Amul as a brand has always emphasised on carrying out branding for their products and not on the retail bit of it. They believe it is the brand that will bring emphasis to the retail aspect. This is why they do not advertise or highlight the presence of Amul parlours. For Amul, RS Sodhi, MD, Amul says, “Our retail parlours come third in line when we look at the marketing aspect. The Amul Girl is at the top of the list followed by our products. After these two, falls the publicity of the parlours.”
If they are laying so much emphasis on their product and the Amul Girl, and have a widespread distribution network in place, why open stores at all?
Himalaya also falls under the same caschool of thought and has a widespread reach through distributors but has recently forayed into setting up own stores.
Product driven popularity
When we talk of Amul, we usually visualise their products, specifically butter, and not their stores. Whereas when we talk of a brand, like The Body Shop, we usually associate it with their stores so we can make purchases. The difference here is how we associate products or their retail bit with the branding that comes across from these brands. When you will think of buying an Amul product, you will never think of going to an exclusive Amul store rather the image of the local kiryana or neighbourhood store will come to your mind. The same is the case with Himalaya, if I want to buy a Himalaya face wash, I’d rather go to the store nearby to pick it up rather than go looking for an exclusive store.
The question that comes to mind is why set-up exclusive stores when the product is available at every nook and corner of the country? Also opening a store involves huge cost of operation, then why open exclusive outlets? Coca- Cola has a widespread reach which it makes possible through distribution channels that they have in place. Their products are available everywhere and their motive of reaching the customer is being fulfilled.
Harish Bijoor, Brand-expert & CEO, Harish Bijoor Consults Inc. explains, “Times change. Consumers change. Retail formats change. Different things are important at different points of time in the evolution of a market. The important point to remember is that the product is the message and the retail format is the medium. The product in many ways is the hero, and the retail format is the way the hero is reached to the desires-length of the consumer. As of today, the product is still the hero in the Indian markets. Such product focused stores only add to image and not to volume. Amul needs to appreciate that its arena of core competence is the product brand and not the retail brand handling. These are two different competencies and do not really meet. My suggestion is for marketers to focus on their arena of expertise. Let Amul do its job at the product and branding end, and let the 14.6 million retail outlets of this country do the job they know best: retail! All efforts to criss-cross terrains will always remain niche. Just as a small retailer who wants to make his own butter and sell through his own outlet will remain a niche, so will an Amul which wants to open its own outlets remain a niche.”
However Jagdeep Kapoor has a different opinion. He says, “Neither is the product important nor is the retail bit important. The only thing important is ‘The Consumer’. Selling from multi format or a single format is a strategic decision of a company. What is more important is the consumer and how easily is he able to buy and how easily can he consume. Hence both product and retail have to serve a common end, i.e. ‘The Consumer’. It should not happen that while fighting over the importance of ‘Retail’ or ‘Product’, the ‘Consumer’ is forgotten. After all – product and retail will exist only if consumers exist.”
Franchisee: Gain or loss?
By giving more spotlight to the product and not focusing on the retail stores, are they killing the franchisees as most of the stores are franchisee operated? If stores don’t get relevance, how will sales pick up? A franchisee at his own level has to work around creating his clientele. An Amul store opened by a franchisee didn’t do well for about two years post which he had to shut down operations. The reason cited for the shut-down was poor footfall. On the other hand, if a lot of stores are opened and shut, the brands essence can also deteriorate.
In such situations, where does the franchisee stand? Kapoor feels that everyone can gain in the chain when we look at brand visibility and brand value. He says, “Everyone in the retail chain needs to serve the consumer through brand availability and visibility. Many, many years ago, in my first book ‘24 Brand Mantras’, I had written 'Jo Dikhta Hai, Woh Bikhta Hai'. Many in the industry now use this phrase. Amul is emphasising service to the consumers through its brand. Whoever in the retail chain serves the consumers through the Amul Brand will gain. Whether it be a traditional outlet or a franchisee or an owned outlet.”
Giving his opinion Bijoor says, “Running your own stores has been and is always a sore point for all other retailers. If the philosophy is that you will stock and show but not sell, that works. But if you sell as well, you are competing with he nearest retailer who also stocks your products. Open stores, but just create image stores. Amul can open ten retail stores in the big cities of India just to showcase its offerings for the sake of image. Better still, Amul should open a Museum of Butter brands in Delhi. Bring in Butter brands from all over the world and show-case it here. Create an image for yourself as the largest in the world. But don't get into selling and retailing yourself. Leave it to the experts: the shop-keepers of India.
A retail entity must be given to highlight both the product and retail as they both complement each other. The retail business is complex and working on the traditional norms just doesn’t work today. Whatever strategy devised, should work for the benefit of a brand and its name.