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About Raj

Creating a Brand Name in Cyberspace
by Kushal Shah

(Note: This article was published in Economic Times on Feb. 23, 2000)

Today the buzzwords Internet, e-commerce & online communities are going all over our minds. Even if you are passing by highway your will notice that half the hoardings are devoted to advertisements are web related. Even in stock market everyone is rushing to buy shares of only InfoTech related companies Even in newspapers headlines are as " indiaworld sold his web site for 500 crore rupees where as his working capital was only few crore rupees".

Why such an interest in websites and portals?!!!!!!!

The answer is that new markets & brands have opened up in last 5 years all over the world. Internet has created new area for business, marketing & management of existing products as well as new Products & marketing ideas. Some of them are Net related, They are Marketed through their brand name which exists over Internet known by particular web site.

Now new concepts are being created on a given web site e.g. free email service like Hotmail. Internet has helped several new companies become household names. What took companies like Coca-Cola and McDonald's decades to accomplish took just a few years for Yahoo! And AOL: They became part of the words most leading CyberBrands

In simple terms, Cyber brand refers to establishing such a strong identity for your product or service that potential users or customers think of you first when they're in the market for that particular product or service

A study which was done by one research company have come to conclusion that's seven Internet-related companies were now recognized by more than 50 million US adults - about one in four. Some of those seven mega brands included AOL, Yahoo!, Netscape, Amazon.com, Infoseek, Excite and Priceline.com

In the world of online marketing, "branding" is perhaps a most misunderstood. Branding in the Real life required the integration of advertising, customer service, sales promotion, public relations, direct mail, newsletters, frequency discounts, event sponsorship, word-of-mouth and other communications tactics to present a unified message about the company, its products or services. Cyber branding happens over a period of time as the result of a consistent effort to communicate a clear message. It begins with a marketable concept as the foundation of a business. Which means that the business founders have given a tremendous amount of thought to how they will distinguish their business from the 5 or 5,000 other businesses selling essentially the similar products and/or services.

With all the competition on the Web for the attention of the casual surfer and certainly prospective customers, you need to not only differentiate yourself but to become "the source" in your category. Strong product branding on the Internet can provide marketer with a powerful advantage over competitors. Even large, successful companies are actively developing a strong online brand. So, how do you do this?

Building a cyber brand requires a two-part strategy: "One focuses on the business process, that is, how a company finds, serves, and satisfies its customers. The other targets the branding process, in terms of how a company manages media and positions messages in competitive and confusing markets."

As the Web site is the No. 1 brand builder in cyberspace, its development and operation should not be passed to technical staff, who generally have little appreciation for brand equity. It should be considered as group efforts of Technical staff for providing technical knowledge; marketing people for marketing strategy & artwork designer team who can successfully create something which can appeal to people to buy that Product. The ‘ Cyber brand ‘the sound of a web site, the tone of voice in its emails, its downloading time, the ease of navigation, its security policy, its color scheme, and way the Company handles customer inquiries. It all adds up to create the perfect Cyber brand in the consumer's mind.

Daily we are exposed to around 10,000 brands while less than 5 percent of new brand launches survive 5 years. Online global brand building means addressing 154 million Internet users spread across 242 Internet national domain locations Getting your company or product recognized on the Web is a challenge, but getting consumers to recall you from memory your particular industry or product is much more complicated task. Brand awareness tactics for the Web are much like branding in the traditional world, except that you only have one medium at your disposal. The same format and cost exists, but the parameter of time has been reduced in some instances, you literally have just seconds to get noticed on web

The large corporations like Microsoft, Intel and IBM have the financial clout to spend vast amounts of money to insure their brand’s continued recognition on the Web and via traditional media…TV, Magazines etc.. Of course, the helping hand that they receive from the other web site publishers who place their corporate icons prominently on their home page adds a great amount of free visibility for them.

If you don’t have the funds available to run a dedicated branding campaign on and off the Internet, you should at least consider incorporating some branding into your campaigns. The long-term benefits of enhancing the recognition and comfort associated with you product or name may not be quantifiable at first. After repetitive reinforcement of your name and logo, people will begin to accept and become more familiar with your brand.

A word of caution for people trying to make a Web site /poratal a salable item. In recent months, since the successful sale of Indiaworld to Satyam Infoway for a large sum, others are trying to duplicate this success story. The examples are indiainfo.com trying to sale its portal to VSNL for very high costs; Rediff/Times of India are also enticing VSNL to buy their portals.

It is unfortunate that we Indians try to ape what goes on in the West where such sales and IPOs are very common. India is different culture and people through the hype of media have been moved into frenzy to think that such large investments in such ventures may be desirable… It is my place to point out that there is little substance in what is being sold. What people just buy is a brand name and nothing else. There is very little solid assets to back the high price which these websites/portals are valued.

Companies like Choksi Technologies of Bombay have betted their entire fortunes on making portals like. www.icleo.com etc. and getting them valued by Arthur Anderson in an attempt to sell them to Indian businesses. They have invested crores of rupees without having any revenue through this approach, in the wishful thinking that they will be bought out… This approach has been successful in USA but will it work in India remains to be seen… From my point of view it is at best questionable.

From the point of view of a buyer e.g. VSNL buying a portal for very inflated costs e.g. 500 crores is highly cost ineffective. With cost of creating a portal in India being considerably lower (because of cost of labour) than buying an existing one. With a competent team e.g. VSNL can create a portal for roughly 1 to 5% of the cost of purchasing a one. As rest of the cost they will pay is for the brand name, which they don't need as their presence is pervasive enough to create their own brand name.

For others similar equation is true. India is quite a nascent market and with the approach briefly expounded above any cash rich organization or even not so cash rich one will be able to create a brand name service or a portal with some degree of effort.

In my opinion, for India, purchase of already built portals, from people who are creating these as a business is cost ineffective, as the already built portals are not something unique and in large part a copy of their counterparts in USA. Most importantly, establishing a brand name in our country is still possible as the Internet markets are still not saturated like the ones in USA.

Copyright 1999 Dr. Raj Mehta. All rights reserved.