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Consumer durable cos to have it cool this summer

Consumer durable cos to have it cool this summer

Author | Source: The Economic Times | Wednesday, Apr 19,2006 7:23 AM

Consumer durable cos to have it cool this summer

It's their summer of contentment, once again. But unlike previous years, most consumer durable marketers aren't really sweating for sales this time round, thanks to a buoyant economy, low prices and a consumer mood to splurge.

Though you may still find that odd free-gift, or a one-off promotion, by and large the Rs 20,000-crore industry is now playing on newer, sleeker and better technology products to build up their brand salience and sales. “Our advertising focus this summer will be on high end products such as frost-free refrigerators and split air-conditioners,” says Girish Rao, VP, sales & marketing, LG India.

LG claims to have almost done away with promotions as it leads to value erosion of the brand. LG would be spending around Rs 10-12 crore on its advertising and marketing during the summers. It expects a growth of around 30% driven by product categories such as ACs, refrigerators and PCs.

Whilst LG concentrates on massive advertising air-power this summer, the other Korean chaebol, Samsung India, apart from doing some promotions, is also pushing the variety of its product portfolio to win over consumers to its brand. “This year, we're targeting growth of 30% in our home appliance business over last year,” says Ravinder Zutshi, deputy managing director, Samsung India.

So it is as much an advertising war as variety of the product portfolio. While LG has already launched 10 models of refrigerators this year, another 10 are on the anvil. Not to be outdone, Samsung plans to launch six new models of its frost-free fridges this month.

And if refrigerators are big on any white good marketers' priority, can air conditioners, a must-have creature comfort for an increasing number of middle class consumers be far behind? Just between LG and Samsung, the two dominant players in the AC market, some 60-odd new models have been launched in the past month or so.

And other big players in the AC market, Voltas, promises to offer 'true value' to its customers instead of offering freebies. “We are extremely buoyant about summers. Voltas has never believed in giving gifts and scratch cards, though we may offer things like zero percent finance options and stabilisers rather than get into marketing gimmicks,” says KD Virmani, senior general manager, Voltas.

Voltas is banking on retail expansion, household distribution, in-shop branding and local activities to push sales besides its presence across media with its high-decibel ad campaign. Though consumers may be disappointed, price wars, are clearly a thing of the past. “Infact prices are likely to go up marginally, 1-2%,” adds Mr Virmani.

Such is the heady optimism in the sector, that marketer after marketer is almost rubbishing promotions. “Consumers should not be taken for granted.

We do not believe in giving freebies or other gifts. During summers we would be hugely present on the electronic media, press and below the line, with focus on showcasing our product range and innovative technology,” says TK Banerjee, president & CEO, Haier India.

The company has launched 14 new AC models to take on the chaebols' dominance in the Rs 3,000-crore AC market. With price erosion a thing of the past, brand building seems to be back in fashion in the consumer durable market. “We'll focus on our new tagline, 'Thinking of You' and display our products than go in for short term gains by offering freebies,” says Madhav Nene, head of marketing, Electrolux Kelvinator Appliances.

The company is planning to roll out a web-based contest, a brand building one and not promotion driven. “This summer we would concentrate on our technology and brand salience in our communication,” says Sanjay Motwani, VP marketing and exports, Godrej & Boyce.

Videocon, otherwise a price-warrior brand, is concentrating this year on spending a large part of its Rs 12-crore marketing budget for ACs and refrigerators on below-the-line activities, pushing zero percent finance in tie-up with Citibank.

Tags: e4m

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