Marketing review news
13 January 2005

Percept ties up with Posterscope
Percept Advertising has entered into a strategic tie-up with the world's largest out-of-home media planning and buying company, Posterscope of the Aegis Group. This is Percept's second alliance with the Aegis Group, the first being with Carat, a media buying agency. Percept will have managerial control of Posterscope.

As per the tie-up, Aegis Group has picked up a 49 per cent stake in Percept Out of Home (POOH). The company has been renamed as Posterscope India.

As part of its plan to become an integrated communications company, Percept group is also setting up a market research division.

This the second time the company is getting into market research. Its first, and unsuccessful, attempt was 10 years ago.

Air fare price war in Eastern sector
A number of airlines are enticing passengers to fly eastern skies with discounts and freebies. Malaysia Airlines is offering passengers enticing promotional offers on the Kuala Lumpur-Kolkata while Singapore Airlines (SIA) has reduced its fares up to Kuala Lumpur to around Rs13,000 while the usual fare on the stretch is about Rs17,000.

Indian Airlines, which runs 10 flights per week to Bangkok and back has reduced its fares on the Kolkata-Bangkok-Kolkata sector by almost 20 per cent to around Rs10,900 three weeks ago from the previous Rs13,655.

Thai Airways recently has introduced two more Kolkata-Bangkok flights and, around 23 Kolkata-Bangkok flights are being shared between Thai Airways, Indian Airlines, Druk Air and Biman Bangladesh.

The carrier likely to change the rules of the game is the Singapore-based no-frills airline, Jetstar Asia, slated to start flights by end-March or early April. Jetstar has announced a fare of Rs10,000 between Kolkata-Kuala Lampur.

HPCL to expand Club HP outlets
Hindustan Petroleum Corporation (HPCL) is adding 400 more 'Club HP' brand outlets to reach 2,000 in Andhra Pradesh. These outlets offer a host of facilities besides selling petrol, diesel and other products.

According to company officials, the retail business of HPCL has been growing steadily and the company is gearing up for future competition not only from Indian players but also from international ones.

HPCL currently has 6,000 retail outlets across the country and a market share of around 23 per cent in the retail segment. The company also plans to increase the number of new-look visual outlets in the country from 200 to around 500 in the next five months.

Print media grows faster than TV in advertising
According to a study by AdEx, a division of TAM media, print media advertising grew faster than television advertising in 2004 at 14.7 per cent to Rs5,450 crore — higher than TV's 13 per cent growth to Rs4,860 crore.

This is despite the fact that the FMCG sector slashed print budgets by over 13 per cent to Rs275 crore this year while increasing its TV spends marginally.

In 2001-02, print grew at 4 per cent, nearly one third of the size of growth of advertising on TV during that period. In 2002-03, TV was just a little ahead of print. AdEx India, TAM Media Research's division has estimated the total advertising budget for 2004 at Rs12,000 crore.

The figure is much above last year's total over Rs1,500 crore more than what the industry achieved last year.

Educational institutions, independent retailers, coaching centers, display retail shops, fueled print media's growth, as these prefer to advertise on print than on television.

Volvo hires law firms to go after imitators
Heavy commercial vehicle maker Volvo, whose buses are increasingly becoming popular in India has found itself the target of unscrupulous brand pirates.

Volvo with its long distance luxury buses that have proved extremely popular with bus travellers, has found that unscrupulous bus operators are passing-off ordinary buses as Volvo buses by fitting Volvo lookalike bodies on a conventional HCV chassis.

The reason for this is that passengers are willing to pay a premium of at least 30 per cent for travelling on Volvo buses.

To counter it, the company has appointed two law firms to investigate the piracy.

The company is surveying operators across the country and legally countering the offenders. Volvo says its survey could eventually throw up some definitive number and type of offenders. But it appears Volvo's survey is in its early days still.

Hindustan Lever opts out of biscuits
Hindustan Lever (HLL) has decided to exit the Rs3,000 crore biscuits market. HLL sells its biscuits under the Modern and Kissan franchise.

HLL entered the biscuits market by extending the Modern brand of bread to glucose biscuits and Kissan Greedy Bistix — biscuit sticks with fruit dips.

Lever's exit from this category is probably due to the price elastic nature of the market. Parle and Britannia increased prices of Parle G and Tiger brands by 50p to Rs1 for small and large packs each in July last year only to roll them in the face of stiff resistance put up by consumers.

Parle and Britannia are the leaders in the popular biscuits mart comprising Glucose biscuits and Marie biscuits respectively.

LG launches DTH-ready TV range
LG Electronics has launched Digi Direct TV — LG's direct-to-home (DTH) ready flat TV. The company expects the DTH range to contribute 10 per cent of its total CTV sales in 2005 and is targeting to sell 3.5 million CTVs this year.

LG is looking at a growth of 40 per cent in turnover this calendar year to Rs9,000 crore against Rs6,500 crore in the last calendar year (2004).

According to the company, IT products and GSM mobile phone segments will drive sales in 2005. The company plans to start production of the economy models of its GSM mobile handsets in India and expect the category to grow at 10 per cent in 2005.

While the contribution of IT peripherals and GSM phones to the total sales stood at 11 per cent and 3 per cent respectively in 2003, the company expects to increase it to 14 per cent and 11 per cent in 2005.

Ariel now available in two variants
Procter & Gamble is now offering Ariel detergent in two new variants keeping prices at the same levels.

The two variants are: Ariel Spring Clean (floral fragrance) and Ariel Fresh Clean (refreshing fragrance).

P&G decided to combine the cleaning function of a detergent with fragrance after in house research found that fragrance in detergents is an important factor of delight for the housewife in her daily laundry chore.

The company claims a market share of almost 10 per cent of the Rs5,000-crore detergent market by value during 2004 with each of its brands — Ariel and Tide — being around Rs250 crore.

The relaunch of Ariel is expected to grow its market share significantly this year.

P&G India claims a turnover of over Rs1,000 crore.

Compiled by Mohini Bhatnagar

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