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30th July, 2010

Brand Wars
It started with the notorious cola and detergent wars, and then led to corporate biggies in the consumer product space washing their dirty linen in public. Comparative advertising is not a new phenomenon in corporate India; it hasruffledmanyafeatherinthepast.Thoughthereisnocompellingevidencein supportofthepropositionthatsuchadvertisingwhereonebrandmakesrandom attacks or disparaging comments about its rivalshelps brands in any way, leadingcompaniescontinuetoindulgeinsuchtactics. On the face of it, such aggressive tactics may seem damaging for brands, speciallytheaggressors,butsomemarketingexpertssayitactuallyhelpsthemget immediate consumer attention. In the past few years, there have been many instances of leading brands making comparative advertising on the part of their rivals. CocaColaIndiaInc.andPepsiCoHoldingsPvt.Ltd Beverages giants CocaCola India Inc. and PepsiCo Holdings Pvt. Ltd successfully cashed in on this phenomenon in the 1990s. When Coca Cola became the official cold drink of the 1996 cricket World Cup, Pepsi came out withthecampaignNothingofficialabout it and it immediately hit a chord with consumers because of its cheekiness, Later, Coke came out with another campaign: Eat Cricket! Sleep Cricket! DrinkonlyCocaCola! Thetwocompanieshave,infact,foughtseveralsuchbrandwarsinthepast, buttheirbrandcustodiansfeelitdidnthurttheminanyway.Sincesoftdrinksis more of an impulse purchase, it worked fantastically for Pepsi. These ads were basicallytoenhancethevirtueofcolas,whichisfun,saysOhri.Thebenefitsof comparative advertising for the category were great and since soft drinks are all aboutfun,itworkedwellforbothCokeandPepsi,recallsVikasGupta,aformer marketingheadforCocaCola. Recentlythislongestofcorporatewarshasruntowhatcouldbeconsidered atruce.Insteadtheyusesocialmediatopushhomethemessagethattheircolais best. Quietly a form of cold war espionage exists where each tracks the others outputonTwitter. www.ghallabhansali.com 1

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30th July, 2010 P&G&HindustanUnilever The rivalry between FMCG majors Hindustan Unilever and Proctor & Gambleisntamystery.Andfortheirnew shampoocampaignsthewritingisalready onthewall. WhileP&GisrelaunchingPantene next week claiming to be the number one brand, HUL has already taken a pre emptive action by placing ads that say DoveistheNo.1shampoo. In the last one year, Pantenes market share has gone down by 60 basis points,andHULsDovehasgainedover130basispointsduringthesameperiod. So,P&GisnowtryingtoregainthelostgroundandmarketleaderHULisnotin the mood to give away any of their market share. Thus comes out an aggressive marketingcampaign. The last two launches from P&G have seen very aggressive comparative advertisingfromHULespeciallyduringtheTideRinfaceoffwhichevenwentto thecourt. Battleofthebourses:NSE&BSE Bitter exchange rivals Bombay Stock Exchange (BSE) and National StockExchange(NSE)havebeenateach others throats for grabbing a larger share of the cash and derivatives segment in equity trading. It seems another battle is playing out on the newlypromotedmutualfundplatforms ofbothexchanges. BSEsshareofstocktrading,cash aswellasderivatives,hasfallen from45 percentin2000to12percentin2005andjust6percentnow.NSEhasa virtual monopoly over derivatives (futures and options) trading in the country. This is a vicious cycle. In stock markets, liquidity breeds liquidity. Because of higher liquidity, the bidask spreads (the difference between the best buy and best sell pricesofanyscrip)onNSEarelower,whichbringsdownthetransactioncostsfor brokers.So,NSEspositionasthepreferredstockexchangegetsstrengthenedday afterday,weekafterweek. WhileNSEtooktheleadbytyingupwiththeregionalstockexchanges,BSE hasslasheditsmembershipfeesfromRs1crore(Rs10million)toRs10lakh(Rs1 million). www.ghallabhansali.com 2

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30th July, 2010 KraftandNestle USbased Krafts $19.7billion acquisition of Cadbury Plc now pits the worlds secondlargest food company against global rivals such as Nestle and Hersheys in the Indian market too. With theproposedforayofKraftFoodsIncinto India, the branded processed foods sector will soon witness a major tussle between Indian and international players. To take on new rivals, Nestle is drawing up fresh game plans which include extension of distribution network & product portfolio andmoderntraderetailinitiatives. NestlIndiaisgettingreadytolaunchahostofbrandbuildingexercisesto promoteitsflagshipbrands,MunchandKitKat,inIndia.Nestleiscurrentlyfine tuning its advertising strategy to woo consumers. The company will soon launch newmassmediacampaignstopromoteitschocolatebrandsinIndia. KraftFoodswillutilizeCadburysexistingdistributionnetworktopushits ownalliedproductssuchasKraftcheeseinIndia.Atpresent,Kraftshasnomajor presence in India except for its three brandspowdered flavored drink Tang, chocolatebrandTobleroneandbiscuitbrandOreo. HorlicksVsComplan ThefightbetweenComplanandHorlicks has become more intense. The war for supremacybetweenthesetwobrandsstartedas early as in 1960s and had continued ever since. Over the years, the brands were involved in aggressivecomparativeadvertisingin printand television over attributes such as ingredients, protein content, growth, and flavors. However, in late 2008, the makers of Horlicks, GlaxoSmithKline Consumer Healthcare (GSK), and the makers of Complan, Heinz India (Heinz), came out with advertisements that directly compared the brands using the competitor brands trademarks. Industry observers felt that in their bid to outdo each other, the two companies had ended up denigratingthecompetitorbrand. www.ghallabhansali.com 3

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30th July, 2010 Conclusion: Experts say comparative advertising at times hurts the entire product segment.Infact,researchshowsthatconsumersdontnecessarilylikecomparative ads where a brand directly attacks its rivals. Their argument: If a brand is in the public eye, it better be for a good reason. If brands make allegations about products, then they will not only hurt their rival, they might end up hurting the entireproductcategory. In the cola ad rivalry, the two companies never attacked each others products. Their rivalry was more of a creative kind, so, it only built consumer interestinit.

In 2007, Jet put hoardings emblazoned with the massage We have Changed. Kingfisher responded by placing billboard directly above the Jet ads with the cheeky message We made them change!

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30th July, 2010 MaheshBabaria maheshb@ghallabhansali.com MittalChheda mittald@ghallabhansali.com Disclaimer:
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