Marketing review news
07 January 2005

Adidas to revamp distribution
Adidas India is revamping its distribution set-up and re-evaluating its distributors. According to the company, the reassessment will help identify distributors who don't fit in with the company's requirements.

Adidas currently sells its footwear, apparel and accessories through 74 exclusive stores run by franchisees, as well as in about 1,000 multi-brand outlets, which are kept stocked by around 40 of its distributors.

The company feels that the creation of a department with a managerial position to take care of distribution would provide a much-needed focus to the function. The department will organise specific programmes in terms of product and marketing support for distributors.

The company is planning to open between 20 and 40 exclusive shops this year, establishing its presence in some of the smaller cities and towns.

Adidas primarily caters the higher-end sportswear market estimated at Rs500 crore.

TRAI lowers ADC charge; cellular tariffs to fall
TRAI has reduced Access Deficit Charge (ADC), a levy private operators pay BSNL to carry out operations in rural areas.

TRAI has removed the distance slab from three slabs of 30 paise, 50 paise and 80 paise per minute and imposed a flat rate of 30 paise per minute for all types of calls across the nation.

TRAI has reduced the ADC component on ISD calls by over 41 per cent lowering the charge on incoming international calls to Rs3.25 per minute from existing Rs4.25 while the ADC on outgoing calls have been slashed to Rs2.50 a minute from Rs4.25 now.

According to Trai the new rates would not change the total ADC amount of Rs5,000 crore annually going to Bharat Sanchar Nigam.

Rates of local calls, cell-to-cell, cell-to-fixed line or fixed line-to -cell, are unlikely to change as the structure for ADC component for these has remained unchanged.

TRAI also said that fixed line operators like Bharti, Reliance and Tatas (other than BSNL) would retain ADC only on their outgoing calls. ADC on all other calls will be provided to BSNL.

Till now only one operator — Airtel — has said that it would pass on the benefit of the entire cut on Access Deficit Charge (ADC) to customers from February 1.

Godrej Foods to launch breakfast cereal
Godrej Foods is entering the Rs 400 crore breakfast cereals market with its soy based health food brand Sofit. Till now the company has been marketing soy milk under the Sofit brand.

Godrej plans to price the product in an affordable price range to make a dent in the largely unexplored market.

The breakfast cereals market is growing in India at about 10 per cent per annum and is dominated by Kellogg's.

HLL to use the franchisee route for Modern bread
Hindustan Lever (HLL) has decided to focus on the franchisee route and get out of direct bread manufacturing operations for its `Modern' bread brand.

A HLL acquired company, Modern Foods India (MFIL), has 11 own bread manufacturing plants, of which four are at present operationally viable. Three units at Silchar, Bhagalpur and Ujjain were already closed before HLL had acquired 74 per cent control in the company in February 2000. MFIL's. The units at Delhi, Faridabad and Kanpur are believed to have become operationally unviable.

At the unviable units, the cost of making bread has become 100 per cent higher than competition and HLL does not anymore see direct manufacturing of bread as a viable activity. Hence, HLL is looking to grow the business nationally through franchisees, taking advantage of the high recall that the Modern brand still enjoys among consumers.

BPCL launches high-octane petrol
BPCL has launched Speed 97, its new brand of high-octane petrol mixed with lubricant additives, to improve vehicle performance.

Speed 97 is aimed at high-performance cars and will help by removing harmful deposits from all fuel metering systems and components, according to a press release from the company.

BPCL has already launched branded diesels, `Hi-Speed' and another high-octane petrol brand, `Speed 93'.

SSC&B Lintas to restructure Delhi arm
SSC&B Lintas, the creative arm of Lintas India group, is overhauling its operations in Delhi and is adopting a new corporate identity.

The agency is also putting an experienced team in charge of the division and is also upgrading its proprietary tools.

Suresh Tewari, who was till recently the head of Grey Worldwide, Mauritius has been chosen to head the Delhi business while Srinivisan Krishnan, an experienced SSC&B Lintas hand, is being brought back to head the client servicing function.

Avijit Sen, earlier the chief executive and head of iB&W Delhi branch, is being appointed as the creative head of the agency and Rishab Mehrotra will be heading the account planning function.

Maruti launches Bharat stage III variants
Maruti Udyog (MUL) has introduced Bharat stage III (BS-III) variants of the Zen, WagonR and Baleno with a price increase in the range of Rs 0,000 and Rs15,000 per unit.

Zen and WagonR are more expensive by Rs15,000 each while the Baleno's price has been hiked by Rs 10,000 a unit (ex-showroom Delhi).

From January 7, MUL's showroom in the 11 designated cities will sell both BS-II and BS-III version of the three models.

From April 1, 2005, only BS-III versions of all models will be available in the National Capital Region, Chennai, Mumbai, Kolkata, Ahmedabad, Bangalore, Hyderabad, Secunderabad, Kanpur, Pune, Agra and Surat.

Bharat Stage III emission norms are expected to bring down the sulphur content in petrol and diesel to 350ppm (particulate per million) from the present 500ppm.

A company release from MUL said that BS-III norms are more stringent than BS-II norms in terms of emission, as the emission limit has been reduced for hydrocarbons and nitrogen oxides.

Welspun expands retail network
Welspun India, part of the Rs 2,000-crore Welspun Group, is planning to begin retailing its products and will open its first concept store in Mumbai in February this year.

The company is investing heavily in opening exclusive 'Spaces' stores across the country and is aiming at opening of 20 such concept stores during next one year.

The stores would be owned and run by Welspun domestic retail division and would function as independent profit centres.

Compiled by Mohini Bhatnagar

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