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BW Businessworld

Maggi, Nano And Dant Kanti

The Nano, a brilliant and novel product, dream child of the venerable Ratan Tata, sadly, became the biggest victim of wrong positioning

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From mid-80s to early 90s I was based in Switzerland, working for a large multidivisional transnational corporation. The company had (it’s since been broken up and sold) an impressive history going back almost 100 years, a phenomenal track record of discoveries and innovation in the field of chemical entities… and a solid financial position.

While I was there a new molecule — let’s call it DCS — was discovered. It was an outstanding NSAID (non-steroidal anti-inflammatory drugs provide painkilling, fever-reducing and anti-inflammatory effects of which aspirin is the oldest and best known) way better than anything else in the market.

Worked brilliantly against muscular and joint pains, headaches, could bring down fever, had virtually no side-effects and was totally non-addictive.

There was however one problem: children couldn’t tolerate it and developed serious liver and kidney related complications that could even be fatal.

Someone suggested putting suitable warnings on the packaging but it was quickly ruled out. Few read those and even fewer heed them. And potential for lawsuits and damages was huge.

And then came a breakthrough idea: market it exclusively for arthritis and sports injuries. In other words: ‘position’ it appropriately.

‘Positioning’ as marketing concept was first postulated by Jack Trout in the 60s. According to pundits it was “the place a brand occupies in the mind of its target audience”. As one wizened old marketing hand explained, “It’s not what you do with the product; it’s what you do to the mind.”

The rest is history. DCS went on to become the biggest blockbuster prescription drug in the world; the first to cross $1 billion in sales in one quarter. Also made a huge profit.

Around the same time, the dyes division of the same company came out with a new class of fabric dyes that had amazingly bright and vibrant colours. Better by far than anything in the market. They also had excellent fading resistance against sunshine. There was however one problem: the colours ran during washing.

Instead of killing the discovery the company marketed that class of dyes exclusively — for upholstery… and never looked back. “It’s what you do to the mind.”

‘Positioning’, or finding the right spot in the customer’s mind and occupying it is probably the most important strategic decision for any product.

Seems few marketing experts in India understood this. The reason is not far to seek; the most powerful marketing companies were subsidiaries of multinationals and ‘positioning’ was an HQ prerogative; local staff were not allowed to tinker with that. Success came through distribution and sledgehammer advertising.

This was exacerbated by the shortage economy of the first 40 years of independent India when demand for almost everything vastly exceeded supply. Nearly anything produced could be sold. Just think of Ambassador cars of the 70s and 80s. ‘Positioning’ was an esoteric concept in business schools and no one really paid any attention.

There were however a few notable exceptions with Amul being probably the earliest. A new dairy operated by a cooperative in rural Gujarat set up a new milk processing plant in October 1955 based on a breakthrough in dairy technology. Buffalo milk was processed to make downstream products — including butter — for the first time in the world.

The word ‘Amul’ is derived from ‘Amulya’, which means ‘precious’ or ‘priceless’ in Sanskrit. But who could persuade kids to eat butter associated with Sanskrit! They wanted something ‘fun’ and ‘delicious’…and got ‘Utterly Butterly Delicious’ with that cute impish girl as the mascot. And the rest, as they say, is history!

Another great example was Maggi 2 Minute noodles that created and occupied a formidable ‘position’ from which even the food inspectors couldn’t dislodge it. And Fevicol, the unquestioned adhesive for anything to do with wood.

On the other hand, the Nano, a brilliant and novel product, dream child of the venerable Ratan Tata, sadly, in my opinion, became the biggest victim of wrong positioning.

In an aspirational society where the young (or millennials, as they are now called) dream big but have limited funds, the idea of a cheap car — one for the poor fit their budgets…but not their aspirations. It just wasn’t ‘cool’.

Those that aimed at free spirited adventure were Mahindra’s Scorpio, XUVs, etc. (Remember the SUVs; XUV500, Thar, Xylo, Bolero and Scorpio cruising through challenging terrain with ease with young 20-somethings singing Live Young, Live Free. For we are the Living?”) Those fit the dreams, but were hopelessly out of reach for the millions of aspirational young — not all of whom were CXOs. Nano was the Garib Rath… and they preferred staying with their Bajaj, Hero and Honda motorcycles that fed their macho fantasies.

Actually historically, there was a parallel. In the early 50s in France Citroën introduced an ugly monstrosity called 2CV (“deux chevaux” meaning two horses, to denote its piddly horsepower). It became the vehicle of rebellion for the young and owning a 2CV was a badge of honour. ‘Cool’, as today’s millennials would say. Something like blue jeans. And it became a pop icon of its times. Eventually, over 5 million were sold and even today there’s a market for reconditioned 2CVs.

Ironically, the one person who’s understood the concept of ‘positioning’ better than most marketing gurus is Baba Ramdev.

By linking his persona, the image of a superbly fit, healthy, yoga expert with a killer smile who could do a headstand or twist himself into a pretzel in the middle of a PowerPoint presentation makes ‘natural’ look credible. And ‘cool’. Note, no other guru (and at least a couple have tried marketing their own versions of consumer products) has been able to occupy that ‘position’ in the customer’s mind. They can spout philosophy but cannot do a sheershasan and thus are unable to claim credible real estate in the mind.

Dant Kanti, a toothpaste produced by Ramdev’s Patanjali, has done what the Nano couldn’t.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

K. Satish

The author is a New York-based independent marketing consultant

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