Marketing review

29 Dec 2003

Himalaya Drug Co to get into direct selling
The Rs 300-crore Bangalore-based Himalaya Drug Company is getting into direct selling for its fast-moving consumer goods (FMCG) products. The company has engaged only women for the venture. According to company officials the project is in its initial stages.

Himalaya Drug Company has 36 products in its FMCG basket including Chyawanprash, which it introduced last year. The company is currently focusing on shampoos, skin cream and lotions, the products in personal care portfolio. The company's thrust area will remain urban.

Santro, Ikon, City, Safar come top in JD Power survey
According to the JD Power Asia Pacific 2003 India Automotive Performance Execution and Layout (APEAL) study released recently, the Hyundai Santro, Ford Ikon, Honda City and the Tata Safari rank at the top in their respective vehicle segments. The study measures owner delight with the design, content, layout and performance of new vehicles across eight specific categories during the first two to six months of ownership. The categories are engine/transmission, ride, handling and braking, comfort/convenience, seats, cockpit/instrument panel, heating, ventilation and cooling, sound system and styling exterior.

The Hyundai Santro has come out on top in the compact car segment for the fourth consecutive year with the Maruti Wagon R and the Maruti Alto close behind in the rankings. The Ford Ikon ranks highest in the entry midsize segment and has registered a nine-point improvement over 2002. The Opel Corsa/Swing comes second in the segment. The Honda City ranks highest in the upper midsize segment having registered a 14-point improvement over 2002. The HM/Mitsubishi Lancer and Hyundai Accent follow in the rankings. The Tata Safari has moved up by 33 points over 2002 to rank highest in this segment, followed by the Mahindra Scorpio and the Toyota Qualis in a tie. The 2003 study is based on evaluations of more than 3,300 owners of personal-use vehicles. The survey covered 11 makes and 26 models.

Nicholas Piramal appoints McCann, Ogilvy Health
Nicholas Piramal India has appointed McCann Healthcare India — the healthcare division of McCann Erickson — and Ogilvy Health on an annual retainership contract. Before this Nicholas Piramal has only used the services of freelancers and small agencies to design its communication strategy.

McCann Health handles the communication for its key categories such as its diabetic brands, central nervous system (CNS) brands and respiratory products. And Ogilvy Health will design communications for Nicholas Piramal's cardiac segment and arthritis medicine brands.

Tata Motors to roll out Indica, Indigo variants
Tata Motors is planning to launch new variants of the Indica and the Indigo over the next one year. The company will launch the Indica Sports and a new variant of the Indigo called the Indigo Estate during the next one year. The company will also be launching variants of other existing car models as part of its strategy to raise its stake in the passenger car segment from the current 16 per cent.

The Indica's new variant, the Indica Sports, will be targeted at people looking for small cars with a trendy and young look, while the Indigo Estate will add new features in comparison to existing variants of the car. Though the prices of the Indica Sports and the Indigo Estate have not been revealed, sources said that the Indica Sports will be priced little higher than its existing variant, the DLX, and will be available in a range of colours.

Titan to market Tommy Hilfiger watches in India
Bangalore-based Titan Industries is planning to market the globally renowned designer watch brand Tommy Hilfiger in India and will enter into a strategic licensing arrangement with the US company for this. According to the agreement, the watches will be designed by Titan with approvals from Tommy Hilfiger. Priced between Rs 5,000 and Rs 10,000, Tommy Hilfiger will be positioned against DKNY, Calvin Klein and Espirit, among others.

Titan had earlier entered into a joint venture with Timex Corporation of the US for marketing the latter's products in India. The two companies parted ways a few years ago. Company officials say Titan's portfolio does not have high-end fashion brands where Tommy Hilfiger fits. The deal, which is likely to be for five years, will be finalised by next month.

Electrolux to enter air-conditioner market
Electrolux Kelvinator Ltd, which has been marketing a range of kitchen appliances and washing machines in India, now plans to enter the air-conditioner market. The company will introduce its entire range of products by February 2004.

The company has chosen to manufacture the ACs in the excise free zone of Uttaranchal and plans to benefit from the lower excise duty by almost 24 per cent. The company is expected to break even in 2005.

Dabur to boost Real brand at pubs and bars
Dabur Foods is organising a series of 'mixology' workshops across India with the aim of increasing out-of-home consumption of its Real fruit juice brand. The workshops are aimed at making cocktails and mocktails at bars and restaurants, with Real fruit juice as the essential ingredient.

The mixology workshops will be held in at least one new city every three months, beginning with the metros. The first mixology workshop was held in Pune a couple of months ago. Dabur's juice brand is available in two variants, Real and Real Activ, which claims to be free of sugar.

Bentley to launch sports car
Bentley is bringing in sports car, the Continental GT, to India. The car will be launched in January 2004, coinciding with the global commercial launch of the car. The car comes with a price tag of Rs 1.65 crore. Equipped with a 6.0-litre engine, with 560 bhp, the two-door sports car can go from 0 to 60 mph in about 4.7 seconds.

The car is available at the Bentley dealership in Delhi, owned by Exclusive Motors. The first offering by Bentley in India was the Bentley ArnageR that was launched a couple of months ago. Priced at Rs 2 crore, the ArnageR has received seven orders.

Aaj Tak may become a pay channel in two years
Aaj Tak may become a pay channel within the next two years. Company officials say as soon as the conditional access system stabilises in the country, Aaj Tak will be in a position to become a pay channel. By end of 2006, 30 per cent of the channel's revenues will be accounted for by subscriptions while the balance will come from advertisements.

Advertisers will be offered package deals for advertising in Hindi on Aaj Tak and in English on Headlines Today. The channel is also banking upon subscription revenue from Dubai, the US and the UK as Aaj Tak already has about 3,000 subscription-paying customers in Dubai.

Amkette launches peripherals range
Allied Electronics and Magnetics Ltd, makers of the Amkette brand of floppy disks, recently launched a range of computer peripherals such as keyboard and mouse. The company has introduced a wireless keyboard, wireless mouse, multimedia keyboard, 'optical noiseless wheel mouse' and 'Internet noiseless wheel 3D mouse'.

A combination of wireless keyboard and mouse is priced at about Rs 2,500, while the multimedia keyboard costs Rs 750. The optical wheel mouse is available for Rs 575 and the Internet 3D mouse for Rs 275.

Laundry service goes branded
As more and apparel becomes branded and therefore expensive 'fabric care' is also going the branded way. The Shiv Vani group in the business of oil drilling has entered the branded laundry and dry cleaning business under the brand of White Tiger. The latter has already invested about Rs 15 crore on equipment alone at its facility in Noida (near Delhi), on a built-up area of 45,000 square feet.

The company says internationally the fabric care industry is worth billions of dollars while it remains largely unorganised. As a result of this many people actually send their expensive clothes outside India for laundry/dry cleaning. Expensive women's clothing also needs careful cleaning. White Tiger is the only ISO accredited dry cleaning company in the country. Besides targeting the upper and middle class consumer in the retail segment, White Tiger has also tied up with hotels such as the Taj, the Welcome group, and Uppal's Orchid among others.

Amway India restructures
Direct selling company Amway India, the wholly owned subsidiary of the US-based Amway Corporation, is restructuring operations to drive topline growth in a negative market. The company is refocusing efforts in areas where operations can be tightened as for instance the company has begun providing additional financial incentives to distributors, and is reviewing its policy of giving out non-cash awards to distributors, as well as increasing its distributor base with the objective of servicing second-tier cities. Amway's distributors currently service consumers across 1,500 cities, and the company has over 3.5 lakh active distributors.

The company closed this fiscal on a sales turnover of Rs 579 crore, a dip from its previous year's turnover of Rs 626 crore. Despite the dip, Amway remains a major direct selling company in India. The company has forecast a 10 per cent growth for the forthcoming financial year. On the anvil are a number of product launches such as a comprehensive men's grooming range comprising shaving foam, gel and skin cream, among others and Bio-C, an anti-oxidant food supplement in tablet format. The product is being imported on a test-marketing license. The price is Rs 999 for a pack of 100 tablets.

LIC regains marketshare
Aggressive marketing initiatives over the last three months have enabled Life Insurance Corporation of India (LIC) to regain lost ground in terms of market share from private sector insurance players. The insurer's marketshare that had gone down to around 88 per cent is now back to 92.07 per cent.

LIC's total asset base has now crossed Rs 3, 23,865 crore, for the period up to 30 November 2003. Of this, 60 per cent is invested in government securities and the balance in corporate bonds, equities and projects. For the period up to 30 November 2003, LIC sold 1.18-crore individual assurance policies, for a sum assured of Rs 86,922.29 crore. From this a first premium income of Rs 2,827.41 crore was earned.

Starbucks firms India plans, to launch in metros
Starbucks Corporation, the $3-billion premium coffee pub, is again focusing on its entry into India. The coffee retailer, which earlier postponed its entry into India following its China focus and problems in Japan, is now planning to actively scout for prime real estate in the metro markets within two to three months and may open its first outlet in a year's time.

Starbucks is believed to be working on a franchisee model even as sources close to the global chain said it might acquire an Indian coffee pub. Earlier, Starbucks was in talks with Tata Coffee for a joint venture until the latter decided to pick up 34 per cent stake in the Turner Morrison-managed Barista Coffee Company Ltd.

Shop through your mobile
M-commerce is here with technologies being deployed by Visa International and banks. Very soon consumers will be able to make payments for utility bills and even purchase online debit and credit cards through the cell phone. At the second stage, they wouldn't need to carry cards, since the credit card or debit card would be embedded on the phone. In effect customers would be able to make all the transactions through their mobiles, which they are now doing through the Internet and the mobile phone will largely replace the Internet. In the next nine to 12 months a host of different types of cards will be launched in India — from virtual cards in cell phones to cards of different shapes and sizes.

The other m-commerce technologies which could be deployed include an e-purse in the SIM card of the mobile or proximity cards where the customers beams in the card number into the point of sale (POS) terminals. The e-purse is a system where the credit/debit card will reside on the SIM card. In case of proximity cards, customers need to have a phone with an infrared capability, available on higher-end phones only. Officials say customers will be able to use their mobile and pay through their debit card/credit card the way they use Internet banking. The customer will be able to authenticate the transaction and he can make bill payments, mobile top-ups and also on-line purchases.

— Compiled by Mohini Bhatnagar