Wrigley Launches New Non-Gum Brand in Russia

Posted by Barry Silverstein

Wrigley is the world's leading chewing gum maker. Its Orbit brand is number five on Euromonitor's list of top-selling candies and gums in 25 countries. But in Russia, Orbit is number one,  according to BusinessWeek. So Wrigley, purchased by Mars in 2008, is making a play for a bigger share of the Russian market.

For Russians, Wrigley is introducing new Orbit flavors, but it is also taking somewhat of a brand risk. BusinessWeek reports that the company has just begun marketing "individually wrapped snacks that look like baked flat breads or crackers and come in a variety of flavors." Erwin Hinteregger, Wrigley's director of emerging business territories, said the "croutons" were developed by the company's Russian unit to fit the country's unique snack demands, and it's unlikely that the product will be marketed elsewhere.

Croutons from Wrigley? What's next, chocolates? Wrigley acquired chocolate-maker A. Korkunov in 2007, and now sells them in Russia.

Does this mark the beginning of a strategy to develop country-specific brands that move away from Wrigley's gum brands? Very possibly. Hinteregger confirms that Wrigley's China unit, with an eye on its Russian counterpart, is now working on new products for that market.

Hermes launches new brand in China – Shang Xia

French fashion label Hermes on Thursday opened its first boutique for its new brand Shang Xia – a bold strategy that highlights China’s growing importance to luxury goods companies.
“We are very moved — this is like the birth of a child,” Hermes chief executive Patrick Thomas said ahead of the inauguration of the shop in a high-end shopping mall in Shanghai, China’s most cosmopolitan city.
The store, a picture of minimalist chic, offers clothing, home furnishings, shoes and tableware — a collection inspired by tea, and made from traditional Asian materials such as bamboo, cashmere and porcelain.
In front of the store, artisans put their skills on display for the widely anticipated opening, making tea cups enveloped in an intricate web of woven bamboo.
Shang Xia, whose name means “Up Down” in Mandarin, aims to boost what Thomas told AFP last month was “very strong growth” in mainland China, Hong Kong, Macau and Taiwan — collectively now the company’s “principal market.”
“The idea is to bring the Hermes philosophy to China, to create a Chinese Hermes,” Thomas told AFP

Levi’s Launching New Brand for China

Set to launch this summer, iconic denim experts Levi’s have created a new brand aimed at the Chinese market. The initial plan is to expand the number of stores in China from 20 to a whopping 1,000 by 2015. It is rumoured that pricing will fall slightly under that which one would expect from Levi’s, with jeans retailing at around $50. For more info check this article from WWD:

Classic Americana purveyor Levi Strauss & Co. is heralding the arrival of the young mainstream Chinese consumer by launching a new brand this summer in China — its first unveiled on foreign soil.

Befitting the new label’s vast home turf, the San Francisco-based denim company has ambitious plans to grow the line’s store base in China to 1,000 by 2015 from 20 this year. Levi Strauss wouldn’t disclose the name of the brand, which is likely to be priced slightly below traditional Levi’s and is being called Standard internally, but revealed it would be in English and make its Levi’s pedigree apparent.

“Although we are focused on China, our hope is that this brand will become one of our big brands,” said Tod Gimbel, senior director of corporate affairs at Levi Strauss’ Asia-Pacific division.

The denim giant joins Hermès International in the push to develop a brand for China. The luxury firm has taken a majority stake in Shanghai-based Shang Xia, which is creating, manufacturing and will sell a collection of clothing, accessories, furniture and other lifestyle products using Chinese raw materials and artisanal know-how. The first Shang Xia store is to open this year in Shanghai.

Levi Strauss’ goal is to develop the new brand’s store base with an even balance of franchised units and company-owned units. The stores are expected to average about 1,000 square feet, which is similar in size to existing Levi’s stores in China. Shop-in-shops within department stores will showcase the brand, as well.

Like Levi’s other stores in China, the new brand’s shops will offer a “top-to-bottom experience,” Gimbel said, with an array of merchandise for men and women. The denim will feature Levi’s signature five-pocket design, but will have a “distinct style and flair,” he said. “There will still be that Levi Strauss & Co. authentic denim craftsmanship, but it will have its unique identity.”

Levi Strauss has been among the most successful American apparel brands in China, though it had a rocky beginning in the country. In 1993, the company halted manufacturing in China because of human rights concerns. Production resumed five years later and Levi’s stores launched about 10 years ago. Now, Levi’s has 620 branded retail locations in mainland China and boasts a considerable presence in the nation’s major bustling retail districts.

Starbucks introduces new coffee brand in China

Starbucks has launched a new brand of coffee grown by farmers in China and said it hopes to bring the blend to stores all over the world.The Seattle-based company, which has been closing stores in the U.S. to cut costs, said its new blend is made in China’s southwestern province of Yunnan, bordering Vietnam, Laos and Myanmar.

“Our intention is to work with the officials and the farmers in Yunnan province to bring Chinese coffee not (only) to China, but Chinese coffee to the world,” Martin Coles, president of Starbucks Coffee International, told The Associated Press.

“Ultimately I’d love to see our coffees from China featured on the shelves of every one of our stores in 49 countries around the world,” he said. A launch date for foreign distribution hasn’t been announced and will depend on how soon farmers can grow enough beans to ensure local and overseas supply.

The company has been working for three years with farmers and officials in the province before the launch, and the coffee will initially combine arabica beans from Latin America and the Asia-Pacific with local Yunnan beans. But Coles said they hope to develop a source of superpremium arabica coffee from the province, expanding it to new brand offerings in China, and then internationally.

The new blend will be called “South of the Clouds,” the meaning of Yunnan in Chinese.

Wang Jinlong, president of Starbucks for greater China, which includes Taiwan, Hong Kong and Macau, said the company wants to make its coffee from China as well-known and as high-quality as Chinese tea.

GM Launches New Brand In China

aimed especially at the lower income and first time car buyers. The brand “Baojun” is a product of a joint venture of GM and Chinese manufacturers SAIC and Wuling, the latter was formed to produce micro-vans.
Since decades, GM is known for its multi brand strategy in the US; although recently it has been seen axing brands which had become slow sellers in the US market namely Pontiac and Saturn. But the automotive giant is trying a similar approach at the Chinese market with the introduction of the Baojun brand. The new brand will compliment other GM brands sold in China like Buick and Chevrolet where Chevrolet is now GM’s fastest growing mainstream brand in China.
There is a wide range of small vehicles and cars lined up to be sold under the new brand in the near future. To start off, Baojun’s first offering will be a low-frill midsize sedan which will be loosely based on the Buick Excelle sedan in China which itself is based on the Chevrolet Cruze sedan sold in India. There are no official photos or any spy pictures available of this new sedan. The vehicle has been developed with help of GM and SAIC’s Pan Asia Technical Automotive Center (PATAC) joint venture in Shanghai.
With GM being very bullish on India as well with Wuling, these low cost cars could be headed India’s way. This may give GM the arsenal it needs to go after the Indigo’s and Logan’s of the world and even at the Manza at a stretch. More updates to follow.

Swedish Match to launch new brands in the US

The Wall Street Journal wrote that smokeless-tobacco giant Swedish Match AB, the dominant maker of snus in Scandinavia, plans to begin a major push into the category in the U.S. in the coming months.

"We think snus in the U.S. is going to be a big category," said Clark Darrah, vice president for next-generation products for Swedish Match's U.S. division. "Globally, this is the biggest opportunity that we have."

The company is unveiling two new versions of its General brand in the U.S., Nordic Mint and Classic Blend.

The company is also sharply expanding retail distribution starting this month. Initial markets will be Chicago, Dallas and Philadelphia, the WSJ said.

Snus account for about 2.5% of smokeless-tobacco sales in the United States.

New Brands to exploit Iconix brands in Latin America

Iconix Brand Group Inc announced that it has entered into a joint venture with New Brands Americas LLC ("New Brands") to further develop and exploit the Iconix brands in Latin America. New Brands is a member of The Falic Group, a Florida based consortium owned and operated by Simon, Jerome and Leon Falic.

The joint venture company, Iconix Latin America, will focus on maximizing royalty revenue via existing and new licensing agreements for the Iconix portfolio of brands in Mexico, Central America, South America, and the Caribbean, which today number 16. In exchange for $6 million plus other commitments, New Brands received a 50% interest in the joint venture, which will also have an option to purchase rights to future brands acquired by Iconix.

Neil Cole, Chairman and CEO of Iconix, commented, "We are pleased to announce the formation of Iconix Latin America with The Falic Group. The Falic brothers have extensive expertise and contacts in the Latin American market. Having locally based partners with knowledge of the different cultures and markets that comprise this region will significantly accelerate the growth of our brands throughout this territory and help us maximize revenue from our existing licensing base in Latin America. Different from our joint venture in China, Iconix Latin America will be run as a traditional licensing business with near-term revenue opportunity."

Leon Falic, President of New Brands, commented, "This exciting venture will enable us to capitalize on the ever growing Latin American market for proven U.S. brands. Because of recent demographic changes in Latin America, we feel that this a unique opportunity to bring the Iconix brands to a thriving new group of consumers there. We are looking forward to working with Neil and his team at Iconix to maximize each brand."

Iconix Latin America is the second international joint venture for Iconix. Iconix China, a Hong Kong company formed by Iconix and Novel Fashion Brands Limited, led by Silas Chou and family, was completed in September 2008 to develop the Iconix brands in Greater China.

Iconix Brand Group Inc owns, licenses and markets a growing portfolio of consumer brands including CANDIE'S, BONGO, BADGLEY MISCHKA, JOE BOXER, RAMPAGE, MUDD, LONDON FOG, MOSSIMO, OCEAN PACIFIC, DANSKIN, ROCA WEAR, CANNON(R), ROYAL VELVET, FIELDCREST, CHARISMA, STARTER and WAVERLY.

New Brands Americas LLC is a member of The Falic Group of companies, which are involved in the retail sale, manufacture and international distribution of luxury goods. The Falic Group owns and operates Duty Free Americas, Inc., the largest duty free retail store operator in the Americas, with over 150 duty free shops located in major international airports and border crossings.

Iconix Brand Group Inc

End of Orange in UK as company seeks new brand

Deutsche Telekom’s T-Mobile and France Telecom’s Orange are merging their UK businesses to create a mobile phone giant with 28.4 million customers and 37% market share making it the number one player in the market.
The promise of the management is “better value, promised expanded network coverage, better network quality and improved customer services”.
Reports say it will offer major customer benefits, including enhanced network quality for 2G and 3G services, providing the platform for unparalleled mobile broadband offers as well as better customer proximity through a larger network of own shops and improved customer services. Sounds great. So what does that mean in branding terms and what “substantial benefits to UK customers” can we expect?
Years ago, I worked on the pitch and launch of O2. At the time, Orange was seen as benchmark for branding excellence in the communications arena.
Times, technology, behaviours of customers and brands have changed a lot since then. It feels like Orange has somehow lost its way in recent years — with the exception of its brilliant and quirky association with film, the network brand somehow feels a little tired, left behind by the massive impact and notable absence of a smart phone.
Now that the merger has been given the green light by EU legislators, both brands have agreed to remain separate for the first 18 months. But they will then drop both existing brand names in favour of a totally new one. Despite this, Orange will need think about how to re-energise its offering as well as the rest of the joint venture in order to compete with the incumbent leader O2.


Unique opportunity 

This thinking time will no doubt be spent wisely as mergers present businesses with a unique opportunity to re-present themselves to existing customers, present themselves to prospective customers, re-motivate staff — those left — and create more value for shareholders.
The problem with most mergers from a brand perspective is that they work from the inside; they are concerned with internal issues rather than presenting a new face to their customers.
The important principles this brand should be:
• putting the customer first;
• addressing any issues of the two previous brands that limited their customer appeal;
• re-launching with something bold enough and big enough to get the brand talked about and noticed;
• ensuring that a solid plan exists to support the proposition and deliver against it — not necessarily on day one but it will be vital to manage the expectations of the customer.
Creating a new, combined, brand is more than usually important because this is the opportunity to find out what values and approaches the companies share and an opportunity to define them for the new company.
The solution will set out a visionary appeal but will have to feel true to the merged company. It will have to be properly motivating to the staff.
After such an uncertain, stressful period, people need a flag to rally around; they need something that they can be proud of.
The new brand will also, of course, have to be properly motivating to the customers, existing and prospective. They are not interested in the merger, and won’t notice until told.
And it will be more than usually difficult because there are two sets of people and two sets of cultures that have to find common, motivating ground between them. Each company comes to the table with its own ambitions and values — not to mention communication ideas — which it may find difficult to share, change or compromise.
Moreover, the existing brand architectures may not, of course, represent the future architecture of the company.
Mergers are a very odd time in the life of a company, and of its managers, because they are devoted to pleasing potential partners and financial investors, rather than customers. It’s not unusual in these situations to reach a brand architecture that’s hugely motivating to those inside the merged company, only to realise that you’ve forgotten about the actual users of the product.
Either way, this is a unique opportunity to reframe the business — and therefore the market — and one that cannot be compromised or watered down because of internal sensitivities.
In branding terms, a merger must be treated as a start-up; this is the one chance that the new company has to set a bold and motivating vision that will inspire both customers and staff. They will have one chance to get it right.
There’s a fundamental question to be asked here though: what business is the company in? What does it actually provide to customers? Is it innovation? Entertainment? Is it connectivity, the ability to talk? Is it the future?
In a complex market like this, where there are multiple products, services and devices and a network bundled together, it’s understandably difficult to narrow things down.
But it’s the branding team’s job to do so, and to do it with a real resonance for the customer. GTB 

Mars Food is set to unveil its first new brand in the UK in nine years

PurAsia is a new brand in Asian cuisine developed to “inject excitement” in to the GBP594.5m (US$1.2bn) wet cooking sauce category.

The range consists of a set of three blends of spices, herbs and pastes, assorted to “help cooks recreate their favourite restaurant Asian meals at home in under thirty minutes”, the company said today (21 July).

The product comes in six varieties inspired by cuisine from India, Thailand and China.

Paul Aikens, marketing director for Mars Food, said: “With meal preparation time averaging at 41 minutes and a desire to produce restaurant quality Asian meals at home, our product will help achieve this in under 30 minutes. Because the meal involves a level of consumer participation there is a greater sense of fulfilment and engagement for the cook.”The PurAsia range consists of six variants: Royal Korma, Tikka Masala, Thai Green Curry, Thai Red Curry, Szechuan and Black Bean. It will be priced at GBP3.29 and available exclusively from Tesco for the first nine months.

The launch will be supported by a GBP1m marketing and in-store campaign from July onwards which will include: advertising on Tesco.com, the clubcard statements, food club magazine and on in-store TV screens.

A national print and online advertising campaign will take place in September.

Before that time the company doesn’t disclose any information on the packaging and visual look of the new range. The brand’s site www.gastrosexual.com is still under construction.

Davidoff Changes the Design

Imperial Tobacco is launching Davidoff Cigarettes packs with a refreshed design. Davidoff Cigarettes is second to none when it comes to the ultimate smoking experience and the passion for the good things in life.The new pack design is the unmistakable symbol of today´s cosmopolitan style with its minimalist new look, selected materials, unique colouring and vibrant pearlescent finishing.

A brush steel band dynamically frames the pack, drawing attention to its extraordinary bevel edge form.

Davidoff Cigarettes new designed pack has been launched officially at TWFA in Cannes and been celebrated at a cocktail evening on the terrace of the Majestic Hotel on October 20th.
Hosted by Imperial Tobacco´s Graham Bolt (Regional Director Travel Retail, Global Duty Free & the Americas), a unique mix of high profiles as the likes of Claus and Gunnar Heinemann, Julian Diaz (Dufry) as well as Maxime and Cyril Godet did not want to miss the opportunity to be present when the new Davidoff Cigarettes design was revealed.

Davidoff Cigarettes new design, the ultimate fashion accessory will see its global rollout starting early 2010.

Wrigley to Launch New 5 Gum in UK

The marketing lifecycle is about to kick off here in the UK with a heavyweight branding campaign designed to encourage product sampling. Let’s look at how the product was launched in the US, taken from the Wrigley corporate site:

2007 In March 2007, Wrigley introduced U.S. consumers to 5, the most exciting development in sugar-free stick gum since the launch of Extra® more than 20 years earlier.
2007 In August 2007, 5 gum unveiled its marketing campaign titled ‘Stimulate Your Senses.’ The advertising spots described “what it feels like to chew 5 gum.” Set against an industrial, futuristic backdrop, the cooling, warming and tingling sensations created by 5 gum flavors Cobalt,
Flare and Rain are expressed through dramatically stimulating visuals and sounds. The campaign also strongly leveraged magazine, cinema and online media advertising to showcase our new brand.
2008 In 2008, 5 brand launched two new fruit gum experiences. Lush gum provides a crisp tropical sensation and Elixir gum is a mouthwatering berry sensation.
2009 5 gum takes it to the next level with unique, game-changing flavor experiences. Solstice, a warm and cool winter, and Zing, a sour to sweet bubble, are new-to-world flavor transitioning experiences.
Do check out the 5 Gum YouTube channel for examples of the TV/Cinema creative, but in this post I’d like to review the packaging, which I believe is a point of difference that will give the product luxury status.

So to begin with, we’re starting with an initial three flavours: Cobalt – a cooling peppermint; Electro – a tingling spearmint and Pulse – a crisp tropical. Packs will reportedly go on sale at £1.50 RRP, to reflect that they are a considered rather than impulse purchase.

I’ll be looking at Pulse – the tropical flavour, which comes with little speckles of sharp citric stuff that actually gets your mouth watering when you first

Royal Enfield zeroes in on TN, Andhra for new base

Makers of iconic bullet motorcycles Royal Enfield Motors, which has been facing capacity constraints to meet the demand growth, are likely to set up a new manufacturing unit near Chennai. The company is reported to have finalised a location for the proposed green-field project and the production unit, its second factory, is likely to come up at the Oragadam automobile corridor here.
The company has been evaluating sites in both Tamil Nadu and Andhra Pradesh to set up its second Bullet manufacturing unit. “We are very confident that Royal Enfield will remain in Tamil Nadu and will not go to any other place for its second plant,” a top state official told Financial Chronicle.
Royal Enfield, part of Eicher Motors, is reported to have committed a total investment in the range of Rs 300-350 crore over a period of time for the project. However, it is expected to invest Rs 150-200 crore initially in establishing the Bullet production unit, which may come up over 50-60 acre land area near Oragadam. The proposed plant will be bigger than the existing one. “We are in discussion with the state government and we hope to finalise things in about 10 days,” a top Eicher official said.
Royal Enfield has been facing production constraints to meet the demand growth for its motorcycles. Though the company has been gradually ramping up the production capacity at its Thiruvottiyur plant, near Chennai, the waiting period for its products continues to be very long. It has over six months waiting list in most of the models. The company has now improved its supplies significantly to over 6,000 units a month during the January-March 2011 quarter from about 4,500 last year. It hopes to achieve a monthly run rate of over 6,500 by the second half of this year as the order book continues to be strong.
As per the proposed expansion, Royal Enfield intends to ramp up the capacity with the establishment of new plant to 12,000 per month by the end of 2012.
Royal Enfield has expanded its presence from North America to Europe and Japan to Australia over the past five years. In 2010, UK ranked it among the top 10 selling motorcycle brands in the 125-500 cc category.
RELATED ARTICLES

IMFL maker Tilaknagar Industries to focus on AP market

HYDERABAD: Tilaknagar Industries Ltd (TI), a leading Indian Made Foreign Liquor (IMFL) manufacturer, to focus on Andhra Pradesh market even as it gets ready to launch seven new liquor brands with an aim to enter into new markets in the country.

The company rolled out Duschess VSOP brandy in the state recently and would bring in some brands.

In a statement, the company said it would launch four new whiskies, two varieties brandy and one rum brand in the market. The new launches would be followed by re-launch of two existing brands with new blends and attractive packaging.

“The multiple brand launch marks a new phase of growth for TI and forms part of its plan to bring to the fore a number of brands catering to different segments across the categories of brandy, whisky, rum, vodka and gin. TI plans to achieve milestones this year through the existing as well as new products in the portfolio,” said Amit Dahanukar, Chairman and Managing Director of the company.

A key player in the South India, TI’s flagship brand Mansion House Brandy leads the market in its segment across various markets. “With a market share of 56 per cent in Andhra Pradesh, 78 per cent in Kerala, 97 per cent in Karnataka, 42 per cent in Tamil Nadu, 78 in Pondicherry and almost 100 per cent in Goa, Mansion House Brandy enjoys clear leadership position. With the new brands, we hope to consolidate our position in the South and foray into newer markets, especially in the West and the North, and also add to our volumes,” stated Raja Mukherjee, General Manager (Sales and Marketing). 

Daimler to launch new brand in India

The world's largest truck maker Daimler on Sunday said it will introduce a range of trucks in 6-49 tonnes category under a completely new brand for its proposed entry into India's commercial vehicle market in 2012. The company, which is investing Rs 4,400 crore through its wholly-owned


subsidiary - Daimler India Commercial Vehicles - for a new facility at Oragadam in Tamil Nadu, is planning to increase its headcount by over five-fold to 3,000 and open 20 dealerships in the next two years.
"We will have our own unique badge (for the vehicles)... Completely designed for India... It will be a new brand," Daimler India Commercial Vehicles (DICV) Vice President (Marketing, Sales & After Sales) VRV Sriprasad told PTI.

He, however, declined to give details about the new brand saying the finalisation is yet to take place.

Globally, Daimler's truck brands include Mercedes-Benz, Freightliner, Fuso, Western Star, and Detroit Diesel.

Asked about the products to be introduced in India, he said: "Initially, we will introduce vehicles in the 25 tonne category during the second quarter of 2012, and within 18 months of the launch, we will introduce vehicles in all the 6-49 tonnes categories."

The German company will roll out the vehicles from 15 platforms, coming from its group firm Mercedes and Mitsubishi Fuso's stable. Daimler AG holds 85 per cent stake in Japanese auto giant Mitsubishi Fuso Truck and Bus Corporation.

"The 25 tonne and above vehicles would be on Benz platform, while 6-16 tonne products will be on Fuso platform," Sriprasad said, adding DICV is currently testing prototypes of the vehicles and trial production will begin by early 2012.

The company is aiming to have localisation of over 80 per cent to make the products price competitive.

"All the products exist in Daimler's portfolio, but these are redesigned to suit the Indian conditions," he added.

On the workforce, Sriprasad said DICV currently has about 600 people on its rolls. "By the time our plant will be ready, we will have more than 3,000 employees."

In order to have a nationwide presence, the company will aggressively expand dealership networks and set up workshops over the next four years.

"More than 85 per cent of the industry sales come from 73 prime locations in the country and DICV has categorically listed the points where it needs to have a presence. We will have 20 dealer partners by 2012," Sriprasad said, adding six outlets will be opened as a pilot project next year.

He said the target is to cover all the 73 locations and to have 25 service points by 2014. "The first dealer partner will open its showroom in Chennai and we will sign the agreement shortly."

Futurebrands presents Mohena the new Lingerie & Nightwear brand in India

Mumbai, Maharashtra, October 23, 2009 /India PRwire/ -- Futurebrands, a specialist subsidiary of Pantaloon Retail ( India) Limited, with a portfolio of brands in apparel, FMCG , home durables categories has announced the launch of a new brand in the lingerie and nightwear category – Mohena , in the Indian market.

Mohena- a lingerie and nightwear brand that is specially designed for the Indian woman aims to redefine style and comfort in Indian lingerie market.

Explaining Mohena brand conception, Mr. Atulit Saxena, COO-Brands, Futurebrands Ltd, said, “Our reading of Indian woman established her need to ‘express herself with comfort’, to drop the tag of ‘traditional’,� and her growing desire to ‘celebrate comfort and freedom in contemporary Indian context’.

In short, Mohena ‘makes her comfort appealing’ in an Indian way amidst western mannequin world.”

Mohena’s designs are an ode to the inimitable femininity of Indian women and celebrate the Indian woman’s body and her choice in intimate wear.� A wide array of structured lingerie available across many sizes will help serve as the core product that a woman can be sure of finding comfort in, on a daily basis while feeling her stylish best. The focus on nightwear has been to cater to the Indian preference by way of colours, fabrics, silhouettes and surface ornamentation.

Commented Mr. Jaydeep Shetty, Head-New Business Development, Future Group, “Mohena has a range of intimate wear which captures Indian femininity not only in design motifs, but also through the architecture of the product, through ease-breathing fabrics and fits suited to the Indian woman. With Mohena, we aim to create a brand that is reminiscent of the timeless portrayal of the Indian female form and that pays tribute to her beauty.”

Mohena is priced strategically in the range of Rs. 299/- to Rs. 699/- for lingerie and Rs. 449/- to 799/- for nightwear. . Designed in India, Mohena is manufactured at world-class factories for the world best quality to offer comfort and style. Currently, Mohena will be available at the leading Pantaloons and Central Stores in all the major cities in India. In the product roll-out strategy, the brand will first make its presence in Mumbai, Delhi, Bangalore, Kolkata, Pune, Hyderabad and smaller cities like Siliguri, Guwahati, Rajkot & Bhubhaneshwar to name a few.

“We designed Mohena with a different mindset.� Our studies showed that Indian women were not adequately satisfied with the choices they had presently and there was a market void of a brand that can understand their specific needs. We have introduced Mohena keeping in mind that Indian women want style, comfort and an element of durability in products but at affordable prices.� We hope to create our own customer base through the product offerings of Mohena”, says Mr. Shetty.

Mohena expects to yield revenues of Rs. 7-8 crores in the first full year of operations and then double it each year in the next two years. With five products (three nightwear & 2 lingerie) launched in the market to begin with, Mohena will be a Rs. 20-25 crores brand by end of the third year of operations (by 2012) and penetrate 20% of the mass premium market in the main metros over the next 3 years.


Notes to Editor

About Futurebrands:

Futurebrands, a subsidiary of Pantaloon Retail ( India) Limited, is India’s first Brand IPR company with a portfolio of 20 brands across apparels, FMCG and home durables categories. The total brands’ net sales was Rs. 660 cr in 2008-09 at 40% growth. The company operates on the brand licensing model with a mandate to create, grow and protect the asset value of its brand portfolio. It also offers specialist services through Futurebrands Insights, Futurebrands Consulting, Futurebrands Partnering to companies outside Future Group.

For more details log on to www.futurebrands.co.in

International Fashion Brands in India – Perspective 2010

After many deliberations, the well-known global brand Donna Karan New York set foot in the Indian market in 2009 through an agreement with DLF Brands to set up exclusive DKNY and DKNY Jeans stores India. The brand is also reported to have signed a worldwide licensing agreement with S Kumars Nationwide Ltd to design, manufacture and retail DKNY menswear in certain specific countries.
Second Chances
Amongst the international brands that have recently entered the Indian market, a few are on their second or even third attempt at the market.
For instance, Diesel BV initially signed a joint venture agreement in 2007 with Arvind Mills, and the partnership intended opening 15 stores by 2010. However, by the middle of 2008, the relationship ended with mutual consent, as Arvind reduced its emphasis on retailing international brands within the country. Within a few months of the ending of this relationship, Diesel signed a joint venture with Reliance Brands for a launch scheduled for 2010. Both partners seem to be strategically aligned with a common goal as the international iconic denim brand wants to take on the Indian market full throttle and the Indian counterpart has indicated that it wants to rapidly build its portfolio of Indian and foreign brands in the premium to luxury segments across apparel, footwear and lifestyle segments.
Similarly, Miss Sixty entered India in 2007 through a franchisee agreement with Indus Clothing. It switched to a joint venture with Reliance Brands in the same year but the partnership was called off in 2008, despite plans to open more than 50 stores in the first three years of operations. Miss Sixty has finally entered India through a franchise agreement with a manufacturer of women’s footwear and accessories. The company has currently introduced only shoes and accessories category and is looking at potential partners for its label Energie and girls’ range Killah.
Other brands that have re-entered the Indian market include Germany-based Lerros whose first presence in India was back in mid-1990s. The brand re-entered the market in 2008 through own brand stores and is growing its presence through this route as well as through multi-brand stores.
Oshkosh B’gosh is another brand that had entered India in mid 1990s, through a licensing agreement with Delhi based buying house, Elanco. The licensee found the childrenswear market hard to crack, and closed down. In 2008, Oshkosh re-entered the Indian market through a licensing partnership with Planet Retail and is now available through shop-in-shop counters at Debenhams stores. Reports suggest that it may consider setting up exclusive brand outlets.
During the turbulence of 2008 and 2009, a few brands also exited the market. Some of them were possibly due to misplaced expectations initially about the size of the market or about the pace of change in consumer buying habits. Others were due to a failure either on the part of the brand or its Indian partners (or both) to fully understand what needed to be done to be successful in the Indian market. Whatever the reason, the principals or their partners in the country decided that the business was under-performing against expectations and for the amount of effort and money being invested, and that it was better to pull the plug.
Some brands that have been pulled out of the Indian market during 2008 and 2009 include Dockers, Gas, Springfield and VNC (Vincci). Gas (Grotto SpA) is reported to remain interested in the market but has not found another partner after its deal with Raymond fell through in 2007 and all dozen of its standalone stores were shut down.
The Scottish brand Pringle and its Indian licensee did not renew their agreement upon its expiry. The Indian partner has reportedly signed an agreement to launch another international brand in India, while Pringle is said to be looking for new licensee.
The good news is that successful relationships outnumber every exit or break in relationship possibly by a factor of ten. Some of the brands that have sustained are among the early entrants having a presence in India since the late-1980s and 1990s or even earlier. These include Bata, Benetton, adidas, Reebok (now also owned by adidas), Levi Strauss and Pepe. Having grown very aggressively during 2006 and 2007 Reebok quickly became the largest apparel and footwear brand in India, while Benetton and Levi’s are expected to cross the $100-million mark for sales this year.
Entry Strategy & Recent Shifts
As envisaged in Third Eyesight’s report from a year ago, with changing market conditions and a growing confidence in the Indian market, there has been a shift among international brands in the choice of the launch vehicle. While franchising has been the preferred mode of market entry in the recent past for risk-averse brands, more brands today demonstrate a long-term commitment to the Indian market, and are choosing to exercise ownership through wholly or partially owned subsidiaries and through joint ventures.
In 2009, we have seen a noticeable shift in favour of joint-ventures as the choice for entry into the market. Even the brands already present are looking to modify the nature of their existing presence in India in order to exert more control over the retail operations, products, supply chain and marketing.
Current Operating Structure
(End 2009)

Brands that changed their operating structures and, in some cases partners, in recent years include VF (Wrangler, Lee etc.), Lee Cooper, Lee, and Louis Vuitton amongst others.
Mothercare, the baby product retailer, which is present through a franchise agreement with Shopper’s Stop has, in addition, recently formed a joint venture with DLF Brands Ltd to enable the expansion through stand-alone stores. Gucci, which had initially entered in 2006 with the Murjani Group as a franchisee, has recently changed over to Luxury Goods Retail, and is now in the process of restructuring the relationship into a joint venture.
VF has also been reported to be looking to license Nautica, Jansport and Kipling to a new partner. Until now, these brands were handled through the joint venture with Arvind Brands. Arvind has increasingly focused on its core business, closed stores and scaled down expansion plans for the international brands.
Burberry that had entered India in 2006 through a franchisee arrangement with Media Star opened two stores under this arrangement. It has now set up a new joint venture with Genesis Colors and plans to open 20 stores across the country.
More recently Esprit has also been reported to have approached Aditya Birla Nuvo to deepen its engagement by moving from its distribution arrangement into joint venture as the international brand sees excellent potential in the Indian market.
Buckling up for 2010
Throughout 2009, the one fact that became clear was that the Indian market was resilient. Now, as the global economic condition stabilizes, confidence levels of brands and retailers in India have also improved.
Several launches are already expected in 2010, and possibly many more are being worked upon. In the following 12 months, consumers can expect to find within India acclaimed brands such as Diesel, Topman, Topshop and the much-anticipated Zara. Many more Italian, British and French brands are examining the market.
Most of the international fashion brands already present in the market are also projecting a cautiously upbeat outlook in their plans, while a few are looking positively bullish.
For example, Pepe, an old player in premium and casual wear segment, has reported plans to grow its retail network further and open 50 more franchise stores by September 2010. Similarly the German fashion brand S. Oliver that entered the Indian market in 2007 is looking to grow significantly. It has already moved from a franchise arrangement with Orientcraft to a joint-venture with the same partner, and has stepped up its above-the-line marketing presence. The brand has recently reported its plans to scale up its retail presence to 77 stores by the end of 2012 while also strengthening its presence through shop-in-shop in multi-branded outlets in high potential markets.
Those international brands that have tasted success have not achieved it by blindly importing business models and formulas from other markets. Most have had to devise a different positioning from their home markets. Some have significantly corrected pricing and fine-tuned the product offering since they first launched. These include The Body Shop which decreased its prices by up to 30% this year, and Marks & Spencer which reduced prices by 20-40%. Others are unearthing new segments to grow into; for instance, Puma and Lacoste are now seriously targeting womenswear as a growth market.
On the operational side, the good news for retailers and brands is that the average real estate costs have reduced significantly, although marquee locations remain high. In several locations lease models have also moved from only fixed rent to some form of revenue sharing arrangement with the landlord. And, while the sector has seen some employee turmoil as many non-retail executives who came into the business in the last 5-7 years have returned to other sectors, employee salary expectations are also more realistic.
As customer footfall and conversions pick up, international brands are also shoring up their foundations for future expansion in terms of better processes and systems, closer understanding of the market, and nurturing talent within their team. Third Eyesight’s recent work with international brands’ business units in India highlights the international players’ concern with ensuring a consistent brand message, improved organizational capabilities right down to front-line staff, and focus on unit productivity (per store and per employee).
We may yet see a few more exits, and possibly some more relationships being reshuffled and partners being changed. However, all things considered, we can look forward to a net increase in the number of international brands in the country.
The Indian consumer is certainly demonstrating more optimism and as far as there are no major unforeseen global or domestic shocks, this optimism should translate into a healthier business outlook for international brands as well. According to early signs, 2010 could be an excellent curtain-raiser for a new decade of growth for international fashion brands in India.
[The 2009 report is available here: “International Fashion Brands - India Entry Strategies”]
(c) 2010, Third Eyesight

The most significant factors to consider while launching a new apparel brand in India

There is a buzz in the retail industry, this buzz is created by lots of Indian and foreign manufacturers who want to have their retail presence in India especially by way of launching a new apparel brand. Here are some of the issues they need to address while launching a new apparel brand:


Positioning:
The most important part is the positioning in the Indian consumer mind-space. Smart casual positions are taken in by the brand such as ColorPlus, Dockers and Canary Blue. Design wear are gone with square-1 mall and Kimaya, Kazo and individual designer having their stand alone store. Any positioning below that is lapped up by Zillions of manufacturers. Sports category is gone, with Adidas, Puma and Nike. Does it spell dooms day for the new entrants? Not necessarily, there are still wide open gaps which lie agape between these broad categories and one should start considering those to enter.


Location:
The location is the key to the positioning, it determines and in turns reinforces positioning; in fact, with about 50% of the operational expenses are taken up by the rentals, it has assumed an even more important position. Its a strategic and vital decision, which can make or mar an apparel brand.


Buying vs. Manufacturing:
It is again a very important decision as about 35% of the expenses in a retail operation are taken up by the cost of merchandise. It is even more important for the foreign manufactures as Indian size set is radically different from that elsewhere, say US. There are innumerable problems of fits especially in western women's wear. Then there is that Indian touch and taste with which even the hot selling merchandise in the western country is rejected by the Indian consumer. If one is manufacturing oneself, one can control the quality and expense, which is not, so if one is buying.


Price Point:
It is said that only thing works for Indian consumers is the price-quality equation. Though this statement is a bit exaggerated, nevertheless, price is a very important criterion in the Indian consumer's mind. It denotes the quality, the status or even the worth of consumer for himself/herself or the loved one. So positioning, price and location should reinforce each other to justify the consumer that particular worth.


Pitching/ Promotion:
Its a moot point whether a brand should be pitched as a foreign brand or an Indian brand. There are brands for example Coutons which even when they use Discounts as their selling strategy, use foreign models in their advertisements to reinstate the quality perceptions in the consumer's mind. In general, pitching a brand as a foreign brand (esp. European) evokes a sense of heightened quality in the consumer's mind and justifies the price premium. But of course, and needless to say, promotion should be backed by positioning, store experience, product performance and prices. Its important also, as just giving one insertion per page per month in the four premier fashion magazines in India can easily consume upto Rs. 1 cr.


Discount Policy:
Much has been written about discounts in India, unlike elsewhere discounts pull the greatest of crowds. So one can say that fashion doesnt attract so much an average Indian as discounts. In India, discounts hit the mind. At the same time they take away a part of brand equity. Proper strategies should be made regarding the timing, assortment and promotion for discounts.


Uncertainty about Indian Retail/Mall Boom:
India is still in a transition phase as regards the buying habits of the people, even in Metro cities. One is not sure of the success of the retail infrastructure that is developed for the envisioned retail boom. Rentals are the biggest cause of worries as they take away a substantial part of the profits. Looking at all this, a promoter needs to be cautious about the viability of launching an apparel brand.


Government Policies:
Government policies are the biggest external factor in the success of a retail brand. Right from allowing the entry of the single brand FDI in India to the Taxes collected out of the profits are a function of the government. Unfortunately presence of leftist faction in the centre will raise doubts about government allowing liberal measures for the success of retail brand. There are also underhand dealings from incorporation of the company to customs clearance of the items imported. All these things should be taken in to consideration while launching the brand.