Brand simplifies, adds convenience to underpenetrated product category
New strategy aims to tap large opportunity
Chief Marketing Officer
Aditya Birla Capital Ltd.
Aditya Birla Capital is one of India’s largest financial services groups, serving over 400 cities with around 1,300 points of service and 150,000 agents. Its operates across 12 business lines, including life insurance, asset management, health insurance, home loans, and private equity. CMO Ajay Kakar is leading the transition to a master brand strategy.
CATEGORY AND CUSTOMERS
How do you define your product category?
We represent a category called financial services. But the fact is, we represent a category called money. Financial services is our calling card, but the consumer doesn’t understand it. Money is the way the consumer engages with this category. Money makes the world go around. Every citizen of the globe needs money for even the basics of life—food, clothing, and shelter. The minute you see it from that perspective, you realize that money can never go out of fashion. There are periods of gloom and doom, like the financial crisis of 2008 and 2009, but these are air pockets. You’re in the plane that goes through an air pocket and you think this is the end of life. And then the turbulence over.
Staying with the metaphor, India seems to be nearing cruising altitude. But people are seated in different classes. How do you segment the market?
The other day I was flying to Dubai, and the upper deck was all business class. And it was filled with people who I would not have imagined would be on such a flight five years back. Travel agencies organize overseas tours of people from cities that even I have not heard of. The people stand out in their clothes, language, and mannerisms. But they have the money to go. They will go in a group with a cook who makes Indian food for them. They remain with their roots, but they have the money to go out and see the world. Purchasing power is far ahead of what I would have dreamt only a few years ago. People do not worry about inflation or job security, which was a concern during the financial crisis. There is also a sense of optimism that comes from the stock market being at an all-time high.
What does this optimism and rising purchasing power mean for you as a brand marketer?
We focus on the mass affluent and above. And we have 12 lines of business. Each of them is big in its own segment. We have life insurance and asset management companies in the top five. We have a private equity business and a corporate lending business. We have general insurance, wealth management, housing finance, pension funds, health insurance, and we’re soon going into low-cost housing. And we have other businesses. It’s a wide spectrum of consumer and business-to-business operations.
What areas are most dynamic now? What areas are you enthusiastic about?
Next month we are announcing the reorganization of these businesses into three broad categories: protecting needs of our customers, investing needs of our customers, and the financing needs of our customers. I’m saying that from the customer’s perspective, you have only three needs for money. If you have it, you want to know what to do. If you don’t have it, you want to know what to do. And if you’ve created assets, you want to protect them. We have protecting, investing, and financing solutions. It means that the first thing you want to do in life is protect yourself because there are people financially dependent on you. So, I’m very bullish on life insurance. Life insurance in India has minimal penetration compared with elsewhere in the world. The life insurance market is supposed to double in six years. Today, only 12 out of 100 Indians who die have life insurance. And of the 88 people who are not covered, only 10 leave their families well off. I’m bullish about health insurance because only 3-or-4 percent of Indians are covered under health insurance.
What other investment products are you enthusiastic about?
I’m buoyant about the mutual fund industry. India has approximately 6 percent penetration. The industry is expected to grow two-and-a-half times in six years. You either need money, have money, or require protection. Indians currently keep their money in a bank. About 39 percent of Indian savings are in a bank earning an average of 5 percent. Only a small percentage is in capital markets, which can potentially earn a 13 percent return. They must move to the capital markets if they want to beat inflation and live the life of their dreams. Similarly, for the more affluent, wealth management is important.
How important is the financing business?
In India, 4 percent of people have home loans. China is 9 percent. Russia is 18 percent. Brazil is 11 percent. This market is expected to triple in six years. We will expand loans to small- and medium-size enterprises, or SMEs. Only 25 percent of SMEs have access to credit. That business is expected to double in six years.
And do you expect this growth to come from across India, or will it be concentrated in the major metros?
The entire financial services industry is heavily underpenetrated. And I don’t mean the rural areas, that you might expect to be underpenetrated. I mean even in the large metros. And people who have some financial involvement often don’t have enough. For example, the conventional wisdom is that you should have life insurance coverage of at least 10 times your annual earnings. Most current life insurance policy holders don’t even have one-time their earnings. It’s a huge opportunity. It’s an all-India opportunity.
You’ve identified a major opportunity to simplify the category for people. How will you implement this vision?
There’s so much opportunity, financial businesses don’t need to go into niche markets. They don’t need to do drip irrigation. Just put your hand out and you’ll capture water. Therefore, most brands in this category are happy with share of market. Our intention is to grow the market. Our brand purpose is to simplify money. Our mission is to provoke Indians to realize the importance of money in their lives. Most people don’t realize that their hard-earned money is not working hard for them. People don’t come to our category because they believe there’s something in it for us. They don’t realize there’s something in it for them. Also, they have a false sense of security that, if they’re earning well today, tomorrow will take care of itself.
How will you communicate?
We’re proposing to launch a brand called Aditya Birla Capital, in September. That will take this simplify-money idea to the consumer. Here is the magnitude. We currently have 12 lines of businesses. Each has its own logo. We will sunset all those identities. And we will go to market only as one brand. Many groups in India have lines of financial services business, but they have all nurtured individual identities. The consumer sees big groups, and they come to him through many different entities. And the consumer is confused. We have chosen to simplify the brand and use the name Aditya Birla, which is the most revered business house in India. It’s a household name known for business and creating wealth. It’s a master brand strategy, while others in India have a house of brands. With the other brands, if you are wealthy enough to have a relationship manager assigned to you, he will take care of all your banking needs. But if you ask him to take care of any credit needs or lending needs, he will say, “I’m sorry, I can’t answer you.” The consumer will say, “But it’s the same company.” And the manager will reply, “Yes, but it’s a different division.” We will give customers one ID that is recognized across all our businesses.
Will a customer coming to you for life insurance be assigned a representative knowledgeable across the entire master brand portfolio?
India is large. We have an agent force of over 150,000. It is difficult to empower every human being to become a superman, a multiproduct hero. We are going to issue every customer an ID that will recognize the customer across our businesses. We will have one call center where the customer can ask about anything and everything. We will have one website where the customer can seek advice and transact. On the backend, we will have one technology. And we have created a category called “Select” for high-wealth customers, and high-performing advisors have been empowered to sell any product to that group.
What media will you use to communicate the new master brand?
We will go to conventional media and beyond. We’ll have to use TV, print, out of-home, radio, digital, and social. We’ll have to speak to our employees, distributors, customers, and shareholders. But we will not sell. We will not preach. We want to empower the consumer to self-realize. We will ask provocative questions. We will not take any sides. We want to create conversations. We will ask questions like, “You have big dreams. Have you done anything about them?” Most financial services brands start from the category. “I have mutual fund products. Do want a mutual fund product? I can make all your dreams come true.” We’re saying, we will not start with our categories, we will start with your life. We will ask, “Are you living the life that you truly desire or deserve?” We will ask, “Are you living the life you imagined, or have you stopped imagining?” We want to leave consumers with the thought, if you’re doing something about it, great. If not, do start, because only you can take care of your loved ones. A traditional brand would say, “I love you guys. I love your family as much as you love them.” We don’t want to say any of that.
What are some of the obstacles you face in realizing this large opportunity?
This category, money, has universal appeal but very low penetration, for one reason. Most Indians have not realized the relevance of our category. The average Indian thinks we’re profiteering from him. He doesn’t see that it is in his interest. On the other hand, our category has healthy growth rates. Opportunity is raining down. Just put your hand out. But we did not want to be a me-too brand. The category is stuck in its language and complexity. So, we pulled back and asked, rather than being competition obsessed, can we become customer obsessed?