‘I understand you are writing a book about the Tatas,’ said the waiter who brought my lunch. ‘That must be such an honour.’ He was perfectly sincere. All over India, taxi drivers, waiters, security guards, porters and ticket clerks offered the same reaction, and very often thereafter went out of their way to be helpful. By and large, the Indian people do genuinely have a great affection for Tata, for the group and for the family, and they are proud of Tata and what it has achieved.
– Morgan Witzel,
Can an adorable corporate brand be built on the foundation of values and service to the society? The Tata brand provides an affirmative answer to this question. While most of the brand-building strategies are based on evoking excitement over the brand by projecting images of a glamorous and flamboyant life-style, Tata group in India has built an endearing brand which evokes feelings of affection and admiration on the foundation of human values. This case study examines how Tata was able to achieve this admirable goal in branding based mainly on the book: TATA: The Evolution of a Corporate Brand, by Morgen Witzel.
The Value of Branding
Before coming to the Tata brand, let us review briefly some of the contemporary thinking on branding. According to branding experts, Mary Jo Hatch and Maiken Schultz, corporate brand is the sum of all stakeholder perception on the firm, its products, its reputation and its values. A corporate brand defines what the firm is. It encapsulates its values and its identity and explains these to all stakeholders, customers, employees, investors and society at large.
This is the scholarly view on branding. Let us now look at what a well-known IT entrepreneur says on branding. Asking the question “what is a brand?” Subroto Bagchi, Chairman of IT consulting firm Mind-tree states: “A brand is the communication of your inner worth over a good period of time. It builds up into a shared understanding of who you are and what you stand for. It attracts people to your products and services so that they become loyal customers and it is the factor that makes other want to work with you as their preferred employers – Building a brand are something that must be thought out well led by top management and woven into every single aspect of the organisation’s working.”
Both these views on branding provide some clues to what it means to build an effective brand. Successful brand management involves influencing or shaping stakeholder perceptions in such a way that it builds a true and positive image in the minds of the stakeholders on what the company is or stands for and its capabilities, achievements and contribution to the society. Thus effective branding is mainly an act of successful communication. But to build a positive image about the company there must be something positive, genuine and admirable within the company. Without this positive content within the company, building a false image about the company through advertisement or public relation is an exercised in hypocrisy, which cannot be sustained for long. On the other hand, if the company has been doing something good or great but not communicated effectively to the stakeholder it may have a good reputation among some of the stakeholders but not a successful brand which has a positive impact on the bottomline. The key factor behind the success of Tata brand is that Tata group has or does both: it has an admirable inner worth in terms of values, achievements or contribution and also communicates this inner worth effectively and honestly to the stakeholders without exaggeration or deception. And the result is a strong, positive feeling and image behind the Tata brand. Some of the brand tracking surveys show that Tata’s brand to be more visible and as having more positive connotations than those of any other Indian company or industrial group.
The Tata Values
The next important question in brand management is what constitutes the “inner worth” of a brand on which depends the true value of a brand. As we have indicated earlier this inner worth depends on the values, capabilities, achievements and social contribution of the firm. And the most important among these factors is the values not merely professed in lips but lived in action consistently and separately. This is the mantra of long-term success of a brand or a company or an individual. This is now recognised in management and also in branding. As Subroto Bagchi explains briefly the process which builds value for a brand. “Building a brand begins with deciding the DNA, the mission, the vision and the values of the organisation. Thereafter, day after day, the organisation has to live these and in the process, create discernible value.” Tata group is an exemplar of this process.
What are precisely Tata values? The Tata group is not a single company but a diverse confederation of companies with a variety of products ranging from jewellery and watches to Steel and telecom. And many of these companies have their unique corporate culture. However there are certain fundamental values which run through the culture of the Tata group. Witzel, based on his extensive interviews and discussions with Tata executives employees and other stakeholder states: “Three particular values are at the heart of stakeholder perceptions.” They are according to Witzel: Trust, Reliability and Commitment to community. Trust and reliability comes from honesty and transparency in relationship and assured quality of the product. Commitment to community expresses itself in making a conscious effort to contribute positively to the well-being and progress of the community, people and nation-building. We may add one more human well-being.
These values of the Tata group were shaped, lived and institutionalized by the founders and leaders of the group. Jamshedji Tata, the founder of the group was one of the pioneering nation-builders of modern India.
His vision, strategy, decisions and projects were not profit-oriented but based on national development. His ventures like textile mill, hydroelectric plant, steel mill, Tajmahal hotel, Indian Institute of Science are intended to serve some unmet needs of the nation. Later other leaders, who followed the founder, continued and reinforced this social and development orientation of the group. Among them, the legendary figure of J.R. D. Tata with his strong emphasis on ethics, human wellbeing, and employee development had a major influence in consolidating the Tata values. This humane and social dimension of Tatas, where societal contribution has become an integral part of Tata culture, gives a very unique, flavour to the group. Ramacharan the well-known management guru in his foreword to the book by Morgan Witzel explains further this unique character of the Tata ethos:
“What makes Tata different is that its societal work is a key part of its total mission. Tata organisations will identify the societal needs of the region wherever the company operates. They identify what rests underneath the society each individual company operates within and how it can create hope and value in the society as well as create values for its shareholders and for its other constituencies, employees, partners and the like.”
Living the Values
But the most important part of Tata culture is that values are lived by its leaders and institutionalized in every aspect of the corporate life. “Our leaders mean every word they say” say Raman Dhawan, managing director of Tata Africa Holding. Similarly Witzel states: “Ask any Tata group executive what is the secret of building and managing a strong brand and they will tell you that it lies in consistent execution and following through on promises. ‘Walking the talk’ is a favourite phrase you do not talk about values, you live them.” The Hosur plant of Titan Watches is an example which shows to what extent a Tata company can go to discharge its core value of service to the community.
The Titan watches, a Tata Company formed a joint venture with the government of an Indian state, for manufacturing watches in a remote town Hosur. An immediate decision had to be made in terms of where the personnel for the factory would be sourced. One choice was to hire professional engineers from the city of Bangalore to staff the factory. This went against the gain of all that Tata stood for. Despite the area around Hosur being very poor, agriculture almost the only industry and no skilled labour available locally, the company knew that this area and its people were their responsibility. Despite the poverty, the local primary education system was sound and was producing plenty of well-educated boys and girls. These were the new recruits to be turned into world-class horologists.
Four hundred young people were recruited and brought to Hosur. Titan immediately provided the necessary support. Many had never seen a city before or lived in anything but a simple hut. Accommodation was built and ‘foster parents’ lived with the young people teaching them the life skills necessary for living in a city. Titan also provided sports and cultural activities, and the facilities to help its workers study for degrees and even take postgraduate courses after hours.
At the factory, trainers and engineers taught the young workers how to use precision machinery.
Titan is now a highly successful enterprise employing thousands of people in Tamil Nadu – it has three factories in Hosur alone, with nearly all the workers coming from the surrounding villages. It provides employment indirectly to thousands more in firms making watch straps, casings and other components. In 2001, Titan was voted India’s most admired brand and proved that it was a truly societal organization.
Thus values lived in action is the secret of success of Tata brand. The name “Tata” evokes these values in all the stakeholders and creates the auro of an ethical and trustworthy company committed to service of the community and the nation of the group. As the Witzel sums up what Tata brand stands for and its impact on stakeholders:
“Trust, authenticity, a guarantee of quality and of truth, and a belief that the purpose of business is to serve the community and country, not to make money – or at least, not only to make money – these are the principal attributes that the Tata corporate brand confers on many of the other brands of the group. ‘If it is made by Tata, you know you can trust it,’ says one Tata customer, and that goes for cars, tea, salt, mobile phones or consultancy services. In India, there is an aura of ‘goodness’ about these brands that derives directly from the Tata heritage, from the myths of Jamsetji Tata and J.R.D. and the legacy of nation-building and the commitment to ‘leadership with trust’ that his successors have carried on.”
When there is such a deep commitment to human values, even failure or adversity helps in strengthening the brand. For example, when Tata Finance collapsed with losses upward of 500 crores, it could have adversely affected the Tata brand. Many of its investors were private citizens and in any other company, they would have lost all their life-saving. But Tata refunded every investor in full, which actually enhanced the reputation of the brand over the long-term. Similarly after the terrorist attack on the Taj Hotel the stories of the heroism and selfness of the Taj employees and the way the hotel was rebuilt, emerging like a phoenix form the ashes, globally enhanced the reputation of the Tata brand.
But there is the other “hard” aspect of Tata, which we should not forget, while discussing its “soft” values. The Tata group is not just a soft, saintly, goody-goody group. They are also one of the most professionally managed companies in India, excelling also in every other parameters of organisational effectiveness like efficiency, productivity, innovation or managing change.
Communicating the Brand
Living the values is only one aspect of branding. The other aspect is communicating the brand and its value to the stakeholder. Most of us associate brand communication with advertising. But advertising is only one way of communication and not always the most effective.
As Subroto-Bagchi of Mind-tree points out: “Many of us think that brand is all about advertising. First of all, building a brand is not equal to advertising. Brands need communicating of their values. Advertising is just one of the many, and often the most expensive and least remunerative, venues of doing it.” Tata management is aware of this fact and uses advertisement as only one form of communication. “Unlike some local brands such as Nike or Coca-Cola which rely heavily of advertising” says Witzel “Tata has for the most part used below-the-line promotion, with only a limited amount of corporate advertising in India and overseas.” Tata group uses a variety of methods like travelling exhibition, quiz programmes and essay competition to convey the message.
And in its communication strategies, Tata’s emphasis is more on its values, philosophy and its contribution to society or nation-building rather than on products and service. For example, an old advertisement of Tata Steel contains a potent line, “We make human growth opportunities. We also make steel.” Similarly, the corporate video of Titan watches focuses most of its attention on its community development and its impact on the workers lives than on its products.
Talking about the company and its achievements is only one way of communicating. The other more effective method is “walking the talk” or doing things. In foreign countries where very few know about the Indian heritage and reputation of Tata, mere talking about the past will not work. As Raman Dhawan, CEO of Tata Africa explains, “In these geographies, it is no good talking about your reputation at home in India. People want to see what you do.” So, when Tata entered South Africa, after an initial brand awareness campaign they started building factories, executing projects and introducing products. Witzel describes how it is done in South Africa and its impact on brand awareness.
“More and more Tata companies began establishing footholds in the country: Tata Consultancy Services began helping to modernize the computer systems of South African companies, Tata Steel built a new plant, Tata Communications established a presence in the telecom sector, Tata Motors began selling cars, and most recently Taj Hotel has entered the picture, with a new luxury hotel in the historic heart of Cape Town opening in 2010. Each of these companies has gradually reinforced the overall image of the Tata brand. The cars were most important in creating public awareness, says Dhawan. ‘Creating a piece of computer software for a bank doesn’t really do that much to raise public awareness. But once we started putting cars on the road, people began to ask questions. Who made it? Where did it come from? At first people did not believe that India could make cars.’ The presence of the Taj group has helped to raise the profile too.”
The author is a Research Associate at Sri Aurobindo Society and on the editorial board of Fourth Dimension Inc. His major areas of interest are Management and Indian Culture.