afaqs!

Canon India targets upcountry market

By Poojya Trivedi , afaqs!, New Delhi | In Marketing | September 07, 2010
The company expects 70 per cent of its business to come from smaller towns in the next five years

With Onam ushering in the beginning of the festival season, digital imaging firm Canon India is shifting its focus from six big cities to target the upcountry market in India. Targeting about 43 per cent growth over 2009, Canon aims to be a Rs 1,200 crore company in 2010; it also plans to be a billion dollar company in five years, with most of its business coming from smaller towns.

Through a combination of communication and distribution, the company is looking to entice first time camera users in small towns and cities. In order to bring these customers into its fold, the company is connecting with consumers by trying to make them understand technology in a unique way.

Until about five years ago, the company had a major focus on the top six cities in the country. Later, Canon India saw a higher demand coming from smaller cities and the share in the total business began to tilt towards smaller towns. In 2010, about 51 per cent of the company's business has come from Tier II and Tier III towns. Some of the company's products, such as printers, contribute about 60 per cent towards revenue till today.

Talking to afaqs!, Alok Bhardwaj, senior vice-president, Canon India, says, "There is a traction happening towards smaller cities and we decided that we have to look at Tier II and Tier III towns as a very integral part of our future strategies to achieve the targeted growth. Our rough estimation indicates that five years from now, 70 per cent of our business will come from these towns."

"The challenge in these towns is that technology is something that does not come easy to the people and there is a phobia and a little bit of 'not-for-me' kind of syndrome," adds Bhardwaj.

The company, which has traditionally been a strong believer in promoting its brand through experiential marketing, launched a pan-India road show, called Canon on the Wheels, early this year, covering states such as Gujarat, Maharashtra, Chattisgarh, MP and Punjab. It is extending this initiative to various other parts of the country, including Uttaranchal and UP. Subsequently, it plans to take the initiative to East India.

The Canon on the Wheels programme has already covered 16 towns and reached more than 15 lakh people. "More than a lakh and a half have actually visited the road show to personally experience the technology," elaborates Bhardwaj. He adds that Canon has already recorded sales of about Rs 3.5 crore so far through this initiative, covering about six states across the country.

The company is targeting wedding photographers in smaller cities as a unique segment. "In smaller cities, wedding photographers are one of the key focus areas and we are leveraging that through workshops dedicated to this very segment - where they get to experience new technologies in photography. We have got phenomenal sales of D-SLR in Tier II and Tier III cities," he adds.

So far, the workshops for photographers have reached more than 2000 photographers in about eight cities.

In these markets, products such as cameras, laser printers and scanners are more popular. About 40 per cent of the total sales (of Rs 3.5 crore through the initiative) was contributed by printers. "This gives us the feeling that in smaller towns, entrepreneurship is becoming important," he reasons.

To penetrate this segment, Canon India recently launched 15 new products in the printer segment, resulting in 85 products under its portfolio in the segment.

The second part of the company's strategy involves the sales channel. "Since dealers in smaller cities are more relationship oriented, we always try to involve them in these road shows," says Bhardwaj.

Canon is also improving services to its existing customers. The company has recently launched the Level IV Master Service Centres, particularly in view of the upcoming Commonwealth Games in the Capital. It has invested Rs 2 crore on building the fifth Level IV Master Service Centre in the country, which has an area of 2,500 sq. ft.

The service centres, which were recently opened in Delhi, will also have an outlet at the games location to cater to the needs of Canon product owners.

Canon currently has 11 camera service centres in the country and plans to expand this to 15 service centres all over India by the end of this year.

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