Marketing review

03 Jan 2004

Rate war breaks out among cell companies
The roaming rate war is raging furiously among cell operators even though these rates might have to be changed once the telecom regulator introduces the new access deficit charges (ADC). Reliance first dropped its rates to Rs 1.99 per minute for outgoing calls as part of its national roaming offensive followed by Hutch a day later. Airtel, which had resisted the change, was the last to give in and matched Reliance's rates.

The ADC to be imposed by the telecom regulator is likely to be an additional charge that operators will have to collect from customers and give mainly to Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL) to compensate them for providing telephony in rural areas that are economically unviable.

Dabur to sell off Binaca brand
Dabur India is in talks with Mumbai-based Anchor Health & Beauty Care to sell off its Binaca toothpaste brand. The brand has been up for sale for some time now. Dabur India acquired the Binaca brand from Reckitt Benckiser in the mid-1990s but early this year it decided to sell off the brand citing that it was a non-core brand and did not fit in the company's restructured portfolio.

The company's restructured brand strategy revolves around two flagship brands — brand Dabur, for natural healthcare products, and Vatika, positioned on the premium personal care platform. These two brands are expected to account for up to 80 per cent of the company's sales. Binaca's valuation has been fixed at a floor price of Rs 20 crore, and PricewaterhouseCoopers is negotiating the deal on behalf of Dabur.

Dalmia Consumer Care launches Chaabaza
Dalmia Consumer Care (DCC) has launched Chabaaza, a product that the company says delivers the satisfaction of a pan masala, without its adverse effects. Chabaaza contains gumlets packed similar to the pan masala pack and is priced at Rs 1 per pack. The product is claimed to contain no supari, or other addictive ingredients.

DCC recently launched a non-tobacco product called Vardan, which simulated the bidi-smoking experience. Vardan had been rolled out across the country and was looking to cross the shores into the SAARC market. Similar plans were being chalked out for its Chabaaza, too. The domestic pan masala market is estimated to be between Rs 3,000 crore and Rs 5,000 crore. There are about 50 different pan masala brands in the country. Chabaaza will be supported by advertising and promotional activities, by April.

DS Foods extends Pass Pass brand
DS Foods has launched a sub-brand under its Pass Pass mouth freshener brand. The sub-brand called Pass Pass Patak Putuk, is a date-fruit and herbal based popping candy. Patak Putuk has been test-marketed over the last three months at Diwali melas, the Ramlila and Himachal fairs.

The success of the product can be gauged from the fact that the product brought in revenues worth Rs 50 lakh in the test-marketing phase. The company hopes to rake in revenues of Rs 20-24 crore from Patak Putuk in its first year. Pass Pass already brings in Rs 35 crore every year. Patak Putuk will be rolled out in the north first, followed by the south towards the middle of 2004.

Electrolux goes in for new product strategy
Electrolux has chalked out an aggressive advertising and product strategy for 2004. To position itself as a complete home appliances company and achieve its higher growth targets Electrolux is planning to almost double its advertising budget next year to about Rs 40 crore from the current Rs 25 crore or so. The company is also rolling out a new campaign next month which would focus on the single brand (Electrolux) strategy which the company is putting into place.

The company is bringing all its products under the Electrolux brand and Electrolux-Kelvinator as a brand will continue to exist but only for direct-cool refrigerators. It has phased out the Allwyn brand as well. The new campaign will showcase all the products, including air-conditioners, under the Electrolux brand and help it position Electrolux as a complete appliances company.

The rise and rise of plastic money
A recent study conducted by American Express among cardholders across six cities of Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad reveals that credit cards are used the most for dining and shopping, and is also popular for travel-related expenses such as air tickets, hotels and car rentals. The Indian survey results are in line with the other markets in the Asia Pacific region that were surveyed. Cardholders in countries such as Singapore, New Zealand, Thailand, Malaysia, Hong Kong and Australia spend 10-30 per cent more on the same services.

Indian consumers are also using the plastic money for everyday spends such as petrol, hospitals, telephone services and home furnishing. Consumers in India are also using credit cards more and more to pay school dues for their kids. However, India is at a low 11 per cent in comparison to other countries in the Asia-Pacific region when it comes to using plastic money for recurring bills such as utilities, subscriptions and insurance.

Rasna figures on top in most trusted brands survey
A survey conducted by research agency AC Nielson ORG-Marg has found that powdered drink brand Rasna has won the battle in consumer confidence in the beverages category. The brand was voted the most trusted brand in the category, above Pepsi, Coca-Cola and Horlicks. Rasna claims to have 90 per cent volume share of the soft drink concentrate (SDC) category. Moreover, Rasna was also declared the 15^th most trusted brand in the country, rising four places from 19th place last year.

The company says Rasna's main ingredients have been products to suit every socio-economic segment and a widespread distribution network comprising over 11 lakh outlets. The most trusted brands survey aims to identify the brands that bond best with consumers. They are not just brands that are most familiar, but are brands that consumers believe provide quality and reassurance. The survey claims to be the largest of its kind in India, with a sample of over 6,000 distributed across socio-economic class, age, income and geography.

Reliance Web World to double up entertainment centres
Reliance Web World outlets will soon double up as entertainment centres showing films and providing digital music entertainment for its subscribers. The company is currently tackling the licensing issues for showing films. The Web World will be provided with a screen on which movies will be screened though at a fixed time each day and as each Web World is equipped with modular furniture, they can be rearranged to accommodate around 40 chairs.

Customers can also view movies of their choice by accessing Reliance Infocomm library through the Net. Each of these Web World outlets has a customer convenience centre, a gourmet coffee bar and a real broadband centre for accessing applications like video chat and conferencing, multi-player online gaming, digital personalised music, digital theatre, digital photo imaging, virtual office and real broadband high-speed Internet.

Cola majors cut prices of large packs again
Coca-Cola India and Pepsi Foods have again slashed prices of its large packs. The soft drink companies were selling their 1.5-litre PET bottles at Rs 38 the same time last year, while this season prices of the packs have dropped to Rs 30. And similarly, prices of 2-litre PET bottles have dropped to Rs 35 now, compared with Rs 43 the same period last year.

In March 2003 PepsiCo and Coca-Cola had reduced prices of their 1.5-litre PET bottles to Rs 35 from Rs 43 earlier, while prices of the 2-litre PET packs were brought down from Rs 50 to Rs 40. Analysts say that the price cuts have been implemented to drive volumes and restore consumer confidence but may not work as in an off season reducing prices may not bring in the desired volumes.

— Compiled by Mohini Bhatnagar