Philips India is getting ready for a big battle.
The Philips Mahasangram Integrated Marketing Programme, to be launched in July this year, will introduce an entirely new set of products to meet the requirements of rural customers. The aim: To aggressively push the company's sales in the rural/semi-urban segment with a clear focus on rural towns with a population of less than 5,000 and semi-urban towns with a population between 5,000 and 50,000.
"We have in place a couple of products that are unique. For instance, a powerless radio that requires one-minute of winding to work. One does not need batteries or electricity for this product as it converts mechanical energy into electrical energy. We are also planning to drive CDs into rural markets with our new portable CD player priced competitively at Rs 3,990 as we feel that increasingly people are beginning to use CDs as their prices have dropped to as low as Rs 100," said Rupam Ganguly, general manager (consumer & trade), consumer electronics, Philips.
The company has also developed a colour television set that detects poor signals and boosts them to deliver better picture. That is because most people in far-flung rural areas have to put up with poor signal reception. "All our products have clear demonstrable benefits for the consumer," said Ganguly. Added Karwal, "Frankly speaking, we have had to adopt this 'look at me, we are better' approach rather aggressively because we needed to rapidly communicate our product benefits to consumers in a crowded market. We had the best products and we wanted consumers to test us on that front," said Karwal.
This aggressiveness is not new. Philips' 'Dare to Compare' campaign carried out across the country last year for CTVs had set the process in motion on a broader level. This was followed up with the 'MP3 Mania' programme targeting the youth and finally the 'Cyber Challenge' against competitors Samsung and LG to promote the company's light monitors.
All of these were focussed on the urban consumer. The company claims these efforts have yielded fantastic response. According to Karwal, the 'MP3 Mania' programme helped the company notch up a 45 per cent share in the MP3 market. He added that since the 'Date to Compare' campaign, Philips' share in Plasma TVs stands at 80 per cent and at 27 per cent for its real-flat 29-inch CTVs. In overall terms its market share in audios has steadily improved from 27 per cent in the year 2000 to 38 per cent last year to stand at 42 per cent till May this year. In CTVs, its share has risen from 3.6 per cent in 2000 to 5.4 per cent last year and now (up to May 2002) it stands at slightly over 6 per cent.
A key reason behind this initiative seems to be the growing potential of the rural market. According to industry estimates, while in 1997-98 rural sales constituted about 25 per cent of the total sales for CTVs, refrigerators and washing machines, it increased to 36 per cent in 2001-2002 and is expected to go up to as high as 41 per cent by 2006-07. Mahasangram therefore is part of a larger plan to tap the potential of rural India and, of course, make up for lost time.
"Considering that the company was reporting losses and had limited resources at its disposal for promotions, we have streamlined three objectives: profitability, topline growth and market share growth in that order. We first created an aspiration for the brand by building a stake among opinion leaders and then injected vibrancy in the brand by roping in the youth. Having achieved the necessary direction in urban markets we are now aggressively turning towards rural markets with specific products and campaigns. This exercise is labelled Mahasangram as it focuses on different sets of buyer needs," Karwal pointed out.
As the figures testify, the critical areas that Philips India needed to address first are under control. It has posted a profit of Rs 19.08 crore for the quarter ended March 2002 as compared to a net loss of Rs 6.36 crore for the corresponding period last fiscal. The company hopes its innovative rural marketing initiative will boost its market share. It hopes to increase the contribution of portable audio sets from rural/semi-urban areas to its turnover to 50 per cent by end-2003 from the current 28 per cent. For CTVs, the company is aiming to increase that figure to 45 per cent in the same period, from the current 22 per cent. © 2002 agencyfaqs!