Branding in Yarn Industry Does It Really Matters?
Gowtham Raj A,
Marketing Executive in GHCL Ltd (Yarn Division)
Marketing Executive in GHCL Ltd (Yarn Division)
Establishing a brand in B2B (Business to Business) is different from B2C (Business to consumer) the role and mechanism of B2B branding strategy has to be more focused than consumer markets (B2C). Generally in B2B markets depending upon the industry & sector, customers will be fewer, larger the values of goods per customer and most importantly it should maintain a closer and longer lasting supplier customer relationship.
ABY (Aditya Birla Yarn) - Transformation from Commodity to Corporate Brand:Aditya Birla Yarn, the overseas spinning business of the Aditya Birla Group, comprises three manufacturing units in Indonesia and one each in Thailand and the Philippines. With 45 years of experience in the spinning industry, it accounts for about 13 percent of the global synthetic yarn market. It has enhanced the perceived value of its product by adding value and creating branded yarn that has transformed the product from a commodity to a much sought-after corporate brand.
The Business was facing much pressure like facing increasing competition from low cost producers and unorganised producers (China, India & Vietnam) and increasing price and cost in terms of raw material price, labour cost and power cost. Top Management realized the need for change & decided to create a unique, differentiated value added products. They took a bold step – to brand a commodity & move it towards value added products. There were many commodities are now branded (salt, Milk, Water, Tata steel etc.) taking cues from them the business explored the ways to enhance the perceived value of its products. A strategic Marketing Campaign has been launched in order to increase margins and create a visibility of AByarn across value chain.
Differentiation of offerings:
After the implementation of strategy, the organisation had to overcome a big challenge– changing the organisational environment from a commodity orientation to being a manufacturer of branded yarn, So a multi-pronged strategy was devised.
Product development for immediate market needs: They introduced existing market products (bamboo, wool, linen blends viscose and modal), under the ABY (Aditya Birla Yarn) brand name.
Building value around the commodity: Developing differentiated products by adding value to its yarn. These Aditya Birla Yarn products combined product consistency and quality and were branded according to their characteristics.
Tie-ups with branded fibres: They have collaborated with other branded fibre manufacturers to create unique fabrics and brands
New product development
The organization adopted a three-step strategy in the creation of these value-added products:
Exploring existing potential: Existing fibres from the market were identified for potential and taken through the whole gamut of product development, testing, perfection and market seeding for commercialisation.
Partnering with branded fibres: Potential branded fibres were identified and through collaboration with the manufacturer, a joint know-how on seeding, development and commercialisation was achieved.
Differentiated product development: A systematic approach that involved ideation, incubation, prototype creation and test marketing before the actual commercialization process.
“From 2010-12, the ABY introduced 16 new products and has also signed agreements with branded fabrics to use the Aditya Birla Yarn logos on the collateral, much like Intel Inside.”
Product branding strategy
The company devised a branding strategy that combines the strengths of the company with the products’ USP. The strategy aimed at beating competition by creating product differentiation and it was difficult to imitate, with a distinct identity.After a comprehensive internal marketing study, the team decided to create sub-brands around the mother brand, which was the name of the company. ABY Flexo, ABY Softura, ABY Style, ABY Colorlast etc. are the sub brands. The product branding strategy was to create each product with clear trade and consumer benefits. With consumer-friendly names, simple and clear fonts and mnemonics, each product had its own unique colour representing its USP. Thus ABY Flexo used blue to indicate denim, ABY Softura used pink to indicate softness, and so on.
They have participated in trade fairs and customer meets to create awareness and created a one-of-a-kind marketing kit to connect with their customers. The marketing kit included fabric swatches, product bulletins, ABY branded products, test reports and customer stories – all designed to create awareness, connect and enhance perceived value of the product. Today, they account for 1200 metric tonnes with revenues of $4.8 million. ABY has upgraded itself from a commodity seller to a thriving corporate brand.
Every company is an example of what to do—or what not to do. In the world of business, our competition doesn’t just have to be something we strive to overcome. It can be our greatest teacher. Lessons learned from observing what others do and don’t do well can be the saving grace of our business.