"We're Aggressive Marketers, not Aggressive Advertisers."
Magazine: 4PS usiness & Marketing, National
03 - 16 June, 2011.
Voted as a Star Brand for 2010-11, by The Indian Council for Market Research (ICMR), Blue Dart has Evolved from being a Document-Centric Service to a Critical Supply-Chain support. Ketan Kulkarni, head - Marketing, Blue Dart explains its Strategies, growth Plans and Challenges Associated with The Industry.
Rs.10 billion in annual revenues is a remarkable landmark for any logistics company. Blue Dart managed better, leaping over the 11-digit barrier to record Rs.11.47 billion in topline during FY2010. While opinions still vary over whether a repeat of a slowdown will see the company's business shrink (as it happened during a slowdown-struck FY2009, when the company's business grew slimmer by 7.11%), the obvious fact is, with every passing day, the brand appears stronger and well-hedged against the worst. Ketan Kulkarni, VP & Head - Marketing, Corporate Communications & Sustainability, Blue Dart Ltd., talks about how the "2.75-shipments-a-second" delivering brand has evolved over time, the challenges and hopes for a smooth ride ahead.
India is known for its huge section of middle-class buyers. Blue Dart's offerings though known to be reliable, are available at a higher price bracket. Isn't this an awkward pricing strategy for the Indian market?
The logistic industry is no longer just a courier service. We deliver shipments that are not only confidential and valuable, but also emotional. Considering the fast paced, dynamic lifestyles our customers lead, we deliver shipments as well as peace of mind. For our customers, aspects like service quality, consistency, responsiveness and reliability are of paramount importance because these dimensions directly impact their business outcomes. These values make excellent attributes to building a trusted brand. When our customers experience optimal service with Blue Dart, they do not mind paying a premium for our products.
Talking about DHL's acquisition ofBlue Dart about half-a-decade back, did any remarkable change come about in Blue Dart's operations as a result of this deal in India?
Despite the deal, the two businesses continue to work independently till date. Today, both Blue Dart and DHL draw on each others' strengths. DHL's market leadership in international air express complements Blue Dart's established domestic strengths, to provide customers with a complete spectrum of domestic and international express services, airfreight, ground and charter services in the country. Today, the two offer customers an entire spectrum of distribution services including air express, freight forwarding supply chain solutions and customs clearance through the combined DHL group companies (DHL Express, DHL Global Forwarding & DHL Supply Chain) et al.
So your idea of "a combined brand" - is this the reason why your ONE-RETAIL initiative was born?
Absolutely. Our common brand association initiative is an external manifestation of our internal synergies. This is an additional endeavour to ensure that customers perceive the two brands as one. We also have a thought-out strategic focus till 2015. As a part of this strategy, Blue Dart and DHL have formed an X-BU (cross Business Units) initiative that aims to 'collaborate and simplify' customers' lives. This also includes increasing the count of ONE-RETAIL stores from 390+ to 1000 across India by 2015.
Blue Dart is not known to be an aggressive advertiser. Do you see this situation changing soon?
Although we are not known to be aggressive advertisers, we definitely are 'aggressive marketers'. We're aggressive marketers, not aggressive advertisers. Even our TVCs and print ads connect emotionally with our customers, as we believe that a strong emotional connect with customers is the formula for brand strength, saliency and equity.
The company also does not believe much in celeb endorsements. Are we right?
Celebrity endorsements may work for some brands but we at Blue Dart are of the belief that every Blue Darter, Associate, Customer and Stakeholder is our Brand Ambassador.
2009 was also one of the most challenging in the history of Blue Dart. The revenues for FY2009 fell y-o-y by 7.1% to Rs.9.08 billion. Are we to understand that the company suffered a substantial setback during the slowdown-marred 2009?
The global meltdown did affect almost every industry and sector. Most companies across the globe were affected by it. We too were partially impacted since our customers' businesses were affected. We provide service to clients across some major industry verticals like telecom, automobile and IT hardware, which were critically affected. Pharma & FMCG which are consumption-driven were less affected. Volumes from BFSI vertical registered a decline too. Also, revisions in diesel prices & rise in ATF adversely affected the operating margins of the Indian logistics players.
Inadequate infrastructure, increase in fuel cost and increasing competition - which is the biggest challenge to growth for the Blue Dart brand?
All of them are concerns. One of the biggest challenges facing express operators today is Infrastructure - both air & surface. Space at airports, airside and city-side infrastructure are often inadequate. In addition, parking bays, air-side/city-side access and traffic congestion adversely impact costs as well as service quality. Air express companies are constrained by the sizes of the facilities at the airports, as they have remained the same while the loads have increased many folds. It is estimated that though 70% of the freight transportation in India is through roads, National Highways constitute merely 2% of the total road network in India. Fuel prices are also a concern. In an industry, where space is a highly perishable commodity, any disruption in services, due to either natural disasters or manufactured reasons, affects us adversely, as the day's capacity inventory is lost forever.
On the fleet front, Blue Dart, currently has four Boeing 757s and three Boeing 737s - the highest as far as the domestic air cargo market is concerned. Any additions planned on this front in 2011?
Our capacity augmentation would continue to be in tandem with our customer needs and basis the behavioural trends. We foresee the need to add another aircraft to our fleet somewhere around Q4, 2011. However, we will wait for another 2-3 months to see the volume growth and then act.
Blue Dart claims that it offers "Solutions for peace of mind". What can be the new tagline that explains the brand's overall proposition?
When customers entrust us with their logistic requirements, globally, it is because no one else understands them the way Blue Dart does. And considering the fact that once we become their partners, our customers can rest assured, I feel the apt punch line for Blue Dart should be: 'At Blue Dart, we don't just deliver Shipments. We deliver Peace of Mind'.