Banking on brand equity

By , agencyfaqs! | In
Last updated : October 31, 2000
As competitors like LG and Samsung stress on their product features, Panasonic plans to bank on brand equity to woo the consumer. Will it work?

Sabil Francis
NEW DELHI, October 31

Build the brand. And make buying the brand an experience. This is the new strategy at Panasonic India to capture the Indian market. "While others are emphasising on product features, we want to establish Panasonic as a high-status product. Features are short-lived, brand name is enduring," says Gurdeep Singh, director, sales, marketing and service, National Panasonic India Ltd., summing up the Japanese company's new strategy to penetrate the Indian market.

And in tune with this strategy, the company has tied up with the New Delhi-based real estate developers Ansals to set up Panasonic's first dedicated 'brand shop' in the country. The stress is on the retail customer. "The consumer must be made to feel special if he is to buy," says Singh.

The new strategy is well in tune with shopping behaviour. Market research has indicated that brand names alone are not enough to sell electronic products or most other products. Shopping for many customers is a sensuous experience, and customers want to see what it looks like, what it sounds like, what it feels like, before they buy the product. It is a principle that holds true for such varied products as cosmetics and air-conditioners.

For example, in the United States, market researchers found that telephone shops sold more phones when customers could actually cradle the receiver and hear recorded messages. It is the same logic that Panasonic wants to replicate in its brand shops, in which the company plans to invest Rs 6 crore over the next few months. Such brand shops will enable the customer to really experience the specific product quality that he or she is looking for.

Says Kazuo Ogishima, managing director, National Panasonic India Limited, "For example, we found that Indian TV buyers put sound clarity in televisions on top of their list. Such an experience can be had only on the shop floor, and it is there that we plan to convince the shopper that ours is the best." The strategy is to target the high-end user.

But realising that most decisions today are made by the young, Panasonic has tried to give its advertising campaign a feel-young touch. The catch-line, "Wanna play?" tries to do this. And with the youth in mind, the slogans go "Wanna rock? Wanna be-bop? Wanna do it in 108 ways?" Says Singh, "The days when the father decided on which TV set the family should go for are over. Our market research indicated that six to 16 year-olds have a major say in the family's purchase of electronic products." That's why the language of the advertisements is what company officials term "street language, in the same league as Nike's Just do it! Campaign."

How far will such a campaign succeed in a market where price and value-for-money are the prime factors?

Panasonic is banking on its perception that consumer behaviour has changed, and that the Indian shopper has graduated from being a price conscious consumer to a status conscious consumer. The vast majority of the nearly 15,000 customers who troop in and out of Ansals each day, are those willing to shell out a little more money if it means quality.

To follow up, the company plans to introduce the concept of Pan Homes - homes that have been filled to the brim with Panasonic products. The brand shops are the first step in such a strategy. Panasonic has invested Rs 6 million in the venture in the hope that customers who buy Panasonic will stay with Panasonic.

Market trends could be one indicator of the success of the strategy. Samsung, which early on made a point of not selling on price, gained an increase of 7 per cent of the CTV market share this year over the last year. Panasonic too has made profits, and now controls 4 per cent of the CTV market, and 7 per cent of the washing machine market.

Can the Indian consumer be won over on the shop floor? Panasonic is betting that it's possible.

© 2000 agencyfaqs!

First Published : October 31, 2000

© 2000 agencyfaqs!