Marketing review

26 Apr 2007


Philips to spend Rs80 crore on image makeover
Dutch consumer electronics maker Philips is planning an image revamp in India and will project itself as a lifestyle and healthcare firm. The repositioning which will be part of a global such effort will result in the company spending Rs80 crore in adspend for brand re-positioning in the Indian market.

As part of its strategy, the Dutch company recently introduced the GoGear range of MP3 players, priced at Rs 2,999 onwards, besides the ambilight and ambisound TVs. In the next 6-9 months, the company will introduce at least 24 new products that will strengthen its position as a company in the lifestyle business.

In the healthcare segment, Philips already offers a range of clinical devices and instruments, but would soon make its foray into consumer healthcare as well.

With the organised retail market surging, Philips has tied-up with leading large format stores and aims at 10 per cent of revenues from this segment this year from 7-8 per cent at present.

Johnnie Walker launches limited edition pack
Johnnie Walker, which claims to be the world''s number one whisky brand, has unveiled a collector''s edition of Black Label Scotch whisky to celebrate the third year of its sponsorship of Vodafone McLaren Mercedes, among the world''s leading Formula One teams.

Exclusively available at select Duty Free outlets across Asia from 1st July 2007, the new collector''s edition of Black Label comes in a contemporary silver and black carrying case.

Functionally practical and sporting a stylish and innovative design, the unique and eye-catching polished outer casing draws inspiration from the revolutionary aerodynamics of a Formula One car itself. Elegant lines and colouring mirror the shape of the nose of this season''s Vodafone McLaren MP4-22 race car and the carrying handle, that of the rear spoiler.

The whisky in the Johnnie Walker Black Label Limited Edition is Johnnie Walker''s award-winning Black Label Scotch blend also called ''the Savoy, the Everest of deluxe whiskies'', is blended from over 40 whiskies, each of which has been matured for a minimum of 12 years, some for considerably longer.

Johnnie Walker is the world''s No.1 whisky brand, founded by John Walker in 1820 and is now enjoyed around the world.

Lakme Lever to use different retail formats to expand reach
Lakme Lever is looking at new retail formats like express salons and corporate centres to reach out to more consumers. The company has pegged the organised beauty services segment at Rs200 crore and sees the business growing at 31 per cent.

The company plans to expand its presence in Pune, Mumbai, Delhi, Hyderabad, Kolkota, Kochi and Coimbatore. Of the 93 salons in existence, Lakme Lever owns five and has franchised the rest.

The biggest challenge facing the Rs1,600-crore beauty services industry in the country is `good retail space'' and `trained personnel. To overcome the HR challenges, Lakme Lever has set up a training centre in Mumbai where staff is trained in both technical and soft skills aspects of the job.

Ford begins servicing drive
Ford India has started a marketing programme to ensure a trouble-free servicing experience for Ford vehicle owners. The programme includes expansion of its Brand@Retail dealerships in key markets and implementation of Ford''s global `Qualitycare'' and Body Shop Quality Care certification programme at Ford dealerships and service centres.

The company plans to launch 20 new dealerships across India by end-2007 taking the total number of dealerships to 136 in 75 cities. The company will inaugurate new dealerships in Ahmedabad, Vadodara, Kota, Bangalore and Navi Mumbai.

Ford plans to extend its global QualityCare certification to 20 more service facilities in key cities and the Body Shop Quality Care certification to eight more facilities.

Reliance Retail opens consumer durable outlet in NCR
The Mukesh Ambani controlled Reliance Retail has marked its foray into speciality retail with the launch of its first consumer durable outlet, Reliance Digital, in the NCR region. Officials said the company would open a total of 150 Reliance Digital stores across 70 cities over the next three to four years.

The stores would typically be spread over 15,000-30,000 sq. ft and would function as one-stop shops for all technological solutions in the consumer durables and telecommunications segment to cater to the tastes and requirement of customers.

Reliance Digital stores would sell TV sets, home theatre systems, refrigerators, cooking ranges, dishwashers to computers and mobile phones across brands.

The stores would stock more than 4,000 products from over 150 brands. As part of its overall business strategy Reliance Retail would also have its own consumer durable private labels in future though not immediately.

With its own labels in the consumer durables segment, Reliance Retail will be fighting for a share of the $5.6-billion domestic market, dominated by South Korean brands LG and Samsung and Japan''s Sony.

Reliance officials said the products offered in the store would be most competitively priced and they went so far as to say that should any consumer find a cheaper product in the market within 30 days the store will not hesitate to match the offer.

Besides, the stores will also provide pre- and post sales services through its in-house RelianceresQ vertical and will also have finance schemes for consumers for which the company is in talks for tie ups with several financial institutions, Citi Financial being one of them.

Reliance Digital will also offer customers RelianceOne, a common membership and loyalty programme across all its formats, which means users would be able to redeem points earned on purchases. Other formats of Reliance Retail such as supermarkets and hypermarkets are due for launch in the April-June quarter.

Future Brands to revamp private labels
Kishore Biyani''s Future Group with retail chains like Big Bazaar and Pantaloon is setting up a wholly owned subsidiary, Future Brands, which will recreate and revamp its private labels as conventional brands and also provide brand consultancy services.

Santosh Desai, managing director and CEO, Future Brands said the Future Brands is currently looking at revamping seven to eight of its private labels across categories like apparels, consumer durables and FMCG.

Through this Future Brands will provide brand consultancy services for other players across segments like FMCG, consumer electronics and lifestyle amongst others — both at the consumer and brand definition level he said.

The company is talking to three `blue chip'' companies at present and expects the consultancy services to start contributing significant revenues to the Group after six months.

Future Group plans to invest about Rs 4,000 crore over the next year for the expansion of its different retail formats. The Group will increase the number of Big Bazaars from 50 to 100 by next year and add eight more outlets of its home solution format, HomeTown. It has also planned to build 12 new malls under its Central and Brand Factory formats.

Airtel to offer PCO services in MSRTC buses
Bharti Airtel has tied up with the Maharashtra State Road Transport Corporation (MSRTC) to launch its GSM-based Airtel PCO services in over 4,000 MSRTC buses.

Airtel will offer the pre-paid PCO service in over 4,500 MSRTC long distance buses and medium-long distances buses. This facility will enable MSRTC bus commuters to make calls to any destination in India for Re1; local calls will be charged at Re1 for 60 seconds and STD calls at Re1 per 20 seconds.

The PCO facility will be installed for a period of two years and depending upon the response of the passengers, this facility will be extended to other buses on other routes as well.

MSRTC will be responsible for cash management for the PCO operation in their buses, while Airtel will be responsible for the maintenance cost. Currently over 1,000 PCOs have been installed in MSRTC buses. All installations would be completed by last week of May.

Private companies beat PSUs in PCO market share
Telecom operators Reliance Communications and Tata Teleservices have beaten Bharat Sanchar Nigam and Mahanagar Telephone Nigam in grabbing a major portion of the lucrative PCO market in the country.

The two companies now account for over 50 per cent market share in the PCO segment leaving behind the PSUs with just 41 per cent share of the 5.3 million booths in the country.

In December 2004, BSNL and MTNL controlled 90 per cent of the PCO market with over 20 lakh booths but a year later by December 2005, the market share of the two telecom PSUs had fallen to 69 per cent. For December 2006 BSNL and MTNL have had negative growth by losing 11,000 PCO booths during the three-month period October-December 2006. The two companies had closed 10,000 PCOs in the previous quarter.

During this period Reliance added 1.2 lakh PCOs while Tata Teleservices added 81,239.

Over the last one-year the BSNL''s PCO booths have remained static at around the 20 lakh booths even as the overall market size has almost doubled. At the same time Reliance has moved from having 5.3 lakh booths in December 2005 to 14.5 lakh PCOs by December 2006. Tata Tele also increased from 3.2 lakh booths to 11.7 lakh in one-year time.

Even though BSNL remains the single largest PCO operator, going by the current growth rates Reliance Communication is expected to overtake the PSU in the next six months.

Private operators are also offering better terms to booth owners.

To counter the private operators'' strategies, BSNL recently revamped its PCO business. It decreased the tariffs for local calls made from PCOs even as it matched it by lowering the pulse rate significantly. The company also increased the commission for PCO booth owners up to 10 per cent

HLL to stop advertising on Star channels
India''s largest advertiser Hindustan Lever (HLL) has decided to pull its advertising off the Star TV network. For the past two months the two companies have been engaged in negotiations to come to a mutually acceptable billing rate.

HLL had been demanding a 35 pc discount on the existing ad rates post the January launch of the conditional access system (CAS) in Mumbai, Delhi and Kolkata.

However, Star was believed to be not budging beyond a 25 per cent discount, said sources close to the development.

The upshot has been that HLL has stopped advertising on the Star network.
HLL is among the biggest advertisers spending around Rs 300-350 crore on television advertising annually, out of which Rs 100 crore goes to Star.

Advertisers are demanding discounted ad rates on Star Network after the drop in channel viewership after CAS was made mandatory. Star India has witnessed 1-1.5 per cent dip in the overall viewership post the CAS rollout.

Fairness creams are biggest advertisers
The fastest growing skincare category, Fairness creams, are also the biggest advertisers within the skincare category on television.

According to AdEx India data, skincare advertising on TV increased by 42 per cent in 2006, with 40 per cent of the ads catering to fairness creams. The volume of fairness creams advertising saw a significant jump, in 2006-07 doubling from the previous year in terms of number of ads per day.

Paras Pharma with skincare brands like Recova and Afterbath was the biggest spender contributing 19 per cent to the total spend, followed by Hindustan Lever with 17 per cent. However, Ponds, an HLL brand has been accounted for separately in the study but if the two are taken together HLL comes out as the top spender at 25 per cent of the total skincare advertising on TV.

The overall skincare market is valued at about Rs 1,800 crore, of which fairness creams have 40 per cent share.

In the skincare segment the products that are driving growth are suncare, anti-ageing and fairness creams.

HLL''s higher ad spend in skincare is due to the huge number of new product launches in 2006 which include the Ponds Age Solutions range as well as its international range of face washes.
Further the company has expanded the Fair & Lovely range to introduce a sun block, skin clarity and men''s cream.

Other big advertisers of skincare products include Emami and L''Oreal.

Matrimonial sites expanding role
After restricting themselves to fixing marriages matrimonial websites are expanding their ambit to include wedding planning and management, roughly a Rs70,000 crore market.

Last year, launched a pilot wedding planning service in Mumbai and now has plans to launch it across the country within 12 months. The company also recently launched its Shaadi Service directory, which provides details on vendors, catering, venues, rental services, etc.

Another matrimonial site is planning to offer pre-marriage services such as booking marriage halls, catering and decorations. and have also announced offline centres. has 140 offline centres called Shaadi Point, which it plans to increase to 500 over 18 months while has over 80 centres, which it plans to increase to 300 by March 2008

Matrimonial websites have seen an increase in registrations from tier-II and tier-III cities. The number has increased from 30 per cent of the total registrations in 2002-03 to 50 per cent of the total database in 2006-07.

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