Zomato vs. Swiggy: Brand Architecture and Positioning

Some of the ardent readers of my newsletter have mentioned that I focus too much on principles and concepts and that they crave more topical content.

They want to see these principles connected to current, familiar brands.

So, I've decided to address it in this latest edition of the Mindful Marketing Newsletter.

In this issue, I delve into the brand architecture and positioning of two well-known companies: Zomato and Swiggy.

Upon analyzing their brand architecture and positioning, I found their differences to be quite striking.

Zomato has firmly established itself as a full-fledged food delivery brand, with a communication strategy that continually reinforces this identity.

In contrast, Swiggy aims to be seen as a 'delivery' company, offering both food and grocery delivery through a single platform.

Swiggy operates under two main assumptions.

Firstly, it believes that by integrating food and grocery delivery into one app, it can effectively cross-sell, converting food delivery users to grocery delivery and vice versa.

Secondly, Swiggy may believe that utilizing the same delivery fleet for both services would enhance efficiency.

However, Deepender Goyal, the founder of Zomato, takes a different approach.

By acquiring Blinkit and maintaining it as a separate brand, he has strategically positioned Zomato in the food delivery market while allowing Blinkit to specialize in grocery delivery.

From a brand architecture perspective, Deepender Goyal employs the House of Brands approach, where each brand stands alone with its unique identity and market positioning.

This strategy has its advantages and disadvantages:

Advantages:

Tighter Focus and High Relevance: Zomato’s focus on food delivery is reinforced through their storytelling and communication. Similarly, Blinkit’s singular focus on grocery delivery enhances its brand relevance.

Disadvantages:

1. Higher Marketing Investments: Significant marketing investments are required to maintain the unique identities of these two separate brands.

2. Reduced Cross-Selling Potential: The possibility of cross-selling is reduced because of the distinct identities, and customers tend to perceive these two brands differently.

On the other hand, Swiggy adopts a Branded House architecture, featuring a single, overarching brand identity that extends across both food and grocery delivery.

Swiggy essentially positions itself as a 'delivery' company.

Advantages:

1. Efficiency: One singular brand, Swiggy, covers all offerings, allowing for centralized marketing planning, resource management, and budgeting, thus bringing more synergy across the business.
2. Potential for Brand Extensions: Swiggy can introduce more adjacent categories in the future under the same brand umbrella, leveraging established brand familiarity and trust.

Challenges:

1. Strict Fit for Brand Extensions: Not all brand extensions succeed. Any new category must fit into the existing association of 'delivery' that Swiggy is trying to establish.
2. Cross-Selling Issues: Cross-selling between food and grocery delivery might not work as assumed. The context of usage for these two categories is different—customers typically do not think of buying groceries when ordering food and vice versa, making cross-selling at the point of sale a challenge.

From an overall brand standpoint, establishing itself as a ‘delivery’ company might benefit Swiggy by attracting both food and grocery ordering customers.

However, both Zomato and Swiggy operate in an oligopoly market where they hold the majority of the market share.

Currently, their brand positioning might not significantly impact their sales, but this could change if new entrants and offerings alter the market dynamics.

In conclusion, while Zomato and Blinkit might enjoy higher brand relevance due to their focused approach, Swiggy benefits from efficiency and the potential for broader category extensions.

The success of these strategies will ultimately depend on how well they can adapt to changing market conditions and consumer preferences.

In my experience as a marketing strategy consultant, I have encountered many companies facing challenges related to brand architecture and portfolio management.

It is crucial for entrepreneurs to structure these elements properly, as they can significantly impact their organization structure, marketing investments and capability building.

https://www.rajeshsrinivasan.com/