoi Rajvilas Chennai
The Oberoi, Mumbai
The Oberoi Udaivilas The Oberoi Philae
BhubaneshwarThe Oberoi Vanyavilas Gurgaon
The Oberoi, Bangalore
Wild Flower Hall, Shimla The Oberoi Zahra
JaipurThe Oberoi Cecil, Shimla Mumbai (2)
The Oberoi Grand, Kolkata
Mena House Oberoi UdaipurThe Oberoi Sahl Hasheesh Cochin
The Oberoi, Gurgaon
The Oberoi, BaliThe Oberoi, LombokThe Oberoi, MauritiusThe Oberoi, Medina
East India Hotels
Brand Identity - EIH
Luxury, sophistication and comfort – Aspirational Brand!Product scope:
Luxury Hotel => TajOberoi => Luxury Hotel!
Present in all areas of a luxurious experience On land, water & airAsia-pacific region & Africa
Country of origin: very closely associated with IndiaQuality/Value: Best in Asia-pacificAssociation with use: Business and pleasureUsers: Foreigners and upper classes, business (managers & upper echelons)Perfect blend of the region’s culture and the comfort of modern facilities
EIH as a Product
EIH as Organization EIH as Person EIH as Symbol
East India HotelsMaharaja Experience – Living like a King!
Brand Identity - EIHEIH as a Product
EIH as Organization EIH as Person EIH as Symbol
Family owned but professionally managed Specialized in hospitality Create an experience Personalized and warm service Trusted Courteous
East India HotelsAn epitome of service, luxury and efficiency!
Brand Identity - EIHEIH as a Product
EIH as Organization EIH as Person EIH as Symbol
Middle aged Male Foreign educated & modern Connection to Royal Family Elegant and sophisticated Believer in traditional Indian values
East India HotelsSecond generation Indian aristocrats
Brand Identity - EIHEIH as a Product
EIH as Organization EIH as Person EIH as Symbol
Very specific to hospitality - ‘Oberoi Hotels and Resorts’ Font is floral and artistic - reminds of old age aristocracy Sober color –elegance, subdued Either heritage or very modern architecture, nothing in between!
East India HotelsLuxury Redefined
Type of Brand & Ability to extend
DProduct
Formula
Knowhow
Interest
Philosophy
BFuel
Stations
CEPC
ELow cost Airlines
APetrochemicals
EIH Capital IntensiveHigh barriers to entryLong breakeven periodHigh returns
RRLCapital Intensive
Long breakeven periodDiversification Strategy
Perimeters of Brand Extension
Inner Core
Line Extension
Outer Core
Spontaneous Associations
Extension Zone
Latent Potential
No-go Area
Threat to Brand’s capital assets
Non-conventional energy sources
Oil and Gas Fields
Forward Integration like Fertilizers
RRL &
Hospitality
Brand Relationship
RIL
Branded House
Same Identity
RRL
House of Brands
Shadow Endorser
EIH
What PRS Oberoi saysThe hospitality business is very capital intensive. EIH has a growth strategy and it needs strong committed shareholders. RIL clearly satisfies these criteria. It is a long term investor and does not have any conflict of interest.
On EIH
What others sayEmotional InvestmentMukesh Ambani had approached the Oberois’ 3 years ago to buy the companyStrategic InvestmentAvenue to invest the excess cash (to the tune of $8 billion) of RIL; RIL to help fund EIH’s international expansion into US & UKWhite KnightRIL stake intended to thwart takeover attempts by ITCDark KnightIs it a replay of the L&T drama of early 1990s?
Tussles between the next generation of Oberois is evident; PRS Oberoi will not want the brand to be diluted after his lifetime
Strong external partner who can carry the flame after PRS Oberoi - RIL fills the gap
Nita Ambani will be appointed to the board; 3 – 5 years down the line, RIL may buy controlling stake in EIH
RIL will not change the Oberoi brand name, but be a shadow endorser
Why the RIL saga will continue
Almost all projects are focused/dependent on the growth of the country
RIL’s giant projects in urban development, distribution and retailing shows a belief that such schemes are beyond the capacity of the government
These sectoral developments are needed by the country, for generation of jobs and revenue
Thank You
Limitations of the frameworks
• Bases of Fit– Not able to apply to completely unrelated industry sectors
• Type of Brand & Ability to extend– Doesn’t discuss about the financial implications/viability– No clear distinction between the types of brand– Brand characteristics not analysed from end user POV
• Perimeters of Brand extensions– Doesn’t discuss about the financial implications/viability– No–go area not applicable for all brands– Brand characteristics not analysed from end user POV
The Detail in RetailHype & Interest of Retail in India
Is Big Retail making money?– Casualties: Shubhiksha, Vishal Retail, Indiabulls!– Spencers’ loss: Rs 300 crore in 2008-09. Is still losing Rs 12-13
crore a month. Downsizing (<1 million square feet now)– Shoppers Stop’s loss: Rs 64 crore in 2008-09– ABG’s More Chain (2007) hopes to become positive in 2012-13– Pantaloon highly leveraged (Rs 4,000 crore of debt)– Reliance Retail: loss of Rs 700 crore in 2008-09 & Rs 450 crore
in 2009-10.
Total Retail Market Organized Retail Market
2010 $400 billion 5-6% ($22 billion)2015 >$450 billion 15% ($67.5 billion)
RIL Vs ADAG
SilentCalculatingOpportunisticRuthlessBehind the scenes worker
Constant stream of cash from petrochemicals
Friends with both ruling & opposition parties
Businesses tied with India’s growth
Media savvyEmotional
PR guy
Cash stream from IPOs
Friendship with Amar Singh –Suspect in the eyes of others
Business success depends on taste of consumers
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