Tuesday, December 21, 2010

Taking credibility of earlier success

Taking credibility of earlier success

Taking credibility of earlier success,
to promote new produce is natural tendency,
towards ease of optimizing efforts,
required to setup new identity.

Using credibility is a wrong strategy in long run.

Good Product companies like P&G and other many deliberate to associate product as a independent brand. Avoiding to put their name as part of product name. Using common suffix can show a certain creed of products definitely. But still using company name on each product as credible maker of the product does not work in long run.

One of bad marketing efforts recently seen on Indian Markets is, Tata Motors.
What is Tata "........."? it is "Nano" these days. Earlier it was "Sumo". Since Tata is associated with more than one product it creates problem to both products when they try to associate themselves with word "Tata".

Nano is product innovation, thus Sumo was. What made them success was being a first of its kind of offering that aligned with consumer needs.

Before Sumo there were jeep variants in many forms for passenger and transpiration. Sumo was perceived to be focused more thin, for passenger. it was right product in the market. Importantly first product to be so better aligned with consumer needs.

Nano, focused on consumer needs. After Maruti 800, it is using "generation gap" to use same "entry level car for mass" concept. It is product innovation in Indian small car segment, in fact innovating extra cheap small car segment. For next product innovation to try same concept may need to wait 30 years more. Else they will be perceived as only the followers of recent product innovator.

In long run, Sumo business will decline. There are most confusion offerings made by Tata Motors, to extend the Sumo offerings. Non such offerings made it grand success as Sumo did after launch. In fact there are multiple version offerings of "Sumo" making it even diluted. 
Nano is also competing for key phrase "Tata ....." taking it away from Sumo. Nano and Sumo only compete for association with prefix Tata. 

Tata Motors is using "credibility" of Tata in all their products. Same for their other car series too.

Another mistake Tata Motors trying to satisfy the cheapest end of car segment and the most expensive SUV segment. Trying to cover too many market segments. In long run ...danger.

The other thinking at Tata Motors is to use "intel inside" concept. The new Fiat Linea with "tjet"! Does anyone buy an expensive sedan which is also properly a "long sedan" in the market, since it has turbo jet fuel injection system, in its engine? I think NO. Same mistake with Sumo varients and other cars. Only confusing customers. Consumers converse... "So you bought 'Qudra Jet' engine car?" NO. Customers generally do not think so. What is critical thing in PC, is processor. What is critical thing in Sedan, Engine? Fuel Injection? ... may be status, style, pride, being expensive, more horse power... differentiating it as a class apart.

Both Nano and Sumo could have registered well in consumer mind without prefix Tata. Tata Motors as all other Tata products from salt to chemicals use their name prefixed on each product. This stems from use of "credibility". In more matured markets such concepts in long run does not stand well.

What is case for Tata Motors is same for all industries. Movies, Chemicals, Retail stores, Construction, everywhere. In software products things are little different where standards compliance are also important.

Reputation is build over time with consistent performance. Market will reward this with business, without even need to know who builds it.

Credibility is like earned wealth, capitalizing on it will only consume it. In long run you might exhaust it, when used unwisely.