Mktg - Rebranding of low-cost Deccan will test Mallya's strategy

Manisha Singhal

Even as liquor baron and billionaire Vijay Mallya gets set to launch Kingfisher Red on October 10, observers are asking whether his decision to kill the low-cost Deccan brand was a wise one.The man who started the low-cost revolution in India certainly doesn’t think Mallya made the right move. G R Gopinath, founder of Deccan, says, “Mallya insisted on rebranding. I respected the money he has put in and did not want a conflict with him.”But Mallya, who merged Deccan Aviation with Kingfisher Airlines in December 2007, rebranded the airline on the ground that he wants to offer customers a superior product but at a price of a low-cost airline.“We have three product offerings under the Kingfisher brand from premium business to premium economy and now premium low-cost,” says Vikram Malhotra, marketing head, Kingfisher Airlines. The airlines plans to leverage on Kingfisher’s training standards and service standards in delivering a superior product from the one it bought over.Experts say it is a move which will give Kingfisher a brand advantage because it now covers the entire spectrum – from the most premium to the sub-economy segment.Mallya’s decision may have been prompted by the fact that Deccan recently lost its numero uno slot to Delhi-based Indigo by a wafer thin margin.“We will back it up with a slew of products and service announcements without any liability for the airline. We bring onboard in-flight facilities like food and beverage. We will also offer the benefit of earning fly miles to our customers even when they fly low cost,” said Malhotra.Kingfisher says exhaustive market surveys point out that the average flier even in the low-cost segment expects certain basic services. “Flying is not for the common man. In this country, railways are still the means of transport for the common man and Kingfisher does not want to convert that segment into a flier,” sources close to Kingfisher says.But experts in branding feel that Kingfisher might not be fully right and that there is a segment for a common man’s airline still vacant after Deccan is phased out.“The brand had an emotional pull in the minds of the consumer from the time it was launched in 2003. So from a brand association perspective, it had a positive impact. But Deccan failed to translate that brand idea into immediate profits and eventually lost money,” says Thomas Xavier of Orchard Advertising, the agency that undertook the first rebranding of Deccan Aviation when Kingfisher acquired it in 2007.Obviously, Kingfisher wanted to do away with the gross error that Deccan made – which is making a brand connect emotionally, but failing in the business aspect.Meenakshi Madhwani, managing partner, media consultancy Spatial Access Solutions, says that Brand Kingfisher Red was a smart move as it helps in associating Deccan with Kingfisher’s strong brand equity.