Koutons : 50% + 40% Off

Brand : Koutons
Company : Koutons Retail India Ltd

Brand Analysis Count : # 483

Koutons is a brand story which has gone sour. This 1000 crore corporate brand is now facing the worst period of its existence- facing mounting debt and bad press regarding the financial position and the stock price moving southward. 

Koutons , the brand owned by Koutons Retail India Ltd was born in 1991. The original name of the company was Charlie Creations which was later rechristened as Koutons. Koutons is both the corporate brand and an individual brand . The company has a range of readymades with the brand name Koutons. Along with it , the company also has other brands of clothings like Charlie Outlaw, Le Femme etc. The current post focuses more on the individual brand.

Koutons Retail is a classic entrepreneurial story. The company was founded by Mr. DPS Kohli. Mr Kohli and his family owned a television manufacturing business which was destroyed during a riot. Mr. Kohli  had to suffer huge financial losses from that even and had to work as an insurance surveyor for long . Later he ventured into the retail textile business.

Koutons grew really fast. The company became India's largest retail apparel chain in a span of 10 years . In 2009, the company had around 1400 Exclusive Brand Outlets (EBO) making it the largest apparel chain. The company had a turnover of around Rs 1000 crore in 2008-2009.

Koutons was a brand built on a very unique strategy - deep discounting. Deep discounting is a pricing strategy where the brand offers huge  ( often mind-blowing) discounts on an unusually high MRP ( Maximum Retail Price) . So the consumers are attracted towards the product seeing the huge discounts which are actually not a discount ( in pure sense). 

Koutons has a popular discount scheme  known as 50% + 40 % off. So there is a 50% off on the MRP and then another 40% off on the discounted price. So  the consumers obviously are delighted to get a shirt with an MRP of Rs 1500 for as low as Rs 450. Another very successful offer was " Buy 4 garments for the price of One ". Seeing this unbelievable offers , consumers flock into the showrooms and buy what ever that is available .

Along with the deep discounting strategy, the brand also invested some money in the brand building.Koutons has the tagline " The way ahead, always " . It had campaigns featuring foreign models and usually the showrooms are located in upmarket malls thus giving the impression that Koutons are a premium brand.  But frankly no one really knows whether Koutons really sells a shirt for Rs 1500. 

But nobody was complaining because consumers got a feeling to getting a good bargain and that is what matters. So this model worked well for the firm for more that 20 years. As usual, 20 years is pretty long time for consumers to learn the discounting model. The sales started drying up and the cost and inventory started building up. More discounts followed and revenues started sliding. The company landed itself into a financial trouble. ( source).

The brand really was able to tap the " value for money " psyche of the Indian consumer. Indian consumers like a good bargain and for long years, the firm was able to capture profit out of it. But the popularity of other discount outlets of established brands and the quality issues of Koutons paved the way for the downside for the brand. According to some newsreports, the company faced the issue of inventory mis-estimates and huge debts. 

I also have bought the brand believing that I got a good bargain later found that I was a victim of a very clever marketing strategy. Often some students ask me whether Koutons will lose its brand equity if it gives discounts like that, assuming that they sell the product at MRP atleast in some outlets. In the case of Koutons, they sell by these discounts.

In the deep discounting model, the brand is secondary. What matters is the  attractiveness of discounts and high media spents announcing the discounts. It is not the brand that pulls the customers but the perceived bargain. Ofcourse the consumers should feel that the brand is aspirational . So it is a kind of a very risky , clever strategy. Project aspirational image and use discounts to pull the consumer in.

Koutons as a company is in financial trouble and the fate of the brand depends on how the company survives the crisis. The deep discounting model will work in a market like India as long as the firm is able to project the aspirational image. It lacks the glamour of brand-building but may work for short-term. In the long term such deep discounting will eventually kill the brand. 

Brand Update : Kara Skincare fights the mighty Hand Kerchief

After a long period of silence, the tissue wipes brand Kara from Aditya Birla Group is back in action. Launched in 2008 with much fanfare, the brand went into a long silence throughout 2010. The product was not even visible in the supermarkets and were silent across media. Now the brand is back with a bang with a new positioning and celebrity power. The brand also had a trademark issues with Dabur's Kaya brand since Kaya also had tissue wipes which was later settled ( source). 

Skincare Wipes are an emerging category in India. We Indians are not yet familiar with the idea of using paper tissue instead of our very own hand kerchief. But this trend is visibly changing with the new generation being open to the idea of carrying tissue instead of the hanky. This is the trend that Kara wanted to see and capitalize.

It can be said that the brand went in for a relaunch. The brand sports a new positioning and a tagline. The new positioning of Kara is very interesting since it pitches itself as an alternative to the ubiquitous hand kerchief. The brand also have roped in two celebrities to endorse - Sharman Joshi and Anushka Sharma.

The brand had moved away from the earlier positioning of " feel good " to hygiene. This is a major shift in the positioning platform of this brand. For that purpose, the brand had pitted against hand kerchief saying that using hand kerchief to wipe the face is a " bad habit " since we use hanky for lot of unhygienic purposes (as highlighted by the ads) .
The ad features these celebrities  highlighting the unhygienic nature of the hanky and encouraging people to use Kara Skincare wipes. The brand is talking about three basic benefits - Cleansing, Nourishing and Deodorizing. Kara Skincare has Cucumber, Aloe Vera and Mint oil  as ingredients to support the claim.

Watch the ads here : Sharman Kara 1, Sharman Kara 2 , Anushka 1 , Anushka 2

The current attempt of Kara is interesting and the brand has the guts to take on the generic competitor hanky head-on. The fact is that many consumers are unaware of the unhygienic nature of hanky and we believe that since it is washed daily , hygiene is taken care of. The ads highlight is issue nicely. The brand currently has adopted the tagline " Face Refresh Karne Ka Specialist "  ( Specialist for refreshing your face !).

The big question is whether the consumers will actually see the tissue wipes as an alternative to hanky - atleast for the use of  wiping the face. The answer is both yes and no. There is a section of our society which already is open to such extra-conscious about the hygiene. Most of the young girls have started using wipes because of convenience factor. These people will adopt the idea first and then there is a chance of more consumers adopting this product.
The brand had earlier tried to position itself  on the feeling good platform highlighting the benefits but consumers did not respond warmly to it. This may have prompted the brand to take an aggressive approach. The direct comparison with hand kerchief will definitely make consumer look at this brand seriously.

Another interesting aspect of Kara's strategy is its focus on both the genders. When launched, Kara was focusing on female segment but now it is explicitly targeting the male segment through Sharman Joshi. The brand also is not projecting itself as a hip-hop brand so that it does not alienate the larger segment of the society . So the brand had put the characters of the ads as common folks .

The strategy of fighting head-on with generic competition is a very risky but bold strategy. Here the brand is trying to create a parity with the hanky . The rationale is that Tissue Wipes is a new category and brand and category competition is not what should be addressed at this stage.
Making this category into a mainstream is the challenge that Kara faces and it has done the homework well.

Related brand
Kara Skincare wipes

Jawbone #286: Back In The New York Groove

New show! We talk about the lives we have led since we last met. BU and U Rant. Trees falling on you while camping and where that event fell on the death scale. Enjoy! Also sorry about the echoing in the middle of the show. That was totally my fault.

Download now.

Icing 150 soap cupcakes

Ive been moaning a bit today on twitter about how I have had to ice 150 cupcakes today for a really nice order - a shop in London.  Well I really should not be whingeing at all, I love my job and this is a nice opportunity to show you some before and after photos.

Firstly, 150 soap cupcakes is a lot and cannot be iced in one go, it takes a lot of preparation and organisation.  I think its the organisation side I always find a bit daunting to start with, once I get my head around exactly what is needed in advance its not so bad. 

Anyway, this order was split into 3 separate batches of different styles which means different soap flowers and bits to put on the top.  My new Lavender Summertime cupcakes have a mauve base scented with lavender essential oils, then the top is piped through a flower nozzle and decorated with one large, double flower made of white and darker mauve soap and either two smaller flowers or ivy leaves - these have to be made and hardened off first.

Then the order needed 50 of my normal Rose garden cupcakes.  These are slightly more complicated as they require 4 different sized and different coloured rose for each one as well as a heart and rose leaf, again, all needing to be made in advance.  I use old, CP soap for making my flowers, grating them to re-batch and re-colour, nothing ever goes to waste.
The last of the 50 cupcakes is my new Rose Garden Red and White range which need 3 larger roses and the usual heart and leaf.  So as you can see, just getting ready and preparing for an icing pour takes ages in itself.

The first job after making all the topping bits is to pour the cupcake bases, they are then left overnight to harden enough to take them out of the silicone base molds.  Sorry these pictures are a little dark.

 

Then they are all iced, I can usually ice about 30 cupcakes each time so I have to make quite a few batches of icing.  The icing has a really annoying habit of setting in the piping bag, which is pretty difficult to handle.  I have learned not to mess about when this happens, just go with it, take out the nozzle, clean it out and start a new batch!

Then, once the icing is done and the flowers and other bits have been added the whole lot is dusted with a very fine layer of cosmetic glitter, this really gives them a lift and sparkle that is difficult to beat!

One finished tray of Lavender Summertime Cupcakes ready for curing

 

 

I really do enjoy making these little soaps, so next time you hear me moaning, take no notice OK?  The best thing of all is thinking about new ones and coming up with new ideas.  I'm working on a new cupcake for a wedding later on this year, its going to match the brides theme of ivory Avalanche roses and diamonds - Ive got lots and lots of ideas I can tell you!   To see the whole range of cupcakes available just go and visit the website, I would really love to know what you think of the new ones.

Original 50 vs 50 Pen and Inks - AVAILABLE NOW

Whoa! It's been a while, I know. We are planning on recording a show soon, for those of you who are still with us. There is certainly a lot to talk about and the next show will be jammed packed. But in the meantime, I want to talk a little about my art project called 50 vs. 50.

For the past two months, I've been drawing heroes and villains for people with the hopes of making enough money to make it to make it to San Diego Comic Con. The good news is that I was able to sell all 100 drawings. The better news is that I am making the original pen and ink drawings available for sale to all those who purchased!

Unlike some artists, I still haven't made the switch to all digital yet. I still draw all my artwork on Bristol board, scan it in and then color digitally. This means after I scan in the drawing, it just ends up on the floor of my office never to be seen again. I'm a big fan of original art because I feel it tells a story. You can see the pencil sketching, the mistakes, and the notes to myself about what to fix in post online. Occasionally, you will get a failed sketch or two on the back of the bristol board that didn't make the cut.

I am making all 100 pen and ink drawings available for sale today. The drawings will be signed by me and can be personalized if you specify it. When you order, just let me know the name of the drawing you are interested in and I'll package it up and send it off to you Priority Mail.

If you would like your original signed pen and ink 50 vs 50 drawing, simply use the paypal button below to purchase. Make sure you list which drawing you would like in the special instructions field.

Got a question? Leave it in the comments and I'll do the best I can to answer it.

Brand Update : Barclaycard RIP ( 2008-2011 ?)

According to newspaper reports, the Barclay's Corporate which runs the credit card business has decided to put Barclaycard on the block. The report further suggest that Barclays is going to scale down its retail operations owing to the bad debts accumulated during recession. The unofficial number of creditcards of Barclays is put at 2.4 Million.

Barclaycard was launched with much fanfare. The brand offered several differentiators which was later matched by other players. The company was in the dilemma of choosing between high risk Vs growth. Finally it decided to sell of the credit-card business and concentrate on other banking domains. 

Credit card brands are a confused lot. On one hand they want the users to splurge  and on the other hand, they worry about bad debts. Greed makes these brands charge exorbitant charges which adds to bad debts. It is a vicious cycle.

Having said that, Barclays had a reasonably good business albeit small in market size. That may bring in some suitors who wanted to scale up their business. Barclaycard failed because the brand lacked the distribution reach which is essential to scale up. The recession add to its voes for fear of accumulating bad debts.

Anyways another brand is going to die. RIP

Related Brand

Barclaycard

News reports

My Last Post? Thanks for Nothing Rapture!

So I guess the rapture is supposed to be tomorrow. Sucks, cause now I'll never know who the new boss will be on the Office. But anyway, I guess I'll make this my last post: 8 Cheap Ways To Avoid The Rapture.

1. Giant Stapler
Find a comically large stapler. Barring access to this, acquire an industrial stapler. Staple feet to solid surface. Note: For best results, must staple feet, not shoes.

2.