“Innovate to Grow” by Mr Harish Bhat

“Innovation that Differentiate Brands and Serve Society” by Mr Harish Bhat, Brand Custodian, Tata Sons, at the Calcutta Management Summit, 2019

Brands are very powerful vehicles of value in today’s world. Consumers buy a specific brand because they trust the brand, and like its values.  Think of the brands you use.  Tata Tea, Dabur fruit juice, Indigo Airlines, Amul cheese, LIC, Tata Steel…the list is endless. 

Why do you buy these brands?  The reasons may be different, in each case.  You may buy Tata Tea because it is fresh tea.  Tata Steel because of its superior quality.  Indigo Airlines or Vistara because they are on time.  Tanishq because of the purity of its gold or its designs.  This is what I called a differentiator for a brand.  The key property that differentiates it from other brands in the same category.

Now, in many cases, when marketers like me launch a brand, we use an innovation to differentiate the brand. When Titan watches was launched in India, the key innovation was the use of quartz, and the use of beautiful designs – because, before Titan, Indian watches were mechanical, and also they had fairly standard and few designs.  When we launched Tanishq, the key innovation that differentiated the brand was the purity promise, and the karatmeter.  When we launched Fastrack watches for young people, the key innovations included the bold designs of these watches and the irreverent, bold advertising.  But look at a brand like Uber or Ola, and the key innovation is not the product (the car is the same), not the advertising (that is similar also), but actually the business model itself.

So the innovations that brands use can be in the core product.  Or it can be in the methods of engaging consumers, including marketing & advertising.  Or it can be the core business model of the brand.  But whichever this is, most successful brands differentiate themselves based on some innovation or the other, in one of these spaces.  And the innovation provides either functional or emotional value to consumers.  Only then will it be successful – only if consumers see value in the innovation.

The best and most thoughtful kind of innovations not only differentiate brands, but also add value to society.  In other words, these innovations add value both to the consumer and the society.  Therefore, they serve both the business objective as well as the social objective. An example of such an innovation, from the Tata Group is Tata Salt.

Household name today, it commands a market share of 58% in the branded salt category in India.  Around 170 million households, which is nearly half the total number of households in India, consume Tata Salt.  It has also been consistently named as one of India’s most trusted food brands, year after year.  But what was the innovation on which Tata Salt was first launched ?  Back in 1983, it was the first national packaged iodised salt brand.  In other words, vacuum evaporated salt plus iodine in a single pack.  This innovation differentiated Tata Salt during a time when only local brands of salt were available.  It added value to the consumer because she obtained hygenic salt with the health benefit of iodine. But this simple innovation was also of enormous value to Indian society, because in the 1980s, Iodine deficiency problems in India had reached epic proportions. In the mid 1980s, iodine-deficiency led problems in India had reached epidemic proportions. A 1989 India Today article indicates that iodine deficiency was responsible for 2 Million births with mental and physical handicaps every year. Nearly 40 Million people were afflicted with varying degrees of goitre. Tata Chemicals recognized the role it could play in addressing this epidemic. With Tata Salt, it offered an easy and accessible way to consume iodine. The iodisation of salt has been one of the best examples of public-private partnership, which led to mass awareness and eradication of many health related issues of epidemic proportions. As a result of this initiative 78% of India’s population is now consuming adequately iodised salt as per NISI (National Iodine and Salt Intake Survey of 2014-15).

This persistent success is in a great measure due to the fact that Tata Salt has continued to address important nutrients deficiencies as part of its philosophy. Tata Salt launched Tata Salt Lite, a low sodium salt to ensure that the chances of hypertension are reduced. In a similar instance, Tata Salt recently experimented with launching Tata Salt Plus- an iron fortified salt which can help reduce iron deficiency in Indian women, given more than 50% of Indian women are anemic.

So, here is an example of an innovation which has helped differentiate a very successful brand, and at the same time it has also served society very well.  Tata Salt has become an integral part of Indian society with its relentless war against micronutrients deficiency.

The question arises, why should brands pursue such innovations which also serve society?  After all, the famous economist Milton Friedman once said that the objective of business is to maximise profits, and that has been the guiding mantra of the capitalist world.

There are a few reasons.  First, we live in a world with an increasing number of problems, that require solutions.  Climate change emergency, with global warming.  Increasing incidence of health issues such as heart disease and cancer and obesity.  Increasing income divide, between the rich and poor.  Increasing pollution levels.  Loneliness and poor health in old age, as more people live longer.  Many of these problems are structural.  While Governments work to address some of these issues, business entities today are amongst the most powerful institutions in the world.  They have the power and resource today to participate in solving these social problems.  They can use this power for good.  It gives them a sense of purpose, which is not linked to profits alone.

Second, unless businesses and brands help in addressing social issues, and if they focus on profits alone, consumers will begin losing trust in them. The last World Values Survey showed that trust in general is a scarce value today. Most countries in this world wide survey have less than 50% agreeing that they can trust others in general. In India only 1 in 3 people feel they can trust others. 

An Edelman report titled “In Brands we trust?” says that while more than 85% of Indian consumers feel it is important for them to trust the brands they deal with; only 45% claim that they can indeed trust the brands they buy. While it poses a challenge, this gap is also a huge opportunity. More than 50% consumers believe that “every brand has a responsibility to get involved in at least one social issue that does not directly impact its business”.  So, consumers want their brands to help address social issues.   One way of meeting this customer expectation is by developing thoughtful and innovative solutions that have broader purpose, at the same time achieving your business goals of differentiating your brands and creating stronger customer loyalty and advocacy.

Third, creating innovations which differentiate your brand and serve society at the same time makes for good business.  Like the Tata Salt example has shown, it builds excellent brands which last for a long period of time.  When your brand lives in harmony with society, it can live long.

All these three reasons are very powerful, and many brands have shown the way in creating such innovations.  Here are some examples:

Core Products

  1. Colgate: Many of our daily-use products are culprits of creating huge carbon footprints and impacting the ecosystem adversely. One such product is toothpaste. Traditionally, the toothpaste tube has not been recyclable owing to several design complications. This means tonnes of waste every year- approximately 20 bn tubes across the globe! Colgate invested five years of research in developing a recyclable tube, which can bring down a tube’s carbon footprints significantly. In June 2019, Colgate unveiled the final design and secured necessary approval. The Company plans to fully convert to recyclable tubes by 2025, when all of its products will be in 100% recyclable packaging.
  2. Tata Pravesh: Our own brand Tata Steel has done something similar, with a remarkable innovation. Most people prefer a wooden door for their houses for its elegance and beauty, but that means felling of several trees. Tata Steel collaborated with one of its customers to create beautiful steel doors that look and feel exactly like wood. Leveraging an existing technology, the company has created a range of steel doors, aptly called Pravesh. This not only combines the elegance of wood with the strength of steel for added beauty and safety, it also reduces the carbon footprints of each house substantially.  Every two Pravesh doors save one tree. Typically, an Indian house has 6 doors. So every time a consumer uses a set of Pravesh doors for their house, they are proud of saving 3 trees at least.
  3. Nike: One of the biggest differentiators of Nike, arguably one of the strongest brands on the planet today, has been its founders’ philosophy that has guided the brand throughout its existence. Phil Knight considered his customers as humans or fellow people or importantly, runners. He firmly believed that if people got out and ran a few miles every day, they would be healthier. This is back in 1960s, when running was not popular and wasn’t considered important. Nike’s mission, in its Blue Ribbon Sports days, was not to earn profits but to educate customers about the joy of running. Bill Bowerman, the co-founder of Nike believed that it’s a misplaced belief that only elite Olympians are athletes. He firmly believed that if a person has a body then he is an athlete. Bowerman promoted the concept of running as a fitness routine through writing articles in magazines. He also created a running program in Eugene that became a national model for fitness programs. In 1966, he wrote a book titled ‘Jogging’, which preached the benefits of jogging and the techniques. The book became a massive hit with millions of copies sold. The concept of running for fitness took firm root in the society. By educating customers, Nike created a new market where competition was literally non-existent. Over decades, Nike has used this philosophy of “anyone with a body is an athlete” to promote healthy lifestyle and athleticism in society. Its tagline “Just Do It” has remained a challenge and an encouragement to all people to achieve their goals and aspirations, whether it’s fitness or quitting unrewarding jobs. In 2012 Olympics, Nike introduced its “Find your Greatness” campaign. Building on its philosophy on everyone being an athlete, Nike urged people to push their limits, despite their individual situations. In their own words, “It is not just the championship athlete or record breaker that aspires to push their limits. It is also the everyday athlete who strives to excel on their own terms, to set and realize personal goals and achieve their own defining moment of greatness.”

As the way forward, Nike has identified its goal as “Inspiring the next generation of female athletes”. On March 11, 2019, Nike gathered with more than 40 of the world’s top female athletes in Paris to highlight new partnerships to champion women in sport. This commitment is underlined by several key initiatives such as a three-years partnership with UEFA Women’s Football. It also promoted young girls’ participation in sports through various enablers. By doing so, Nike is creating a new consumer base, just like it did with promoting running back in ‘60s. Today Nike has 62% of US market share, which is more than 4 times of its competition combined. It is also a global leader in the sports footwear industry. Nike’s market cap is more than double of its nearest rival Adidas. According to one 2016 analysis, it sells 25 pairs of sneakers every second on an average! 

  • Tata Tea: Moving away from product based communication, Tata Tea has used its Jaago Re campaign to mobilise desirable change. Much before “cause-marketing” came to be “a la mode”, Tata Tea decided to address social causes through its communication and launched “Jaago Re” in 2007. Their ingenuity in designing the campaign is worth sharing. Tea is the first drink for most Indians in the morning and is usually associated with waking up thoroughly. Picking up on this simple insight, Tata Tea decided to use the word “Jaago” which means “wake up” in Hindi, but also “awakening”. Playing on the two meanings, the “Jaago Re” campaigns for many years now have urged the Indian people to take the responsibility to address various social evils ranging from corruption to the low representation of women in active voting during elections. The brand came up with campaigns such as ‘Khilana Bandh, Pilana Shuru’, ‘Choti Shuruat’, ‘Soch Badlo’ that aimed to bring about a positive and much needed change in the society. These campaigns attacked corruption and small things that people should do that gives a sense of responsibility. Their third and most recent campaign “Alarm Bajne Se Pehle Jaago Re” focused on “armchair-activism”, or what many call “slacktivism”. Tata Tea introduced the concept of “pre-activism” with this campaign- to recognize the signs before disaster strikes and nip the problems early through appropriate action. Tata tea has used this campaign to pro-actively drive public action on prevalent issues such as farmers’ suicide, women’s safety, and sports (or the lack of it) in schools. Till date, Tata Tea has submitted 1.8 Mn petitions to the government on making both gender sensitisation and sports compulsory in schools. The brand has also used this platform for creating awareness and call to actions around other important issues such as water conservation, reducing undue pressure for performance on children etc.

Today, consumers know Tata Tea through Jaago Re.  It has also helped Tata Tea become the single largest brand of packet tea in the country. 

  • Mera Gao Power (SME space): This is a small for-profit start-up by two people- Nikhil Jaisinghani and Brian Shaad- who worked together earlier at USAID (The United States Agency for International Development). When one of them spent a few days volunteering in Nepal, they realized access to electricity is a major concern in rural India and Nepal. They built their first solar-powered micro-grid in August 2010, and called their company Mera Gao Power (MGP). Today, Mera Gao Power (MGP) builds, owns, and operates many micro-grids in Uttar Pradesh, serving off-grid villages with high quality, dependable lighting and mobile phone charging services. MGPs unique model is able to provide service to a typical hamlet for less than 70,000 Rs. a month, making its lowest cost design the first commercially viable micro-grid targeted at the rural poor. The company works on subscription model at the rate of INR 30 per week; it has collection agents who use apps to manage the process, and uses text messages to send bills and reminders. Today, MGP serves close to 2 lakh people from 25,000 customer-households in 1,500 villages in eight different districts of Uttar Pradesh and plans to expand further.
  • Tanishq: Tanishq is one of the leading jewellery brands in the country. But making and selling beautiful pieces of jewellery is not the only thing it’s been doing. With a deep understanding of the way jewellery craft has evolved in India, Tanishq recognized the plight of the Karigars or artisans, who have traditionally been working in pitiful conditions, while crafting exquisite jewellery. The brand took sincere and proactive steps to uplift and support the lives of its Karigars by ensuring healthy, hazard-free, and dignified working conditions. Not only the scientifically designed shop floors are a world apart from the dingy, dark, dreary back-rooms of a typical traditional jeweler, but Tanishq also provides clean, comfortable, and hygienic accommodation to the karigars at its factories. The centres at Tanishq’s Hosur facility, called “Karigar Parks” span over 11000 sq. ft. each and combine healthy living with state-of-the-art work plants.

This initiative makes the karigars’ lives and lifestyle much better. But it does more than that. Given the long prevalence of poor working conditions, the young generations of the Karigars’ family have been abandoning the age-old profession of jewellery making. India has been able to develop a unique and wonderful craft of jewellery-making over the centuries, but the immense and skilled talent pool has been in the process of drying up. Karigar Park is an effort by Tanishq to keep this talent thriving and continuing to add value to the art of jewellery-making. 

The recent Tanishq Campaign called “Dua ka Sona” tells this story of transforming artisans’ lives and informs consumers how when they choose Tanishq, they choose gold enveloped with the blessings of every life it has touched.

We have seen so many examples of very successful brands which are based on innovations with twin purposes – to differentiate the brand, and to serve society at the same time.  Different routes – product innovation like Tata Salt, engagement platform like Jaago Re of Tata Tea, or business model innovation like Tanishq.  But when brands do this, it should be authentic.  That is the most important ingredient of this magic potion.  In other words, brands should be seen taking action in whatever social area they have chosen to serve. Each of us who runs a business or a brand can do this, big or small.

Let me end with a story about Croma, and e-care.  It is now on its way to becoming a differentiator for Croma.  A small effort to save the environment, which many of us can replicate in our own businesses too. What social issue can your business or brand help to solve?  If you answer that question, I think the search for the right innovation will begin.  Which will help your brand, and help society.  Jamsedji Tata’s words on putting the community at the centre, and not just another stakeholder.

The Oration by Mr Bhat may be revisited and relived here…

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