Yesterday, in my post I had suggested that analyzing the new branding strategy adopted by Rajiv Bajaj of
Bajaj Auto would be a great learning experience. I had suggested that we will analyze it from two
perspectives. First, I will discuss it from the point of view of what management theory says.
Positioning refers to how the brand is perceived in the mind of the customer. In other words, what does
the customer think of the brand. Perception of the brand can be created in the mind of the customer or the
customer develops it on its own taking his experience with the brand into consideration. Positioning is
what you do to the mind of the customer and not what you do to the product in the factory.
In simple terms, a brand should mean one and only one thing to the customer. In other words, a brand
can have just one positioning. The positioning that each brand occupies in the mind of the customer has
to be one, preferably unique. So, what Rajiv Bajaj is trying to do is exactly right because today the Bajaj
brand means too many things to too many people. Even in the Rahul Bajaj Group, it means too many
things to too many people, that is, finance, insurance, auto rickshaw, high-end and low-end bikes. As
such, Rajiv is correct when he says that the Bajaj brand has been diluted and stretched beyond what is
The other part of the branding and positioning theory that needs to be discussed is the issue of brand
extension or the use of an umbrella brand. Brand extensions by and large do not work. It has financial
and some marketing logic on its side but not the logic of the mind of the customer. Remember, it is the
mind of the customers where all the marketing battles are lost and won and not in the retail stores. The
financial logic behind adopting brand extension strategy (trade acceptance, consumer acceptance, lower
advertising costs, corporate image) is so overwhelming that it is very difficult to counter it.
Because of the overwhelming financial logic in favor of brand extensions, a large number of companies
adopt the strategy. Colgate has adopted brand extension as a strategy. They have Colgate toothpaste,
Colgate toothbrushes, Colgate Dant Manjan, Colgate powder and more. But if you visit a Kirana shop and
say, “Please give me a Colgate,” the shopkeeper will either hand you Colgate toothpaste or ask you what
do you want (toothpaste, toothbrush or talcum powder). Colgate was positioned as a toothpaste and that
is the positioning that the customers remember in their mind.
I recently noticed that the only TV commercial that ones sees on the TV is of Colgate toothpaste and not
for the brand extension products. This clearly suggests that either the brand extension products of
Colgate are not very successful or they are so popular that they do not need any advertising. I will let you
decide which is the case. However, I am sure that Colgate toothpaste is the highest selling and the most
profitable product under the Colgate brand. The reason-Colgate is positioned in the mind of the customer