Equally complex is the motive behind scores of companies buying old, faded brands. Anchor recently bought out the old and forgotten oral care brand Forhans from John Oaks Remedies for an undisclosed sum. The acquisition has raised many questions in the marketing world. Why? Does the Forhans brand have any residual recall value? Will it be relaunched with different bells and whistles? How will Anchor make sure that Forhans does not cannibalise sales of its own flagship brands? What strategic gains can Anchor expect to gain from Forhans? It might be useful to recall that Geoffrey Manners originally owned Forhans. The company was subsequently merged with pharma company Wyeth Lederle. Wishing to concentrate on pharma, Wyeth sold Forhans to John Oaks Remedies for a song (Rs 2.5 crore).
Some clues could probably be found in Colgate’s strategy with Cibaca, a veteran brand it bought over from Ciba Geigy in 1994. Colgate initially positioned the brand at a low price point, hoping that first time users would graduate into the organised oral care category through Cibaca.
However, despite the fierce competition in the segment – especially from well-entrenched brands like Babool, Ajanta, Anchor – Colgate was able to create some waves with Cibaca. This helped Colgate consolidate its leadership position in the Rs 2,500-crore oral care market.
But, then not all companies buy old brands to gain market share. Some buy competing brands to kill them off and eliminate any future threat to their flagships. For instance, Unilever bought over International Best Foods and as a result of that Hindustan Lever in India inherited some old brands, such as Brown & Polson. However, for reasons well known to senior Lever managers, Brown & Polson was given an unceremonial burial in India, though the brand probably still exists in some Asian markets. Incidentally, does anybody remember Dipy’s, a brand originally owned by Herbertsons, part of the Vijay Mallya empire? The same group sold off Kissan to Levers in the early 1990s.
Again some companies buy aged brands because they want to use it to spearhead their entry into other, unconquered markets. Take the example of Godrej buying little-known British FMCG company Keyline Brands Ltd for its well-known brands Erasmic and Cuticura. However, Chennai-based Cholayil Pharma, better known as the Medimix group, holds the rights for Cuticura talcum powder in the Indian market. Also, Erasmic – whose current portfolio of shaving creams, foams and aftershave lotions will be introduced first to the Indian market — was better known in the past for its shaving blades.
This time the brands were probably not the main attraction; Keyline’s established distribution channels in the overseas markets certainly were. So, while Godrej will be able to market some of its brands overseas (hair powder dyes and Fairglow soap initially), Keyline’s Erasmic brand will be re-introduced to the Indian market. What about Cuticura? Godrej’s solution: market it to the expat Indian population in the West Asian markets, where the company already has a distribution channel.
Remember, some companies also buy old brands because they probably believe that reviving them could be simpler, or more cost-effective, than launching new, greenfield brands. There is this story of how beverages giant Allied Domecq sold off its brand Plymouth Gin for a song. However, the buyer -– believed to be an employee of brand consulting firm Interbrand — was apparently able to turn around Plymouth around in a year, leaving many red faces at the Allied Domecq HQ. Today there are many specialist consultants in the market – especially in the US — who make a living from buying ‘ghost’ brands, reviving them and then selling them back to mainstream marketing companies.
There are also some who buy old and ancient brands, in the manner of collectors who like accumulating antiques. Subhash Chandra’s (of Zee fame) acquisition of East India Company for just one sterling pound probably falls into that category. But, then, for every brand that receives a new kiss of life, there are many more that are allowed to quietly pass into the night of product cycles.