Does CSR really build BRANDS?

Jitesh Patel, Sria Majumdar, IIM S

Does CSR really build BRANDS?

“We do not claim to be more unselfish, more generous or more philanthropic than other people. But we think we started on sound and straightforward business principles, considering the interests of the shareholders our own, and the health and welfare of the employees, the sure foundation of our success.” -Jamshetji Tata

Coming from the founder of Tata Group, the most socially responsible corporate entity in the country as per Times Foundation survey, this quote helps us put CSR in perspective. In a world where CSR is no longer a choice but a necessity for business; companies seem to forget that the foundations of CSR can be strong only when it is built into the fabric of the organization. Neither is CSR altruism, nor is it a fad- a survey of business leaders in the US found that 8 out of 10 CEOs believe that CSR helps their bottom line and 75% say that people have a right to expect CSR from firms. Even the Economist editors recently admitted that CSR has moved from the domain of ‘do-gooders’ to mainstream. It is accepted today that CSR cannot sustain when it is treated as charity, it requires modifying business models to achieve the triple bottom line of people, planet and profit.

While Corporate Social Responsibility is the need of the hour for sustainable development of the environment and societies across the globe, it is even more relevant in our country given the gross inequalities and the fact that development is still in the initial stages. CSR in India is marred by scepticism from intelligentsia and implementation challenges at the grass roots. To top it, there is no authentic data available on the kinds of CSR activities, coverage, policy etc. While evaluating the success of the CSR activities itself could be a whole article, we try to evaluate how CSR is helping organizations in building their corporate brands. The consumer empowerment movement across the globe has made cynics of all customers, and many fear that CSR is just window dressing. Through this article, we have tried to understand what makes CSR a successful brand campaign.

When we started writing this cover story, the lines between ethical consumerism, sustainable marketing, green marketing, CSR, Business Ethics & Corporate Citizenship seemed to blur. We were forced to rise above the jargons and focus on what CSR really means to companies and to the stakeholders. We explore definitions of CSR in our next section, but for the purpose of our article we have considered all activities of the company which help society and environment, and in turn affect the company’s image and the corporate brand.

Defining CSR

The term “social responsibility” was proposed in the U.S. by Frank Abrams, Chairman of the Board of Standard Oil of New Jersey in 1951, in a statement about the duties of executives to society. It gained a following with the publication two years later of the “Social Responsibilities of the Businessman” by economist Howard Bowen who, having surveyed the consequences of laissez-faire economics in the 1920s through to the Great Depression, concluded that business had obligations to society over and above creating jobs, paying taxes, and obeying the law.

Corporate Social Responsibility started off as charity with roots in ethics. Organizations had surplus profits, and some leaders, who were philanthropists, chose to distribute their wealth among the not so privileged. Then globalization happened, and the world became a smaller place with sourcing, production, consumption of the same product spread across multiple continents. Businesses realized that the only way to grow was to help the consumers grow with them, and a more collaborative development model was employed. On the other hand, rapid environmental degradation led to concerns about sustainability of our planet- leading to greater customer consciousness. Also, various Enrons of the world forced companies to focus on ethics. Suddenly, it was not uncommon to see capitalists invest in social and environmental upliftment and abide to ethical standards, even build business models which led to betterment of society and environment. While CSR started off as some leaders looking at the triple bottom line, today it has become a qualifier.

The World Business Council for Sustainable Development in its publication ‘Making Good Business Sense’ by Lord Holme and Richard Watts, said ‘Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.’ While there is no universally accepted definition, the key issues in CSR are accepted by all - environmental management, responsible sourcing, stakeholder engagement, labour welfare, community relations, gender equality, good governance and anti-corruption measures.

We see companies engaging in Corporate Citizenship for multiple reasons- reputation and brand building, competitiveness, risk management, enhanced access to capital and markets, increased sales and profits, operational cost savings, improved productivity and quality, efficient human resource base and enhanced customer loyalty. Undoubtedly the greatest motivator for a company to go in for CSR is reputation and brand building, and surveys corroborate this conclusion.

In the context of measurement of CSR, the ISO 26000 by the International Organization for Standardization is interesting. This standard offers guidance on socially responsible behaviour and possible actions. However, in contrast to ISO management system standards, is not certifiable. CSR rating agencies have sprung up across the globe, and demand for non-financial measures of value creation has increased. Social accounting, auditing and reporting have emerged as disciplines of study. Yet, it would be a mistake to believe that CSR is only about compliance to standards, laws and indices.

Some companies have managed to do CSR and build brands. Some have done CSR only to be labelled as window dressers and green washers. And for some, CSR has had no impact on brands. In the next section, we examine some global as well as Indian firms which have managed to walk the talk.

Success Stories

Reputation Institute, an International Organization, has tracked how CSR ratings affect the company’s reputation and brand. In the ’08 and ’09 studies, they discovered that the CSR index predicted 40% of overall reputation. In the Indian context, the Times Foundation survey found that TATA Group (67 per cent) was the numero uno company with active CSR initiatives, distantly followed by Infosys (13 per cent), ITC (12 per cent), NTPC (11 percent), Anil Dhirubhai Ambani Reliance Group (10 per cent), Ambuja Cement (9 per cent), Microsoft (7 per cent), Wipro, BILT and L&T (6 per cent each). The findings of the survey place education, health and environment as three of the most popular areas of intervention for companies as part of their CSR initiatives. Globally however, environmental issues including climate change are the most popular investment areas for CSR.

Organizations like Body Shop, Ben and Jerry’s, Patagonia have been cases studies in Business Schools, highlighting the corporate citizenship initiatives of these firms. These efforts have led to their success, and finally their take over (in many cases) by mainstream companies. The top firms in CSR in US context today include Walt Disney, Microsoft, Google, Honda, Johnson & Johnson and Pepsi. However, in this section we focus more on Indian success stories, as we believe the Indian socio-cultural context is quite different.

No discussion on CSR in the Indian scenario can be complete without the Tata Group. A group which has become synonymous with trust and ethics, and doing good for the community- the company has achieved what many firms would kill to get. Consumers trust the brand and anything which has a ‘TATA’ to its name, must be honest and true. In this context, it is noteworthy that even the Tata Group which traditionally never advertised its CSR, is now doing the same. The ‘Values Stronger than Steel’ campaign, highlights how Tata Steel, a Tata Group company has always focussed on ethical practices and employee and society development. Then there are brands like Mahindra Group, which have only recently started with massive CSR initiatives globally such as the RISE campaign. This initiative not only aims to tie together all the Mahindra entities, it also shows that the brand is becoming more socially conscious.

Overall, the FMCG sector seems to lead CSR initiatives with ITC’s E-Choupal and HUL’s Project Shakti. From being a cigarette mogul, ITC is now known for building public private partnerships, social and farm forestry, reviving Indian Classical music and the e-Choupal initiative. Needless to say, consumers admire the company for its sustainability efforts. ITC is also one of the few Indian firms to come up with a dedicated Sustainability Report year on year, and they are GRI - G3 Compliant Application Level A+. On the environmental front, the firm is carbon positive for five years in a row, water positive for 8 consecutive years and waste recycling positive for last three years. ITC, unlike the Tata Group has never shied away from broadcasting its CSR initiatives. Be it PR or advertising campaigns such as ‘Responsible Luxury’ for ITC Hotels, the claims are always in your face. In the long run however, we feel that the authenticity of Tata’s CSR cannot be matched by aggressive advertising.

HUL’s success in reaching out to women self-help groups across the country, and giving them a sustainable livelihood source has been so successful that the model has been taken to Srilanka and Bangladesh. It’s not surprising then that HUL’s ‘Small Actions, Big Difference’ has been translated to 3 of the top 10 brands in India being HUL brands. Coca Cola (another brand which has a dedicated sustainability report for India) focuses on water stewardship, sustainable packaging, energy management, climate protection, solid waste management etc. and this had led to greater brand recognition and increased brand equity. Coca Cola India has won the Golden Peacock Global CSR Award for 2009 for two consecutive years in recognition of the company’s water conservation/management practices and community development initiatives. The fact that such awards have come to exist, again prove the point that brands are being built by CSR.

These are some brands that have gained in their mainstream business due to their CSR focus. Brands continue to shift towards CSR and CSR spends have increased. More importantly, CSR discussions are now imperative in the board room. CSR helps build brands, but only when brands live up to their promise. Green washing and window dressing is severely punished in this connected world, and there are other brands which haven’t really been able to cash in on the CSR hype despite having done good work in this field. We explore some of these organisations in our next section.

CSR: Not always building brands!

Today, CSR has become the mantra for every organisation in the world. It is next to impossible to find a company which doesn’t do CSR as part of their activities. Everyone has a Sustainability & CSR tab on their website, everyone talks about it yet there are companies which are unable to connect with the consumers based on their CSR work. These are companies which have done quite a bit of CSR but it hasn’t contributed in building their brand. These are companies which customers don’t associate with CSR, but are yet strong and powerful brands in themselves.

Pepsico India is one such company. Their emphasis on sustainability is evident from the vast amount of work they have done in India ranging from community development, water replenishment, waste management and partnering with farmers. Pepsico India has spent over $11 Mn in the years 2008-10 for their CSR activities in India. Despite this, the Pepsi brand in India is not viewed as one which is socially responsible. There are instances where Pepsico has suffered because of being depicted as a Multi-National Corporation which is exploiting the resources in India – especially water. Pepsico has come with labels on their packaging to dispel the myth but to no avail. It also has an exclusive website which details out the various steps Pepsico has taken for water conservation and how it has emerged a water positive organisation. The Pepsi brand is seen as a youth oriented one signifying freedom and a slight streak of rebellion among the younger generation. Over the years, its communications have been consistent to this theme and it has therefore emerged as one of the strongest brands for the 18-25 segment. This could be one reason that the social responsibility aspect is never really connected with Pepsi. Their positioning for the brand doesn’t gel with initiatives like water conservation and it is in cases like these that CSR fails to propel the brand’s success. There is one more way of looking at this, it might turn out that is the “true CSR” which the company continues to do despite gaining no obvious brand benefits out of it.

The case of Reliance Industries as an organisation is something similar. Their websites lists out a myriad number of programs through which it has contributed to different spheres of health, infrastructure, education development and also environment protection. The public perception of Reliance though is that of a ruthless corporate entity which doesn’t give back enough to the society. The question then becomes, is Reliance not doing enough CSR? Or is it not marketing its CSR as well as other companies are? This is a pretty dicey question and the answer probably lies somewhere in between. The judging of CSR as already been discussed before has become a matter of great debate. Reliance Industries has won a lot of awards at the corporate level for their social work but the general public is more or less unaware of these developmental actions. Reliance Industries major operates in the Oil and Gas segment which is itself viewed as a great threat to the environment and ecosystems. The CSR reports and work take more prominence in this industry because companies are desperate to break the mould of being called a ‘polluting organisation’ and want to be seen as a green, socially conscious entity. British Petroleum was ranked in top 3 in the Sustainability index on Dow before the oil spill happened and all its work came to nought. These are problems companies have to deal with because they work in an inherently risky industry which makes humungous amounts of money.

Challenges

CSR has evolved to become more of a necessity than an option. We’ve seen how it is being used to build the brand value for an organisation. There are still many challenges to overcome before it becomes a two way process. The two way process; actual CSR work being done rather than just reports and window dressing and this work benefitting the organisation’s image in the long run.

Government Policy : The Government Policy in India with regards to CSR is pretty lax. The policy could empower private organisations to work more closely in conjunction with public ones to reach the grassroots of the rural communities. For this , the policy first has to address the working of the public bodies. The Government’s policies have to move away from the myopic view of CSR being a donation driven activity and use it more as a participative tool. The encouraging point to note is that the policy has ensured that there are enough number of Public Sector organisations which have come up trumps in implementing CSR initiatives.

CSR in Small and Medium enterprises : SMEs have typically not been involved in CSR activities. This has been seen as the responsibility of the big corporate houses. The Government can try and incentivise CSR for the SMEs to set the ball rolling and this in turn will have a major impact on India’s development since the number of SMEs and their potential impact would be significantly high in India.

CSR Metrics: The fact that CSR is part of every company’s corporate agenda has made skeptics out of the normal consumer. When all companies come out with Sustainability reports which look more and more similar each year, it is difficult to pinpoint the ones which are doing the actual work and other who are just talking about it. The need to identify metrics which make it easier to pick out the genuine work is essential but remains an unsolved issue

Disparate Brand Identitites: In some cases, though the companies indulge in CSR , their brand is such that it is disparate with the whole concept. The whole idea of socially conscious might not fit in with how strongly the brand conveys its other personality traits and CSR doesn’t become a significant contributor. This is more of a marketing problem, for the company to figure out which acitivity will fit in with the brand image and bank on this to propel the CSR to prominence.

The examples conclusively establish the fact that CSR does have a significant impact on brand value of the organisation in most of the cases. The dilemma is that, whether it was success of the CSR activities themselves or the marketing of these CSR activities. It won’t be long before the consumer realises the difference between CSR and window dressing, and that will be when the true impact of CSR on brands will be realised.

Uncharted Territories

Jitesh Patel, Rahul Mantri, Ritika Nagar | IIM S

Uncharted Territories

Automakers in India exploring the road less traveled…

Behold the turtle; he makes progress only when he sticks his neck out. (Bruce Levin)

For the turtle, sticking his neck out is essential to move forward. The automobile companies in India are doing just that – sticking their neck out. India is poised to become one of the largest automobile markets in the world and to succeed in India, companies are entering uncharted territories. Territories which they have shied away from until now. Tata made the cheapest car in the world keeping in mind the Indian customer and the world took notice. Now, Toyota has, for the first time come out with a small car, the Etios which has been designed completely based on the needs of the Indian market. Maruti is coming out with Kizashi; a D-segment car which is a first for Maruti Suzuki . Tata Motors is aiming to create a new segment altogether with the launch of its car Aria deemed to be India’s first crossover car. We take a look at the reasons for these business decisions, the strategies being employed for their success and also on how the market might react to these offerings.

The Toyota Etios – Toyota’s first “Indian” car

The Etios has been in development for 4 years, employing over 2000 engineers from Toyota’s Indian and Japanese operations. The Japanese major is investing Rs.3200 crores to set up its manufacturing facility in Bangalore. It has been designed keeping in mind the minute preferences of the Indian consumers. Toyota says it is the first and last ever low cost sedan coming out of their stable. Etios was recently launched with much fanfare (A.R.Rahman was there for the launch) and has been priced in the range of 4.96 lakhs to 6.84 lakhs.

The Etios was born out of the need to compete in the very lucrative and high growth compact car market in India. Toyota is something of a non-entity in the emerging markets in terms of market share volumes and with Etios it wants to change that. A small car is essential to gain foothold in the rapidly developing countries. Toyota believes that entering the right segment with a car such as the Etios will be a winning proposition for them in the long run. Toyota’s usual plan of action has been to design cars for the developed world and then sell watered down versions of the same car to the developing nations. This attitude restricted its scope of expansion in the emerging economies. Etios is a car that has been designed solely for the Indian context and it will be launched in other developing nations as well.

The tagline for the Etios is “World First. India First.” which emphasises Toyota bringing its world class quality and engineering skills to meet the demands of the Indian people. The promotional campaign stresses that the Etios is in a class of its own and has no competitor as such. Toyota did a road show of 25 cities to reach into a wider market in India; it currently has presence only in 15% of the Indian market. The market penetration is essential for Toyota since it currently has costlier cars which are largely based in the metros and Tier-I cities. To ensure Etios is successful, the expansion is necessary and rapid growth plans for its distribution chain are in the pipeline. Toyota expects to have 150 dealerships by the end of this year and deliveries for the Etios will start in January 2011. In addition to this, A.R.Rahman has been signed on as the brand ambassador for the Etios.

Competitors are wary of the effect of Toyota jumping onto the bandwagon and starting to manufacture cars at a lower price point. Toyota is known for its world class quality and also has the reputation of redefining the marketplace with its stringent cost and quality measures. The competitors for Toyota Etios would be Indigo Manza, Ford Figo, Hyundai i20 and the Swift Dzire which all lie at similar price points to the Etios. The Etios promises to offer more on the features and performance front but Toyota lacks in terms of the on ground support. Its competitors Maruti Suzuki, Tata Motors and Hyundai have a far more widespread presence and this will be an uphill climb for Toyota to achieve its ambitious goals for the Etios.

The Etios is almost like a make-or-break car for Toyota. The company believes that the Etios will carry forth Toyota through the 21^st Century, just as the Corolla carried them through the 20^th century. Such a statement, coming from the World’s largest automobile manufacturer shows how bold and significant this move is for Toyota. The start has been bright; Etios has already received over 8000 bookings in the first week after its launch was announced. The plans are to sell 70,000 cars in the first year. This seems to be an ambitious but nevertheless achievable figure with the amount of effort Toyota has put into the Etios. Toyota has stuck its neck out, only time will tell whether it was the right move and whether this will help spur Toyota’s forays into uncharted territories.

Kizashi – Maruti Suzuki’s foray into the Luxury car segment

Maruti Suzuki is the market leader in the A2 and A3 segments with a market share of 53.3% in A2 and 42.7% in A3 segment. It is currently exiting the A1 segment by phasing out its 800 model. It wants to become a company which is capable of satisfying the needs of customers across segments (Full market coverage, segment by segment invasion plan). The next logical step that could be taken to achieve this objective was to enter into the A4 segment. Although breaking into this segment may take time but with the high growth rates expected in this segment it is an opportunity that should not be wasted. The A4 segment is expected to grow annually at the rate of 30% per year for the next 5 years.

So, Maruti the name synonymous with “the best service and value for money” is planning to add another feather to its crown with its launch of Maruti Kizashi in 2011. Maruti Kizashi is a mid-size sporty looking sedan. Maruti has lots of cars in small car segment starting from Maruti 800, Maruti Alto, Maruti Wagon R, Maruti A-Star, Estilo and Maruti Ritz. But there was a vacant space for a luxury sedan in D-Segment which will be soon filled by stunningly beautiful and elegant car Kizashi. The issues which crops up is with respect to the brand Maruti Suzuki which is perceived as low cost and value for money. Moreover Maruti has to compete with D-segment giants and gain market share. Pricing and proper positioning of the car will be a challenge for the success of this new project. The promotional activities and defending the market share by MNC leaders in the segment are other major issues.

The competitor cars are priced between 10-15 lakhs with various models. However Kizashi is being launched as a sport model car (price range Rs 10-12 lakhs). Its UVP is its design and style. An advantage on power of 2000CC is also there (with compromise on mileage which does not affect this segment much). It has also more room compared to competitor products and Maruti has a better distribution system and aftersales service adding to its competitive edge.

In this segment both Maruti and Honda have decided not to go for a full on frontal attack. Their strategy has been such that they have emphasised that the Civic is youthful, while the Kizashi is mature. The Civic is sharp and designed to look quick and fast, while the Kizashi is rounded and has a majestic of bearing while on the move. The Civic breaks new ground when it comes to sedan design, while the Kizashi improves upon what already works. Kizashi can steal Civic’s market share in this market, by emphasising on these aspects.

Kizashi was earlier released in USA and Japan in 2009 but it was unable to make any significant impact in the US market and sales figures were not encouraging In India, Maruti Suzuki known for its low priced cars which have helped it establish a stronghold in the automobile market .The Kizashi is a sign of diversification and Maruti aims to be the market leader in this segment as well. The growth plans are sanguine and the result of Kizashi will decide Maruti Suzuki’s fate outside the small car segment.

Tata Aria – India’s first Crossover

Recklessness meets caution, contemporary meets the classic, the first Indian crossover TATA Aria hasn’t even hit the road and it has already created a buzz on various media channels. It is the company’s most expensive offering till date between Rs13 lakh and Rs16 lakh. Targeting the niche the Tata Motors has again not only developed a truly revolutionary product but also surprised people with the right and unique marketing campaign.

Although the issues in the launch of Aria are manifold like lack of awareness in the Indian market about crossovers, the brand itself and being first of its kind. But using the integrated marketing channel Tata has adopted a planned strategy to position Aria into the Indian market. Aria has been packed with lots of features which are supposedly to compete with those of the Innova and Xylo. Aria sports a 2.2 litre common rail diesel engine and blends the functionality and comfort of a mid-range MPV with the all-terrain assurance and premiumness of an SUV. In terms of features it has 6 air bags for safety as well as an Electronic stability program offered first time by an Indian manufacturer.

To overcome all issues related to Aria, Tata is driving the most ambitious marketing strategy. Tata starting with online campaign which will be followed by viral marketing will try to create curiosity in the customer about the crossovers and Aria in particular. Through a LIVE webcasting channel, thousands of automobile lovers across the world bore witness to the unveiling of a new breed in vehicles. Tata recently launched a website called the BuildDreamCar.com which allows users to create a user or connect via Facebook. Then a participant can create a car step by step in various levels, which is also kind of fun if you are into cars. Apart from their online presence with “LIVE” and Build a Dream Car” they have also showcased the prototype in Geneva Auto Expo and Delhi Auto Expo.

The planning for Aria started 5 years before the launch. They formed a focus group including owners of Sedan, SUVs and MUVs and gathered all their problems related to these existing products and after all that they tried to implement most of the features in Aria. A small example is of ground clearance for Indian women in saris. This speaks a lot about the positioning strategy of Tata.

The Tata Aria aims to create a new market segment for itself and hence has its task cut out. The aggressive promotion strategy is essential when aiming to create a buzz for the growth of a product such as the Aria. Tata has tried something like this before, with the Tata Xenon which was a lifestyle pickup truck and it failed to take off. This time Tata is treading more carefully to ensure that Aria captures the market share it deserves.

These cases show that the automobile companies in India are experimenting and experimenting big to find the right way to tap the growing opportunities. Companies are no longer satisfied with sticking to the beaten path; new paths are being treaded upon in the hopes of making tremendous progress. This bodes well for the consumer; he now has more choice and has better products awaiting him. As for the companies, it will be a while before their success or failure becomes clear. Some experiments will bring in the desired results, some will not, but one thing is sure the experiments will continue.

Trent Limited - A Strategic Business Unit of Tata Group

Priyanka Datta | IBS Hyderabad

TATA group’s entry in the retail sector through TRENT has been silent but strong. It was the brain child of Simone Tata, the lady behind the success of Lakme.

The marketing strategy of Trent can be studied in two phases:
• Phase I: the start of the company, its journey to its current status in the market and
• Phase II: the future

The story commenced in 1996 when Simone Tata decided to sell 50% stake in LAKME to HLL and out of its proceeds created TRENT LIMITED by acquiring Littlewoods, a London based retail chain in 1998. Littlewoods was renamed as what we know as “Westside”. Since its inception, Trent Limited has been on the major expansion mode and has targeted metro cities in India.

The “WESTSIDE” Story
Westside is the flagship brand of Trent in apparel and accessories retailing. The value chain was already in place as Littlewoods had expertise in primary activities like designing, producing and delivering the merchandise. They just needed to blend them into the Indian context, which was successfully done by keeping track of the pulse of the market, daily sales figures and the latest trends in vogue. Strategic marketing plan for Trent targeted youth in the metro cities. This was very well reflected when famous cricketer Yuvraj Singh, who was considered the Face of the Youth, was made the brand ambassador of Westside during its launch. Choosing a cricketer for an “apparel” ad led to easy brand recall and rescued the brand from falling into the trap of cluttered advertisements. The shopping experience was enhanced with each Westside store having elegant interiors, sprawling space and courteous store staff, thus making it a much sought after shopping destination.

Major marketing plans focused to improve the reach of the brand by setting in smaller formats of Westside stores like “Westside Girl”, “Westside Woman” in order to make them popular in Tier II, Tier III cities. There are currently 35 Westside stores in 20 cities in India. The reason they are concentrating on the woman’s apparel segment is because they want to tap the new empowered woman’s brand loyalty with their stylized yet pocket friendly offerings.

Other value added and after sales services includes returning of the merchandise within a month’s time if anything goes wrong with the fabric. Also, CLUBWEST membership is offered where customers are given special privileges like 20% discounts during their birthday month, free home delivery of merchandise and Clubwest points on each purchase that can be exchanged for money. Focus is to be extremely sensitive to the needs of the customers and build the brand on their suggestions and opinions. Westside also got into cause-related marketing last Diwali, where it sold diyas prepared by underprivileged kids at its retail stores.

The “STAR BAZAAR” way
Trent further expanded into Hypermarket retailing through “STAR BAZAAR” in 2004. The reason for coming up with such stores was to cash on the limited time the working individuals had to buy groceries.

Quality and convenience is what urban customers are looking for and Star Bazaar satisfies it, making them visit the store again. The stores are also sensitive to the regional requirements and they vary across the length and breadth of India.

The procurement process in Star Bazaar is highly dependent on locals who supply and transport the goods. Since product differentiation is difficult here, the motto “Chota Budget, Lambi Shopping” is hard to achieve considering the bargaining power is on the supply side. To tackle this and to have an edge in providing the goods at the lowest prices Trent has agreed upon supply chain integration with UK based Tesco, world’s third largest retailer. With financial aid of £60m, Trent can enjoy reduction in costs through economies of scale with this agreement. As per india-reports.com retail weekly, Trent Limited is expected to invest close to Rs. 2000 crores for setting up fifty such Hypermarkets.

A “LANDMARK” event
Before Pantaloons could lay hands on it, TRENT captured 76% stakes in the 22 year old Chennai based, India’s largest bookstore chain “LANDMARK” in August 2005.Recession or no recession, books and music would never go out of business and Simone Tata knew it well. Rather to everyone’s surprise, Gen X is more into books than ever before. Landmark was into books, magazines, stationary and greeting cards but later it added on music to its stores. Further it also added gifts, home stores & toys .The USP of its stores is the wide assortment and range of stock.

The “FASHION YATRA”
The latest news from Trent is a complete family fashion store Fashion Yatra. At the launch, Simone Tata said, “The strength of Trent Limited lies in it being able to provide our customers garments that suit their specific needs. Fashion Yatra is our latest venture to provide customers really fashionable choices at great prices.”

Throughout its phase I, TRENT has been a mass-to-mid-market retailer and has targeted its marketing strategies towards the metro population in the age bracket of 20-35. It has acquired businesses that already had all their primary and secondary business activities in place. The only turn Trent gave to all these brands was bringing them under one roof to create a shopping experience like never before. Gurgaon’s Grand Mall is an example where all these brands are brought together.

All these related sectors point towards the highly styled lifestyle requirements of the youth who are able to finance them through their cushy jobs in the booming service sector. The major pull force of the company is the related product assortment. The brands under its umbrella are already popular; Trent would provide them further ground to prove their strength through its financial muscle. Trent posted revenues of Rs 716 crore and net profit of Rs 33.64 crore on a consolidated basis in FY08.

Phase II: What does the future hold for TRENT?
Trent has two-way line stretching in mind, as can be clearly seen (downward stretching) from its entry in the mass merchandize retailing through Fashion Yatra where it offers “Value for Money” clothing and its strategic tie ups with brands like SISLEY, Benetton’s premium apparel brand, and Topshop & Topman, a UK based high-end apparel brand, mark its debut in the premium segment (upward stretching). Moreover, economies of scale and scope can result only when the scale of production and consumption is large. So Trent is concentrating on reaching wider masses and creating value positioning in the minds of its customers.

To wrap it up, TRENT has the potential to bring its competitors down. With its immense financial muscle to undertake any possible venture and the unmatchable guidance and vision of Simone Tata, once called the “Cosmetic Czarina of India”, Trent has all that it takes to become the Best Retail Brand in India.