We know the market!
We know our customers!
We know our competitors!
As brand consultants we keep hearing this from many brand owners. But one thing which I always impress on my clients is that markets, consumers, competitors are in an unswerving cycle of evolution. If we don’t amend and adapt to the perpetually evolving environment then sustaining the business would be a challenge. Latest stories of downfall of Kodak the market leader imparts the prerequisite fact to overcome from the colonial business mind-set. I’m sharing a classic example of a brand that had put their strategies in place at the right time. ‘Bata Shoes’ one of the brand with which we all are connected since childhood.
Bata Shoes has strong history and legacy attached with two
of the main historical events i.e. WWI & WWII. Company was incorporated in
the year 1894 in Zlin (Austro Hungarian Empire then, today the Czech Republic)
by Mr. Tomas Bat’a. The company started experiencing rapid growth during WWI
due to rising demand for the
army/military shoes.
Company expanded its operations under the leadership of Mr. Thomas Bat’a and after his sudden demise due to plane crash, under the leadership of Jan Bat’a (half-brother of Mr. Thomas Bat’a). Bata Shoes started their operations in India in the year 1931 by establishing ‘BataNagar’
With the 1991 economic
liberalization and the entry of International Brands / perceived international
brands (although Indian but the communications build the image as International
brand) Indian consumers’ (including myself) got exposed to multiple brands with
trendy designs and it started overtaking the rational of Bata i.e. product
performance. I’m not sure about the
business performance of Bata since 1995 onwards, but as a consumer I never
wanted to buy the brand which is perceived to be meant for middle class and
also the designs never built iota of aspiration within me. So, I opted out from
this brand for almost 11 years (from 1999 until 2010)
We know our customers!
We know our competitors!
As brand consultants we keep hearing this from many brand owners. But one thing which I always impress on my clients is that markets, consumers, competitors are in an unswerving cycle of evolution. If we don’t amend and adapt to the perpetually evolving environment then sustaining the business would be a challenge. Latest stories of downfall of Kodak the market leader imparts the prerequisite fact to overcome from the colonial business mind-set. I’m sharing a classic example of a brand that had put their strategies in place at the right time. ‘Bata Shoes’ one of the brand with which we all are connected since childhood.
Bata Shoes has strong history and legacy attached with two
of the main historical events i.e. WWI & WWII. Company was incorporated in
the year 1894 in Zlin (Austro Hungarian Empire then, today the Czech Republic)
by Mr. Tomas Bat’a. The company started experiencing rapid growth during WWI
due to rising demand for the
army/military shoes. Company expanded its operations under the leadership of Mr. Thomas Bat’a and after his sudden demise due to plane crash, under the leadership of Jan Bat’a (half-brother of Mr. Thomas Bat’a). Bata Shoes started their operations in India in the year 1931 by establishing ‘BataNagar’
In
India we all grew up with Bata brand and was the only brand known to us in the
male footwear segment. The only brand gratifying the expectations of true
Indian mindset was Bata. It still confuses me that why the brand didn’t
leverage its equity in the female footwear category then, the brand was
masculine targeting only male, the designs and product performance was robust.
I still remember, my Dad always recommended Bata Shoes for me (May be, in the
long run it will be lighter on the pocket
In March 2011 my
dad noticed an advertisement ‘Bata discount sale, up to 50% off’, he insisted
me to visit nearby Bata Store with him. More than a surprise; it was a positive
shock for me. I never thought it was the same old Bata brand I use to wear it
in school. I never imagined such aspirational and trendy designs from Bata,
multiple choices for every occasion i.e. formal, casual, and party, sports and sports.
As a brand custodian and consultant it intrigued me to visit few more stores
and interact with captive customers and sales personnel inside the store.
Basis
that I’m sharing a few insights (from brand point-of-view) that ‘How Bata has
overcome the colonial business mindset ’
1)
Strategic Shift: Lot of brands disappeared in last 20 years or is on
the verge of disappearing due to entry of International Brands. You must be
remembering Topaz, Onida, Televista, lambretta scooter etc. Nevertheless Bata
relooked its strategy i.e. overcoming from the mindset of being a manufacturer
to retailer of brands. This is one of the conscious and apt decisions made by
Bata senior management team.
2)
Focused approach: The Company established its focus on
high-margin premium brands such as Hush Puppies, North Star and Weinbrenner and
outsourced the production of its low-cost merchandise to keep the operational
cost in control.
3)
Brand Visibility: In 2010, it opened 108 stores, taking the
total count to 1,300 in India. Planning to open 50 -60 stores in Tier-II &
Tier-III towns coupled with consistent advertising and communications. This has
created huge visibility for the brand in the targeted markets.
4)
Brand repositioning: The brand has repositioned itself to
target younger audience through Northstar, Hush-Puppies and Weinbrenner. It has
also brought ‘Bipolarity’ to the brand by establishing equal focus to Women
category through exclusive brand Marie Claire
5)
Aspirational Communication: The communication is very much
sophisticated targeting the affluent class. It is more subtle and sensitive
towards the Indian Gen-Y
6)
Optimization of retail stores: Optimized the retail chain by opening
large-format stores, closing down the less profitable ones and renovating the
rest. Brought focusing on
high-footfall locations for better conversion and margins.
7)
Multiple choice of brands: Introduced premium brands from global
portfolio like Hush Puppies, North Star,
Weinbrenner and Marie Claire
8)
Brand Line extension: Brought in accessories for both Men and
Women i.e. Belts and Hand bags as a natural brand extension to increase token
size and per SqFt margins. This also gives better choice to the shoppers
9)
Experiential service: Along with in-store service Bata has also
launched new complementary services such as online shopping and Bata Home
Delivery service.
The
business has started showing healthy signs of recovery both from operational
margins and net margins POV
The
brand has been able to enhance its enterprise value from shareholder point of
view with upward moving share price. From the entire stakeholder point-of-view,
Bata brand has able to create the pull for the brand, all because it has
“Overcome from Colonial Mindset”
