Understanding Marketing Strategies Guide Prof. Rajeev Kamble Dineshwar Moparthi 2009130Sravanthi Nanduri2009131ParthBhatt2009135Dipti R2009139

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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.

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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

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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.

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Swot Analysis

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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

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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.

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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

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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.

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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

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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

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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

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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

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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

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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

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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

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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

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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.

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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.

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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

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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.

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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.

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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

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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.

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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.

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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

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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

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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.

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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

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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

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