BRAND DIRECTION FOR FARMTRAC.
In the early 1990’ s, the Ford Motor Company took a policy decision to focus its FORD brand on the passenger car and light-truck products only.
As a part of this strategy, it decided to:
Sell its global cargo truck and agri-machinery businesses by:
- Putting on the block its manufacturing facilities for these products.
- Selling the rights for the use of the FORD brand name for both - cargo truck and agri-machinery products - to third parties, for a limited period.
Escorts exercised option ‘a’ for the manufacturing facilities in India, and was contemplating option ‘b’ till 1995.
Embrand advised Escorts to:
- Forego the short-term gains of paying royalty for use of the Ford brand name and, instead invest in building a new brand.
- Use technology already available to produce existing models borne of the collaboration with Ford Motor Company - initially to sustain the confidence of the Indian farmer.
- Create more differentials - primarily products and customer services – before the emergence of products with the FORD brand name, which could be launched by competitors exercising option ‘b’.
Escorts concurred with Embrand and decided to launch its own brand - Farmtrac. This led to the parting of ways between the Ford Motor Company and Escorts Ltd. This led to a vacuum in the market for premium tractors due to the absence (and eventual demise) of a brand that had created and dominated the premium segment of the Indian tractor market with annual market shares of almost 75%, for over a decade.
Ford Motor Company sold the rights to the use of the ‘Ford’ brand name till 2002 to Fiat Agri of Italy.
During this period, Embrand’s conducted continuous research amongst farmers to track consumer expectations of this brand. Based on the research, Embrand designed several promotions to meet, and often exceed, the customer expectations. Unfortunately the initiative to set the pace of change, which rested with Escorts until the expected date of entry of global tractor brands, was wrested by Fiat Agri in 1999. Fiat Agri did this by introducing Indian farmers to its brand - FNH (‘Ford New Holland’) - with a 75 hp product priced at a premium of 60% over that of the Escorts flagship - the Farmtrac 60 (a 50 hp tractor).
Escorts felt that FNH would not sell in numbers large enough to pay for either the investments made by Fiat Agri in a new plant at NOIDA, or the cost of the product launch.
Embrand, however, believed that:
- This product was a threat because it was not aimed at capturing market share, but establishing its brand amongst the most valuable of Farmtrac customers - the large-tract owning affluent, feudal zamindar.
- The fact that the product far exceeded the needs of even these very knowledgeable and demanding customers was not a case of bad product positioning, but sensible brand positioning.
- More importantly, it made the memorable Ford tractor slogan (ironically coined by Escorts marketing team in the 1970’s and used till 1994), ‘Har Kisan ka Sapna’ ring true again… this time for the same brand under its new owners.
- That heavy advertising inputs for Farmtrac would not be a substitute for product upgradation at this juncture. And that the upgradation need not be in terms of horsepower to match the FNH entry product.
Embrand commissioned research prior to a design brief for the new product. ‘Ford’ brand name till 2002 to Fiat Agri of Italy.
On the basis of the results a cost-based design brief was given to Embrand’ s design associates. The result was a product that exceeded expectations of then Farmtrac and FNH owners in areas that mattered most to them then - aesthetics, operator comfort and safety in haulage and farming operations, and cost of ownership as opposed to cost of acquisition.
Most importantly, it gave the Farmtrac brand an opportunity to differentiate itself from all other brands in the minds of the farmer and make him pay for the difference. Escorts, after much deliberation, decided it did not have the resources to create or buy the technology to compete with global brands in the premium tractor segment. Escorts decided to focus investments into their second brand - Escort - that had traditionally stood for high volume, low-tech, low-horsepower, lo-price tractors. Escort also decided to create an “ intermediate technology” mid-price brand - Powertrac - for markets where Escort products were unacceptable and Farmtrac pricing was a barrier.
The Farmtrac brand co-exists with the Powertrac and Escort brands today and offers low-hp and lower-priced models as well. Ford New Holland, too, has launched low-hp models. L&T has tied up with John Deere to launch new tractors in India. The Chinese may come soon.
What will Escorts do now?
- If ‘Escorts’ is merely the registered name of a corporate entity, and Escort, Powertrac and Farmtrac the names of tractor brands that offer models in similar hp segments, how will Escorts position each of its three brands in each segment?
- At ground level, how does the Escorts dealer salesmen explain/describe the difference between tractors of similar HP rating sold under three different brands from the same company?
- From among the brands entering the Indian market (from China and the global agri brands), and the existing domestic brands, what are the brands that each Escorts brand is designed to compete with?