Thomson overhauls strategy; allocates Rs 20 crore to reestablish brand presence

Here is one more instance of a multinational brand learning its lesson the hard way. Thomson Multimedia India (TMI), which launched its range of colour TVs, audio and video products in 1994 in India, is eyeing the market aggressively with a new product and marketing mix.

The result of this rethink is its decision to reposition its products on a high-technology plank and create two distinct product niches - one, targeted at the mass market comprising its range of CTVs and audio/video ranges; and two, targeted at the top-end consumer comprising hi-technology new generation products. Simultaneously, it has severed its relationship with local advertising partner, Renaissance, in favour of Paragon, a Rediffusion subsidiary based in Chennai.

"The whole idea is to bring vibrancy into the brand and make the consumer believe that we are company that offers high-technology and affordable products. We have allocated Rs 20 crore for the year to drive home this message through a reworked advertising strategy," says Vivek Badrinath, managing director, TMI.

This aggressiveness was long overdue. Since the time TMI set foot in the country in 1994, it has made several costly errors. "To begin with, we entered the market with high-end products that were almost 20 per cent more expensive than what the competitors were offering. We realised that the dealers were unable to explain the merits of our products to the consumers and we lost out in the bargain," points out Badrinath.

The problem was not in the pricing alone. Four years after the launch of Thomson, TMI had also launched another brand RCA in India in 1998, but had done little to drum up excitement around its products. To top it all, instead of trying to find out what the average Indian consumer actually wanted, TMI focused on the 29-inch segment in CTVs when bulk of the sales comprised of 14-inch, 20-inch and 21-inch sets.

For this Badrinath has an explanation. "We do not believe in meteoric growth that is done at the cost of profitability and internal stability; so we refrained from spending obscene and unjustified amounts on advertising." Which may be the reason why it settled for a relatively small agency in Chennai. But, obviously, its earlier strategy did little to create space for TMI in the consumers' mind.

All that is history now. "We are looking at ways to strengthen our branding and positioning as we are not very happy with our performance so far. The beginning has been made with our new positioning plank ‘Happy-Technology-to-You'. But we are still looking at ways to make an impact," says K Sampath Kumar, senior vice-president, marketing & sales, TMI.

The turnover of the company stands at Rs 320 crore currenly, and it has a share of 3.5 per cent in the CTV market and 22 per cent in VCDs and DVDs. It is looking at a turnover of Rs 400 crore by the year-end and hopes to make a start by making deeper inroads in metros and smaller cities. "The nature of our products is such that we feel it would be better to concentrate on urban areas right now," says Badrinath.

For instance, it has launched a range of WebTouch telephones that provide easy access to Internet and email, besides the VMP300, a portable five-in-one audio player, which has a VCD and MP3 player among other things. VMP300 has reportedly sold one lakh units. These are the kinds of products, it hopes, will sell well in the metros. It has also rationalised its CTV prices - with the range starting from Rs 6,900, going all the way up to Rs 49,990 for its 29-inch flat TV sets.

The company is also focusing on an exclusive chain of outlets branded ‘Techno Shoppe' across all major metros. The company feels that general dealer outlets are not sufficient to host its entire range, nor can they sufficiently communicate its product benefits. "Hence, barring CTVs, which is aimed at the mass market, for our high-end products we will have exclusive outlets from now on," says Kumar.

The question is: Will Thomson be second time lucky? © 2002 agencyfaqs!