Friday, May 16, 2008

Reliance Fresh: Brand Names, Extensions and Troubles

Here's against mindless extensions.

Organized Retail - of all kinds - is booming in India. And all kinds of companies/ individuals have ventured/ have plans to venture into the sector. Notably the big conglomerates like Tata, Reliance, Aditya Birla, etc. Not that they've restricted themselves to one kind of format. They are exploring all sorts of formats and in different product categories.

Is the above paragraph a little vague. How could it have been any clearer; it's just a reflection of the way things are happening? And the initiatives taken by some big conglomerates haven't been without their share of troubles.

Reliance Group named its grocery retailing (dry and wet) chain Reliance Fresh. Just at the same time Aditya Birla Group also opened its grocery retailing chain under the name More. There's another chain of grocery retail stores - Spinach - which opened within the same time-frame. And of course, Subhiksha was already there. There must be other chains too but not so well-known.

All these chains of stores are doing the same thing. Giving a bigger and better shopping experience for your daily needs while charging almost the same (in certain product categories even less) as unorganized retailers/vendors. In effect, replacing the latter or taking a substantial chunk of their business. No wonder, they (More, Reliance Fresh, Spinach, etc.) would face resistance from the affected community. But it wasn't 'they', it was just Reliance which was at (or got sucked into) center of the storm. And one of the reasons is the name 'Reliance'.

What about it? Reliance has gone about branding each of its business areas as 'Reliance _______'. Until the point the company got into sectors (with the name 'Reliance') which were new, niche or additional to the economy, everyone smiled. The moment it sought to replace (under the brand name Reliance) an existing business community, it faced resistance. Obvious isn't it? A threat to your subsistence would make you sit up and react, won't it? Unorganized retailers/vendors did the same. Natural! More so when it is India, where people try so hard to live a simple life.

Reliance is perceived to be massive. All know what it is. They might not be aware of the numbers but they know its might. You might not know how heavy an elephant is, but you know its might when you see it. Indeed, when it got into grocery retail, small vendors would've shuddered thinking about the loss of business. They know the power of 'Reliance'. Here's where extension of the brand Reliance creates problems.

What if the chain was called 'Morning Fresh'? What if the brand 'Reliance' were simply kept away from the chain store brand. Perhaps, it wouldn't have stirred the imagination of small vendors/retailers so violently. They would've known the adverse impact but would've just considered it like 'More' or 'Spinach'. The moment one hears Reliance, it only conjures up an image of elephant - huge, massive, dominating. When it gets mad, it is trampling! Not just that, Reliance name has become all pervasive. Wherever you go, you find something that is Reliance. Is it a God? Is it trying to play God? We don't know but people might think so; they'll react in the same spirit - in the way they best know. Medium is the massage. When all the places are painted with Reliance and all the places you buy from become Reliance, I'm sure you're gonna lose it one way or the other.

So, it would have been more appropriate, for various reasons, for Reliance to use a different brand name, especially when it seeks to so conspicuously replace the existing businesses and small businessmen. Telecom was new (new in people's lives), something additional. Naming it Reliance brought in kudos for the company. Context matters. Understanding the context matters as much.