In a very unpublicized move, Leo Burnett, Mumbai, has won a significant share of the communication business of Bajaj Electricals (BE). The agency - which already handles the advertising for quite a few two-wheeler brands of Bajaj Auto - has been assigned the fans, lighting (CFL) and luminaries accounts, and will also service the company's Engineering & Projects division and BE's corporate account. All put together, the gain is expected to give the agency approximately Rs 5 crore worth of billing.
The highpoint of this development is that Leo Burnett has unseated ex-incumbent Heros, which was handling this part of the Bajaj business for around 40 years. While it is not clear as to why Bajaj sacked Heros, for Leo Burnett, the win marks an entry point into BE, which has major interests in the home appliances market too. Incidentally, the advertising for the various products in BE's appliances division is handled by two agencies - Touchstone and Saarthak.
Apparently, Leo Burnett won the BE business on the back of a strategy-cum-creative pitch, but nothing more is known about the details of the pitch. "We were able to demonstrate that we brought to the table a good degree of strategic and creative input," said a Leo Burnett spokesperson. "We also showed a high degree of eagerness to work with Bajaj Electricals."
The spokesperson revealed that vis-à-vis this account, the primary challenge for the agency would be, "to establish a clear and strong identity for Bajaj Electricals. To find and appropriate key category benefits across the various categories that it competes in. And to thus make its brands a preferred choice for consumers."
It's not as easy as it sounds, though. Take the domestic fan market, for instance. According to some market sources, the fan market is fiercely competitive and price sensitive, and the unorganized sector - which accounts for 50 per cent of the total sales turnover - is actually consolidating its market share. This is primarily attributed to the 25-30 per cent price advantage that the unorganized players offer, as they do not pay excise duties or sales tax. The Leo Burnett spoke doesn't agree, of course. He is of the opinion that it's the branded players who are gaining ground, considering the assurance of quality, and the concerted push for rural markets.
Even so, Bajaj still has a smallish 10 per cent share of the total fan market (including the unorganized sector). And the competition from branded rivals such as Crompton, Orient, Khaitan, Usha and Polar is strong. Of course, Bajaj claims to be the leader (with 30 per cent share) in the premium ceiling fans segment (ceiling fans in the Rs 1,000 to Rs 1,400 bracket), which constitutes 30 per cent of the total ceiling fans market (which, in turn, constitutes roughly 80 per cent of the total fan market).
In the TPW (table-pedestal-wall) fans segment, Bajaj has been a recent entrant, launching its TPW as late as last year. In this segment, Usha claims to be the market leader (with 40 per cent market share), while Crompton is the number two with 25 per cent market share.
In the lighting and luminaries market, Bajaj again has a lot at stake. In India, the CFL (compact fluorescent lamps) segment is still at a nascent stage, and category growth is tortoise-paced, despite aggressive efforts on the part of Philips (through its Essential brand). Low-cost Chinese CFLs are, of course, adding a ray of light in terms of increasing product awareness. The other significant players in this segment are GE and Ortem. In luminaries of course, Bajaj is one of the biggest players (along with Philips and GE), and has quite a few prestigious lighting projects under its belt (perhaps, the best example being the lighting of Mumbai's Marine Drive, apart from most Indian airport terminals and quite a few stadiums). However, for some strange reason, the company has chosen not to play up these achievements.
From all this, it is clear that Bajaj and Leo Burnett have a huge task ahead. A whole lot of strong brand building is required to add a zing to the Bajaj brand (best remembered for its 'Jab main chhota bachcha tha…' commercial from the eighties) in the face of stiff competition - from both MNC and Indian brands, as well as the unorganized sector. And a lot will also depend on how well Bajaj contributes to category growth.
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