spcl one....

1. MULTI-BRANDING STRATEGY OF
VIDEOCON INDUSTRIES
IN THE
CONSUMER DURABLES SECTOR
Presented by:
Bhavika Sawhney
Bhoomika Chadha
Prateek Arora
Tarun Dhingra
Trisha Pruthi

2.  It is a marketing strategy under which two or more similar products
of a firm are marketed under different brand names.
 Many a times, these products are competing ones and are
marketed under brand names which are completely unrelated.

3.  1984:- NV Dhoot with 3 sons:- Venugopal, Rajkumar & Pradeep
founded VI
 Earlier, they started a business of sugar mills and some other low
profile industrial interests in the region of Maharashtra
 Establishment of VI surprised the Industry Watchers .
 1987:- Manufacturing and Marketing the Videocon Range of B&W
AND Color Televisions, launched washing machines.
 1989:-Home Entertainment Systems and Air Conditioners
 1991:- Refrigerators and Coolers.

4.  Early 90s :- After the failure of VI to diversify into Real Estate,
Crucial decision Was made to manufacture CRT glass shells.
 Set up a world class manufacturing facility at BHARUCH, GUJRAT.
 1996:-Entering Energy Sector. Investments into Rava Oil Fields
gave it a regular flow of cash.
 1998:- Bought a TV manufacturing facility of PHILIPS in WB.
 1999:- Took the services of McKinsey & Co. to draw the plan for
restructuring the company.
 Company established 8 SBUs headed by independent chief
operating officers
 These were:- MANUFACTURING,AFTER SALES , THE AKAI
BRAND, THE SANSUI BRAND % VIDEOCON BRAND
 Others were Product Specific:- TVs, Refrigerators and Washing
Machines

5.  7TH JULY,05:- Acquisition of ABE in EKL.
 Focus was on Multi Branding Strategy.
 Agreement with HUNDAI ELECTRONICS LTD .
 Licensing Agreement with Toshiba & Sansui
WHY?
 Was unable to face the immense competition
 Market Share % Market Growth were the major factors.
 Large Sales Volume with Cost Effectiveness
 VI :- Profitable Company & Had resources( man power,
Financial,Technical etc ) to sustain a Multi Branding Strategy.
 Focus was on Long term Goal.

6. VIDEOCON INDUSTRY‟S
BRAND PORTFOLIO

7. • Videocon entered the consumer durables sector in mid 1980‟s
• VI marketed its products under the Videocon brand and was
positioned and perceived as a mid segment brand.
• Competed directly with BPL and Onida.
• But the entry of LG and Samsung disturbed its market share.
• To counter attack- VI adopted multi-brand strategy and to boost
brand image came up with a high-decibel ad campaign in 2001.
• Immediate result was increase in sales by 30% but market share
declined in 2002.

8. • In 1980‟s, VI went into an agreement with the Japanese company,
Toshiba, to manufacture its range of colour televisions.
• In 1998, VI launched Toshiba brand projection TV‟s. They competed
directly with Samsung‟s range of projection TV‟s.
• In 2001,in order to increase its focus on marketing Toshiba‟s high-
end products, VI created a a wholly owned subsidiary called
Kentosh Electronics India Ltd.(KEIL)
• KEIL was also to market Kenwood branded Hi-Fi audio products.
• In 2002, Kenwood and VI parted ways. Till 2005, KEIl sold DVD
players, TV‟s, flat TV‟s, Projection TV‟s under the Toshiba brand.

9. • In March 1999, VI entered into a join venture with Akai Electric Co.
Ltd.(AECL), to form a new a entity called Akai India Ltd., in which VI
had 70% share.
• VI followed a two-pronged strategy for the Akai brand. It continued to
sell low price models but made efforts to emphasize quality and
technology in the communication.
• Over the years, Akai was projected as a price warrior. Hence, it became
a player in the lower end of the market.

10. • Sansui came into VI‟s fold in 1990‟s
• Initially, the products under the brand were priced on the higher
side and competed with brands like Philips.
• But gradually, prices were slashed
• Sansui also launched exchange schemes for its CTV‟s
• The brand heavily depended on promotional offers and discounts.
But inspite of the promotions Sansui couldn‟t gain a significant
market share.

11.  KAIL launched KENSTAR in 1996.
 Introduced with microwave ovens and then followed by coolers,
mixers and grinders, toaster, juicers and refrigerators.
 KENSTAR was positioned as premium segment and entered in to
agreements with Yugoslavia and an Algeria based firm to
manufacture and supply KENSTAR branded CTV‟s

12.  2004-05 LG and SAMSUNG spoiled the party of VIDEOCON and
subsequently LG acquired 40% of market share in ovens

13.  2004: VIDEOCON(VI) licensed HYUNDAI brand from „HEI‟ South
Korean co for 5% royalty on sales.
 2005: VI made HE INDIA a wholly owned subsidiary.
 HYUNDAI was positioned at the upper end market.
 Company had planned to spend heavily for advertising and R&D.

14. • 2005: VI took over EKL. It brought the Indian rights of
ELECTROLUX for 5 years and 25 years for KELVINATOR. ALLWYN
brand also came under the VI fold subsequently.
• 2006: VI announced it will stick its KELVINATOR brand with
Refrigerators and its tagline will also remain same “the coolest
one”.
• VI expanded its dealer and showroom network to increase its reach.

15.  Prior to liberalization, Indian durables industry was dominated by
Indian brands.
 By the end of 1990s, the share of Videocon steadily declined.
 In order to onslaught from the competition, VI adopted the multi
branding strategy by acquiring Toshiba, Sansui and Akai.
 The strategy was meant to fend off attacks on core brand from
rivals.

16. TOSHIBA
HYUNDAI
ALLWYN SANSUI
VIDEOCON
KELVINATOR KENSTAR
AKAI
ELECTROLUX
 In 2000, VI launched several products under its core brand, Sansui
and Akai and VI was positioned as a Value brand.

17.  Positioning and targeting has to be distinct, or else the brands
tend to cannibalize each others share.
 In 1999, VI had market share 10.5% which fell to 7.3% in 2002,
whereas Sansui increased its market share from 4.6% to 6.7%.
 Having several brands, unless backed by constant upgradation in
technology and design would prove to be burden to the company.

18.  Inexperience in managing premium brands. For instance, Kenwood
which was a premium brand couldn‟t make a dent in the marketing
arrangement.
 Multi-branding strategy requires deep pockets who can allocate
high marketing budgets for each brands.

19.  2005 – LG & Samsung lion‟s share of T.V. & home appliances
market.
 Philips rejuvenating business in India, Haeir & TCL planning to
establish themselves.
 Videocon not doing well in all product categories.

20. Market Shares in Indian Washing
Machines Market in 2004
4%
24% 34% LG
Whirlpool
IFB
13%
Samsung
14%
11% Videocon
Others
Market Shares in Indian
Refrigerators Market in 2005
9% 11%
10% Videocon
23%
Godrej
17% Samsung
LG
30% Whirlpool
Others

21.  VI will have to manage its existing brands as well as EKL‟s brands.
 Indian white goods industry very competitive. VI capable of
investment in building brand equity.
 VI should not use price plank for core & premium brands.
 VI needs to invest in technology.
 VI may be able to pose a challenge for Korean brands because of
its multi-branding strategy.

22. Q1.
Considering the fact that marketing
costs are escalating, how prudent, in
your view, is VI‟s strategy of having
several brands?

23.  Good strategy when faced by heavy competition.
 Protection of core brand.
 Increases shelf space.
 Keeping firm‟s managers on toes by generating internal
competition.
 Company can fill up price & quality gaps, & saturate the market.
 Company can serve effectively to brand switchers.

24.  Cannibalization
 May cause operational confusion.
 Heavy budgets needed.
 Videocon a mid-segment brand, inexperienced in handling
premium brands (poor management).

25. Do you think that VI adopted the multi-
branding strategy because it failed to
counter competition with a single
brand?

26.  Prior to liberalization of the Indian Economy, the Indian Consumer
Durables Industry was dominated by Indian Brands like BPL, Onida
and Videocon.
 By the end of 1990‟s, Korean brands like LG and Samsung had
established a strong foundation in the country by expanding their
dealer networks.
 As a result, VI‟s share declined.
 In order to onslaught the competition, VI acquired Indian Rights for
brands like Toshiba, Sansui and Akai.

27.  Though the share of Videocon fell, the other brands were able to
corner market share, thereby giving VI a respectable combined
market share.
 Multi-Branding strategy was akin to warfare. Just as a king is
flanked by several soldiers in a battle, the multi-branding strategy
allowed VI to protect its core brand Videocon.
 So the strategy was meant to fend off attacks on the core brand
from rivals.

28. With the Korean brands, especially
LG, entering rural India in a big
way, what in your view are VI‟s chance
of becoming the No1. consumer
durables company in near future?
Justify you‟re answer

29. THANK YOU!