The Tata Group has been impacted by developments with regard to the 2G scam where its name figured along with other companies but it will bounce back.
R. Gopalakrishnan, Executive Director, Tata Sons, while addressing a Round Table on ‘Building Indian corporate brand', said, “It bothers us but our response has always been to fix the problem and to be open and honest about how it has happened because we have done nothing wrong. Although it does bother us that the Tata name can be affected, we have to carry on because all long lasting brands have tremendous hidden horsepower,” he said.
The Tata Group's revenues grew from Rs.14,092 crore in 1992 to Rs.38,607 crore in 2000 and now stands at Rs.319,534 crore with two-thirds coming from overseas operations.
The group acquired several ‘marquee' brands over the years like Corus, Tetley and Jaguar-Land Rover. “However, the real value enhancement for the brand is in knowing when to leave it alone and not try to integrate it. Why would we choose to re-brand Jaguar-Land Rover or Tetley? Only commodities like steel and soda ash have been integrated by tagging the Tata brand.”
In 2005, the Tata brand was valued at $5.5 billion and the group had been promoting the Tata brand in South Africa, the U.S., the U.K. and China. “It was a new game and being a compact place, spending could be controlled. The awareness increased only when our cars came onto their roads. We started in China only last year. In the U.K., we are among the largest manufacturers there, so do not have to do too much. The U.S. market is driven by consumer brands and that is the nature of the market.”
Although the Tatas are not well-known in China, its trade with China amounts to $5 billion annually with business from Jaguar-Land Rover, Nanjing Taco, TCS and other group companies. “Although Land Rovers cost a lot, a lot of Chinese buy them. Later this year, we are starting ‘Tata China Management Training Scheme' on the lines of Tata Administrative Services (TAS) here.”
On the issue of brand royalty to be paid by group companies to the parent, he said all acquired companies sign a brand acquisition and brand promotion contract. Speaking on the leadership transition from Ratan Tata who is to soon relinquish power as group chairman, Mr. Gopalakrishnan said, “Mr. Tata is only the fifth chairman of the 140-year-old group and the problem would be that people would look at the terminal brand value of the outgoing leader against the entry brand value of the new leader.”
