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Case Analysis: Good Company

Location and creating the right aura is a critical part of a brand’s success

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Every brand is in the business of being profitable. Branding is not something that sits in an Ivory tower. Branding without fiscal responsibility is irresponsible. That means each and every aspect of the business is critical to it.

In the retail business, the location and neighbourhoods where the customers interact with the brand, is as critical as the services that the brand provides. A brand is likened to a personality and the consumer will view the brand as an entity/personality to associate with.

There is an emotional quotient angle in brand associations. Being in good “company” (neighbourhood) is a part of creating the brand aura. There is a reason why luxury brands cluster with each other. You will rarely find a Gucci store near a Bata store.

There will always be exceptions like a ‘Bade Mia’ roadside kiosk in the back alleys of Colaba, Mumbai that has, over the years, built a reputation of being able to attract people irrespective of its surroundings. In fact, the surroundings at night build up the romance of the product. However, for the rest of mainstream brands across retail, the location is one of the critical factors for success.

A successful brand manages to get positioned in its consumer’s mind as a provider of a specific service as a differentiated positioning. In this case, the mall is a critical factor for achieving that differentiated positioning. The actions of the mall will definitely impact the numbers of the Brand “Gigil”. One cannot be under the impression that a brand and its actions can supersede any adverse action taken by the mall. Volyoom would have been under the impression that the LG floor would have an environment and approach conducive to its brand and business. By negating both, the mall effectively made it difficult to achieve the numbers.

A mall is a protected environment that is beneficial to consumers as it affords the convenience of parking, toilets and climate control apart from other things.

But is that the only reason for a brand like Volyoom and now Gigil, to occupy the LGF that has neighbours that are not in the same space that it wants to occupy? Is the presumption that the brand is so strong that its customers will search for and find it, no matter where it is located? Is there such confidence in the brand that could burn through any barriers of visibility or access?

It is like asking if Bose should set up shop in a discount apparel mall. The fact is, location does not offer direct visibility to customers entering the mall. So, though the mall is positioned as a premium mall, the benefit is not being passed on to Gigil. The customers, who come down to that level, do so, specifically with the mindset of exploring the value priced merchandise on offer. The chances of them converting to use the salon services, are slim.

From the case, it is apparent that Gigil will not enjoy visibility from the main foyer. Also, it is presumed that the mall has been unable to attract significant brands to the LGF and hence, has made do with a sort of “flea market” scenario to fill up the vacant areas.

There will always be a counter argument that if Gigil will have a great façade and provide outstanding service, then it will capture a loyal clientele. But then, why play with one hand tied behind your back?

Set up at a location that has good visibility and neighbourhood. Then, the good facade and service will have robust results. Remember that ‘salon services’ is more than a ‘product’. The customer wants to visit a place that has at least some ‘sense of arrival’.

The last question is: Is location a part of the mandate of the brand-consulting firm? A brand-consulting firm will need to raise all relevant matters to the client on anything that will impact the success of the brand.

Therefore, it is implied in the mandate that StratNext will need to discuss the viability of site selection and its challenges. Also, if Mahadev feels the location will impact the brand, it must be presented to the client Gigil as a core concern.

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.

Srinidhi Rao

The writer has more than 25 years of experience in hospitality and retail startup businesses in categories of hotels, cafes, entertainment, bars and restaurants

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