F&B Retail in India; Think National , Act local- A strategy worth considering

Even after a few years of the entry of large organized F&B retailers, the small ‘mom and pop’ grocers who have been around for a few years and the smaller sized local supermarket chains that have their roots in the ‘khirana heritage’ have survived and flourished. Why is this? The answer is simple and is centered on the concept of customer centricity. These chains are highly localized; understand what products, variants, price points and sizes to stock. Over a period of time they have even mastered their inventory cycles. I often keep probing relatives and female colleagues about their experiences with and preferences for organized national chains and the consistent response I get is their preference for their trusted khirana store or local supermarket cause it stocks what they want. It’s the small things that matters to them. They will invariably get their regular Taj mahal Tea or their Haldirams in any of the national retail brand but what sets the small guy apart is in addition to stocking the fast moving popular generic national brands he stocks his customers’ favorite brands of toiletries, spices, pickles, snacks cleaning material (cloth/mops),etc. As a result of which these women prefer going to their local trusted store and save time instead of wandering the aisles of 3 different organized retail brands to complete their weekly shopping needs.

Secondly, one must realize India is a country that is highly diverse in its food habits and culinary culture. Each state has its own unique culinary culture and this high degree of diversity breeds region specific culinary cultures within a state too. An example would be Coastal Karnataka vis-à-vis northern Karnataka or Central Karnataka. This diversity and concentration trickles down even to localities and suburbs within a city.

Let me use the example of Karnataka. Food culture varies across the state’s region. Coastal Karnataka has its own unique culinary culture vis-à-vis the rest of the state and in the same vain a typically Brahmin locality of Malleswaram in North Bangalore predominantly consisting of Tamilians and Konkanis will have different needs from the grocer vis-à-vis a Bengali dominated locality in the same city. I am not saying that F&B retail chains may have to devise a strategy that requires a high degree of customization in their store wise inventory, but if they want to beat competition and differentiate this is definitely a very interesting option. Now this is exactly while the small stores and department chains still mushroom and thrive irrespective of the presence of the Spencers, Foodworlds, Fresh @s and the Reliances.

The national chains may have to think national but act local if they want to grow beyond profit margins of 1% or 2%

branding....

is not a logo....is not advertising....is not package design.....they are all vital components r rather spokes in the wheel of branding..there's more to branding than what meets the eye!!!

Thoughts on franchising

Anyone and everyone who thinks they own a unique, successful AND SCALABLE business or business idea wants to develop it into a franchise. There’s no harm in that ambition. There are both positives and negatives. I am not going to dwell on what they are as there’s enough information available on the internet.

What I want to stress on in the Indian context is that Franchising is not about using an established ‘brand’ name to scale operations. Franchisors that have a myopic view of their businesses driven solely with the intention of earning a quick buck will not last long and franchisees associated with them will pay a heavy price. After all how far can a brand ‘name’ take you? A consumer maybe a fool to trust the established brand once, but not twice if the first experience was substandard or bitter. There are enough options out there for him or her to try

Franchising is not about mindlessly lending one’s name, logo and equipment for a fee. It involves a lot more. It requires a more serious investment of time and operations of the franchisee to ensure that the brand promise that the consumers expect is consistently delivered.

Potential franchisees, beware of those franchisors that are out there to make a quick buck at your expense. Don’t be fooled by the impressive marketing stunts and financial projections. Listen to what the layman has to say…listen to what your potential customers feel about the product! Partner those who are willing to support and sustain the brand promise that they communicate to the end customer.

I Say....

Sucessful and Strong brands listen to and deliver what their core customers want and not what stock analysts demand.

Personal View

Barring all the technical explanations and at the risk of sounding simplistic ... the current economic scenario in Investment Banking sectors in USA and the potential national bankruptcy of Iceland can be attributed to a combination of two factors: greed and sentiment, the lack of a balanced approach to sentiments. The bane of capitalism. Where has the TRADITIONAL approach to FINANCIAL DECISION AND RISK TAKING DISAPPEARED?
The principles OF CONSERVATISM, RISK AVERSION AND RATIONAL THINKING.

In greed, critically risky mortgage bonds were invested into and the driver for it was the superficial sentiment of global boom and the rising of the Asian tigers...

Is globalisation good? It is but when done in a tempered, calculated and rational manner.

I'm not surprised if young, over ambitious and greedy Investment Bankers did what they did. It's the system that has to be blamed. We are to be blamed...our greed , our desire for more, our dissatisfaction with what we already have and our lifestyles, our need to spend beyond our means...

I may not have structured this post well and may have also not articulated it well...but do think over what I have to say...

your brand...

- must be relevant
- must be different
- must stay loyal and true to its brand values
- must stay loyal to its core consumers
- your employees must buy into the brand and believe in it and in time be it's advocates

Insight to myself

Today I was all set to buy a pair of Size 12 Sandals to replace the old tattered ones..as I untied the shoes and tried on a few sandals that's when I realised that..I was wearing Nike socks, Puma Sneakers and was in an Adidas store buying sandals. So how brand loyal was I? Rather was there something pyschological to buying three different brands for different items? How did I relate to these brands and what did they mean to me??

I think I bought the socks from Nike cause they were cheap or were in a value pack, Shoes from Puma cause they were stylish looked cool and Adidas sandals cause my previous pair lasted so long...so how many of you are like this???

My favorite Ogilvy Quotes

Our business is infested with idiots who try to impress by using pretentious jargon.

A good advertisement is one which sells the product without drawing attention to itself.

Advertising people who ignore research are as dangerous as generals who ignore decodes of enemy signals.

Every advertisement should be thought of as a contribution to the complex symbol which is the brand image.

I notice increasing reluctance on the part of marketing executives to use judgment; they are coming to rely too much on research, and they use it as a drunkard uses a lamp post for support, rather than for illumination.

If it doesn't sell, it isn't creative.

Many manufacturers secretly question whether advertising really sells their product, but are vaguely afraid that their competitors might steal a march on them if they stopped.

Ninety-nine percent of advertising doesn't sell much of anything.

Turning GReeN with envy!!

everybody's turning green...green in their logos,tags,colors,statements, advertisements...but how green are you actually? how much does it really matter to your customer that you are green? does he or she even care or buy because you are green? do you genuinely care about going green and does your customer believe that you are genuinely green?

so whats the next color after green since, everyone's turning green and its getting monoton(e)ous?? where's/what's the next differentiator in your marketing communication??

What is branding??

Everyday I ask myself this question and everyday I hope to discover something new to complete the answer. As days go by I am sure the posts that I add will be related to answering this question.

I see that lots of companies be it ad agencies or mgmnt consultancies making a huge cry for brand strategy and the brandingimperative and in the process setting up dedicated units to cater to the same.It's like the flavour of the season. I wonder if they do understand the role of branding and the realms that branding can extend into in an organisation.

If one company redoes it's logo and make a huge cry of the so called branding exercise..competitors feel threatened and decide it is time we did the same...the me too mentality as we call it.The snazzy 2.0 version.

Branding is not just a cool logo, or attractive colors or even great packaging.It's also not about a catchy tag line!! While these are important they are just the tip of the iceberg, the portion that is visible to the world. For me branding in this decade and the ones to come, is about the substantial portion of the iceberg that is not visible and is hidden to the eye. The portion that can potentially sink your company's ship.

Consulting in my opinion is bridging or merging the bigger picture with ground reality. It's about finding the right proportions of the two, to find solutions that add value and create meaning for the customer

My Quote

"the hollower the trunk,louder the sound"...any parallels to smooth talking suave consultants??

Second Innings

i start my second job in brand strategy in a firm whose claim to fame has been it's much trumpeted branding exercise of an Indian IT giant....any guesses?? will be interesting to see how this place is as compared to my previous company..in terms of culture, people and work...