Marketing review

17 May 2007


Ginger Hotels ties up with Café Coffee Day
Bangalore: Indian Hotels Corporation''s Ginger Hotels, positioned on the `Smart Basics'' platform has entered into a partnership with Café Coffee Day, for opening a Coffee Day''s outlet in the hotel.

The outlet would be open to all, and not just the hotel''s guests.
The company said that the aim is to increase footfalls in Ginger and increase the reach of Café Coffee Day.

At present Ginger Hotels is present in seven cities and 25 Ginger hotels are expected to added by the end of this financial year. Work on the new hotels has begun in Goa, Puducherry and Agartala, while work in Pantnagar, Vadodara, Tiruppur, Guwahati, Ludhiana, Jamshedpur, Delhi, Mangalore, Paradeep, Panaji and Ahmedabad will commence soon.

The retail coffee chain Café Coffee Day café hopes to increase the number of outlets in the country to 500.

Airtel, Reliance slash lifetime pre-paid charges
New Delhi: Bhatri Airtel and Reliance Communications have dropped the upfront cost of a lifetime pre-paid card to Rs 495 from the existing offer of Rs999.

While in Airtel''s Rs999 lifetime pre-paid card, users have to make a minimum of only one call in six months to keep the connection alive, users of the new Rs495 card will have to make calls worth a minimum of Rs200 every 180 days. The new card will be available from May 18.

Oil marketing companies revamp retail outlets
New Delhi: Government owned oil marketing companies (OMCs) are modernizing their outlets in a bid to revamp their image with an investment of Rs 1,089 crore during the current fiscal (2007-08), up from Rs 732 crore in 2006-07.

This is an increase of 48.77 per cent in expenditure for modernisation of retail outlets. The Union Minister of Petroleum and Natural Gas, Mr Murli Deora, informed the Lok Sabha today that the PSU OMCs — Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd — would be investing on modernisation of their retail outlets to improve appearance and provide facilities to customers with a view to effectively face the competition in the deregulated scenario and enhance the customer loyalty through improved services.

While IOC including IBP has earmarked Rs 763 crore for the purpose, BPCL would be spending Rs221 crore. HPCL plans to spend Rs 105 crore for modernisation of retail outlets.

In 2006-07, IOC (including IBP) had spent Rs 351 crore, BPCL Rs 214 crore, and HPCL Rs167 crore on modernisation of retail outlets. The criteria for selection of retail outlets for modernisation are primarily based on location, current sales and the future potential.

S. Kumars, Dunhill enter pact
New Delhi: Textiles major S Kumars Nationwide Ltd said that it had entered into an exclusive marketing agreement with the UK-based luxury men''s brand Dunhill, and plans to open around eight to 10 stores in the next five years.

"Initially, we plan to open a total of four stores in the next two years, with an approximate investment of around Rs 16 crore," said Mr Nitin Kasliwal, Vice-Chairman and Managing Director, S. Kumars. "We eventually plan to open about 10 stores in five years. But all that would also depend on real estate conditions in the country," he added.

The company will open stores with an average area of 2,000 sq. ft to 2,500 sq. ft at five-star hotels and all luxury malls coming up in the country. The first Dunhill outlet was launched at a five-star hotel in the Capital, on Saturday.

Mark Newman, regional managing director, Asia Pacific, Dunhill, said that the company had plans to roll out the brand in India. "Once all our planned stores are in place, we expect India to contribute about 10-20 per cent to Dunhill''s global revenues," he said.

Flying Machine brand relaunched
Jeans brand Flying Machine is being relaunched across several exclusive boutiques in the country. The first five stores have come up in Bangalore. About 50 more are planned in the first year of relaunch.

The brand, from the Arvind Brands stable, which underwent a major revamp recently, is looking to sign on Bollywood actor Abhishek Bachchan as brand ambassador. The brand rehaul saw changes in the logo, product line and brand positioning. The new Flying Machine products have been designed in collaboration with Italian designer Chicco. The retail stores have been re-engineered by British retail design firm JHP.

Machismo from Enfield
Which bike manufacturer in India would include in a feature-list of its bike a comparison with a tractor? No prizes for guessing — Royal Enfield.

The latest, Machismo 500, the bike with the pulling power of a tractor, according to Royal Enfield officials, was launched on Friday.

But then, when have the usual rules of the game — fuel efficiency, smooth lines, flashy looks — applied to a machine from Royal Enfield starting from the Bullet, a model that has been around for over half a century.

The Machismo 500 is true to form. The four-stroke bike with a lean-burn engine and five-speed gearbox with left footgear shift will cost the buyer Rs1.05 lakh.

But compare it with a tractor or an earthmover? Who cares? Definitely, not the Royal Enfield customer.

And, there are over 33,000 of them buying a new Royal Enfield every year and 5,000 more are willing to wait a few months after coughing up the full payment. All of them sold on the half-century of legend, tradition and the `bullet beat'' of a brand dating back to the World War era.

According to Anupam Thareja, Director, Royal Enfield, its production facility at Tiruvottriyur in North Chennai is churning out the bikes to full capacity of about 34,000 and the company hopes to increase capacity to about 40,000 during the year. Royal Enfield will sell just about five hundred Machismo 500s a year, making it a "machine to aspire for," Mr Thareja said. Royal Enfield has picked for itself a niche — it promotes not motorcycles but a motorcycling experience. The Machismo 500 is a niche within that niche.

It will be an exclusive club with the buyers getting the `royal'' Enfield treatment at any of its brand stores and select dealerships where the bike will be available, he said. This bike is exported to the Europe and Australia, he added.

Royal Enfield, a division of Eicher Motors, has turned a profit last year. However, Mr Thareja declined to share the details of the turnaround. The company hopes to launch a motorcycle with a new engine later this year, he said.

Royal Enfield has five other two-wheelers in the domestic market — Bullet 350, Bullet Electra 5S, Bullet Machismo and Thunderbird.

UTV Motion Pictures launching second brand
After establishing UTV Motion Pictures as a strong player in Indian and international cinema, the company is launching its second motion picture brand Spotboy.

Mr Ronnie Screwvala, CEO of UTV, says, "Our business has grown manifold and we have numerous projects underway. Also, we are entering new markets and going international in the coming months, which made this the appropriate time for us to launch Spotboy Motion Pictures.

"This brand will take over some existing projects but will largely develop its own fresh content."

"This is a typical business expansion plan followed by most international production companies and provides the company with bandwidth and thinking flexibility.

It also helps bring diverse projects within the same studio through different brands.''''

Vikas Bahl, business head, SAB TV, has been appointed to head this new venture as executive vice president. Bahl has built SAB as a strong player in the GEC space in the last 18 months, by more than doubling its ratings and revenue and building a strong brand in a hugely cluttered environment.

SAB, in the last one year, has become an example of re-inventing a brand with consistency of content and marketing. Bahl, has spent a large part of his 11 years of work experience in advertising, with Ogilvy and then Contract as Vice-President. He has also worked with and Radio Mirchi as its national marketing head.

Future Brands unveils Dreamline for home segment
Future Brands, a part of the Future Group, has announced the launch of its first brand `Dreamline'' for the home category. The company also announced that actor Hema Malini would be the brand ambassador for the products.

Dreamline includes kitchenware, bed and bath linen, furniture and home decor.

The brand has been exclusively licensed to Pantaloon Retail (India) Ltd, although both Future Brands and Pantaloon Retail are part of the Future Group. It will enter the market initially with Dream Kitchen and Dream Bed and Bath, while Dream Furniture and Dream Décor will be launched in the future. The Dream Kitchen and Dream Bed and Bath products will be priced starting from Rs30 and go up to Rs2,000.

Hans Udeshi, CEO, general merchandise, Pantaloon Retail, said that the company hopes to make Dreamline a Rs 200-crore brand within the next four years. "We are confident that Dreamline will win over customer loyalty," he said.

The brand will be initially introduced through Pantaloons'' Big Bazaar and Food Bazaar outlets across the country and will be priced competitively with other products from the same category. "We see a huge potential to grow in the home category, with the Indian market offering wide scope for the `value proposition'' products," said Kishore Biyani, managing director, Future Group, in a press release.

The Dream Kitchen product line will be launched in the non-stick cookware, hard anodised cookware and utility. In the plastic segment, products such as thermoware, household items and kitchenware will be launched. The crockery segment will have opalware and glassware. The Dream Bed and Bath brand will have products such as plain and satin bedsheets, pillow covers and towels.

Hyundai phases out Accent CRDi, Viva models
Hyundai Motor India has phased out the Accent CRDi (diesel) variant and the Viva (petrol and diesel) model. A company spokesperson said only the GLE petrol variant would now represent the Accent range.

The Accent CRDi, launched in October 2002, was the first car in the mid-size segment to feature the CRDi (Common Rail Direct Injection) diesel technology; the Viva model (petrol launched in August 2002, diesel in January 2004) was the first sports notchback vehicle in the mid-size segment. This was the second batch of variants in the Accent range that were discontinued. Earlier, the company had discontinued GTX-Tornado, GLX and the GLS model.

The GTX model came with a 1.6-litre engine and safety features such as ABS (Anti-Brake Locking System).

The phase-out of old models would help remove production constraints on the roll-out of new and promising models such as Getz and Verna.

Hyundai recently introduced a revamped Getz with a smaller 1.1-litre petrol engine against the earlier 1.3 litre engine.

The new engine (eligible for tax sops) has received a positive response with a waiting period of one to two months.

The change has also pleased motoring critics. From March 2007, it is the latest Hyundai model to be exported with a target of 20,000 units per year for the next five years. Forty thousand units will be exported in the first fiscal, said senior officials.

It will be exported mainly to the European markets as it meets all their safety and emission standards.

With the success of Verna (especially the diesel variant) in the domestic market, the company recently launched the top of the line CRDi SRX variant.

It comes with new features such as keyless entry with burglar alarm, and instrumentation upgrade to display information such as outside temperature and distance to empty for the fuel that is an industry first in its segment.

The new models have enabled the company to reduce the variants in the Accent range to the GLE model, which continues to sell 700-800 units a month.

According to senior officials, the GLE model is ideal for the debutant buyer in the mid-size segment and is primarily well suited for the fleet market.

Company officials said exports of the Accent model to Morocco, Algeria, Sri Lanka and other countries will continue.

TV Italian brand Diesel ties up with Arvind Mills
Diesel is in India. The Italian luxury denim and casual fashion brand has entered into a joint venture agreement with Arvind Mills to create a new company called Diesel India Fashion Arvind Pvt Ltd.

It will be a 51:49 joint venture with Diesel having the larger stake. According to Mr Renzo Rosso, President and founder of Diesel: "India is a most incredible country in terms of economic growth and for the fast development of its fashion market."

The joint venture company will set up two flagship stores in New Delhi and Mumbai by the end of this year. It hopes to open 15 stores in three years in cities such as Hyderabad, Chennai and Chandigarh. They will be a combination of large flagship stores (5,000 sq feet) and smaller ones (3,000-3,500 sq ft).

The stores will sell all product lines of diesel — jeans and other casual apparel for men and women, bags, women''s lingerie, innerwear for men, watches, jewellery, shoes and glares. The pricing will be the same as in international markets. A pair of jeans will cost about Rs8,000.

Darshan Mehta, president, Arvind Brands, said: "It is a prestige to be associated with the god of denim fashion. The fact that they signed a joint venture with us shows that they see India as a long-term destination. We want to bring in authentic original Diesel products from wherever it is made in the world — most of it is made in Italy — to Indian consumers in stores that are as attractive and exciting as they are in the world."

A V Birla group set to unveil new retail brand
The A V Birla group is all set to unveil a new retail brand soon, according to sources in the group. The group''s retail venture, spearheaded by the Trinethra chain of stores, which it acquired in January this year, will see stores being launched next month in Pune under the new brand. The expansion of the chain in the West, North and East will be under the new brand and eventually Trinethra''s 225 stores, which are predominantly in the South, will be rebranded, say these sources.

The group has set itself an aggressive growth plan with 20-25 stores planned in each city that it enters. The group''s hypermarket venture will be on course by next year; it already has one in Mysore, set up by Trinethra before the acquisition.

A V Birla Retail is also on a hiring spree as it scales up. According to sources, several retail merchandisers from Reliance Retail have moved on to the Birla group with substantial raises. Retail merchandisers have become key to organised retail as they are responsible for product placement, pricing and promotion and responsible for a store environment.

The group has also recruited expatriates for its top management. While Mr Andrew Denby, who was formerly with retailer A S Watson in the Philippines, heads the supermarket chain, Russell Berman, who was earlier with Carrefour in China, heads the planned hypermarket chain.

The Group plans to invest Rs 4,000 crore in its retail venture and began its retail play early this year by taking over Trinethra Super Retail for Rs 150 crore. ties up for in-film placement
After Bharat Matrimony, it''s now the turn of rival to go in for in-film placement. The online matchmaker has tied up with Hindi film Metro, starring Konkona Sen and Shilpa Shetty, to reach a wider audience.

Speaking to Business Line, Mr Omprakash Hassanandani, business head,, said the company is increasing ad spends by about 30-40 per cent. The company is in the growth phase and needs to sustain its No 1 position, he said. It has also announced plans to enter businesses associated with matchmaking, such as horoscope matching and wedding planning.

On the in-film placement, Hassanandani said wants to position itself as part of a daily lifestyle. Online matchmaking has now become popular in the metros. The script of the movie, which portrays "everyday people living in a city like Mumbai" also provided the opportunity for a seamless fit and hence the tie-up, he added.

The People Group, which owns, produced a `Hinglish'' movie called Flavours about four years ago, about the loves and lives of the Indian diaspora in the US. Earlier, it made a short movie for private viewing called (one of the actors was People group CMD Anupam Mittal), the theme being the trials Indians in the Western world face finding a match. has had 10 million members since inception and has facilitated one million marriages, Hassanandani said.

Perfetti plans higher priced brands
Perfetti van Melle India (PVMI) Pvt Ltd has embarked on a new marketing strategy to manufacture and market relatively higher priced brands, in an effort to ease out the pressure on margins from its existing brands.

"We have decided to manufacture and market slightly higher priced brands in order to bring balance to our margins which are currently under a lot of pressure due to increasing prices of raw materials such as glucose, sugar and milk," said Prakash Wakankar, managing director, Perfetti van Melle India Pvt Ltd. "Well, it''s not only us who is facing the problem. It''s an industry challenge since these raw materials are commonly used across the sweet confectionery market," added Mr Wakankar.

According to the company, while prices would be increased, it would have to be done keeping in mind the affordability factor, since PVMI deals in mass products. Some of the company''s flagship brands are Alpenliebe, Center Fresh, Big Babol and Chlor-mint.

In fact, earlier during the year, on a visit to the country, Stefano Pelle, vice president and chief operating officer, business unit Russia and South Asia, had said that sooner or later the 50-paise price point would have to be increased to maintain a balance in the margins.

New launches
On new products, Wakankar said, "We have several new launches in the pipeline, with more focus on value-added products and variations. We will also introduce a few new categories that will be a part of the broad sweet confectionery market." Of the Rs1,800-Rs2,000-crore sweet confectionery market that does not include chocolates, PVMI captures around 30-35 per cent share, thereby making it the market leader in the segment.

On growth plans, Sameer Suneja, head, marketing, PVMI, said, "While the industry is growing at around five to seven per cent per annum, PVMI has a much healthier double digit growth rate, owing to its wide distribution network." The company will hit the two million-distribution outlet mark by the year-end.

On the company''s upcoming plant in Uttaranchal, Wakankar said, "The new plant will add significantly to our current production capacities in the gum and the candy segments, as soon as it becomes operational within this month." The company plans to manufacture products such as liquid filled gums, cream fills and certain new brands at the upcoming facility. PVMI already has two other plants in Manesar and Chennai.

Benetton''s new perfume range
United Colors of Benetton (UCB), a leading Italian clothing brand, has unveiled its new perfume range — Cotton — for the spring-summer season. The company has launched this new range in three variants, United Colors of Benetton (fragrance) — Woman, Man and Unisex.

According to Patrick Malek, export director, elective Beauty, "The new range is inspired by the softness and freshness of pure and delicate cotton. We have also kept market and brand acceptability in mind before launching it in India." UCB Woman is inspired by the accents of neroli and mandarin. While, UCB Man has flavours of bergamot and blackcurrant bud, UCB Unisex has a fragrance of bergamot and neroli.

All the three variants are available in three sizes — 125 ml priced at Rs1,925; 75ml priced at Rs1,495 and 45ml available at Rs995. Malek said that the range would be available in 150 stores across India. "We are also looking at introducing two other ranges later this year. We are looking at launching the B.United Jeans range in September and the UCB White Nights range.

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