To combat corroborative pressure, the company launched the latest models knight market and went in for heavy advertising to maintain its leadership in the market for a quality product company from its earlier image equipment company.
Sensing the consumer electronics industry is going to be fiercely, competitive in the years to come and growth rate will show down, BPL is diversified itself into other industries like power and cell phone networks. Both of this unrelated diversification’s for the group, and group resource are stretched to the limit as both the segment entail heavy investment.
BPL is the largest exporter of consumer electronics products to Japan, USA, UK and Middle East. In India, BPL has a customer base of over 18 million people.
BPL adds value to its businesses by continues innovation in the creation of new brands and concept, by being the first with the latest and most exciting technologies at the best prices, by offering expert comprehensive service, by continually improving the efficiency operation and by selecting the best people for its businesses. BPL has Customer Units, 21 Customer Interface Units and 28 manufacturing units in India. It has over 3000 dealers and 300 exclusive outlets throughout the country . BPL shares a long lasting relationship with its partners, Sanyo, Toshiba, Denon, Loewe, AT& T and France Telecom
BPL is committed to achieve a leadership position in all it business group through utilization of the best and most appropriate technologies, applying the finest manufacturing disciplines and most efficiently marketing high quality products and service, to consistently give customers the best for their money.
OBTECTIVE OF THE COMPANY
- To ensure customers confidence through product quality, efficient marketing and effective service
- To continually enhance Company’s worth to its shareholders and investors through sound investment and profitable operation.
- To demonstrate a real concern for its employees and to constantly improve the quality and value of their job and career advancement
- To be a good corporate who contributes positively to its community by protecting the environment and working for public welfare.
- To respect the laws, rules and customers of the land and to ensure that the conduct of all company activities will always be to the highest ethical standards.
- To identify and determine suitable marketing strategic for boosting up the market share of CTV, particularly for BPL Ltd
- To make a detailed study of the CTV, in terms of its existing market size and future market potential.
SUMMARY ABOUT THE COMPANY
The present trend of corporate adaptation (take-over) and marriages (mergers) seems to be sort sighted and would only handle the immediate threats of competitions i.e. intra-country. In a global perspective, inter country and international competitiveness would be developed only through of inner strength that comes through successful commercialization of R&D effort and building up of the market share
BPL the homegrown consumer electronics leader has grown with reviving its existing marketing strategy from time. It is one of the Indian Companies, which has been able to hold their own against the TNC onslaught. The explanation of why BPL continues to lead the thoughtful Indian customer. But it is a fact that country’s Top Color Television manufacturer have seen their collective market share shrink.
The present is an effort to formulate strategy to boost up the market share for CTVs for BPL Ltd. Therefore is a greater awareness in our country now, however, in order to face the challenge ahead it become absolutely necessary to understand the implication of building market share.
In the fiercely competitive world of today information and inherent knowledge play a key part in determination the competitive edge over others. Hence, it is important that the ambitious Organization should keep their information as updated as possible. The present endeavor is a modest attempt in this regard.
CURRENT MARKETING PLAN OF BPL LTD
The group has always been as an electronic engineering group, unlike many of its competitors. Today we make everything from the cabinet to the electronic tuner itself and buy the picture tubes from Indian supplier. This in itself is seen as a transition of BPL from an engineering group to more diversified group dealing right from achieved with tremendous success. The BPL group is lot shy, introverted, but excited about the quality of its products. It is not suppressing plan that over the past years, the group has quietly set in motion a wide ranging, strategic plan to established itself as the undisputed leader a stunning array of new products” washing machines, vacuum cleaners, refrigerators, microwaves, oven. In audio, it has widened its range dramatically. Soon to come, gas stoves with built in lighters, mixer-grinders, and mineral water machine. In just 10 years, sales have zoomed from Rs. 19 crores to Rs.100 crores. BPL in the field of color TV’s has left behind old time rivals Videocon & ONIDA black. In audio segment the sales of BPL is second only to PHILIPS who is the market leader. In VCR’s and VCP’s, BPL SANYO was the market leader with a 21.4percent share of Indian made machines. In B&W TVs, BPL is fifth, but leads in 20-inch sets, the only segments it was present in till last year. In color TV component, the group has 65 percent of the market for electronics tunes, fly back transformers and deflection yokes, supplying too many of its competitors. In medical electronic, it has 80 percent of the electronic tunes, fly back transformers and deflection yokes, supplying to a many of its competitors. In medical electronics, it has 80 percent of the electrocardiogram market and 50-60 percent of the ICU monitors market. In the Epbaxs, the group has the largest user base in the country. Some conservative which now to a large extent has been able shed its image to largely because of the involvement of BIG B in the advertisement which in itself was seen as mega coup or event
Smoother the competition with range it keeps both the consumer and dealer happy. It uses the top-of-the-line product to gain attention. The rub-off on the range down the line will work wonders. Finally, get BPL product to occupy every corner of the target household. If this means sometimes getting into product categories, which aren’t profitability immediately, so be it. It’s a price worth paying. BPL has also running dealer promotion scheme but not to the extent their competitors indulge instead by believe more on advertising due to the fact that if the promotional spend crores and that means they are cutting their brand in the long run. So for, dealers they look at high margins trouble free performance so the customer won’t hassle him and a constant flow of new product on all factors BPL has got its act together. BPL’s range strategy work on two levels, at the first one, the group is pushing into every consumer durable category in an attempt to crate an-all encompassing umbrella brand munch like those of leading Japanese companies. It is selecting dealer showrooms at price location across the country and turning them into BPL Galleries that stock and display only and all BPL products. The main objective of the BPL Galleries is to show the public the width of BPL’s product range, build corporate image and sales. The second level of BPL’s range strategy is most obvious in the Rs1,000 crore audio market. The one with Rs 1500-3000 stereo portable segment (popularly known as two-in-ones) will become the largest segment volume wise overtaking mono portable. BPL is trying to compete with PHILIPS its nearest competitor with range and line-filling product as it not only keeps the consumer a choice and the dealer happy. In the CDs market BPL plans to challenge PHILIPS by being hi-tech, trendy and the medium of future. They introduced models right from 50 watts to 1000 watts in the market, by calling the BPL CD range as
DIGITAL GENERATION
The BPL group is slowly moving away from its core areas of entertainment electronics and consumer durable. But not all its diversification has been successful. It was this same tenacity that helped the BPL group floats a high-technology company in a very short time. BPL Mobile, one of the two cellular phone operators in the four Indian metro-Modi with Telstra, Max with Hutchinson, etc – have tagged along overseas partners in their new ventures. But BPL Mobile and simultaneous diversification’s into the power skills of it’s the BPL group’s attempt to move away from the highly competitive entertainment electronics sector, its mainstay all-long. They have entered power sector because of its high entry barriers for smaller players. Since telecom and power are high turnover areas our dependence on entertainment electronic will reduce but it very gradual. The various companies are in six main areas of operation entertainment electronics, appliance, telecom, power, electronics and TV components and international operation. Form a turnover of Rs. 2,282 crore in 1995-96 the BPL Group had targeted sales of Rs.5,000 crore at the end of the decade which it successfully achieved.
INDUSTRY PROFILE
COLOR TV INDUSTRY PROFILE
The industry analysis or industry, which grows phenomenally in a short period of about 10 years, does affect, the cycle and the culture of the society. All of a sudden, the emergence of a wide variety in the hardware and the software is sure to influence viewing thinking and living in the society and that is what has happened. Today, the TV has become a device, which has changed generation, both young and old.
TV perhaps is a most powerful media today in India. The socio-economic impact of this media in a country like India is tremendous. Television started to pro life-rate, Indian homes in the last 2-decade. This was largely due to the increase in the disposable income of the middle-class supported by expanding transmission to remote areas. The extensive use of the media as a powerful toll for entertainment, information and education by other channels has added impact to this growth.
Since the launch of CTVs in India during 1982 with Asia games, throughout the 80s the Indian TV market is found to be dominated by handful of payers like Weston, Crown bush and the other government owned companies
The CTV industry for the fast expansion of TV industry has been the “channel expansion” from 2 to 40 in less than 3 years. The popularity of the channels boosted the TV industry.
The economic revival in the early years of this decade gave the people money to buy, the “Idiot Box”. The sudden change in the demand for the B^W by weaker section of the society brought in new players in the industry. The big 3 companies in the emerging market were
The 3 have been clearing from time the leadership of the market. These 3 soon contracted more than 60% of the TV market in the country. During this period, other brand like Philips and Optonica also thrived in the market shares ranging in the single digit
In fact, the on set of the 90s- brought about such frenzied activity that there was no clear picture of who is the leader in India. The 2 man rivals Videocon an ONIDA, held positions, which contrasted sharply with BPL’s. Videocon was on the low price, value for money Spaot and ONIDA was selling status symbols in the following years, on parameters exclusively, BPL stole ONIDA’s long premium mantle.
There was perception that Videocon is known mainly for its low price. In order to dispel it, Videocon launched its top of use 21 inch Bazooka as expensive product priced at over is Rs.22000
Purchase of the CTVs recorded an expansion of over 29.5% 1.35 million in 2002-03 to 1.75 mm set in 2003-04. The growth decelerated in 2004-05 with purchases estimated at around 1.9 mm sets only. This would still yield a growth rate of 9%
The competition has been holing up. Exchange Schemes, free gifts, price off and other incentives are some of the promotional tools deployed by the produces, which certainly have made the market vibrant. A major factor contributing to growth was the availability of consumer financing scheme
And now THE NEW SCENARIO with a new market profile: The entrenched position of the Indian market leaders in CTVs –Videocon, BPL and ONIDA has been challenged the MNC’s such as
- Akai
- Panasonic
- Sony
- Samsung
- Sony and Sharp
INDUSTRY AND MARKET OVERVIEW
Consumer Durable
The growth in consumer durable in India represents an important fact its transition to modernity. Economic growth and the gradual rise in disposable income, changes in lifestyle caused by growing urbanization, benefits of technology and the demand for new and better product have been the primary drivers of growth for the durable’ industry in India
MARKET CHARACATERISTICS
The total demand for any category in durable comes from
- New users buying for the first time
- Existing owners buying a second unit of the same from 3 source
- Replacement by trading in/scrapping and buying a better, new product
In India, the major component of growth has been from new users buying for the first time. During most of the nineties, there was a lower sale of white goods as compared to Color Television. However, Indian households tend to prolong the life of Application and hence the rate of replacement demand is still low in comparison with developed countries
Affordable products with basic features account for a major share of the market. For instance in Refrigerators, Direct Cool model represent over 75% and in Washing Machine, Semi-automatic models over 80% of total market. In contrast, Frost free and fully automatic categories account for the bulk of the market developed countries.
Affordable product with basic feature, account for a major share of the market. For instance in Refrigerators, Direct Cool models represent over 75% and in Washing Machine, Semi-automatic models over 80% of total market. In contrast, Frost Free and fully automatic categories account for the bulk of the market in develop countries
Consumer fiancée has become a major demand for consumer durable as it reduces the effective income level at which acquiring a consumer durable become possible. The recent reduction in interest rates an the plenthora of “Zero” percent offers have led to a significant increase in the purchases, using consumer finance option
Demand for consumer durable is sensitive to prices. There had been a consistent drop in retail price over the years of most categories like Color Television, Refrigerators and Washing Machines, brought about by reduction in excise and customs duty and increased competition. However in the last year, the price drop has evened out due to increase in Sales tax in several states, as result of tax rationalization efforts.
The time interval between introduction of new technology in international and Indian market has been narrowing. The trend in Television is towards digitalization and increased use of embedded software for delivering easier customer interfaces and better features. Television displays are moving from conventional pictures tubes to new technologies like Flat screen, LCD and Plasma.
SWOT ANALYSIS OF THE C.T.V INDUSTRY
STRENGTHS
- 90% Manufacturing Bases BPL Ltd. has acquired four CTV manufacturing facilities in the country on lease basis. This takes company’s CTV manufacturing capacity 2 million units existing 1.2 million
Units are located in:
Bangalore
Chennai
Delhi
Palakkad
BPL also acquired Uptron facility
Brand Awareness
- BPL never lost the mind game, according to A&M annual survey BPL IS India’s first most admired consumer durable firm. Trisys and independent research agency has valued the BPL brand at Rs 1,102 crore
- Maximum dealers networking in India almost 400 authorized dealers, which give it price control & maximum reach. Collaboration with world’s best manufactures which upgrade it technology when market demand
- 65% of India’s CTV Industry depends on BPL for equipment
- Second Largest Exporter of CTV after Sony after but still commands 14” & 17” CTV Exports.
Note: BPL WAS No 1 last at 58% export share
- BPL is adorned with internationally acclaimed quality standard
- The BPL group has reported whopping 32% rise in volume in CTV for the period April 2004 to Dec. 2006 according to latest ORG Report
- With this BPL has maintained its No.1 Position with an over all market share of 23.2% last year
- Despite the domestic market getting fragmented due to stiff competition. In four out of five segment of CTV” (20”, 21”, 29”) BPL is No.1
- The vigorous growth of the satellite TV and the choice own available to the consumer is a point of strength for the industry
- India can become an excellent base for consumer electronics manufacture because the liberal policies of the government have attracted leading multinational from Japan, Korea etc, to come and set up business in India either on 100% equity basis or joint venture, Government is also considering further liberalization and the question of permitting private TV and radio operators to set up their own station
- One such a decision is taken will be greater choice for the Indian consumer and thereby greater opportunity for marketing of consumer electronics products
- Developed distribution infrastructure
WEAKNESSES
- Considered as premium brand so middle class people think it is unaffordable
- Non – Existence of BPL in CTV exports in following categories:
20” CTV
21” CTV
25” CTV
29” CTV
- Although BPL protects its No. 1 Position in Domestic CTV market but is regularly losing market share
- BPL slipped to No.2 14” CTV
- Our market penetration is still very low, whereas China with comparable levels of income boasts 18 million Color TV sets alone, we are hardly at the level of 4 million
- Narrow product range, low sustenance capability
- High import contest
- Small domestic market hence long productions capacities lying under utilized
- Low qualities resulting in exports prices being non competitive
- Additional fiancée not available for WC from India’s Banks
OPPORTUNITIES
- Potential market for CTV sets in India is vast as CTV penetration in the country is one of the lowest, 43 person per 100 population possess a TV set
- 66% of CTV revenue seen coming from rural areas, BPL can upon this
- India’s rapidly growing middle class segment
- Growing replacement market
- Multiple TV homes increasing
- TV Veopar Journal states, greater export potential for CTV in Singapore (currently 81% export share), followed by UAE (18%), China & Malaysia
- The increasing presence of multinational in India for manufacturing be it Samsung Goldster, Panasonic, Sony, provided an opportunity for upgrading the quality of manufacture in the country
- Growing market, increasing export opportunities
THREATS
- Kabir Mulchandani picked up AIWA over Akai since AIWA is producing kits 10% to 15% lower prices than Akai, Hence armed up for low-price in CTV 14” Rs. 5950, 20” Rs11400
- China largest TV manufacture KONKA ready to host the red flag over India’s CTV Market, KONKA entered the CTV arena last year
- Kabir Mulchandani ‘s marketing Sales & Distribution tie up with HHEA (Hitachi Home Electronics Asia) to initially market three model 21”, 29,” & 33”
- Patent right on “On Screen Display” and “Menu Display” a major road block for BPL exports to Germany, USA & Italy
- Existing MNCs Samsung, AIWA, LG and Philips continuously raising their share while BPL despite of increasing sales losing its market share
- The Indian domestic manufacturing industry is facing the problem of the brand names from abroad and this is an area anxiety.
- Alliances Lead Players
* Leading Brand
Bazooka ONIDA, Videocon, BPL, Turbo, Tough, Panasonic, Samsung, Akai, Philips, Sony, Salora, Golden Eye, Philivision, Dyanora, Sharp, Bush, Thomson Budgetline
MARKETING STRATEGIES & MIX
MARKETING STRATEGIES
Broadly it can be started that BPL Ltd. Stand by closely reviewing its existing marketing strategies
- The first and the foremost information is that CTVs more than 90% sales are controlled by the 21 inch CTV taking into consideration all categories of CTV. This means company should focus mainly on the production of 21 inch CTV
- One of the most important is that customers look for quality with reasonable price while purchasing a CTV and slight importance is given to the company’s reputation whether or not the company is offering freebies and gifts.
- Dealers, retailers, sub-dealers are also vital to be due to be given due importance. It is also necessary to understand the dealers, retailers, and sub-dealers because they are one of the important people who can push the sales of the company. It was found that dealers mainly want that the company should give them credit facilities and discount.
- BPL is the overall winner in its category. The rivals of the BPL are LG and Samsung which are coming up like anything
- As dealers are also the controllers of the sales to some extent. One of the important information is the most the dealers ask the customers to wait and assure him the delivery if the particular brand is not available. Few of them advice the customers for other brand. The company should improve their physical distribution system and assure the availability of different models in the showroom.
- Most interesting information is that almost all the brand is having best selling models supported with different reason. The customer relates BPL with quality and brand name, which is good indication. But the company should strengthen their R&D efforts to develop models having USP (Unique Selling Proposition)
- On the basic of the information of the retailers, it can be concludes that promptness towards the complaints is also very important, many of the global players like Thomson, LG, Samsung have already build up the impression in the mind of the customers that very prompt towards the complaints. It should be done in the mind that this aspect be should not be overlooked.
- The name of the TV set should be such that it appeals the customers that it has been specially designed for them.
- One important aspect of hooking local Indian customers is by redesigning the TV sets to appeal to local needs i.e. developing a unit would have on screen displays in the vernacular languages of Hindi, Tamil and Bengali. The logic is that the Indian customers who are unfamiliar with English would still be able to use the TV without feeling intimidated.
- It was found that still Indian customers are price sensitive but simultaneously they are willing to pay more if he sees value i.e. not necessarily true that cheap products do well.
- Information reveals that Korean companies run their dealerships differently. Market studies revealed that transparency between companies and dealers or dealers and customers was low and companies had no time to sort this issue. For Example, all companies come out with new schemes for dealers every month for special promotions. Special margins are made available on air conditioners and refrigerators in the winter. But Videocon and BPL, which have large portfolio or products, operated as many as half-a-dozen schemes at any given time. For dealers who have to keep track of 150 different models, additional work was not easily manageable. There are examples of dealers who have not reconciled these accounts for as long as two years. Others have just lost money.
So, it is suggested that SAP network should be used to keep track of all dealers, traders and ensure that dealer’s accounts are reconciled every quarter.
- It was found that mostly every CTV player knew more or less what customers are looking for and they readily incorporate those features in their products. Example, when Videocon found that Indian sought big audio output in TVs it launched the successful Bazooka range. Philips launched aggressively priced 21-inch model with 200-Watts output especially for India. But the companies could be successful in such fiercely competitive market when they offer unique features that could justify the additional cost and more important be of real use the consumers. Examples, to stand out Koreans had gone for such strategy and were successful LG’s Golden Eye TV in an additional to all the features that other premiums products boast off- Graphic Equalizers Channel Memory System, Turbo Search adjust the TV picture automatically to the light conditions in the room.
- BPL and Videocon pride themselves on being available at the highest number of outlets in market. Sometimes that means two (or more) dealers in the same area, a factor, which can lead to price wars at the dealers, end and creates doubts about a brand pricing policy. This is one of the most important information and the company should take certain actions to check this problem.
MARKETING MIX – THE 5PS
- Product Analysis CTVs
Color television account for 37% of all TV sets sold in India, 21” CTV is the largest selling product in CTV’s. At present the market is in a growth stage and currently there is a boom in the market. BPL is producing expected products which have set of attributes and conditions that buyers normally expect and agree to, when they purchase a product. In this category, BPL offers features such as 100 programs (channels), Cable readiness, Bass expander, child locking and host of others. But of late, it has started making augmented products that meets the customer’s desires beyond their expectations. The up gradation of product quality is through digitalization and accordingly the company is coming out with a range of high end digital products like digital camera, digital home theater systems and digital versatile disc player. In the television industry, it is the product, which drives the brand. BPL is launching new products to widen its product mix. BPL is lengthening its product line of CTV’s by adding more items within the line’s present range.
BPL has also introduced the concept of line featuring by promoting low-end promotional models to serve as traffic builders to attract new buyers. It plans to concentrate on producing higher margin items only. As has been the case worldwide, the 21” version has been gaining ground and this year, in fact has established it with maximum sales among all sizes.
The other big factor in the 21” segment is the gradual shift to the F&FST (full and flat square tube), which allows for better viewing. India is expected to go the way of the rest of the world, which prefers F&FST. MNC’s have been promoting F&FST in a big way because the margins are higher there. Even as more consumers are willing to write out big cheques for feature packed TV sets, enormous potential is crystallizing below. In the market called India, the best and the obsolete products both can sell side by side in substantial numbers.
Model
14” Portable
KSR
KDR
KBR
KTE
20” CTV
EBR
LVR
LXR
LCR
21” Flat & Full Square Tube
FQR
FXR
FHR
FTR
FWR
FYR
25” Large Screen
BQR
BXR
BZR
29” Large Screen
NPR
NQR
- Pricing
The demand for CTV is sensitive to its pricing. With a little reduction in prices the demand shoots up rapidly. The major barrier to penetration and market expansion has been the high price in relation to purchasing power of an average Indian. In order to price open and expand the market, manufactures are bout to adopt strategies to lower prices. BPL has been affected by price cuts of its competitors with its market share falling to 22% at present. Within the new price paradigm a brand such BPL would continue to command a premium over other brands, due to a higher perceived quality and the brand values it enjoy. BPL went for quite a few promotional schemes last year. Regularly dropping prices create dissatisfaction among the consumers who have brought the same CTV Model earlier.
CTVs value and price are currently perceived in 30/70 ratios, which means that Indian consumers still go for the lower version, or at least a majority of them. BPL has prices its products in such a way that it can cater to all category of buyers. The company has been very aggressive in its pricing which has led a sales strategy of receiving 100% advance payment from in its dealers and giving its dealers and giving its dealers a margin of about 10% on the MRP. Though the effective margin received by the dealers is effectively the lowest for BPL CTV’s, yet it given them higher turnover, which ultimately leads to higher, profits. Recently three successful pricing strategies which received over whelming consumer response were:
- Financing at 0% rate of interest
- No profits No loss sale scheme for its best dealers in Delhi
- Attractive price reduction due to in-house development of some components
CTV industry is witnessing a general trend lower price. New CTV sets come cheap, thanks to exchange meals and easy finance offered by leasing CTV manufactures. Pricing of CTV’s is done more value perceived by the and less on cost plus markup basis
BPL is trying to reduce costs as a result of concentration effort by the company’s designers, engineers and vendors to reduce them. It is using optional features pricing, special event pricing and low financing as forms as forms of promotional pricing. The BPL brand commands a premium position in consumer durables. But, if it has to climb up the volume, leader, it has to step down the price-ladder since it is the middle class segments that have the potential for growth.
- Place
Needles to say that competitive scenario in the CTV Market intense. Infect the industry is gradually becoming over crowed and competition is cut-throat
So in present marketing situation BPL to become CTV leader has three marketing strategies (3M) available to deals upon
Although earlier, BPL had placed itself as marketing leader in I-M & III-M, but recently it has lost its leadership in export.
Also it is striving to maintain its supreme position in urban market, since its market share has reduced to 19.7% in December 2006 as compared to 22% in December 2005.
I-M ─ Marketing in Urban
In current situation around 15 CTV manufacturers are fighting cutthroat competition in urban market. As out of 15-listed CTV manufacturer 74% (11) are MNCs with a total 54.7% (Dec’06) market coverage.
And in initial phase of their marketing strategies (Top to bottom) they always prefer to cater in large density cities/towns. Thus making the urban market congested and operating at thin margins, by working at large volumes and low price.
Even BPL is striving to maintain its supreme position since despite of rise in sales volumes to 63,800 in 2006 from 55,400 CTV sets in 2005.
Its market share reduced to 19.7% in Dec’06 from 22% in Dec’05.
II-M ─ Marketing in Rural – Why go rural?
- Urban Market is over crowded with domestic as well as MNC players and saturated urban demand made the profit margin thin.
- 60% CTV revenues seen coming from rural areas in 2006 which is almost 30% at present (FICCI)
- Increased rural income resulted in growing consumerism
- Pioneer is the first & maximum beneficiary
- You do otherwise some other will do, as Philips & LG started to look upon Rural Segment
Analysis: Over the past twenty years there has been a great increase in television viewer ship in rural areas as compared to urban areas.
III-M ─ Marketing in Overseas (Exports)
Worldwide CTV Demand over the years
Analysis: Huge potential for BPL’s, CTV Export
The Paradigm Shift
The Transition of TV viewer ship from urban to rural, which makes it evident that rural percentage, has suppressed the urban. Hence hey are the better prospects to target.
It is evident from the above pie charts pie charts the relative importance of the rural market for CTV manufactures (BPL) is raising.
Geographical distribution of T.V. viewer ship in urban and rural India.
Analysis:
TV viewer ship is high in North, West & South India Rural areas so they are better prospects for the sale of CTV.
4. Promotion
The beginning of 2006 did not present an exciting picture of CTV manufacture, with poor counter sales and the economy witnessing a slow down in many key segments. Thus manufacturers had to stimulate demand and wake up latent desires. With more than 15 brands competing in the same market place, and with very little differential between one brand and the other. Companies resorted to various tactics to attract the attention of the consumers.
Free gifts, attractive exchange offers for old TVs sets, money back offers and zero percent finance schemes have become handy tactics to push up sales with each company outdoing the other in giving free gifts and discounts.
The market registered a dramatic increase in size last year; BPL has also introduced some exciting offers to attract the customers, like:
Real Discounts
Exchange offers
Installment schemes
The increasing competition in color television industry has forced the marketers to go for innovative promotion schemes. The total amount to be spend on advertising and promotion by BPL in Rs. 120 crore this year, it spend Rs. 110 crore in 2005.
BPL relies more on consumer pull type of promotional strategy. The effectiveness i.e., balances of push Vs pull tends to vary across regions in India. In consumer electronics industry, the north and west are seen to respond more to push and east and south are comparatively brand loyal. As competition heightens, companies are being compelled to continually widen their product range. Their investment in tools, used to make dies and kits of CTVs, are rising, BPL launched four to five models each year. They have five tools and each tool costs Rs 5 crore to set up. The brand building activity has become important for all the companies and this basically to keep them selves updated with consumer’s perception of a particular brand.
BPL has around 160 exclusive showrooms at prime locations across the country called BPL galleries hat stock and display only BPL products. The main objective of BPL galleries is to show the public the width of BPL’s product range, build corporate image and sales.
BPL has announced end of its multi-crore association with Amitabh Bachcan in 1999 since his popularity is on a down swing in TV commercials and media campaigns, especially in metros and urban centers. Currently BPL is using Amitabh Bachcan only for its rural marketing campaigns. BPL will also exit from niche programs like BPL, Oye, the popular Hindi film song countdown show on Channel V de to the fact that it has been unable to qualitatively differentiate from competition and retain edge in this genre of programming. It is trying to build an emotional bond with consumers. It moved to establish a bond with the younger generation the key to future market lay in typing the brand in inextricably with entertainment. The commercial inspired by the blockbuster movie, ‘Home Alone’ evoked sympathies (thanks to the kid) and warmed its way inside every family’s heart BPL is projecting itself as a company many advertising entertainment products.
BPL has decided to capitalize on India’s near-religious fever for the game and get into cricket-related sponsorship in a big way in the Cricket World Cup this year. BPL has also launched its Player of the Wheel program for international cricketers on which it is spending Rs 2.56 crore. The last cricket world cup in February 1996 saw TV sales surge in India. With the increased coverage of cricket on TV, the popularity of the game is expected to grow even further in the country.
Competitors
Samsung has announced that it would significantly increase its advertisement and promotion spending and has focus on new promotions during the Cricket World Cup and during Diwali. Also LG electronics was declared the official supplier of consumer electronics and home appliance products for the 1999 cricket world cup in England with a sponsorship amount of $15 million. Philips is also focusing on brand building riding on the back of the youthful image tem and offering the latest technology products at competitive prices. Akai is offering various exchange schemes to boost its sales. In last 2 years it had come out with more than 11 such schemes.
5. Packaging
Undoubtedly, BPL is considered as top brand and is positioning is basically based on following categories:
Attractive Looks
World Class Products
Attractive Advertisement
Analysis:
BPL is declining in its positioning strategies, where as LG is regularly gaining growth.
FINDINGS
&
CONCLUSIONS
FINDINGS & CONCLUSIONS
Product – CTV
BPL the market leader in CTV with 19.2% Market Share in Dec ’99 but erosion in market share from 22% Dec ’98.
In screen size BPL enjoys No. 1 in 20”, 21”, 25” & 29” but slipped in No. 2 in 14”
BPL is major exporter of CTV after Sony (T.V. Veopar Journal)
BPL mainly exports 14” & 17” CVT but absolute non-existence in 20”, 21”, 25” & 29”
Price
BPL adopted and currently working on skimming pricing strategy in CTVs. Most of the middle class segments considered it – “A brand suitable for upper class segment”.
Place
Commands leading position in urban sector but no serious efforts are made to cash upon untapped huge potential demand in Rural Sector, especially demand for Small Size CTV.
Promotion
BPL advertisement expenditure and brand association largely executed on CTVs.
Dealer’s Survey
Most of BPL’s authorized dealers keep other competitive brands (LG, Philips, Aiwa etc), which hamper BPL sales.
South Delhi and Central and East Delhi performing well as compare to North and West Delhi.
60%-authorized dealers are not satisfied with current inventory level, mostly from North West Delhi.
If dealers margin in increased sales volume will increased to 10% or more
Dealers are more susceptive to foreign trip as reward for performance credit or commission.
Positioning
Mind share as well as heart share of BPL, CTV is very high as compared to other products.
Large chunk of people stimulated to purchase BPL product by Advertisement and discount schemes.
Most demanded feature
When switch over from more channel to another sound should be same
Colored plastic cabinet of CTV
100 or more programs
Child lock
Hi-fi surround system
On the basis of the study it can be stated hat it is the right time for the CTV makers to battle it out for the viewer’s choice. If you are in the CTV industry watch out, it’s going to be full-fledged war in the years to come with dire consequences for some.
Information provided by the respondents’ reveals that after seven consecutive years of phenomenal growth – the growth in the CTV market this year could fall.
The industry has grown too fast, much faster than most other durables and for too long, and the factor that made it possible is running out of steam. Post 1992 a host of factors impacting T.V. demand were unleashed, including the proliferation of satellite channels, entry of the lots of global manufacture and brands and a fall in CTV prices. But the impact of these factors is now weakening. The companies and dealers would be forced to dump at exorbitant costs to themselves and it would mark the beginning of the shakeout in the fiercely competitive industry with some 15 major brands.
The companies which carry momentum into the current year are such as LG and Samsung those who are on revival mode from low base volumes such as Panasonic is likely to increase their absolute volumes. If Videocon, which has been in deep slumber, wakes up, its still has enough clout to increase its volumes. The message is quite clear.
All those who wage war will succeed those who stand on the sidelines will fall.
FINDINGS ─ I
DEALERS SURVEY IN DELHI
Ref. Q. 1: Average CTVs sold per dealer in Dec. ’06.
Findings:
SD & C & E Delhi evolved as major in BPL sales volume in Dec. ’06
Ref. Q. 2: What was the break up of unit sold (Av. Sale per dealer)?
The break up of unit sold (average sale per dealer)
Findings:
65% market share of BPL CTV sale is captured by 20” & 21 CTV.
Ref. Q. 3: Which other brand do you keep in your show room?
Findings:
Since most of BPL dealers also keep other competition brands in their show room, which gives consumers, an option to choose other brands hence hampered BPL sales.
Ref. Q. 4: What do you think about the margin given by the company?
Findings:
60% Dealer’s are not satisfied with margin given by BPL in comparison to competitors.
And if margin is increased, most dealers confirm to increase 10% or more sales of BPL products.
Ref. Q. 5: Do you think company should force all its dealers to sell its products at fixed price?
Findings:
There’s negligible controversy (7%) among BPL dealers in terms of “Price Off” given by the co-company.
So BPL should not force its dealers to sell its products at fixed price.
Ref. Q. 6: Are you satisfied with the current inventory level?
Findings:
60% dealers are satisfied with current inventory level.
From non satisfied dealers 75% belong to ND & WD and they demand of more frequent supply.
Ref. Q. 6: Are you satisfied with the current inventory level?
Findings:
60% of the dealers are unsatisfied with the current inventory level.
Out of this 60% of unsatisfied dealers 41.7% are from North Delhi and 33.3% are from West Delhi.
Ref. Q. 7: According to you who of the following factors will result in increase in sale of BPL products from your counter?
Findings:
Mostly dealer’s (53.3%) voted for advertising & publicity as best factors for increase in sale of BPL products.
Ref. Q. 8: BPL reward system for dealers is good enough to motivate them.
Findings:
Those 13% who are not satisfied with reward of BPL, most of them demanding for foreign trips related to any event like cricket match, tennis match, etc.
FINDINGS ─ II
CONSUMER SURVEY IN DELHI
Ref. Q. 1: According to you which are the top two brands in following consumer durables?
Findings:
Mind Share (i.e., name the first company that comes to mind)
IN CTV, Sony and BPL is the two top of the mind brands.
Heart Share (i.e., Name of the company from which you would prefer to buy product)
IN CTV, 39% responded for BPL
Ref. Q. 2: Which of the following stimulus motivate you to purchase consumer durable products?
Findings:
Very few people (10%) are stimulated by exchange offers, since they have purchased CTV, W/M or Refs few years ago or they are the first time purchaser of these products. More emphasis should be given to attract prospects on advertisements and discount
Ref. Q. 3: Previous purchase decision of BPL products was influenced by
Findings:
Only 23% consumers confirmed that they were motivated by dealers.
Now, if dealers’ advice and past experience are kept apart, rest 77% consumers can be directly persuaded by BPL through increased advertisement expenditure and warranty period.
Ref. Q. 4: Satisfaction level of consumer.
Findings:
Mostly, 62.4% consumers are unsatisfied with BPL’s after sales services.
100% consumers are satisfied with quality of BPL’s products (fully and partially).
88.8% are satisfied with life of BPL’s products.
92.6 consider it as value for money brand.
10% consumer are satisfied with BPL’s products features (fully and partially)
Ref. Q. 5: Problems Faced with BPL products.
Findings:
Around 60% of consumes are unsatisfied with BPL’s after sales services.
CONCLUSIONS
Potential Market
Small Size CTV (14”) particularly in rural market.
How to increase sales (found out by dealers survey)
Emphasize on 20” & 21” (TV since they are the most selling sizes)
How to increase sales (found out by consumes survey)
In order to increase sales of CTVs emphasis should be given on heavy advertisement expenditure and discount offer. Also dependable warranty should be given to the consumer for purchased product. After sales service should be given more emphasis and improved.
Causes for declining performance of BPL in:
14: CTV
Intensive price war in 14” CTV market segment particularly launched by Aiwa which is offering 10 to 15% lower prices to the consumer. Also BPL is emphasizing on exports of 14” CTV and overlooking the national market.
Feedback on product performance from consumers:
Most consumers are satisfied with quality of BPL’s products, life of Balsa product and BPL’s products features. They also consider it a value for money brand. Most consumers are unsatisfied with after sales service though.
Relative quality perception of BPL brand in:
In CTV’s quality perception of BPL’s product is quite good with consumers.
The year 2005-2006 was one of exciting developments at BPL
True, there was an overall slowdown in consumer off-takes and the market sentiment was not at its best. Brown and white goods growths were flat, if not negative in certain cases, even in the wake of increasing competition. Despite these odds, BPL maintained its leadership position by listening to its customers, anticipating market trends, keeping pace with technology and strengthening its brand and product portfolios.
In addition to being the most trusted, preferred and powerful brand in our businesses, BPL’s other significant milestones were:
- The No. 1 color television brand with the highest overall market share and the leader across all screen size segments
- The only single brand to cross sales of 1 million color televisions (for the second consecutive year)
- The no. 1 exporter in consumer electronics, registering a 53 growth in exports
The BPL brand is a most valuable asset and a source of competitive advantage in today’s marketplace. It id defined and articulated a powerful brand vision for BPL to stand for “Excitement”. Everyone wants BPL to be he most exciting brand in the business. Driven by the values of offering the best technology, style innovation and customer delight. This brand vision will be the mantra to guide the business. The management and employees of BPL are committed to devising winning strategies backed by smart operations, for consolidating and growing the leadership in the coming years. People at BPL, recognize the immense challenges both operational and strategies, that they face. It will be an endeavor to meet the challenges that the men and women of BPL would be successful in achieving the goals.
Recommendations
Recommendations
- BPL should focus on the three new areas namely telecom, alkaline batteries and color monitors besides the existing line of CTVs washing machines, audio system and refrigerators with product development, innovations, etc.
- The up-gradation of product quality through digitalization where the focus of consumer electronics is heading towards
- Identifying niche markets and segments
- Increase investments in research and development (now only 0.35% of sales are used for R & D purpose)
- Indian companies like BPL have numerous schemes running for its dealers at the same time, creating huge accounting problems for these dealers like credit notes which are now pending for six month. The BPL can streamline dealer networks and increase efficiency and transparency.
- Better monitor and control systems for their supply logistics
- Move from price cutting measures to price bundling offers especially for their high end products.
- Thus for BPL what will make a difference is the attitude of its brands. Therefore what is needed first is strong planning backed by competitive pricing and marketing strategies with a focus on brand differentiation.
BIBLIOGRAPHY
BIBLIOGRAPHY
- Article “The Marketing Guide to Entry Barriers”, Business Today
- Elcina News –Nov, 2006.
- Article, “Indian Television Industry”, Elcina News, Oct-Nov ’06.
- Articles, “Clash of the titans”, The Observer of Business & Politics”
- Articles, “ Selling the Idiot Box”, The Observer
- Article, “Buying the Right TV”, The Observers
- Article, “The Golden Industry”, The Observer
- Article, “Videocon- Cover Report”, Business World
- Article, “Videocon –Spreading Winder”, A & M
- Article, “BPL at a Glance”, Annual Report 2005-2006, BPL
- Marketing Management by Philips Kotler.
ANNEXURES
ANNEXURE ─ I
DEALER QUESTIONNAIRE
Q. 1: How many units did you sell in Dec’05 (give in no.)?
CTV
Q. 2: What was the breakup (no. of units sold in each model)?
CTV
14” model
20” model
21” model
25” model
29” model
Q. 3: Which other brands do you keep in you showroom (please tick)?
LG ❒
Videocon ❒
AKAI ❒
AIWA ❒
Samsung ❒
SONY ❒
Q. 4: What do you think about the margin given by the company?
1. Very Good 2. Average 3. Low
Q. 5: Do you think company should force all its dealers to sell its product at fixed price?
Y or N
Q. 6: Are you satisfied with the current inventory level?
Y or N
Q. 7: According to you which of the following factor will result in increase in sale BPL product from you counter?
(Give 1-for Best Factor, 2-for Average factor, 3-for Poor factor)
Increase margin through uniform pricing
Training your sales person on BPL product features
Faster (order to delivery) process
More frequent contact by company sales personal
Better after sales service
Better advertising publicity
Q. 8: Is BPL’s reward system for dealers good enough to motivate you?
Agree or Disagree
Signature of Interviewee Signature of Interviewer
Name : _____________________________________
Address: _____________________________________
ANNEXURE ─ II
CUSTOMER QUESTIONNAIRE
Personal Information
Name ___________________________________
Address ___________________________________
Tel. No. ___________________________________
Q. 1: According to your which are the top two brands in following consumer durables?
CTV
Sony ❒
BPL ❒
Videocon ❒
Akai ❒
LG ❒
Samsung ❒
Panasonic ❒
Aiwa ❒
Q. 2: which of the following stimulus motivate you to purchase consumer durable products? (Please tick any one)
Discount Offer ❒
Exchange Offer ❒
Advertising & Publicity ❒
Q. 3: Your previous purchase decision of BPL products was influenced by:
Dealer advice ❒ Past Experience ❒
Neighbor Advice ❒ Wife Pursuance ❒
Warranty ❒ Children Pursuance ❒
Q. 4: What is your satisfaction level (on give parameters) for BPL Product currently used by you? (Please tick under appropriate column)
Q. 5: What are the problems (if any) faced in the current BPL product owned by you? (If any):
_______________________________________
_______________________________________
Signature of Interviewee Signature of Interviewer
by
iiftabhinav (student)
