This slide deck was shared by Raj Nair at the TiE Institute Knowledge Series in Mumbai in July2010. The deck covers the concept of Value Brands. [Related Videos may be available at http://Youtube.com/EnterprisingINDIA ]

1. Value brands : growth unlimited Presentation: July 17, 2010 TIE, Mumbai

2. Roadmap What are Value Brands ? What does it take to build Value brands? Can we penetrate International markets with Value Brands?

3. Value Brands are Value for Money The seller’s mindset seeks big volume, low price, decent quality to feed aspirations of consumers Buyer’s mindset: maximise value without compromising on benefits Benefit Price Chart 100 Value Brands Territory Positive value “Line of indifference” Benefit Index 50 Negative value 0 100 50 Perceived price index

5. Prices are dropping with each new model launch

6. People looking for fancy phones with many features

7. Cheap Chinese phones of doubtful quality

8. Enter Micromax in 2008. Nobody gives them a ghost of a chance09/07/10 – ND/pr

10. People looking for fancier phones with many features. Give high end features in low priced phones. Imagine QWERTY phones below Rs.5000! Now selling 1 million phones a month!!

11. Cheap Chinese phones of doubtful quality. Focus on acceptable quality09/07/10 – ND/pr

14. Aggressive Pricing

15. 25% to 40% lower than Kwality Walls

16. Built market shares through point-of-sale promotion, product promotions and low mass media

17. Leveraged the strong Amul brand association with the integrated milk business

18. Many others have failed, before and after Amul09/07/10 – ND/pr

20. Value brands address aspiration needs of the masses

21. Value brands are “good enough”…and more attractive than private label

22. Made possible through

23. Proliferation of low priced channels

24. “Insurgent” business modelsPricePoints

27. Now produced in 5 ‘close to consumer’ factories

28. Extensive distribution with substantial intermediary incentives / trade marketing

29. Priced > 30% less than major brands09/07/10 – ND/pr

30. Chinese Detergents Diao rapidly ate up everybody else’s lunch to become the leader Diao Market Share, 1992-2003 % Market Share Relative Share by Value, 2003 % Market Share Diao BrandLaunched DejaVous? 09/07/10 – ND/pr

32. Ujalafabric whitener – 65% market share, displaced Robin Blue

34. Pampers Simply Dry diapers in Germany

35. Naturella feminine care pads in the Arabian Peninsula are three recent examples of products in this category. L’Oreal ventured into the value products segment via its high-end brand The Body Shop. They launched a new line of cosmetics called The Original Collection, which includes 11 iconic Body Shop products sold at attractive prices. 09/07/10 – ND/pr

36. Roadmap What are Value Brands? What does it take to build Value brands? Issues involved in penetrating International markets

38. Value Brands strategy is not about winning a small prize at a low price

39. Nano is a Value Brand. Addresses a huge 2 wheeler market which has millions of car aspirants

40. Mayonnaise is not a category in India for a Value Brand. Niche market best addressed by a Store Label9650_India 09/07/10 – ND/pr

41. Build low-cost Business model Grow volumes 1 4 2 3 Increase distribution Pass margins on to retailers Value Brands Virtuous Circle is not just about branding How are Value Brands created? Isn’t it what Micromax, Amul and Diao did? 09/07/10 – ND/pr

43. Mid-market brands have weak Brand Utility

44. Population pregnant with aspiration….’climbers’

45. Access to retail space possible

46. Independent distribution

47. “Direct to Retailer” selling09/07/10 – ND/pr

49. ‘Value Seeking’ customers

51. Roadmap What are Value Brands ? What does it take to build Value brands? Can we penetrate International markets with Value Brands?

53. The recession has set off down-trading

54. China is creating some global brands in consumer durables – Haier, TCL, Lenovo….

55. Consumers have started trusting Chinese products because many famous global brands are sourcing from China

56. Why not Indian Products?9650_India 09/07/10 – ND/pr

58. Managing the channels

59. Establishing after sales service“You don’t get a Coke by putting four quarters in four machines. Think big.” 09/07/10 – ND/pr

61. Branding is so different from producing as a sub contractor

62. Creating global capacities starts with creating big capacity for the Indian market in most cases

63. Flawless execution and sustained effort.9650_India 09/07/10 – ND/pr

65. Managing the channels

66. Establishing after sales

67. Grass-root

68. M&A

69. OEM routeThink big, think smart 09/07/10 – ND/pr

70. Thank You For comments, views and suggestions contact me at raj.nair@consultavalon.com Avalon Consulting Casa Avalon, 61 Dr.SS Rao Rd, Parel, Mumbai 400 012 09/07/10 – ND/pr