Durables cos bet on LCDs, plasmas to push overall sales

Durables cos bet on LCDs, plasmas to push overall sales

Author | Source: The Economic Times | Saturday, Jul 01,2006 7:51 AM

Durables cos bet on LCDs, plasmas to push overall sales

The growth story of high-end products in the consumer durables industry is known. Marketers are now leveraging this buoyancy in the category and increasingly using it in their advertising and communication.

Brands such as Samsung, LG, Onida and Haier are pegging their communications around LCDs and plasmas in a move to gain from the healthy growth rates and to achieve a positive rub-off on their low-end products. Sample the ORG '06 Q1 figures. Flat TVs registered almost 48% growth, while split ACs grew by a whopping 137%.

“We have a heavy skew in our advertising towards LCD TVs, since that is our flagship product. Even in our outdoor advertising we are using LCD creatives because the latest technologies are incorporated in LCDs and plasmas.

Samsung will continue to focus on the high-end technology product line,” says Ravinder Zutshi, deputy managing director, Samsung India. “Our flat panel TV sales grew by 900%, while side by side refrigerator category grew by 145%,” he said.

As the consumer durables sector piggybacks on these high growth categories, players in the industry are hoping to grow the base numbers of these products and attain a critcial mass in a year's time.

“Price erosion and easy financing have helped consumers in a big way to purchase these products and very soon they will be contributing in value terms because of the higher margins that they fetch,” says Vivek Sharma, VP, sales & marketing, Onida.

As far as communication goes, he believes that to have high-end products in one's communication portfolio helps the consumer identify the brand as a high-tech and aspirational one. “Our latest LCD campaign is helping our overall CTV sales besides building our brand image,” he adds.

LG on the other hand spends 90% of its overall advertising around these high-end products. “Most of the Rs 100 crore, which we spend on advertising is on these categories.

Our entire campaign with our new brand ambassador Abhishek Bachchan is to showcase our range of frost-ree refrigerators, LCD and plasma range amongst other high-end products,” says Girish Rao, VP, sales & marketing, LGEIL.

Average price drops registering anywhere between 8-10% have also contributed to making the high-end products fall into the affordibilty zone. TK Banerjee, president & CEO, Haier, feels that the prices of plasma TVs will soon become sub Rs 1 lakh in a couple of months.

He says, “We will continue our focus on LCDs, plasmas and high-end split ACs in our communication as we are looking at selling an aspirational product. Other marketing efforts would be around offering exchange programmes for consumer who want to upgrade.”

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