BPL strategy to shore up market share

By R. Chandrakanth

BANGALORE, NOV. 4. Till such time the two major sporting events - World Cup football and World Cup cricket in 2003 - are held, the colour television manufacturers have to depend on the marketing gurus to shore up their respective market share.

And the market leader, BPL, which has seen erosion in its market share from 21 per cent to 19 per cent, has put in place a strategy of segmentation of the product range by creating specific sub-brands and is going at the market `aggressively'. It has pumped in about Rs. 5 crores for promotion of its `Studio Line' range and another Rs. 4 crores for the low-end `entertainment dhamaka', in time for the festive season.

``Right now for us, Studio Line is important," told Mr. Ajay Baijal, Chief Operating Officer, BPL (Entertainment electronics business group). Studio Line provides the consumers the best `feature-packed' colour television. The segmentation of the market - high-end (such as XGA projection sytsem; Plasma display); tech-savvy (Flatscreen); value maximiser (Studio line - conventional but feature packed); risk averse (basic features but brand conscious) and the recruiter (Prima from the house of BPL) - had become necessary for BPL to consolidate its position.

Mr. Baijal states that though the low-end range, at the moment, was driving the market, BPL had to take a conscious decision of ensuring that its other product range moved as expected when there was `pressure' on the middle-end and high-end colour television range. The middle-end accounts for about 40 per cent of the market. It is in this segment, BPL introduced five ranges and found success, hoping to touch 1.2 million sales this year. The `Studio Line' should account for about 12 per cent of the overall sales and the low-end 40 per cent.

Sales, Mr. Baijal says, has been picking up now, though not on expected lines as the slump continues. However, there would be twin peaks this year (Dasara and Diwali falling in two different months, unlike last year when the festivals came in the same month) and this should reflect on improved sales. The performance in the first six months has been better than last year and the company should return to the growth path hopefully next year.

The contributory factors, he says, would be the fall in the prices of components which would be passed on to the consumers and the growth of consumer finance.

BPL has positioned itself strategically, technology-wise and has been introducing products that are contemporary. It is working on digital platforms. It will be soon launching digital designer televisions in association with Loewe, Germany.

On the threat from China, Mr. Baijal states that they will not be able to compete in the 14 inch and 20 inch segment as it was highly price competitive and the landing cost would not enable them to get better. ``Besides, the Indian consumer is mature. He needs a product which has brand value and after sales service." The Chinese may enter the 25 inch to 29 inch segment, but remains to be seen, as, in the past two years, the two major Chinese players have not been able to achieve a market share of more than 2.2 per cent combined.

The Indian market, undoubtedly is large, with the overall penetration rate of colour televisions being 14.7 per cent. The number of televisions is expected to double to 10 million by 2008, though the growth was only 4.5 per cent last year. The industry expects a turnaround in the slowdown by next year and a prop from the two sporting events.

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