PowerZone to power Amara Raja''s volumes

08 May 2007

According to managing director Jayadev Galla, PowerZone is a retail format selling only in-store branded products. "The PowerZone outlets would sell automotive and power related products - batteries for tractors, cars, inverters, uninterrupted power system (UPS) and others-at a lower price."

After investing around Rs5 crore in plastic moulds and other designs, the company has come out with this product variant. Galla does not foresee any cannibalisation amongst the company''s brands - Amaron and PowerZone- as they have different product attributes, performance levels and cater to different client segments. "We will actually eat into competition''s market. The Amaron is a premium brand whereas as PowerZone will target the low-priced market. It will be 25-per cent cheaper than any other national brand."

A simpler design and cheaper raw materials brought about the cost reduction for PowerZone range. There will be only one product for one segment and the marketing spend will be comparatively lower for PowerZone as the company plans to opt for local campaign solutions and not the national medium-print, television-as it does for Amaron brand. Similarly the company is not planning to have a brand ambassador for its new brand.

As the new brand is expected to increase the volumes Galla hopes to benefit from economies of scale - sourcing, distribution and other expenditure. "We will sell around 2 lakh PowerZone units in a short time."

Adds head, automotive after market G Indeevar, "In small towns there is more frequent storage battery purchases whether to run tractors, power the homes or the shops like public call office."

Perhaps, in most of the towns where PowerZone stores will be located it will be the first fully air conditioned retail outlet. That itself will help in building a brand. In addition there will be a 24x7 call centre to help out customers when they face some problems. The outlets will also act as a collection centre for the old batteries."