“Uncles, aunts and neighbours needn’t know my brand; students do”: Karan Kumar

AUG-2013 – As of last year, ITC’s stationery business was pegged at more than Rs. 700 crore. The goal is to cross the Rs. 1000 crore mark over the next 18 months. ITC’s prior understanding of the paper value chain at a raw material level made notebooks the right product for its foray into stationery, in 2002. The brand was Paperkraft, notebooks for executives. The offering was extended to students with Classmate in 2003. Around 2007, ITC entered the writing and geometry instruments space and in 2010, launched art products with Classmate Colour Crew. A chat with Karan Kumar, marketing manager of ITC’s education and stationery business, comes with the revelation that this seemingly boring category is fascinatingly complicated. Did you know that notebooks have more seasonality of demand than any other stationery item? Or that consumption of art material peaks during school vacations? There’s a lot more where these nuggets came from. Excerpts.Q. : How did ITC approach the stationery category in 2002? Karan Kumar : When we entered with our notebooks, there was hardly anything called a ‘national branded player’ in the space. There were a lot of regional and local players transacting primarily in a particular state or geography. Notebooks were not always asked for by brand. People said, ‘Ek dus rupai ki single line/double line notebook dena’. And among the existing players, quality, consistency, availability and distribution were suspect. It was a clear opportunity. And fundamentally, there was no brand proposition that any of the players offered. It was an extremely transactional, low involvement category where anything sold at a convenient price point got picked up. So, in the case of notebooks, the challenge, and opportunity, was category conversion – from a ‘commodity category’ to a ‘branded category’. The next logical step was to ask ourselves, ‘What are the other complementing non-notebook categories that the same consumer is consuming?’ Q. : How different was the challenge in the writing instruments area? K.K. : Very different. Here, the existing players were nationally branded and nationally penetrated players. We thought, ‘While being a late entrant, how can we have a product and brand proposition that is superior to the ones currently available?’ This was when marketing input, re-thinking what the brand stood for, product portfolio and quality benchmarking became important for us around 2007-08, as we started getting into the non-notebook space. So, with notebooks, we were getting into an unorganised, commoditised space with the challenge to convert it into a branded, nationally penetrated category. And later, for pens and other non-notebook products, the challenge was to compete with existing heritage brands. Q. : Purely from a recall standpoint, Classmate is a lesser known brand compared to some of your competition… K.K. : There are brands that are universally known by mothers, fathers, neighbours, uncles, grandfathers, dogs and cats. As far as we’re concerned, reality is that we’re in a category that, compared to other categories, has relatively smaller margins. Therefore, it is important for our brands to be known by our direct consumers – students – even though they may not be known by the world at large. Uncles, aunts, relatives and neighbours may not know my brand but it scores extremely high among students. Do we get noticed because of front page newspaper advertising? No, and I don’t intend to. Why should I get into a communication strategy that has a huge spill over? I can’t afford, nor do I need, spill over. I don’t have dollars to waste on audiences that are not my valid consumers. Q. : So, what’s your target audience and how well do they know your brands? K.K. : Our brand marketing efforts target students studying in class one to 12, across SEC A and B in all urban markets. We’re doing very well in specific categories. If you go to schools and colleges, Classmate is the first name that comes to mind. And I say this with responsibility; our brand track research shows that our top of mind score — that is, the first unaided mention of our brand — for notebooks is in excess of 55 per cent at an all India level and as high as 75 per cent in some centres. Even in the geometry box category, we’ve struck it well; while in terms of market share Camlin leads, our top of mind recall is almost equivalent to Camlin. And I’m the first to admit we have a long way to go in our other categories, like pens, pencils, erasers, sharpeners and art materials, which we entered around four years back. It’s a challenge we’re working on. Q. : Tell us more about the nature of your current competition? K.K. : We’re one the few brands trying to have a footprint across all stationery categories. Any stationery product a school-going child needs should come from us – that’s our endeavour. Sure, others have attempted this but their portfolios continue to be limited. In each product category under stationery, the brands we compete with are very different. Yet, the lead competition in each category comprises established, iconic brands that have been around for 50-80 years, with high residual recall. In art stationery and geometry boxes, Camlin is dominant, in pens Cello and Reynolds lead, followed by others like Montex, Lexi, Rotomac, Luxor and Linc. In pencils, we compete with Hindustan Pencils’ brands Nataraj and Apsara. In mechanical pencils, prominent players include Camlin, Cello and Faber-Castell, and in notebooks there are brands like Bilt, Navneet and Sundaram. The landscape that we have in front of us is extremely disparate and disconnected. Most are not recognised or listed companies, many are typical, family-owned, ‘lala’ run operations whose balance sheets are not transparently available. There are businesses that have carried on for generations, making them heritage brands. Some are strong in a particular geography. For us, the challenge is to be as nimble and responsive as possible.

Friday, October 18, 2013 - 15:30