1. MULTI-BRANDING STRATEGY OF VIDEOCON INDUSTRIESIN THECONSUMER DURABLES SECTORPresented by: Bhavika SawhneyBhoomika ChadhaPrateek AroraTarun Dhingra Trisha Pruthi

2. It is a marketing strategy under which two or more similar productsof a firm are marketed under different brand names. Many a times, these products are competing ones and aremarketed under brand names which are completely unrelated. 3. 1984:- NV Dhoot with 3 sons:- Venugopal, Rajkumar & Pradeepfounded VI Earlier, they started a business of sugar mills and some other lowprofile industrial interests in the region of Maharashtra Establishment of VI surprised the Industry Watchers . 1987:- Manufacturing and Marketing the Videocon Range of B&WAND Color Televisions, launched washing machines. 1989:-Home Entertainment Systems and Air Conditioners 1991:- Refrigerators and Coolers. 4. Early 90s :- After the failure of VI to diversify into Real Estate,Crucial decision Was made to manufacture CRT glass shells. Set up a world class manufacturing facility at BHARUCH, GUJRAT. 1996:-Entering Energy Sector. Investments into Rava Oil Fieldsgave it a regular flow of cash. 1998:- Bought a TV manufacturing facility of PHILIPS in WB. 1999:- Took the services of McKinsey & Co. to draw the plan forrestructuring the company. Company established 8 SBUs headed by independent chiefoperating officers These were:- MANUFACTURING,AFTER SALES , THE AKAIBRAND, THE SANSUI BRAND % VIDEOCON BRAND Others were Product Specific:- TVs, Refrigerators and WashingMachines 5. 7TH JULY,05:- Acquisition of ABE in EKL. Focus was on Multi Branding Strategy. Agreement with HUNDAI ELECTRONICS LTD . Licensing Agreement with Toshiba & Sansui WHY? Was unable to face the immense competition Market Share % Market Growth were the major factors. Large Sales Volume with Cost Effectiveness VI :- Profitable Company & Had resources( man power,Financial,Technical etc ) to sustain a Multi Branding Strategy. Focus was on Long term Goal. 6. VIDEOCON INDUSTRYSBRAND PORTFOLIO 7. Videocon entered the consumer durables sector in mid 1980s VI marketed its products under the Videocon brand and waspositioned and perceived as a mid segment brand. Competed directly with BPL and Onida. But the entry of LG and Samsung disturbed its market share. To counter attack- VI adopted multi-brand strategy and to boostbrand image came up with a high-decibel ad campaign in 2001. Immediate result was increase in sales by 30% but market sharedeclined in 2002. 8. In 1980s, VI went into an agreement with the Japanese company,Toshiba, to manufacture its range of colour televisions. In 1998, VI launched Toshiba brand projection TVs. They competeddirectly with Samsungs range of projection TVs. In 2001,in order to increase its focus on marketing Toshibas high-end products, VI created a a wholly owned subsidiary calledKentosh Electronics India Ltd.(KEIL) KEIL was also to market Kenwood branded Hi-Fi audio products. In 2002, Kenwood and VI parted ways. Till 2005, KEIl sold DVDplayers, TVs, flat TVs, Projection TVs under the Toshiba brand. 9. In March 1999, VI entered into a join venture with Akai Electric Co.Ltd.(AECL), to form a new a entity called Akai India Ltd., in which VIhad 70% share. VI followed a two-pronged strategy for the Akai brand. It continued tosell low price models but made efforts to emphasize quality andtechnology in the communication. Over the years, Akai was projected as a price warrior. Hence, it becamea player in the lower end of the market. 10. Sansui came into VIs fold in 1990s Initially, the products under the brand were priced on the higherside and competed with brands like Philips. But gradually, prices were slashed Sansui also launched exchange schemes for its CTVs The brand heavily depended on promotional offers and discounts.But inspite of the promotions Sansui couldnt gain a significantmarket share. 11. KAIL launched KENSTAR in 1996. Introduced with microwave ovens and then followed by coolers,mixers and grinders, toaster, juicers and refrigerators. KENSTAR was positioned as premium segment and entered in toagreements with Yugoslavia and an Algeria based firm tomanufacture and supply KENSTAR branded CTVs 12. 2004-05 LG and SAMSUNG spoiled the party of VIDEOCON andsubsequently LG acquired 40% of market share in ovens 13. 2004: VIDEOCON(VI) licensed HYUNDAI brand from HEI SouthKorean co for 5% royalty on sales. 2005: VI made HE INDIA a wholly owned subsidiary. HYUNDAI was positioned at the upper end market. Company had planned to spend heavily for advertising and R&D. 14. 2005: VI took over EKL. It brought the Indian rights ofELECTROLUX for 5 years and 25 years for KELVINATOR. ALLWYNbrand also came under the VI fold subsequently. 2006: VI announced it will stick its KELVINATOR brand withRefrigerators and its tagline will also remain same the coolestone. VI expanded its dealer and showroom network to increase its reach. 15. Prior to liberalization, Indian durables industry was dominated byIndian brands. By the end of 1990s, the share of Videocon steadily declined. In order to onslaught from the competition, VI adopted the multibranding strategy by acquiring Toshiba, Sansui and Akai. The strategy was meant to fend off attacks on core brand fromrivals. 16. TOSHIBA HYUNDAIALLWYNSANSUIVIDEOCONKELVINATOR KENSTAR AKAIELECTROLUX In 2000, VI launched several products under its core brand, Sansuiand Akai and VI was positioned as a Value brand. 17. Positioning and targeting has to be distinct, or else the brandstend to cannibalize each others share. In 1999, VI had market share 10.5% which fell to 7.3% in 2002,whereas Sansui increased its market share from 4.6% to 6.7%. Having several brands, unless backed by constant upgradation intechnology and design would prove to be burden to the company. 18. Inexperience in managing premium brands. For instance, Kenwoodwhich was a premium brand couldnt make a dent in the marketingarrangement. Multi-branding strategy requires deep pockets who can allocatehigh marketing budgets for each brands. 19. 2005 LG & Samsung lions share of T.V. & home appliancesmarket. Philips rejuvenating business in India, Haeir & TCL planning toestablish themselves. Videocon not doing well in all product categories. 20. Market Shares in Indian Washing Machines Market in 20044% 24%34% LGWhirlpoolIFB13%Samsung 14% 11%VideoconOthersMarket Shares in IndianRefrigerators Market in 20059% 11%10% Videocon 23%Godrej17% SamsungLG 30%WhirlpoolOthers 21. VI will have to manage its existing brands as well as EKLs brands. Indian white goods industry very competitive. VI capable ofinvestment in building brand equity. VI should not use price plank for core & premium brands. VI needs to invest in technology. VI may be able to pose a challenge for Korean brands because ofits multi-branding strategy. 22. Q1.Considering the fact that marketingcosts are escalating, how prudent, inyour view, is VIs strategy of havingseveral brands? 23. Good strategy when faced by heavy competition. Protection of core brand. Increases shelf space. Keeping firms managers on toes by generating internalcompetition. Company can fill up price & quality gaps, & saturate the market. Company can serve effectively to brand switchers. 24. Cannibalization May cause operational confusion. Heavy budgets needed. Videocon a mid-segment brand, inexperienced in handlingpremium brands (poor management). 25. Do you think that VI adopted the multi-branding strategy because it failed tocounter competition with a singlebrand? 26. Prior to liberalization of the Indian Economy, the Indian ConsumerDurables Industry was dominated by Indian Brands like BPL, Onidaand Videocon. By the end of 1990s, Korean brands like LG and Samsung hadestablished a strong foundation in the country by expanding theirdealer networks. As a result, VIs share declined. In order to onslaught the competition, VI acquired Indian Rights forbrands like Toshiba, Sansui and Akai. 27. Though the share of Videocon fell, the other brands were able tocorner market share, thereby giving VI a respectable combinedmarket share. Multi-Branding strategy was akin to warfare. Just as a king isflanked by several soldiers in a battle, the multi-branding strategyallowed VI to protect its core brand Videocon. So the strategy was meant to fend off attacks on the core brandfrom rivals. 28. With the Korean brands, especiallyLG, entering rural India in a bigway, what in your view are VIs chanceof becoming the No1. consumerdurables company in near future?Justify youre answer 29. THANK YOU!