Arun,
the flagship brand of Hatsun Agro Products (HAP), an established brand for more
than 10 years, has introduced a new range of ice creams under the brand name
‘Ibaco'. The existing ‘Arun Unlimited' brand (store) would also be re-branded
to ‘Ibaco'. The name Ibaco was chosen by Mr C. Sathyan, Executive Director of
Hatsun, son of Chairman & Managing Director Mr R. G.Chandra Mogan. The name
Ibaco sounds different in the Indian context and it means Richness which most
of the people don’t know.
Ibaco
is not a novel name. There exists a consultancy company named IBACO which
stands for Investment Business and Commercial. The nature of their business is
to provide total integrated technical and commercial service in petrochemical
and chemical industry to do investment in Arab countries.
HAP
is now having 50 outlets under the brand name Arun Unlimited in Tamil Nadu.
Their plan is to open 20 more Ibaco outlets in Tamil Nadu by next month (March
2012) making the total to 70 Ibaco stores. They want to be a pan-India brand
and have planned to invest Rs 50 crore to develop 250 Ibaco outlets across
India including 70 in Tamilnadu. An Ibaco store will require Rs 20 lakh
investments.
Ice
cream business, including ice cream and parlour account for Rs 95 crore 2011
which is 7 – 8 % of its total revenue.
Ice cream parlour alone contributed to about Rs 10 crore. This means that also
a very small percentage of revenue comes from parlour sales.
I
believe that this is a right move from HAP. Their existing outlets are situated
in places like Express Avenue, Spencer’s Plaza, etc. in Chennai. It is clear
that their target customers are upper middle income &premium customers. By
the way, existing stores are not meeting their customer needs and people who are
coming for ice cream parlour are not only expecting tasty ice cream but more.
Premium customers have the perception that funky or odd brand name will give
them the right experience like Baskin-Robbins. Brand Arun looks regional,
traditional and simple; this will not give them any benefit when they target
premium customers across India. Middle income customers will buy Arun ice cream
even from the multi brand stores, but the customers coming for parlours are
different. They are expecting a good experience than taste.
There
are less Indian players in the premium ice cream segment. This move wills give HAP
an early entrant advantage. So brand Ibaco will be the right solution for their
brand and customer needs.
Do
you think so?
Hi Srini,
ReplyDeleteI don't think this is the right time to do this rebranding exercise, because they are slowly (through their TV ads), making an effort to showcase their rural impact as a home-grown local brand. This is for Aarokya milk.
The next issue is to see why they were short-sighted in suddenly closing the Arun Unlimited stores (that were very recently opened) and starting another new series of stores. Do you think they could have had both formats in ice cream parlour?
Hi Mr.GNR sir,
ReplyDeleteThe case of Aarokya milk is different. Milk is essential product but ice creams are not like that. They can use their rural image to build Aarokya brand but the same strategy will not work for ice cream. Customer perception differs according to the product.
Coming to the next point,they want to target upper middle class and premium customers. if they will come up with two different brands for same kind of customers, will get confused. This will dissolve brand image.
I think Ibaco will clearly says : This is a brand for upper middle class and premium customers those who expect experience than taste..
Hi Srini,
ReplyDeleteMy view is that they can change their brand name because they are being in market for 10 years which shows them as traditional,regional and simple, re branding may focus their brand personality as young, fun and modern.
Another reason is that target customers of Ice cream parlour being youth, this kind of change will make them more attractive
Hi preethi
ReplyDeleteI believe Brand name is too important to attract upper middle income customers. Now a days customers are too brand consious. Arun stores are located in mall but still not able to attract target customers because of thier traditinal look and regional name. They want to show the premium image to target people
thats why they coming with funky name like this.
Hi anitha
ReplyDeleteThis rebranding exercise will attract youth too. Adding to your point, new store will give good experience to youth.
In my opinion
ReplyDeleteRebranding the Arun ice cream is to push their level up from being a regional player to national player. The Name “Ibaco” will be better than the name” Arun Icecreams” as hatsun is expanding their business and also to face the competition from the foreign players like Haagen Dazs, Movenpick (Nestle) and Baskin Robbins in future.
hi Devi
DeleteThis is valid point. Rebranding will help Arun to attract new customers and also compete leading brands as you mentioned.
Hi Srini,
ReplyDeleteI think we have to wait till the entire branding exercise to get over and its too early to get into a conclusion, Since they are good at roping in foreign strategists but products failing in market. One such example is a try to entering into ready to eat curd rice but they got a beat.
Hi Sidhesh
ReplyDeleteI am not concluding anything,Customers only will conclude whether this right or wrong, i hope it will happen in another 3 or 4 months. i am just shared my views regarding rebranding of Arun.
Then, i accepted your second point regarding failure of ready to eat curd rice. But that is new product, this case is not like that.
What could be the investment for arun icecream parlour
ReplyDeleteMost wonderfull Article, Thanks for sharing!
ReplyDeleteTop 10 Ice Cream Brands In India – Best Selling Ice Creams