Changing consumer preference and cost pressures bringing rivals closer
in FMCG & automobile sectors
Why are rivals in the marketplace wishing
each other well or collaborating on key manufacturing processes? Because these
brands have understood two fundamental shifts are taking place.
NEW DELHI | MUMBAI: Urban Ladder makes a nice gesture
to rival Ikea, Parle to Britannia, Mother Dairy to Patanjali. And not just in FMCG.
There’s Mahindra & Mahindra teaming up with Ford, Tata Motors cozying up with
Chrysler, Maruti with Toyota.
Why are rivals in the marketplace wishing each other well or collaborating on key manufacturing processes? Because these brands have understood two fundamental shifts are taking place. One, consumers are not so impressed with aggressive branding strategies that attack rivals. In fact, social media fallout of such ads can often be counterproductive. Two, cost pressures and rapid technological innovations mean shop floor collaboration makes sense for brands selling competing products.
FMCG is therefore seeing plenty of PDA (public display of affection) between rivals. Take these recent examples. When biscuits and dairy company Britannia Industries celebrated its centennial, Parle tweeted from its official handle:
“May you find the Melody to many more Little Hearts”. Nice touch, since Melody is a Parle brand, and Little Hearts, Britannia’s. Britannia responded almost immediately with a“Thanks for the love, Parle” tweet. Both tweets went viral, attracting plenty of positive comment. When Baba Ramdev-promoted Patanjali announced its dairy foray, milk behemoth Mother Dairy promptly released a statement “welcoming” Patanjali.
Online furniture store Urban Ladder welcomed Swedish furniture and home accessories giant Ikea with a namaste through an Instagram video. Ikea’s near-immediate response was “Tack (Thank you in Swedish)… we are very happy to be here with you”. Companies have not only sent welcome notes, but also remained unaffected by spoof ads from rivals.
'GETTING MORE CONVERSATIONAL'
Ikea didn’t mind Kishore Biyani’s Future Group hoardings that announced sale schemes in the Swedish company’s colours. Jubilant FoodWork’s Domino Pizza also didn’t react when rival Pizza Hut released ads spoofing Domino’s four weeks back. All this is miles away from those cola brand wars of Coca-Cola and Pepsi, or from more recent skirmishes between HUL and Amul over ice cream brands, or the Air India versus IndiGo brand battles, or the HUL and Procter & Gamble snarky hoardings on each other’s shampoo brands.
“Brands are loosening up and getting more conversational because that’s the need of the hour. With social media, consumer awareness and so much choice, conversations that need to break citadels are more relevant,” said brand and social commentator Santosh Desai. Brand consultant Harish Bijoor agrees. “In an environment where hatred and fear are increasingly being shunned, it’s brand love that’s refreshing… hit-and-run is the old format… for all stakeholders, brand wars are yesterday to a large extent”.
RIDING TOGETHER
In auto, too, big fights are yesterday, as far as engineering goes. Market rivals are shaving costs by sharing. The upcoming premium SUV from Tata Motors will have a Chrysler Jeep twolitre diesel engine and a Hyundai’s six-speed automatic transmission is built on a Jaguar Land Rover ‘D8’ architecture.
Mahindra & Mahindra is conceptualising a vehicle architecture in North America in partnership with South Korean brand SsangYong, codenamed W601, being designed by Italian design house Pininfarina. The W601 vehicle architecture of Mahindra is likely to churn out multiple SUVs and vans with an estimated volume potential of over 2-3 lakh units per annum, catering to multiple markets around the world, said several people in the know of the company’s plans. Pawan Goenka, MD at Mahindra & Mahindra, confirmed the exploration of three-way partnership on the C segment.
Toyota, which could not crack the mass market in India, is piggybacking Maruti into volumes end of the market. And the critical part of the partnership is electric and hybrid vehicles. Toyota is a world leader in technology, Suzuki is not, so one can see the value the partnership brings to the table, Maruti Suzuki chairman RC Bhargava told ET.
Why are rivals in the marketplace wishing each other well or collaborating on key manufacturing processes? Because these brands have understood two fundamental shifts are taking place. One, consumers are not so impressed with aggressive branding strategies that attack rivals. In fact, social media fallout of such ads can often be counterproductive. Two, cost pressures and rapid technological innovations mean shop floor collaboration makes sense for brands selling competing products.
FMCG is therefore seeing plenty of PDA (public display of affection) between rivals. Take these recent examples. When biscuits and dairy company Britannia Industries celebrated its centennial, Parle tweeted from its official handle:
“May you find the Melody to many more Little Hearts”. Nice touch, since Melody is a Parle brand, and Little Hearts, Britannia’s. Britannia responded almost immediately with a“Thanks for the love, Parle” tweet. Both tweets went viral, attracting plenty of positive comment. When Baba Ramdev-promoted Patanjali announced its dairy foray, milk behemoth Mother Dairy promptly released a statement “welcoming” Patanjali.
Online furniture store Urban Ladder welcomed Swedish furniture and home accessories giant Ikea with a namaste through an Instagram video. Ikea’s near-immediate response was “Tack (Thank you in Swedish)… we are very happy to be here with you”. Companies have not only sent welcome notes, but also remained unaffected by spoof ads from rivals.
'GETTING MORE CONVERSATIONAL'
Ikea didn’t mind Kishore Biyani’s Future Group hoardings that announced sale schemes in the Swedish company’s colours. Jubilant FoodWork’s Domino Pizza also didn’t react when rival Pizza Hut released ads spoofing Domino’s four weeks back. All this is miles away from those cola brand wars of Coca-Cola and Pepsi, or from more recent skirmishes between HUL and Amul over ice cream brands, or the Air India versus IndiGo brand battles, or the HUL and Procter & Gamble snarky hoardings on each other’s shampoo brands.
“Brands are loosening up and getting more conversational because that’s the need of the hour. With social media, consumer awareness and so much choice, conversations that need to break citadels are more relevant,” said brand and social commentator Santosh Desai. Brand consultant Harish Bijoor agrees. “In an environment where hatred and fear are increasingly being shunned, it’s brand love that’s refreshing… hit-and-run is the old format… for all stakeholders, brand wars are yesterday to a large extent”.
RIDING TOGETHER
In auto, too, big fights are yesterday, as far as engineering goes. Market rivals are shaving costs by sharing. The upcoming premium SUV from Tata Motors will have a Chrysler Jeep twolitre diesel engine and a Hyundai’s six-speed automatic transmission is built on a Jaguar Land Rover ‘D8’ architecture.
Mahindra & Mahindra is conceptualising a vehicle architecture in North America in partnership with South Korean brand SsangYong, codenamed W601, being designed by Italian design house Pininfarina. The W601 vehicle architecture of Mahindra is likely to churn out multiple SUVs and vans with an estimated volume potential of over 2-3 lakh units per annum, catering to multiple markets around the world, said several people in the know of the company’s plans. Pawan Goenka, MD at Mahindra & Mahindra, confirmed the exploration of three-way partnership on the C segment.
Toyota, which could not crack the mass market in India, is piggybacking Maruti into volumes end of the market. And the critical part of the partnership is electric and hybrid vehicles. Toyota is a world leader in technology, Suzuki is not, so one can see the value the partnership brings to the table, Maruti Suzuki chairman RC Bhargava told ET.
Ratna Bhushan & Ketan Thakkar
ET
Bureau | September 22, 2018
https://retail.economictimes.indiatimes.com/news/industry/changing-consumer-preference-and-cost-pressures-bringing-rivals-closer-in-fmcg-automobile-sectors/65908362
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