Hyundai Electronics India Ltd. (HEIL), a part of the Korean conglomerate - Hyundai Group, has entered air conditioner segment in India recently. The company has launched six models of its technologically advanced range of Windows, Split and Tower air conditioners priced between Rs 19,990 and Rs 36,990.
Pavan Bhargav, COO, Hyundai Electronics India, said, "With the launch of ACs our objective is to become a comprehensive solution provider capable of responding to all air conditioning needs with advanced value-added solutions. On the strategy behind entering the AC market in India, he said, "The AC market has witnessed a phenomenal growth of 25 per cent last year. The outlook for this year is also positive. There is a projected growth of 25 per cent. We would be promoting AC as a category with more focus on the Split and Tower segments."
The company is aiming to notch a turnover of Rs 500 crore by the end of 2005-06 out of which 20 per cent will come from ACs, while the major chunk will come from colour television sets which will contribute about 75 per cent of the total turnover.
When asked about the pricing strategy with respect to its competitors like LG and Voltas who have carefully chalked out their pricing formula, Bhargav said, "We are present only in the Window with remote, Split and Tower segments and are targeting the middle and high-income levels. Our pricing is competitive when targeted at these segments. We are primarily positioning ourselves through feature led benefit campaigns. We are not looking at volumes now. Idea is to offer the best of technology to the consumer even if it comes at a premium."
In order to tackle the competition at a time when rival companies like Electrolux India, which has captured 6 per cent of the market share in the overall air conditioner category within a short span of time, Hyundai Electronics has chalked out a strategy to concentrate on building their image. "Hyundai is not into volumes and we are focusing on image building and establishing ourselves in this category in the Indian market currently, said Bhargav.
With summers approaching the company intends to introduce new models in the split and tower segment and will be venturing into new segments as well.
Hyundai Electronics intends to do a multi-pronged promotional campaign around ACs with major spends on print and TV followed by outdoors and other media and has already set up wide marketing network for ACs consisting of over 200 dealers in North, East and Central India. Asked on the promotional budget, Bhargav said, "We would be spending close to 10 crore on this."