Shamni Pande

Car battery is a grudge purchase. No one even thinks about it, till it fails some day.

It's not his man-about-town image that makes Jay Galla, executive director, Amara Raja Batteries , interesting. Nor is it the recent campaign using him as a model. It's because this 37-year old runs a company that's actually making an otherwise fuddy-duddy category (automotive and industrial batteries) look positively attractive! His team, comprising men-in-black-and-green, talks of zany marketing ideas alongside striking lucrative overseas deals, while his company has gone ahead to stake claim to this year's Creative Advertiser of the Year award (for brand Amaron), along with Bennett Coleman & Co (The Times of India, The Economic Times and Navbharat Times) and Coca-Cola India (Coke). In this informal conversation with Shamni Pande of agencyfaqs! , Galla says, "If I can get people to actually think and talk about a 'grudge purchase' - that is, a car battery - then I am in the clear." Here are some excerpts from the interview.

Edited Excerpts

Let's face it. No one talks about batteries the way they talk about any other product - even radial car tyres. What has your company done to change consumer attitude towards the category?

Automotive batteries is a very, very low interest category. Our first challenge was not selling our brand Amaron, but getting people to start thinking about automotive batteries. If they start thinking, they will automatically start comparing and realise that our product is superior.

One of the reasons why the unorganised sector in batteries is so big and Exide (in the organised segment) had such a huge share was because no one could even think of another brand besides Exide. If you asked 10 people what was the battery under their hood, they would say Exide, even if only seven had it. They did not even know what was there, because it was a low-interest category. Moreover, the brand had been around for 50 years and had become synonymous with the industry.

The biggest challenge, therefore, was to get consumers thinking about automotive batteries. The Amaron brand was launched only in January 2000 and we have been advertising heavily since then. We actually look at advertising as a route to increasing consumer interest and thus play the role of a catalyst to get other players to start advertising. The more the advertising - whether it is our brand or somebody else's - the better it is for us as more people will be forced to take cognizance of our existence and draw comparisons.

The latest survey done by TNS Mode has been very gratifying. Top-of-mind recall has gone up from 2 per cent to 6 per cent after our `Chicken Leg' campaign and, more recently, it has gone up to 20 per cent in major markets. This is excellent for a category such as ours and for a brand that is only three years old in the market. It has definitely contributed to the sale of our product.

But has consumer attitude to the category changed?

The odds are against me. Car battery is a grudge purchase. No one even thinks about it, till it fails some day. Batteries have long life (three years); so in a way, it is a slow-moving consumer good. Also, for all that I put into the brand, it goes under the hood and people can't really flaunt it the way they would their radial tyres. But If I can get people to actually think and talk about a grudge purchase - that is a car battery - then I am in the clear. At least people have my brand tucked away in their sub-conscious mind and will voice it at the time of purchase. My company will have a sound image and represent a certain value to the customers. In that sense, treating my product like an FMCG has its rewards.

We actually gave away 3.5 lakh Bisleri bottles last year at major traffic junctions with the message, "In this heat you need water, not the Amaron battery under your hood". We had a small contest for Shatabdi travelers and gave away Amaron puzzles and gifts. At the same time, we are careful not to go overboard with our communication and marketing. In that sense, we are not really a big advertiser, but we spend better and smart. Our cumulative spends on communication would be in the region of Rs 8 crore.

Can you quantify and say what kind of difference your communication has made to the company's turnover

I would like to put it this way. It is difficult to have a campaign work for you if it does not synergise with the way you distribute, the way you do below-the-line communication, the product - which includes both the quality and the look-and-feel factor - and the promise of long life. So every little thing has got to succeed, everything has to work right for the product to succeed in the end.

However, if a product fails, it is perhaps easier to point to that one factor that did not work as it was supposed to. So if we are not offering a battery that is competitively better, it is not going to get us anywhere. The whole product proposition has to be in place. But then many a times with all things in place one is still not able to get the product out of the low-interest level. It is then that the incremental sway of communication comes into play.

Assuming that good quality is a given, how does the look-and-feel factor work for a product that's eventually going to go under the hood?

It's not just the black-and-green look on the surface; it's so many other things. The battery is designed for consumer convenience in every way. The polycarbonate handle bars that make it possible for one to lift and put it in place, the unique barcode that makes it possible for us to track every single product movement at every stage. If a consumer has a problem, that bar code can tell us the entire history of the product - the date, time, the assembly line it was put together on, which truck loaded it, which warehouse it was stored in, when it went to which retailer, when did it exactly go to the consumer and in what condition. It is not the bar code that you see on your soap in a shopping mall. That is just meant to give the price and to register its sale code in the register books. This is far more complex, akin to the barcode on a laptop.

Look at our Quanta brand of industrial battery that would eventually get inside an UPS. We have given it a distinctive look and feel that communicates its qualities. It's an attempt to establish a standard like, say, `Intel Inside'.

Considering that your company was a late entrant in the market, were there any specific areas you focused on while starting out?

Looking at the market (for automotive batteries) and studying it we realised we would be a very small player in it as nearly 60 per cent of the market is in the unorganised sector. Issues such as lack of environmental legislation, tax evasion were of course there, but primarily the issue was the lack of any product differentiation between the organised and unorganised segments.

We realised that there was a huge technology gap between what was available to consumers here and those in the international markets, very similar to the situation when we entered the market for industrial batteries. Our strategy has always been to bring the latest technology that exists anywhere in the world and adapt it to the local environment here and offer it to the customer at rates at which they find great value. Our assessment at that time was that the competition was not doing this. There was a clear gap to be filled.

In our segment, value equation is about offering a product to the customer that is distinctly superior in terms of life, maintenance and service, compared with the offering of an unorganised manufacturer. There were some improvements that were taking place then, but it was too little, too late. Even then the technology was not on par with what was being offered elsewhere in the world. That was our product/technology strategy.

To get our distribution right, we actually went and studied other markets to see how the distribution and marketing of these products have evolved in the US and Europe and how the product was being adapted, used and distributed in developing markets such as China, Brazil and Mexico. The conditions in those countries are similar to ours. We learnt critical issues about how companies were handling the unorganised sector, how they were dealing with issues such as warranty fraud, handling of credit in the marketplace, mode of collecting money from small dealers etc. The other thing we saw was that many battery units had fallen sick because they did not follow some of the things critical to hold customers for survival.

Your biggest competitor in the organized sector, Exide, is also an active advertiser. How did you manage swinging consumer attention in your direction?

We decided to focus entirely on cable and satellite channels, as we felt that is where our target audience would be and in terms of national presence it would be the best bang for the buck in terms of reach.

Are you trying to spread your campaign considering your brand is spreading its presence overseas and the company has ambitious growth plans?

In overseas markets the strategy would be completely different as the environment is very different from what it is here. Batteries would be a low-interest category anywhere in the world, but most of the export markets we are looking at do not have any significant presence of the unorganised sector and there is no single brand that dominates the market.

So when people go out looking for batteries there, they go out and compare and make informed decisions. Advertising would not play as big a role there as it does here. It would be more distribution strength-led, than being brand-led. In a place like the US, if a consumer has to buy battery, the first thing he thinks is where should I go? To a place like Wal-Mart or K-Mart? It would not be whether to go buy a Diehard or an Everlast brand. They would not even know those brands. So price, features, warranty, shelf-space (given to a product/brand) would be the deciding issues there.

Has there been any major shifts in the thinking process at ARBL since it was set up and now that it is looking at other markets?

We had a great thrust on operation and marketing because we were getting technology and incorporating it; we weren't doing much R&D on our own. The engineering role was limited to absorbing the technology and bringing that into the market.

The focus has now shifted to engineering and R&D as we have started designing our own products. What has also changed is that along with Amaron getting more visibility, we have been able to draw talent to our company. We are being seen as a success not just by individuals but also by other companies. Just as we are beginning to attract talent from other industries, they, in turn, are also taking our talent. It cuts both ways.

What is the pecking order in the battery market in India today?

Amaron is the second-largest selling brand in the country, though in the maintenance-free range we would be the market leaders. In VRLA (valve regulated lead acid) batteries - that's again a niche within the industrial battery segment - we are the market leaders. We introduced that technology in the country and created the market for it.

Our clients include every player (light vehicle and truck manufacturers) other than Hyundai and Toyota. We are on the verge of getting Volvo, we have Ashok Leyland, Telco, General Motors, DaimlerChrysler, Nissan, Ford, Honda, Mahindra & Mahindra, Hindustan Motors, Fiat, Swaraj Mazda...

What are your targets?

We are constantly looking at new areas of growth and we hope to be a Rs 500-crore company in the next five years and as a group we hope to hit the Rs 1,000-crore mark in the same time frame.

On a personal note … with your father at the helm of affairs, was your entry in the organisation fait accompli or a conscious move on your part?

My family entered this business when I joined college and I always knew this was an option for me. It was never forced upon me though. I made a decision that I would like to work with my father and be involved in developing the industry and the business. I joined Amara Raja Batteries (ARBL) in 1991, the year we came into commercial production for industrial batteries and was involved right from the project implementation stage. It wasn't an established business when I joined.

My father (Ramachandra N Galla, chairman & MD, ARBL) worked in the US as a consulting engineer with Sargent & Lundy (power consultants) and was primarily responsible for designing electrical systems for nuclear power plants. In the 1980s there was a public outcry against nuclear energy there. So he knew he had to shift track and at the same time there were lots of incentives being thrown in for NRIs to come back and invest here. His first idea was to come back and work as a consultant for power plants to help increase their efficiency. One thing led to another and he realised that the batteries used in state-run power plants were four generations old, compared to what was being used in the US. He felt there was one product that could be brought from the US … and the rest as they say is history.

Did you work your way up, or join the company at some fancy rank by virtue of being part of the family that owned the business?

The two years that I worked in the US, I was working for a battery company called GNB Technologies that has since been merged into Exide Technologies. It was the third largest manufacturer of industrial and automotive batteries in the US. It was also our technical collaborator. I worked in the international marketing department. So I did have some experience before joining ARBL, and I did join at the very bottom. My first job when I came to Tirupati was to handle all the vehicles and drivers, their administration. It is the most difficult job I've ever had! I was given that responsibility so that I understand the culture and people well.

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