Our core philosophy rests on quality, innovation & service: S Subramanian, Preethi
S. Subramanian, Managing Director, Preethi Kitchen Appliances Pvt Ltd, tells us how product innovations based on consumer insights have helped the brand connect with the consumer
Founded in 1978, Preethi Kitchen Appliances, the leader among mixer-grinder brands in South India, was acquired by Philips in 2011. Since then, Preethi Kitchen Appliances has evolved to become a brand with a strong presence in South India. Commenting on how the brand performed last year, S. Subramanian, Managing Director, Preethi Kitchen Appliances Pvt, Ltd. says, “In the last five years the CAGR has been upwards of 15 per cent. Last year was a good one, where we did close to 24 per cent in terms of overall growth in value.” Subramanian attributes this success to the innovations in the segments that Preethi operates in, expansions into new categories, good quality products and excellent service to its consumers. He adds, “We believe in ensuring that consumers get what they deserve and we try to plug in the states, innovating along the way.”
A Match Made In the Kitchen
The Philips acquisition helped Preethi primarily in the areas of technology systems and processes as the company has been drawn in synergies with the parent organisation. Says Subramanian, “As far as Phillips and Preethi go, we have understood that the Preethi brand has got its own set of strengths when it comes to understanding the consumers and the relevance it has in the Southern markets. We have kept the consumer part of the brand independent of Philips. What actually got integrated into the acquisition are the manufacturing and the R&D facilities.” He adds, “From an expansion point of view, we have kept ourselves closer to the markets that we have our strengths in, Tamil Nadu, Kerala, Karnataka, Andhra Pradesh and Telangana. We have also entered into Gujarat, Maharashtra and Orissa. Also, in terms of categories, we've tried, as much as possible, to keep the exclusivity between the two brands. And together with Philips, we are the number one kitchen appliance company in the country.” In the South, Preethi holds a market share of over 30 per cent.
Mitigating Risks
Primarily known as a mixer-grinder brand, Preethi has repositioned itself as a kitchen appliances brand. It has diversified itself into other categories to mitigate the risk of being highly dependent on a single category. Subramanian explains, “We decided to expand into the areas that we were familiar with, as far as consumers are concerned. In that journey, the only challenge was to not dilute our position as a mixer grinder brand and to continue being the number one in the category. At the same time, have judicious resources ploughed into other categories for investment and growth.”
While Preethi’s top five categories are mixer grinders, gas stoves, tabletop grinder, induction cooktops and electric rice cookers, the company’s growth has been led by the gas stove and mixer grinder category.
He says that when Preethi ventured into was the highly-penetrated gas stove category, the strength of their understanding of consumers, their insights and meaningful innovations, backed up with strong communication enabled them to create a niche for themselves in the category.
Subramanian pointed out that the consumers were looking at multi-cuisine and there was a need for smaller appliances, given the shrinkage in the kitchens, and people did not want to have multiple appliances.
Preethi innovations led to the launch of Preethi Zodiac, a mixer-grinder and food processor combined into one. When Zodiac was launched five years ago, the average price of a mixer-grinder was Rs 3,000. Today, Zodiac sells for around Rs 7,000.
He says, “The price point has been elevated and consumers are getting value as the food processor and mixer-grinder are combined into one. It's been a win-win situation for the organization and the consumer. Zodiac is the number one SKU for us in the mixer grinder category. We were able to balance our portfolio and without compromising on our number one position, innovate continuously to see consumer need states plug gaps, and grow categories apart from mixer grinder.” Subramanian says that the company’s core philosophy rests on three pillars – quality, innovation and services, which provide a winning experience to consumers.
Marketing Preethi
Preethi’s advertising expenses are pegged at 5-6 per cent of its sales with the focus on the top five categories. Says Subramanian, “We need to be present in certain key categories and geographies because we understand the consumer much better here in the South.” With the region being an insulated market, he says that investments are made in every market and a judicious mix of ATL, BTL and Digital are used. For all new product launches communications, TV and Print. Preethi experiments with Digital, from time to time, in terms of the different media formats, combinations, etc. In a category like appliances, BTL is equally important for Preethi, which helps create awareness and desire and initiates action to the final conversion on the shop floor through demonstrations and activations. “So it is a judicious mix of all three, we cannot ignore any one of them. At the same time, we have kept in mind what is it that we want to take to the audience and we've tried to use the mix accordingly,” he says.
Looking ahead on what we can expect from Preethi, Subramanian says, “For us, it's all about ensuring that we get the right product and introduce meaningful innovation for consumers. If there is a need gap that is to be plugged, we must understand what it is and ensure we give a value proposition. We have a strong innovation lined up for the existing categories and very recently we have entered chimneys as a category in Tamil Nadu”
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