So Far, So Good...

When it comes to ensuring that your brand shines amidst the clutter of automotive foreign and indigenous auto brands, high on octane, and grossly involved in the blood-bath on Indian highways, there remains only two choices before the players – ‘to kill’ or ‘to perish’. Rajeev Chaba, CMD, General Motors India, speaks exclusively to 4Ps B&M on how GM India has rightfully chosen the former...

4Ps B&M: How did the GM brandbuilding start and where does it stand as of date?
R.C.: When we started our operations in India in 1995, GM’s strategy was to position Opel as a global brand. In that context we started with Opel products. Opel Astra was the first and Opel Corsa came second. Then, Opel was a German niche, premium brand, with perhaps Opel Astra being the next best car after Mercedes. In time, we realised that we had to get into the mass segment. Thus we needed a mainstream brand for a mainstream segment.

Also, we realised that a European sourced product for a mainstream segment will not be of right value for Indian consumers. So it was decided that Chevy would be the mainstream brand for this country. But with Opel, we had already got an insight into Indian consumer psyche, a good customer base and a strong dealer-network system. We also understand a lot from Indian legal perspective. So GM was ready to brave into a second phase of its India expedition. Then we went for a midcourse correction, and in the mean time GM realised thatfrom mainstream perspective Chevy has got the right DNA to become a global brand.

Slowly it also dawned that there is nothing called made in a particular country tag like made in China, Japan or Germany. In terms of brand strategy of Chevrolet we said that positioning of Chevy has to be mainstream plus. It means that we want to create an aspiration for the brand, where we are able to charge a premium over other mainstream brand and that extra value we should be able to command because of certain USP’s of Chevrolet.

We also realised that we needed to offer plus in terms of service aspects too. We extended the service warranty to three years where normally the competition was offering two years and today, Spark is the only car in its segment to offer 3 years warranty. So that is the plus.

4Ps B&M: What is the desired image for the Spark?
R.C.: The ‘Spark’ is full of life and the product has got torque, style and overall is cute and naughty looking. So its for people who are full of life (like the product). It’s a representative of the mood of people of India which has turned very positive, in terms of future expectations in recent years.

So, basically this is very close to the personality of a new Indian. So whether it’s a new comer, or a 23 year old person who wants to buy his first car or it’s a 40 year person who is buying a car for the first time (graduating from just a two wheeler) or for anyone who is just replacing his old car.

4Ps B&M: What’s the strategy behind taking Saif and Rani as ambassadors?
R.C.: We felt they are the personification of style, that’s why. We positioned Aveo as stylish and a performer. And we think these two are the style icons and of course known for performance. So that’s why we picked up these guys. We thought they are the perfect fit.

4Ps B&M: Would you say that there is much more acceptability towards the GM brand today than there was a few years back?
R.C.: The success of any brand has to result in its sales. You don’t want to be a big brand without any significant sales. So when we were putting only 10,000 cars a year and then 35,000 last year, we knew we were still growing. This year we have already done 16,000 during the first four months.

So in a way, I would say that there is surely more acceptance as people can see a new aggression from our side, which is also reflected in our commitment, as proved by our initiative shown by opening-up a brand new plant with huge capacity.

4Ps B&M: Being a brand for all segments is what GM is trying. Don’t you think there is a risk in it?
R.C.: I’ll tell you why GM is different. There are two reasons: Remember the brand Chevy? First, it has done well in many countries before. Imagine this - in countries like Brazil it starts from the smallest to the biggest and its only one Chevrolet brand. It is very much successful in the Middle East too. We have Chevy Aveo, Chevy Capry, Chevy Ucon et al. And who can but accept that Chevrolet is aspirational too?

So I think, the history, the pedigree of the GM brand clearly suggests that it has got that captivating appeal. So the brand has got the ‘bandwidth’ to expand across segments and still be appealing to the consumers across the segments. Second reason is that we adopted a different approach. Our approach is up to bottom. We established the brand with some top cars. We intentionally launched the Forrester initially to have the image of a ‘premium brand’ and then Optra... Andwe are confident that at this point of time we are moving in the right direction to be an all segment star. So far so good, you could say...

Substance will rule...
Despite consolidation, content is the key

(column by Gyanendra Kashyap)

If you can’t beat them, buy them. ...This seems to be the latest mantra that’s spreading across media industry like wildfire. Just like all industries across the globe reeling under the pressure to consolidate to maintain competitiveness, media industry is by no means an exception. And this is amply visible when a Rupert Murdoch makes an unsolicited and unsuccessful $5 billion takeover bid for Dow Jones, Microsoft Corp. looks to buy Yahoo Inc. for $50 billion and Thomson completes a massive $17.2 billion acquisition of Reuters.

While news of Microsoft Corp. buying out internet portal Yahoo Inc. has cooled, amid denials from the company, none dare deny that the era of M&As in media has arrived. Companies have a two-fold focus for inorganic expansion – either build subscribers who are willing to pay for information or build mass audiences that can be sold to advertisers at a premium.

The mindful media moghul Murdoch expresses his view, “Traditional companies are feeling threatened.” His unsolicited bid for Dow Jones Group (whose balance sheet is not exactly an investor’s delight!) was primarily aimed at tapping the niche of financial news services provided by Dow Jones; and giving it global scale. Ed Atorino, Analyst, Benchmark Company, explains the logic behind Murdoch bidding for Dow Jones, “The point is not the profits and revenues. It’s the size, scale, infrastructure, brand name and the image of Dow Jones that has been built step by step for last 118 years, which stimulates Murdoch to shed $5 billion.” Meanwhile Microsoft is struggling to keep Google at bay, for which Yahoo! looks the perfect foil. And for Thomson, the Reuters acquisition creates the world’s largest news and financial data company.

Media behemoths argue that they need more freedom to consolidate their businesses in an increasingly competitive market where consumer groups, independent content producers, journalists, et al argue that consolidation is killing creativity and diversity. Global coverage, technological dynamism and mass customization have become more of a necessity due to increase in the segmentation amongst media customers. Thus it is very evident that the need for convergence has necessitated consolidation. Supporters of the ongoing process of consolidation believe it to be a part of the societal and technological transition, which is bound to benefit everybody in the long run. There are opportunities for synergy and leverage, yet bringing together several activities under one umbrella does bring about some degree of risk. The ill effects stretch beyond compression of salaries and erosion of working conditions to threatening standards of professionalism in journalism and broadcasting.

Indeed, in this maddening rush for subscriber base and advertising revenues, companies must ensure that the content aspect is not compromised on. Commoditisation of news can at best provide them with short term gains.

(End of Gyanendra Kashyap column)