As the curtains rise once again on Indian Ceramics 2015, there is no better time than now to reflect and emphasise how branding is a key prerequisite for success in the ceramic industry as in any other, in particular, ceramic tiles. While branding is believed to apply more to B2C companies, B2B companies are not exempt. A good example to evaluate this is the context of tiles which is a classic example of a combination of B2B and B2C segments.
A good portion of a tile manufacturer's sales is to institutional builders and dealers (B2B segments) while the rest is direct sales to end consumers (B2C segment). India's ranking in world ceramic tile production stands at #3 (Chinaand Brazilare the top 2) and is growing at an annual growth rate of 15% contributed largely by urbanisation, a boom in the retail industry, and optimism in India's economic outlook. Ceramic production today is a sizeable contribution to the country's GDP (with a turnover of INR 18,000 crores) at 600 million sq mts p.a.
Tiles, today, are perceived as a signature to the way interiors and outdoors look and, thereby, assume high importance in the matter of selection. But is the average Indian consumer sufficiently brand aware with adequate knowledge regarding the brands and quality/types of ceramic tiles to choose from? For example there are wall tiles, floor tiles, and cladding tiles. Depending on the percentage of water absorption, floor tiles are classified as glazed tiles, vitrified tiles, and industrial tiles. Vitrified tiles have less than 0.5% water absorption and are acid/stain resistant. Within the range of vitrified tiles, further, there is a multiplicity of technology that offers more choice in terms of full body vitrified tiles,glazed vitrified tiles, and double charge vitrified tiles. But the consumer awareness of these options and of the brands is very limited. Presently, the number of suppliers is so large that an average consumer is not aware of the ceramic tile brands. As per statistics published by ICCTAS, the number of tile producers in the National Sector is 14 for a share of 40% production (own/outsourced), whereas, the number of regional tile producers is 200 for a production share of 60%; 70% of this is based in Gujarat. In terms of brand awareness, consumers recall only a few brandsin the National Sector, namely, HR Johnson, Orient Bell, SOMANY, Kajaria, NITCO, and RAK ceramics. These brands invest in marketing and advertising and consistently showcase their new designs and technology on digital marketing platforms and/or via Ceramic fairs. Such brand communication enables them to reach out to a larger audience. In fact some of these brands also hold patented rights to their technology. Such investments enable to improve firm performance through enhanced consumer preferences for well-marketed brands and consequently, to grow strong brands enjoying higher brand equity. A major concentration of ceramic producers is in Morbi, Gujarat accounting for nearly 70% of the total production from the Regional Sector. Some of these tile producing units are growing steadily and sustainably and are setting new benchmarks not just in terms of efficiency and quality but also in setting new trends in creative and customised designs, shades, sizes, etc. Some of the well-known brands in the National Sector use Morbi producers as outsourcing or JV partners. Morbi is said to be the second largest tile cluster in the world. However, very few companies from the Morbi sector participate in the annual ceramic exhibitions. Brands such as Motto tiles, Dell Ceramics, Itaca, Italake, Tocco Ceramics, Casa, Accord Ceramics, and Vita are few examples of the regional players that match and at times outperform the stronger national sector brands. However, on a larger scale, the Morbi sector brands being family-owned, consider branding to be non-essential and place emphasis on cost leadership and digital technological advancements. There is a lack of structured efforts towards brand building. Perhaps, it is just a matter of time, before the Morbi sector understands and values brand building and marketing. Overall in the ceramic tiles industry, there is a challenging need to have a professional and structured approach to sustainably create brand equity. It is important for tile producers not just to create brand names, but to develop brand identity and positioning. This needs to be communicated to customers (both B2B and B2C) in order to enhance brand awareness (recall and recognition) and brand image. In a category where ceramics are viewed as mere commodities, branding and high brand equity can provide companies with sustainable competitive advantage. This is a task not merely for the marketing /sales team but for the entire organization; in fact, more importantly the top management. Top management commitment to brand building can provide the needed impetus for overall corporate growth and long-term business sustainability. And with the growth of strong Indian brands, India can envision being the world leader in ceramic tile production, ahead of even China and Brazil. (Asha Sampath is former CEO, Endeka Ceramics India Private Limited and Preeti Krishnan Lyndem is Visiting Faculty, Indian Institute of Management Bangalore) DISCLAIMER : Views expressed above are the author's own.