Understanding Marketing Strategies Guide Prof. Rajeev Kamble Dineshwar Moparthi 2009130Sravanthi Nanduri2009131ParthBhatt2009135Dipti R2009139
1
ACKNOWLEDGEMENTS
We would like to convey our heartfelt gratitude to Prof. Rajeev
Kamble for his guidance in completely our marketing project on the 4
P’s of marketing for the consumer durable segment of Videocon
Industries Ltd.
We would also like to mention a special thank you to Mr. Sunny,
Vidharba Branch Manager, Videocon Industries Ltd., and Mr. Bhushan
for their guidance while undergoing this project. It was an experience
worthwhile to work on Videocon Industries Ltd.
2
3
Table of Contents
Introduction 4
SWOT Analysis 6
Segmentation, Targeting and Positioning (STP) 7
4 P’s of Marketing
Product 9
Price 18
Place 21
Promotion 24
Past Experience 27
Re-positioning 28
Future 30
Bibliography 31
Videocon Industries, also known as Videocon Industries Limited is an India-
based electronics goods manufacturing company established in 1979.
Videocon Industries belongs to the legendary business conglomerate – the
Videocon Group. The main business activity of Videocon Industries Ltd. involves
manufacture of consumer electronics, home appliances, and office automation
equipment. Further, the company is also involved in other business areas like Internet
services, petroleum exploration, and power generation. The parent company of the
Videocon Industries is a USD 2.5 billion global conglomerate.
The Videocon Group operates through the following 4 sectors:
Consumer Durables
Consumer products like Color Televisions, Washing Machines, Air
Conditioners, Refrigerators, Microwave ovens and many other home
appliances, selling them through a Multi-Brand strategy with the largest
sales and service network in India. In-house compressor manufacturing
technology in Bangalore further supports refrigerator manufacturing.
Thomson CPT
With the Thomson acquisition Videocon has emerged as one of the
largest Color Picture tube manufacturers in the world operating in Italy,
Poland and China, continuing to lead through new innovative technologies
like slim CPT, extra slim CPT and High Definition 16:9 format CPT.
Introduction
4
Color Picture Tube Glass
Videocon is one of the largest CPT Glass manufacturers in the
world with a high level of experience and technical expertise operating
through Poland and India.
Oil & Gas
An important asset for the group is its Ravva oil field with one of
the lowest operating costs in the world producing 50,000 barrels of oil per
day.
Videocon Industries registered net sales of Rs. 2214.36 crore for the year ended
31st March 2009 and the company's net profit stood at Rs. 72.98 crore for the same
period. Mr. Venugopal N. Dhoot is the chairman of the company.
5
Swot Analysis
6
SEGMENTATION
Market segmentation is the process in marketing of dividing a market into
distinct subsets (segments) that behave in the same way or have similar needs.
Because each segment is fairly homogeneous in their needs and attitudes, they are
likely to respond similarly to a given marketing strategy. They are likely to have similar
feelings and ideas about a marketing mix comprised of a given product or service, sold
at a given price, distributed in a certain way and promoted in a certain way.
The overall intent is to identify groups of similar customers and potential
customers; to prioritize the groups to address; to understand their behavior; and to
respond with appropriate marketing strategies that satisfy the different preferences
of each chosen segment.
Segmentation based on Income
LCD: Income bracket of Rs 20,000 and above
Slim: Consumer in the income bracket of Rs 9000-15000
Flat: Consumer in the income bracket of 7000-12000
Conventional TV: income bracket of Rs 3000-6000
Segmentation based on social class
LCD: upper middle class and rich class
Slim: middle class
Flat: middle and lower middle class
Conventional TV: lower economic class.
Segmentation based on benefits offered
Conventional, Flat screen Slim, and LCD can also segmented on the basis of
benefits that an end consumer would receive from them.
STP
7
TARGETING
Once the firm has identified its marketing-segment opportunities, it has
to decide how many and which ones to target. The decisions involved in
targeting strategy include:
* Which segments to target?
* How many products to offer?
* Which products to offer in which segments?
At the lower end of the market Videocon still retains its “Value for
money customer”.
At the premium end it is attempting to upgrade its image to one of
“Quality Driven” customers by associating itself with the international reputed
brand name of SANSUI.
POSITIONING
Positioning has come to mean the process by which marketers try to
create an image or identity in the minds of their target market for its product,
brand, or organization. It is the 'relative competitive comparison' their product
occupies in a given market as perceived by the target market.
Once the competitive frame of reference for positioning has been fixed by
defining the customer target market and nature of competition, marketers can
define the appropriate points-of-difference and points-of parity associations.
Points of Parity (POPs) are associations that are not necessarily unique to
the brand but may in fact be shared with other brands. They represent
necessary-but not necessarily sufficient-conditions for brand choice.
Videocon's Points-of-Parity are good quality Picture and good
sound.
Points-of-Difference (PODs) are attributes or benefits consumer strongly
associates with a brand, positively evaluate, and believe that they could not find
to the same extent with a competitive brand.
Videocon's POD is the quality product with low cost.
Thus, Videocon is positioned itself as a reliable and value-for-money
product.
8
Two of the points of Videocon’s Vision & Mission include…
“…improved technology…”: the means
Technology is no more a premium input; it has become the bare minimum in recent years. Rapid advances have only fuelled this phenomenon. Videocon is extremely vigilant in shunting out dated technology and replacing it with the best-in-class offers of the times.
“…innovative products…”: the means
Product development, innovation and customization are the tools Videocon uses to stay ahead of the competition. This is because a continuous stream of innovative products excites the market and enhances brand recall - A strategy that Videocon banks on a lot, especially on the domestic front
Product
9
Product Mix
The width of a product mix refers to how many different product lines the company carries.
The length of a product mix refers to the total number of items in the mix.
The depth of the product mix refers to how many variants are offered of each product in the line.
10
WidthLengt
hHome appliances Consumer electronics
Refrigerators Washing machines
Air conditioners
Microwave ovens
Television Audio/Video players
Videocon Videocon Videocon Videocon Videocon VideoconKelvinator Kelvinator Kelvinator Electrolux Akai AkaiElectrolux Electrolux Electrolux Kenstar Sansui Sansui
Kenstar
Consumer Electronics
Television Audio/Video
LCD TV DVD Player
Ultra Slim TV
Flat TV Multimedia Speakers
Conventional TV
Home Appliances
Microwave Owens
Refrigerators Washing Machines
Air conditioner New Home Appliances
Solo Frost Free Fully Automatic Window AC Home UPS / Inverter
Grill Direct cool Semi Automatic Split AC Batteries
Convection Front Loading
11
Television
LCD TV
Similarity Variant
Platinum – VLL32FBA High Glossy Finish
HDMI facility Invisible Speaker Sleek Design DCRe High Resolutions Response Time Aspect Ratio
Full HD 1080p 100000:1 Super Contrast
Ratio 1.06 billion display color
Platinum – VLL22SBA
30,000:1 Super Contrast Ratio
1.06 billion display color DCRe
Platinum – VLL19SBH
16.7 Million Display Color 15,000:1 Super Contrast
Ratio
12
Ultra Slim TV
Similarity VariantFLEMINGO
200 – VBS21SGR
44% Slimmer (54 cm wide) 200W PMPO Stereo Sound 200 Program Memory 4- Mode Selectable Sound 5 Mode Selectable Picture Picture improvement
Technology Child Lock Hindi OSD Plug & Play.
FLEMINGO 200 –
VBS21SRR
FLEMINGO 200 –
VBS21SBR
FLEMINGO 200 –
VBS21SDR
Flat TV
Similarity Variant
ALPHA 250 – VAF15SDV
200 Program Memory 10 Picture Modes Child Lock Hindi OSD Plug & Play
54/36cm Flat TV 500W / 250 W PMPO Stereo sound 04 sound modes Game Facility
ALPHA 150 – VAF15MOV
54/36cm Flat TV 200 W / 150W PMPO Game Facility
ALPHA 150 – VBF15MOV
38cm Flat TV 150 W PMPO
ALPHA 150 – VBF15CDV
38cm Flat TV 150 W PMPO
Conventional TV
Similarity VariantCHAMP 20 – VAN20ESP 200 Program Memory
Music Mode 10 Pictures Mode Child/Panel/AV/TV/Lock Plug & Play
51cm Conventional TV 200W PMPO
CHAMP 20 – VBN20ESP
51cm Conventional TV 200W PMPO
CHAMP 20 – VCN20ESP
36cm Conventional TV 100W PMPO
13
Videocon has continued to manufacture CRTs for the lower middle class of the
country. CRTs such as Videocon, Challenger brands are still in the market.
Audio / Video
DVD Players
Similarity Variant
VAD 10SNN
Composite / Component / S-Video output
DivX / MPEG4 Compatible
12 / 24 bit Audio DAC Parental Lock Pro-Logic II
VAD 11SUN In built USB port Power resume
VAD 12SCU In built USB port Parental Lock
VBD 13SAN 12 / 24 bit Audio DAC Pro-Logic II
VBD 14SAG 12 / 24 bit Audio DAC Pro-Logic II
VBD 15SAU In built USB port In built Amplifier
VBD 16SHC HDMI Output USB & Card reader
Multi Media Speakers
Similarity Variant
VAH32BNN
Compatible with PC / TV / DVD / VCD / Walky / Audio System
Full function remote control
5.1 ch. Amplifier 2 Ch. Input to 5.1 Ch. Output
VEH55BTW 5.1 ch. Amplifier 2 Ch. Input to 5.1 Ch. Output LED Display
VDH20BNN 2.1 ch. Amplifier Bass Control
VBH45SNN 5.1 ch. Amplifier 2 Ch. Input to 5.1 Ch. Output Super Bass
VCH45BUN 5.1 ch. Amplifier LED Display
14
15
Microwave Ovens
Videocon microwave ovens are equipped with insta-menu drives, multiple
power levels, Xpress cooking and active defrost devices.
Solo, Grill & Convection Range
VB20GSSJ
VH19SWWM
VD20CGSJ
Multiple Power Level Auto Cook Menu Combination Cooking Multiple Stage Cooking Express Cooking Defrost Settings Clock Setting Timer
Refrigerators
The refrigerator market estimated at around 4.5 million units in 2007/08
has also grown by 10%. Within this, the frost-free segment is exhibiting the highest
growth and is expected to contribute some 35% to total sales. Refrigerators have
achieved penetration levels of 9% and are expected to grow at between 11% and
13% per annum.
Frost Free Range & Direct Cool Range
VAL233
VCL50Z
VCE08Z
VBL194
Unique Eco-Fresh range with eACE technology
3-star and 4-star rating with Energy efficient compressor
Crisper cooling technology
Anti-fungal removable gasket
16
VBP214 Humidity control
Washing Machines
The washing machine market valued at Rs. 1600 crore (US$ 400 million) annually
has witnessed total sales of approximately 2.2 million units in fiscal 2007. In this
category, the high-end segment comprising fully-automatic and front-loaders have shown
the maximum growth.
The latest Eco-wash of semi-automatic washing machines with quant wash
technology gives unique features like germ free, rust free, central spin shower and
multiple water level selectors.
Fully Automatic & Semi Automatic Washing Machine Range
Digi Ocean
Digi Pacific
Nemo
Atlantic
Marine
UV light emitting low concentration Ozone
Pre-set wash programming
Auto-Error Detection
Digital Sensi Logic
17
Air Conditioners
Air-conditioners are the smallest segment of the durables market. With increasing
incomes and better standards of living this segment is expected to explode. In the
foreseeable future, however, it will continue to be driven by urban India. Air conditioners
include the entire range between 0.8 TR and 2 TR capacities in window and split models.
Window AC & Split AC Range
VKW21CE1
VKW30CE1
VYS61BL1
VKW51CE1
Giga Filter Technology
Turbo Cooling
Anti-Corrosive Fins
CTL protection
18
Pricing for products is a result of the pursuit value that they hold i.e. based on the
perceptions the customers have about the brand. Since its launch, Videocon has always
been a “value for money” brand and its target customers are the middle class population.
Videocon is determined to retain its competitive pricing position in the mass
market. Thus Videocon is following a two-pronged pricing strategy-
At the lower end of the market, it still retains its “value for money” method of
pricing.
At the premium end, it is attempting to upgrade its image to one of “quality-
driven” by associating itself with the internationally reputed brand name of Sansui,
and following a perceived value pricing method.
Multi Pricing and Multi Branding strategy
Videocon adopts a multi-branding, multi-pricing strategy wherein different
products and brands have different pricing. It has consciously adopted a multi-brand
strategy -- besides its own brand, Videocon, it markets the Sansui, Kelvinator, Electrolux,
Kenstar and Akai brands.
The brands Akai and Kelvinator target the same audience; the only difference
being the hoard of varying features such as color and technology used among the
products of the different brands, to avoid brand versus brand conflicts.
Electrolux and Sansui, being foreign brands and having the perception as offering
superior technology, are priced higher compared to the rest for similar category of
product.
Price
19
Television
Sansui is a brand that only has 32-inchers and 26 inchers officially in India,
thus they seem to be concentrating very much on the small screen LCD
space, plus price wise too they try to be highly competitive at Rs. 41900
whereas Videocon offers the cheapest LCD TVs in 20”, 32” and 42” screen
size with a maximum dynamic contrast ration of 50000:1 priced at about
Rs. 30000 for a 32” and Rs. 45000 for a 42” screen size TV.
Akai products are mostly flat and conventional CRT TVs. The only LCD that
it offers is the 32” screen size with a low aspect ratio priced at Rs. 26000.
Refrigerators
Kelvinator, emerging from under Electrolux ownership as an independent
brand, was marketed as the “coolest one,” as its advertising tagline goes.
Kelvinator is positioned as a mass-market refrigerator brand.
The Kelvinator brand name still has a strong resonance with Indian
consumers and, backed by a strategy of value-for-money pricing. Videocon
says the strategy is to leverage the brand image of Kelvinator to generate
business without getting into price wars.
Videocon refrigerators are low priced for the same kind of features offered
by Kelvinator except that they are priced even lower than the latter.
Kelvinator carries with it the perception of an in-built superior technology
and so, priced slightly higher than Videocon.
Electrolux is a high priced brand owing to its superior technology and so, is
priced at Rs.20000-25000, while Videocon prices its products at about Rs.
15000-20000.
Kelvinator offers low priced and lesser features in its products and hence,
prices them at Rs. 10000-15000.
20
Microwaves
Kenstar, marketed by Kitchen Appliances, a Videocon Group company,
occupies the third slot with a market share of 18 per cent.
Kenstar microwaves are currently priced at Rs. 8900, while Videocon
microwaves are priced even lower at Rs. 7990.
21
Videocon has been and is No.1 in terms of the quantity of products sold by any
consumer durable enterprise. In the Western region, it holds 63% market share.
Videocon Industries Ltd. conducts its operations in Maharashtra, where it has its
branch offices in certain regions- Pune, Mumbai, Nashik, Vidharba (Nagpur). There are 2 or
3 distributors per region, depending on the demand of Videocon products in those regions.
Currently, in the Vidharba region, there are 16 distributors, 26 dealers, 3 NEXT retail
showrooms.
Videocon has its central manufacturing plant located at Aurangabad and 5 other
manufacturing units over India. The company has both company owned warehouses
(depot at Wadi) and franchises to carry out its distribution of products. The marketing
channel used for distribution is either a zero level marketing channel or a 3-level
marketing channel. The zero level channel consists of the manufacturing unit connected to
retailing their goods and merchandise at company owned retail outlets like Next. The 3-
level channel contains three intermediaries. These are local wholesalers or distributors,
dealers and sub dealers.
To the Wholesalers: The Company sells the bulk of goods to the wholesalers at the
lowest possible prices, who then sell them to the customers. The onus is upon the wholesalers
to dispose off the goods from him. These wholesalers are not company authorized, as seen in
the FMCG sector.
To the Distributors: The distributors work in a network and the whole network acts as
an expense account for the company. The distributor plays down the line, asks the retailers,
dealers and sub-dealers for the kind of products in demand by customers and then places an
order for those products only, from the company.
Forward and Backward Integration
Videocon employs forward integration through its retail outlet NEXT, launched two
years back, through which it brings out different variants of its products to satisfy the varying
Place
22
customer need through ownership of the retail outlet. This, they like to call, fulfilling customer
delight rather than just needs.
Backward integration too has been a part of its operations, wherein the company
manufacturers the components of its products such as the picture tubes for CRTs, and other
parts, without the need for suppliers.
23
Marketing its own brand and other brands
Retailing is done through its own retail showrooms such as NEXT, Videocon Plaza
for the mini metros and the latest being, Digiworld, a multi-brand outlet, and also
through display and sale in shopping malls (also called single point selling), who buy from
the manufacturers i.e. the company directly. This is the modern trend because the
customer prefers a wide variety of brands at display before he zeroes down to buying
one. An online retail shopping website, EDigiworld has also been put for convenient
online shopping of Videocon products.
Retailing is done through its own NEXT showrooms and also through display and
sale in shopping malls (also called single point selling), who buy from the manufacturers
i.e. the company directly. This is the modern trend because the customer prefers a wide
variety of brands at display before he zeroes down to buying one.
Videocon has entered into marketing alliances with several other brands such as
Akai, Kelvinator, Electrolux, Kenstar and Sansui. Among these, Akai and Kelvinator are the
distributor’s brand i.e. they generate low sales turnover and hence are marketed strictly
as per the request of the distributors which is in accordance with the demand for these
products. The other brands such as Videocon, Sansui and Electrolux are marketed in retail
outlets while Kenstar is both available in retail stores as well as marketed by the
distributor.
24
Videocon, besides marketing its own products, also markets other brands’
products in the Indian market. Videocon has marketing alliances with Japanese brands
such as Akai, Sansui and Swedish brand Electrolux to promote those brands in India.
These companies pay royalty to Videocon for marketing and advertising their brands.
Their products may or may not target the same audience, each differing in their own
features and specifications.
Videocon indulges in many sales promotion activities through advertisements in
print and electronic media and also, offering discounts at make shift stalls during local
events in Nagpur city. It concentrates on pull strategy to persuade customers to demand
the products from the intermediaries such as the dealers or distributors. This strategy is
particularly successful in the case of Videocon since there is high brand loyalty and
involvement.
Videocon has differentiated its promotion strategies based on whom the company
is targeting. There are 2 types of promotions done-
1. Customer promotion-attract customers to buy products through means of
discounts, coupons and rebates offered.
2. Trade Sales promotion- attract the dealers through means of discounts and buy
back allowances, wherein the company promises to buy back the left over
inventory in case they do not get sold.
Videocon’s new Brand Identity
The change in the logo speaks a lot about its changing focus to target the higher
end of the market through its ad campaign of “Experience Change”. Videocon has been the
pioneer in introducing consumer durable product range in India. It targeted the only
market then, i.e. the middle class. Since then until now, it has focused only on that
segment and has been successful in doing so. To remain competitive in the market, it has
become imperative for it to target the upper class customers too and so with its new logo
Promotion
25
and new ad campaign, is trying to change the perceptions of people about the brand as
not only being for the middle class.
The Videocon logo is the heart of the new brand identity. The Fluid lava reflects
the brand idea, 'Experience change'. The color palette has been chosen to reflect the
philosophy of Videocon Group i.e. the color green is symbolic to the company's ecology
drive.
Videocon Group is determined to bring about a change in all its communications
both internally as well externally. Strong marketing initiatives with hi-biltz promotional
campaigns across all the media i.e. print, electronic and radio plus various BTL & on
ground activities, marketing collaterals, visual merchandising etc. have been designed to
launch the new identity. The company wants to completely adapt to its new tagline
'Experience change', in every sphere of its domain. Internally, also the focus is on further
developing latest technology products with thrust on quality and innovation, improved
service penetration and increased employee morale. Videocon Group has always been a
pioneer, leading the India Consumer durable Industry and this time also the Group is
geared up to revolutionize the whole market with its new brand identity and latest
product technology.
26
Brand Ambassadors
Videocon’s most popular brand ambassadors Shah Rukh Khan and MS Dhoni have
been successful in promoting the brand’s values through the famous ad commercial of the
two estranged brothers reuniting with the help of a gold locket of the then Videocon logo.
The ad was launched in the last week of November 2007, with Videocon spending about
10 per cent of its annual marketing budget on this campaign. Cricketer Rahul Dravid too
was once a brand ambassador during the ICC World Cup 2003.
27
Videocon has also great learning from its own past experiences as not proper
utilizing a balanced mix of 4 P’s of marketing.
As the products such as Internet TV and DTH service were released before time
and were termed as flop models. We can see the product is well ahead of time but the
promotion strategy and the company’s brand image did not go with the product.
Actually TV is considered as multi viewer entity where as computer is considered
as single viewer entity. These two were not complementary to each other. Company
should have taught before they released the product. Company also should have made in
significant efforts in taking the technology into the people first and then sell the product.
The technology itself was new and people were unable to relate to it.
The brand image of Videocon right from the starting is value for money i.e. they
are always considered as the middle class brand in India and was more synonymous to
the fighting spirit of the middle class of India.
The products like Internet TV and DTH service were well ahead of time and the
company was unable to promote the product nicely so that it would have gone to the
masses.
The brand image change now gives the youthful image to the brand and actually
gives freedom to innovate and succeed. Now we can see the embedded DTH service with
the LCD TV are given to the customers.
Past Experience
28
The aim is to bridge the gap between mass and premium brands. Videocon has
already started developing new hi-tech products and is trying to bring more products
across categories in LCD, frost free, automatic washing machines and air conditioners so
as to address the premium segment. Thus, we feel it is becoming imperative to upgrade
our customers in to buying a premium product”. Videocon has always been seen as a
'value for money' proposition and has created a strong presence. However, the premium
segment is where the margins exist. In the mid segments it is a volume driven market
where price sensitivity is much higher.
Durables major Videocon is rebranding itself and has shed its solid steel 'V' for
more fluid, lava like 'V', coupled with a new proposition – 'Experience change'. The
brand, which has been in existence for more than two decades, has managed a fair share
in the entry/middle product segment. It is perceived as a brand for the Indian middle
class -- no frills, no glamour, simple, reliable and hassle-free. This rebranding exercise is
being read as cues of Videocon making forays into the premium segment.
Prior to this, the brand has banked on other propositions, such as 'Technology for
health and pleasure', 'Bring Home the Leader', 'New Improved Life', 'The Indian
Multinational', 'Whatever role life gives you, play it big', as well as the most recent one,
'Eco Logic for sustainable life'.
Conceived by Inter-brand, Singapore, the new 'V' is composed of two animated
green, lava-like shapes called Chouw and Mouw, both of which have distinct identities.
Chouw and Mouw are 'live' characters that will be employed to tell simple stories, each
depicting a positive dimension of Videocon's new tagline, 'Experience Change'. Both
have certain personality traits, based on their physical attributes. The bigger one,
Chouw, is slow but earnest; strong and silent; he is patient, good natured, kind, and
maybe a little romantic too. The smaller one, Mouw, is quick witted, energetic bordering
on restless, curious, and funny.
Re-positioning
29
The rebranding exercise has been successful on the front that it is:
Fresh and relevant- It is a campaign that has a whiff of fresh air and also
projects a brand identity that people can relate to easily.
Well Launched – The decision to launch the campaign at the IIFA 2009
was a masterstroke since it guarantees eyeballs and also combined its
punchline with IIFA’s green pledge.
Vibrant- The green color for the “V” logo is Vibrant, appealing and also
provides continuity from its earlier green products platform.
30
The Videocon group is a diversified global business conglomerate with interests
in Consumer Electronics and Home Appliances. The group has a full range of products in
Flat panel Devices (LCDs) and CTVs, washing machines, ACs, refrigerators, home theatre
systems, microwave ovens, food processors and sophisticated small home appliances. In
the consumer durables sector, Videocon is a mass brand and very middle-class in
character. Videocon markets its brand and other foreign brands through multi pricing
multi branding strategy. Videocon is now attempting to revamp its brand image through
its new brand logo to enter the higher end of the market.
In the coming days, Videocon aims to develop manufacturing of components for
consumer Electronic products, Multimedia TVs, Plasma televisions, Composite Home
Entertainment system with Internet adaptability and launching new brands under the
Videocon umbrella, continually improving quality along with reduced prices.
Future
31
Philip Kotler for Marketing Management
Kothari, C.R., Research Design, Research Methodology, Second Edition,
New Delhi, New Age International Private Limited, 2004.
www.videoconworld.com
www.moneycontrol.com
www.wikipedia.org
www.crisilresearch.com/ResearchProWeb/control/homepage
Bibliography
32