Many pundits had gazed at the crystal ball and written post-dated requiems and ele­gies for them. After 1991, India Inc was unshackled and unleashed to fight bruis­ing, and often fatal, marketing battles to win consumer loyalty and gain market share across a slew of products and services. The logic was: the big daddies with fat marketing budgets, huge ad spends and a nationwide distribution network would simply smash the smaller, regional brands out of the Indian market place.

Something similar was predicted in the fascinating world of Indian media. As the Indian elephant started dancing, the media simply exploded. New publications, new television channels, new FM radio stations and subsequently even new internet portals started offer­ing a hitherto unbelievable array of choices to Indians. Here, too, the pundits prognosticated: the big players with their clout would elbow out the smaller regional players from the arena.

Step back a little into the late 1980s and you will witness startlingly similar forecasts for the murky world of Indian politics. A popular acronym in those days was TINA that read as: There Is No Alternative. Most po­litical pundits lamented the supposed fact that there was no alternative to the Congress and how the grand old party’s stranglehold over power was harmful for the Indian democracy. With a nationwide network of workers and patronage and a huge war chest of funds to fight elections, the Congress would continue to deny smaller political parties their day in the sun. Or so it was believed.

And what really happened?
If illusions were horses, pundits would ride them forever. Look at the tumultuous Indian political landscape; peep into the incestuous world of Indian media; and glance at the snooty world of Indian marketing in contemporary times and you simply cannot escape the startling con­clusion that has proven all manner of pundits wrong: the regional lords it over the national. Be it politics or media or consumer products and services, ‘regional brands’ have refused to be beaten into submission by the much bigger national brands. Far from that. In fact, in case after fascinating case, they have given a bloody nose to the big brother.

Still not convinced?
Just sample a few teasers before we get down to the nitty-gritty of establishing the validity of our hypothesis. When it comes to Uttar Pradesh, Bihar and Tamil Nadu, even the charisma and pan Indian appeal of national ‘brands’ like Sonia Gandhi and Atal Bihari Vajpayee are no match for heavyweight regional ‘brands’ like Mulayam Singh Yadav, Lalu Prasad Yadav and J. Jayalalithaa. Sonia Gandhi may straddle India like a colossus, but the ‘wrestler’, the ‘jester’ and the ‘Amma’ beat her hollow in their own turfs.

Hindustan Levers, Procter & Gamble, ITC and Tata Tea may be veritable giants that hold sway not only in the Indian market place, but also boast of a significant presence in global markets. Yet, in many consumer product categories, to quote The Hindu Business Line: “Despite slick packaging, attempts at differentiation and well-orchestrated advertising campaigns, players have found it difficult to shake off the legacy of a commodi­tised business… consumers look for cheaper options in regional and local brands.”

In the cooking oil category, despite expensive promo­tions and even more expensive ad campaigns, national brands like Saffola (Marico Industries) and Flora (HLL) have not been able topple hitherto regional brands like Gold Winner, Fortune and Postman. Brooke Bond, Lipton and Tata Tea have barely managed to withstand the onslaught of regional price warriors in the tea mar­ket. Hindustan Levers and ITC have been struggling for years to penetrate and dominate the branded food and spices market with little or no success. In this cat­egory, it is hitherto regional players like MTR, MDH, Priya and Bedekar that rule the roost. One of the most celebrated examples is shampoo where a little known regional player from the South beat Levers and Procter & Gamble at their own game by making ‘Chik’ shampoo a runaway success.

So, whether it is market share, vote share or mind share, regional brands have displayed amazing chutzpah in holding their ground against the more powerful na­tional brands. Some analysts say that this phenomenon reflects how diverse and fragmented a nation India is. When it comes to consumer products, cultural variations and differences in preference patterns are dished out as reasons why national brands find the going tough in many product categories. A favourite example doled out by this school of thought is that of coffee. Since most south Indians prefer to have filter coffee, the mega brand Nescafe, despite ruling the Indian market as a whole, doesn’t find too many takers in the South.

Such cultural and societal diversities are held respon­sible for the growing clout of regional ‘brands’ even in Indian media and politics. The Sun network scores over national leader STAR because it understands the ‘Dravid­ian’ mindset much better than its bigger counterpart. Exactly for the same reasons, ‘Dravidian’ parties like Dravida Munnetra Kazhagam (DMK) and All India Anna Dravida Munnetra Kazhagam (AIADMK) completely dominate electoral politics in the state, relegating the ‘un-Dravidian’ Congress and the BJP to the sidelines.

Yet, such facile presumptions about the impact of cultural and societal diversities tend to hide a big weakness of the major national players, be it in media, politics or consumer products. The primary function of a successful organisation is to fulfil the aspirations of consumers. The national players often lose touch with aspirations at the grassroots level, allowing local and regional players to sneak in and deliver a telling market­ing punch. There is also a huge change in the mindset at work here. With growing prosperity, middle class Indians who are no longer fluent in English are no longer awed by the ‘firang’ image. The consumer has also become more demanding when it comes to the value-for-money and vote-for-performance equations. While we will deal with the changing Indian mindset a little later, let us see how the problem of unfulfilled aspirations has led to upheavals in the political arena.

Till the 1980s, the Congress was a behemoth that completely dominated politics in India. An early warning about the eventual shattering of this monopoly came in Tamil Nadu, where the ‘Dravidian’ parties evicted the Congress from power in the 1960s. Since then, the Congress has never won elections on its own in Tamil Nadu. The reason: Tamil voters were convinced that it is only regional parties like the DMK which could fulfil ‘their’ aspirations while a national player like Congress sacrificed ‘their’ interests at the national altar.

This gathering storm, which originated in Tamil Nadu, triggered an avalanche that shook the founda­tions of the Congress by the 1990s. First came the Telugu Desam in Andhra Pradesh. Stung by a perception that the Congress was humiliating the Telugu pride, voters in the state handed a landslide victory to a newly-formed regional ‘brand’ - the Telugu Desam - in Assembly elections in 1983. The Telugu Desam has been in power in Andhra Pradesh for 15 years now.

The next big player to emerge was Shiv Sena in Maharashtra, which dislodged the Congress from power in the 1990s. Then there is the Biju Janata Dal in Orissa that has thrown the Congress decisively out of power. The only saving grace for Congress as a national ‘brand’ in these states is that it still retains significant support. The real disgrace is in the heartland states of Uttar Pradesh and Bihar, where the lower castes, miffed with the Congress for having hoodwinked them for four decades, have decimated the party. In these two states, the Congress has been out of power continuously for more than 15 years.

The growing clout of regional brands is clearly established if you examine figures released by the Election Commission of India. In 1984, the peak year for Congress when the Rajiv Gandhi-led party secured a record mandate; national parties had a vote share of 79%. By 1999, this had slipped to about 67% (See Chart). In contrast, regional parties increased their vote share from 8% in 1984 to more than 26% in 1999. This trend has been reinforced even in the general elections of 2004. Imagine the voters as consumers. Between 1984 and 2004, more than 25 million consumers have switched loyalty from national to regional brands. Similar trends are clearly discernible even in the world of media. Since television is a late entrant (though regional channels boast higher viewership figures in their respective states), we will take the print media, specifically newspapers, as the correct barometer of comparing the past with the present. Till 1977, the combined circulation of English newspapers in India exceeded he combined circulation of newspapers in all other Indian languages, including Hindi. In what can be a landmark year in 1978, Hindi newspapers overtook English dailies for the first time and the latter has steadily lost ground since then. According to the latest available data from the National Readership Survey, 2003, not a single English newspaper figures in the top ten lists of largest selling dailies. Every single one is a regional brand. According to the rival Indian Readership Survey, 2003, just one English daily, The Times of India features in the top 10 as number nine (See table).

While credible data for various consumer product categories - particularly for regional brands - is not so easily available, there is little doubt that regional brands have given the national brands sleepless nights.

To come back to the transformation in the Indian mindset, the success of regional brands with an earthy appeal also reflects the growing confidence of the Indian consumer; a growing equanimity about the Indian identity and a significant drop in the Indian inferiority complex related to English and all things ‘phoren’. Till the late eighties, in upscale college canteens, board rooms, parties and discothèques, it was infra dig and downright downmarket to converse in Hindi or any other Indian language. You could avidly see Bollywood movies and enjoy them; but it was sacrilege to admit it in front of peers. The standard practice was to ridicule Bollywood movies while gushing about the offerings from Hollywood. Most importantly, the host of a party or a discothèque would be banished to the never land of social acceptability if any Hindi songs were played. All that changed in the 1990s. The satellite channel boom ensured that ‘Hinglish’ became socially acceptable, and even fashionable. “Thanda matlab Coca Cola” and “Yeh Dil mange More” are just two examples of how far Indian marketers were travelling to woo the new Indian consumer. And, it all started with pretty people dancing to singer Daler Mehndi’s Bhangra beats in discothèques. By now, ‘item’ and Hindi pop numbers rule the dance floors. MTV first came to India as a channel that would lure the youth with ‘English’ songs and disdained Hindi songs in a lofty manner. By the late 1990s, all that MTV was playing were Hindi songs.

Pundits should not worry about this ‘fragmented’ nature of the Indian market. On the one hand, regional ‘brands’ in politics are forcing the bigger national players to pay more attention to voters. That is the power of democracy at work. On the other hand, regional consumer brands are forcing the bigger national players to not become complacent and take the consumer for granted. That is the power of the market place at work.