Freebies are out; new marketing strategies up festive season sales

Freebies are out; new marketing strategies up festive season sales
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First Published: Wed, Nov 14 2007. 11 55 PM IST

An electronics showroom in New Delhi
An electronics showroom in New Delhi
Updated: Wed, Nov 14 2007. 11 55 PM IST
Consumer electronics companies claim their sales this Diwali season were more than they had anticipated, making up for lower sales in the months leading up to the festival.
An electronics showroom in New Delhi
“This Diwali the industry has seen a 35-40% growth in sales from last year, exceeding expectations for most players,” said Suresh Khanna, secretary general, Consumer Electronics and Television Manufacturers’ Association (Cetma), an industry body.
And in a significant change from previous years, most companies sold more on the back of fewer promotions.
LG Electronics India Pvt. Ltd, for instance, did not offer any promotions or freebies to its customers during Diwali. “Our strategy this year was to move away from competing on the platform of prices and gifts and focus on quality,” said V. Ramachandran, director, sales and marketing, LG Electronics. “We have seen a 35% increase in Diwali sales over last year, which is more than the 28% we had expected.”
Samsung India Electronics Pvt. Ltd also approached this Diwali differently. Instead of focusing on promotions or gifts, the company launched new products. “We created consumer excitement by introducing newer technologies and product launches around Diwali this year. While we did have a gift offer, there were no scratch cards or promotions as in previous years,” said Ravinder Zutshi, deputy managing director, Samsung India. The company recorded a 41% growth in sales, to Rs1,200 crore, in the Diwali season.
Mirc Electronics Ltd, the company that sells its products under the Onida brand, said the Diwali season boosted sales by close to 40%, almost 15 percentage points more they had expected, according to Vivek Sharma, vice-president, marketing and sales, Mirc Electronics. The growth had little to do with marketing initiatives, Sharma added.
“Every year around Diwali we increase our promotional activity by about 25%, but this year was different as we did not invest anything extra,” Sharma said.
Whirlpool of India Ltd said it had not yet calculated aggregate sales during the Diwali season, but said that it was confident of having done better this year compared with last year.
“The initial data available indicates that we are well on our way to surpass our expectations...,” said Sukhpreet Singh, general manager, marketing, Whirlpool.
The four companies account for between 40% and 50% of the market, in terms of value, in most categories.
Their higher than expected sales during the Diwali season have made up for a slump in the consumer durable industry in August and September.
Cetma’s Khanna said there had been a decline in August and September, but added that this could have been because an inauspicious period “when people do not buy much” had fallen in these months. He also said that customers could have deferred purchases because they knew “Diwali was coming up”, and with it, “better offers (on products)”.
This year has not been bad for the consumer electronics industry, Khanna said, adding that “it has grown at a healthy 10-12% in 2007 with some categories such as LCD TV (liquid crystal display TV) recording more than 100% growth.”
According to LG, the company has already met 85% of its target of sales of Rs9,500 crore in the year to December. “Our consumer electronics division is growing at 15% and household appliances at 16%, we are very much on track,” said Ramachandran.
Samsung, too, is confident about achieving its Rs5,200 crore target by year-end. “The category-wise growth has been 237% in the flat panel (LCD and Plasma) segment, 25% in flat screen TV sets, 35% in refrigerators and 21% in washing machines,” said Zutshi.
Mirc Electronics had set itself a Rs2,000 crore target for the year ending March and the company said it feels it is ahead of the game. “Our growth in every category has been strong which makes us believe we have done better than what we expected,” said Sharma.
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First Published: Wed, Nov 14 2007. 11 55 PM IST