Branding Mishaps: Why Fiat Uno failed in India?

Fiat usually positions its cars as ‘reliable and sturdy’ cars for middle-class consumers. This
strategy has worked well for the company especially in emerging markets like Brazil. In
1997, the company entered India through a joint-venture with Premier Automobiles Ltd (to
sell its new car ‘Uno’), which it had successfully partnered with previously (since 1951)
allowing the latter to sell Fiat cars in India that were dominantly used as taxis back then.
The Uno’s pre-launch image appeared to be very fascinating, but Fiat screwed it up by
continuing its position strategy in India carried over from its huge success in South America.
It believed that the similar positioning would work for them considering that both Brazil and
India share similar attributes (both being emerging economies). One of the major problems
was lack of market research.  For a start, their brands’ perception was largely associated with
the cheap taxis that had been selling for several years. These cultural issues needed to be
considered to counter such perception through aggressive advertisements. Apart from this, we
reckon, the company failed to look into the demographic statistics of India. Only about
600000 cars were being sold to a billion people every year. On account of such low sales,
Cars therefore were more of a status symbol in India than a utility option. Therefore they
were wrong to market the car as a reliable workhorse, which obviously led to their failure to
woe the Indian consumer.
When did Fiat learn its mistake?
Just after they re-launched the Palio in a limited edition bearing the autograph of world-class
cricketer Sachin Tendulkar, the management knew they had indeed struck the right chord in
the Indian consumer’s hearts.
What followed was the recent success of its Palio Stile and the latest new products in the
form of, Linea and Punto (priced way higher than its competitors) that gave the company a
great new Brand Image.

The Old 'Fiat' Logo

The company knew it had to build this new image to appeal to the younger generation. The
new ‘Fiat’ logo played its part in building a newer generation Fiat image.
So has the Indian market changed to suit Fiat’s ‘reliable and sturdy’ image?
Not really. The company literally flipped its positioning strategy. Although today the number
of Indian population who can afford a car has more than doubled up since 1997, it is still
minimalistic when compared to the huge population. Check out the table below which
indicates the rise in sales of passenger cars in India. This means that buying a car in India is
still a status symbol than being a utility-based purchase.

Domestic Auotomobiles Sales trends for Passenger Cars

Fiat now targets the higher class market in India focussing on ‘Luxury’ and ‘Style’ rather
than ‘Reliable’ and ‘Sturdy’ image. This helped the company to connect with its consumers
right away. The Consumers said “Well, we want our cars to be associated with ‘high status
and comfort’ ”. Fiat responded, “You got it!! Buy the new Linea or Punto”.
Branding Mishaps: Kellogg’s India Venture a Failure

INDUSTRIES HOLD MORE PROMINENCE THAN A BRAND. Phew!! Many of you must
have been amazed to read this. There’s at least something, if not everything, that is greater
than a Brand’. And I wouldn’t dare to disagree with you! We have been talking a lot about
how a Brand overpowers most other tangible and intangible assets of a business, but this one
comes with an exception.
Today we talk about how the international breakfast industry leader Kellogg Company often
referred to as “Kellogg’s” learnt this the hard way in India. Kellogg’s entered India in 1994 to
introduce Corn Flakes into the market, eyeing opportunities right after the Indian economy
liberalized.
Kellogg’s, we believe, rode on the globalization horse confidently hoping for a smooth
growth and revenue in the Indian economy. The company did everything they usually did
while entering new markets without realizing that they were about to enter an emerging
economy with strong cultural roots and essentially a very low-priced (moreover universally
embraced) breakfast Industry competition which included Hot milk, Idli, Dosa, Vadaa, Bread
& Spread, etc depending on various regions.
Kellogg’s believed that its brand equity carried forward from the West would mirror its
success in India. So it started building its brand by promoting its quality crispy flakes which
were a worldwide success accepted throughout the western countries. But what sounded like
a safe strategy, turned out to be drastically daunting for the company.
Firstly, Indians have always preferred their milk hot. When the Kellogg’s crispy flakes are
mixed with hot milk, they turned out to be soggy thereby out rightly rejected by the
consumers. Kellogg’s later had to modify their products to suit hot milk but the damage had
been done.
Secondly, the cost of a 500 gm package of Kellogg’s was itself way higher than its traditional
rivals. Kellogg’s brand was mostly meant to be targeted at the middle-class consumer. But
the high pricing resulted in the consumers buying their products on one-off basis as a status
buy rather than a nutritionally rich breakfast.
REPOSITIONING: 

Additionally, Kellogg also managed to overlook the cultural dimensions of India. Something
similar to what we saw turned out to be vicious for Pizza Point (see how Pizza point missed
out on appealing to the Indian consumers) when they entered India. Apart from the high
pricing, it proved to be an unachievable task of convincing consumers about the highly
nutritional contents of the corn flakes. The Indian consumer typically holds extremely strong
cultural values and refuses to let off traditional (eating) habits. The company should have
known and researched well into these factors.
Important lesson to be learnt out of this is that, globalization may be an increasing trend, but
regional identities, customs and tastes are distinct as ever. There may be more opportunities
in localizing your concept in the market than globalising the market as someone rightly said
‘Think Globally, Act Locally’. What Kellogg’s wrongly tried to do in India was the attempt
to turn the consumers against their cultural tastes which wasn’t quite well received.