IIPM: An intriguing story of growth and envy
However, the question is: is this another ploy by Yahoo! to grab new users too, who for long have served the consumer ranks of its competitors? “Yes, it’s both about retention of old ones and getting new users onto the Yahoo! vehicle. In short, it’s ‘Grow and explore’,” shoots back Mathur. Obviously, this is yet another attempt from Yahoo to make its brand indispensable to Indians (and users globally). But has such rebranding strategy worked in the past? And will Yahoo succeed? As far as Harish Bijoor, noted brand analyst is concerned, he doesn’t seem to agree completely with Mathur as he opines, “When it comes to the softer side of online technology like browsers or search engines, brands find it tougher when it comes to returns from just re-branding, as users are very loyal to the particular browser or search engine. So if Yahoo! is actually looking at acquiring new consumers, at the cost of its competitors, it will prove a very difficult proposition.” And what about payoffs? Bijoor opines, “I don’t believe the payoff will be as solid as the company expects it to be, because it is only a little change of identity and product offering that we are looking at in this case. And again, the great loyalty factor will play against the expectations of Yahoo!” On the other hand, Mathur justifies the investments as, “We are looking at personalising and customising the brand Yahoo! And our payoffs will definitely touch our expectations...”
$100 million is indeed a great deal, for Yahoo, being a company that has its roots in technology, could have invested a great part of this amount in something more concrete, like offering a newly innovated service. To this Bijoor adds, “Yahoo could have gone single-handedly through the route of harvesting young people who are just new to the market. The problem is that Yahoo is preaching to the converted, which is really futile! They could do something for new users, maybe something like a Kids Google, that could cater to age group eight years and above.” A slightly different-minded Kapoor however feels that, “This campaign repaints Yahoo! as more vibrant and fresh, as a young and trendy service, and it should do a world of good to Yahoo!” Providing a different solution to the proposed payoff matrix, Diptarup Chakraborty, Principal Analyst, Gartner, hints at a potential sell-off of the brand, “The brand has lost a lot of value and weight in the recent past, and this campaign only appears to be increasing the brand value of Yahoo! to make it more appealing and attractive to potential bidders.”
And how will competitors react? “I do not believe that the competitors need to even react as this outlay is clearly a cost for Yahoo which will eat into its bottom line,” explains Bijoor. While Chakraborty doubles up on the same, a rather assertive Ptak states, “They will be very glad that Yahoo! has spent $100 million to so little effect. It should motivate them to invest much more heavily in technology to create new offerings and services for their customers.” Yes, $100 million is a big sum anyday, but at the moment, it appears to be the best bet for Yahoo! Mathur and his Yahoo! India team is hopeful, and who knows, Yahoo!, Yellow and its yearning, might just click!
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Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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