Thick Brands

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OPINION 2 Motorola needs a solution, not an escape hatch Motorola has revealed that it is consideringseiling its handset division.The surprise isn't so much in the restructure; with the company's bleak share performance, it's to be expected that investors like billionaire Carl Icahn will demand change. What isn't entirely clear, however, is whether any mobile phone rival will want a piece of Motorola, or if the company will fall into the hands of a private equity firm. Could this be the end lor Moto? For all its troubles. Motorola has a sizeable presence in the US market that you'd assume would be appealing to a Korean, Japanese or Chinese brand with global ambitions. Yet some weeks on and no Asian brand has expressed interest in some sort of deal. Of the likclysuitors — LG.Samsung.Sony Ericsson and Lenovo — none appear inclined to take on the risk of acquiring Motorola's business, despite its strength in America (where it controlsaboutathirdof the mobile phone market). Who can blame them? After all, the deal isn't necessarily a case of one plus one making two. AnAsian mobile phone brand with an eye on American consumers may not necessarily inherit Motorola's US market share because of the strong influence

PERSPECTIVE

wielded by mobile service providers there. Moreover.a takeover and the restructuring that follows could not only be costly, but also dangerous if BenQ's experience is anything to go by. And who can forget BenQ? Its story was the most high-profile failure by an Asian brand to acquire a struggling Western mobile company.The brand itself was making headway until it tried to jump-start its international push by buying the struggling handset unit of Siemens.The deal, sadly, proved too rich and theTaiwanese company eventually went bankrupt. The more established Asian brands may find increasing marketing spend an easier way of boosting presence without the potential hazards. Which leaves smaller Chinese hardware makers such as Huawei (budding international brands). Likely suitors, yes. but many of the mainland mobile handset makers are struggling themselves and there are hints that even Lenovo (China's largest with nearly six per cent share) may quit the handset business altogether. Could they afford the hefty US$8billionorso price tagslapped on Moto? Even if they could, it won't be easy to turn around such a big ship, and whoever comes on board will struggle in the initial stages. But don't expect that to happen too soon. Motorola's results in Q4 weren't great, but not terrible. With more losses expected, a

potential buyer is likely to wait a quarter or two. It really is a sad state for a brand that once astonished the industry with its cutting-edge product lines. Motorola was the pioneer in the low-end space and rolled out Razr at a time when no one else was doing thin.at least not well. Moto's advertising in China has been both award-winning and effective, thanks to a partnership with Ogilvy. But the brand has struggled to offer a wider portfolio tor the extremely competitive mid- to high-end segments, and seems to have lost touch with the consumer. None of the successors to Razr have been original enough to persuade consumers. who are increasingly demanding convergence of devices, lo trade in their Nokia or Samsung. It almost seems that Motorola has staked long-term success on shortterm gains — a Wall Street mentality that's decidedly different to how Nokia tackles the market. Moto needs help. But stopping out of an industry it once — nol so long ago — dominated isn't the only answer. It still owns much of the mobile spaceintelleetualproperty —and that isa strongbase to work from and to work with. What the brand needs is leadership that's more strategic, consumer-focused andmarketingsavvy.

No Asian brand has expressed interest... Wiio can biame them? Thedeaiisnta caseofonepius onemaiûngtwo

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Brands must hecome thick' in order to be sticky A couple of weeks back,I saw an advertisement for Quaker Oats, recently launched in India, extolling its nutritional value. I had an epiphany of sorts (something! usually try to avoid, as this is the kind of thing that only American moviestarsdo)anditwasthis —brands like Quaker Oats no longer have any genuine reason for being. 1 don't mean tosuggest that itsdemise is imminent; simply that the produet has outlived its purpose as the world which created and valued this kind of brand is fast disappearing. Why does India need a Quaker Oats tocóme and tell us about the virtues of oats? I can understand why India needs an iPhone or even Nike, for they bring a unique piece of culture along with them. But how can a company sell a commodity to the world and grow so large and profitable? What makes any company selling something undifferentiated in a generic way better suited to handle local needs and tastes than a local company? The only difference between a multinational and a local company is money and the knowledge that consumers will eventually fall in line, country after country. There was a time when marketing skills were a differentiator; today that is no longer the case.

Everyone has the same kind of people, uses the same kind of research and hires the same kind of agencies.The advantages of being a multinational are slowly being peeled away, especially in cases where product innovation is slow and brands are thin. Gilbert Ryle used the idea of'thick' and "thin' to distinguish between those descriptions that had layers of contextual meaning and those that didn't. A lot of multinational FMCG brands are wafer-thin when it comes to packing in meaning. If Quaker Oats is about an ideology, a belief system or a way of life that makes sense to the Indian consumer, then it will thrive here. But if it is about oats what do — which is, to provide nutrition and improve health — then we have a hundred better options. We have traditional foods that do just as well, we use oats in any case in traditional meals and we have local companies which today have the skill and the finaneial wherewithal to build brands. The trouble with a lot of FMCG brands is that they are rooted in the assumptions of the 20th century.The idea that powerful brands could be built worldwide merely by offering a good quality product with the help of positioning (which really meant that by em-

phasising one aspect of an existing product attribute or benefit, the consumer would be persuaded to buy) made sense once. The consumer saw the idea of a product as something essentially immobile; the brand was a temple built to this deity. By putting moisturiser in soap and talking about soft skin. Dove has built a powerful global franchise — and it has thus stayed relevant by becoming a "thicker* brand and moving beyond the first level ofmeaningdelivery. The truth is that the idea of the product has been redefined thanks tochanging technology. Anything manmade needs relentless mutability in today's world. FMCG products just cannot keep pace: they are unable to make us view life through a constantly refracting lens. Traditional advantages like financial muscle, distribution, reach and advertising spend are all being blunted. Venture capitalists are pleading with people to take their money, the internet has redefined the idea of distribution and, more importantly, of scale — no brand, however big. can forcibly dominate the worldwide web, no matter how much it spends. Santosh Desai, CEO, Future Brands