Battle for a brand
With Pawan and Naveen Munjal seeking legal intervention for restricted use of the Hero brand in electric, brand experts are divided on its importance in this new mobility arena. Hero MotoCorp dealers are hoping for the best too since this will mean additional investments for a new brand.
To Harish Bijoor, this four-letter word brand is a “humongous asset” for the electric space.
The reference is to ‘Hero’ where Pawan and Naveen Munjal have sought legal intervention for use of the name. The former who heads the market leader, Hero MotoCorp, wants the brand (Hero) for the foray into electric. This is not acceptable to Naveen Munjal who is already an established brand with Hero Electric.
So, is ‘Hero’ so important to Pawan Munjal as he gets ready to throw his hat into the electric ring or can he survive without it? Bijoor, founder Harish Bijoor Consults, is emphatic that using the brand could make a world of difference to Hero MotoCorp in its electric drive.
“There is a ready-made and ready-built brand name of huge repute that can make the difference from being a winner to that of being an also-ran in this space,” he says. Sure, it is not as if this is a matter of life and death but the advantages are way too obvious.
“The clear point I make is that he (Pawan Munjal) can do more than survive with the Hero brand name,” clarifies Bijoor. This is a brand name that has been “built assiduously” over the years with deep investments.
“The EV space is a clear adjacency and adjunct to the space of two-wheelers of every kind. This is a valuable brand asset that cannot be given up without a fight at least. The fight for it is worth it,” he says.
According to Ambi Parameswaran (popularly called Ambi), Independent Brand Coach & Founder, Brand-Building.com, Hero Motocorp is a well-established brand in the two-wheeler space with sub-brands like Splendor. Yet, since the electric space is new, “I am sure a new brand can be built in that space if Hero MotoCorp wants to do it”.
It is also Ambi’s view Hero Motocorp can survive in the electric space with a new brand name. “Just as Bajaj has launched their electric vehicle under Chetak, Hero Motocorp can also launch its electric vehicle under a new brand. Your competition is all new: Ola, Ather etc,” he reasons.
Sandeep Goyal, founder and current chairman of the Mogae Group, points out that Pawan Munjal has gone through the Hero and Honda divorce which did not adversely impact Hero “quite as much as everyone believed”. As he puts it, “There was Hero Puch from OP/Kamal Oswal in the past...never came in the way of Hero Honda. So these are irritations for sure, but not really obstructions.”
Goyal also believes that the electric opportunity is for a “much younger, newer” generation. “Hero is a known name to their parents, not to them. Creating a younger, greener, fun name could actually be an opportunity for the future.”
Ambi goes with this view of being able to move on without the Hero brand. “As long as the consumer knows that the brand is from the Hero MotoCorp stable it will not be an issue to launch e-scooters under a new brand name. “
Bijoor, however, holds his ground in insisting that Hero is integral to Pawan Munjal’s foray into electric. “A Motocorp without a Hero as a prefix is a bald brand statement. One word can make that big difference. And that word is a generic word called Hero in this case!”
The stakes are clearly high in this case even while a section of industry experts believes that this issue could have been sorted out amicably instead of bringing it out in the open. “Family squabbles are best settled without the world knowing about them. This is needless publicity which could have been avoided,” says a top CEO.
Ambi adds that in India “we have had family disputes creating brand fights”. As he elaborates, “Haldiram for instance has two families sharing the brand name. Same with Medimix. Even in the Bajaj family there is a discomfort with the brand being used for hair oil. But that said, all families manage to work around these obstacles.”
Finally, it is up to the courts to decide how this turns out eventually. To a layman, there is no question that Hero has a huge brand recall which possibly explains why both parties involved in this legal tussle are so keen to own it. Hero Electric has been around longer and with Hero MotoCorp now getting into this domain too, there is every reason to guard its brand turf zealously and more so when it believes it is in the right legally.
In a recent interview with Autocar Professional, Naveen Munjal had made it known that with more companies getting into the EV space, the market would naturally expand “and there are no two ways about it”. As he added, “It is not going to be only one winner taking it all, rather there are going to be a number of companies which are going to expand this market.”
Munjal also welcomed competition in this space since it “keeps a company on its toes to do constant innovation and take the right product with utmost quality” out to the customer. “We are not focused on any one particular company entering the segment, we are focused on the entire market, and when we look at our market share over the last few months, we have only expanded.”
While this is happening already, the issue just becomes a little trickier once another ‘Hero’ is ready to throw its hat into the ring. The law will finally decide if only one side of the family can claim rights to the brand or if it can be used by others too. Hero vs Hero is a clever brand slogan for the current legal feud but there is a lot more at stake here.
“While it does appear that Hero Electric has the right of using the Hero brand name for its electric scooters, how Hero MotoCorp will circumvent depends upon how the family agreement is worded and if there are any loopholes,” a prominent lawyer told Autocar Professional.
Assuming Hero MotoCorp ends up switching to another brand name for EVs, the company would then ask its dealers to invest in a separate retail setup, he added. This may not be a walk in the park for the dealer fraternity. As one of them confided, “Creating a natural footfall of customers will become a challenge and there will be some time lag before dealers are able to do that. It always makes sense to hold the customer in the same showroom.”
The truth also remains that there is “always resistance to new investment” from dealers especially when sales of traditional internal combustion two-wheelers have been slowing down in recent times. “Fresh investment is not just about infrastructure; it also takes into account manpower, security, insurance, and all other overheads. Having said that, if we are asked to do so, we will do it, but with a heavy heart,” he admitted.
Eventually, all this will depend on the legal verdict and if Pawan Munjal will be allowed to use Hero for his electric foray or, alternatively, Naveen Munjal is the only one allowed to enjoy this right.
This feature was first published in Autocar Professional's January 15, 2022 issue.
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