The Hindu Business Line : Hitachi targets high-end market with ultra thin TVs

With its ultra thin LCD televisions, which are at least 70 per cent thinner than conventional flat panel televisions, TV maker Hitachi is looking to capture a market share of 10 and 20 per cent of the LCD and plasma markets respectively in India for the current financial year. LCD sales experienced a fillip during the IPL season, but inflation, a depreciating rupee and higher fuel costs took a toll on sales.

“However, it will be our attempt to boost sales by rapidly penetrating the premium flat panel market, as demand is less price-elastic,” says Mr Tarun Jain, Country Head (India), Hitachi Home Electronics Asia. “In a way our focus on the premium segment of the flat panel television market could be viewed partly as an inflation-protection strategy.”

“The ‘ultra thin’ value proposition has to be seen to be believed,” says Mr Jain. “We will, therefore, be placing considerable focus on experiential marketing where customers get to see our televisions in appropriate locations and relevant contexts.”

Film clubs

Hitachi is in advanced talks with Palador Pictures Pvt Ltd for jointly setting up film clubs in premium private clubs such as Bangalore Club, Delhi and Bombay Gymkhana where movies, which fall in the genre of World Cinema, can be displayed on Hitachi TVs.

“This way the customers get to fully experience both the technological as well as the aesthetic value proposition of the TVs,” adds Mr Jain.

Since the ‘ultra thin’ offerings are for a niche audience, Hitachi is adopting a direct marketing approach. There are estimated to be at least 1.6 million households in India earning upwards of 45 lakh per annum; with most the millionaire population concentrated in Delhi, Mumbai and Bangalore.

Therefore, the three cities would be Hitachi’s main target segments. Thereafter, it will move to other tier-1 cities.

So far, Hitachi has committed around Rs 10 crore to establish this category in India. “We will need to gauge the market response to decide on the future course of investments,” added Mr Jain.

The advertising strategy hinges on communicating Hitachi’s most important differentiator – innovation. “It’s a simple core message: The ‘Ultra Thin’ era has arrived. Experience it. Emphasis is being placed on premium-end magazines as far as print goes,” he added.

However, from a marketing standpoint, Hitachi pays a lot of attention to carefully dovetailing its advertising strategy into direct marketing initiatives, through which customers can actually experience what its advertising promises. It also believes that its products would themselves be the company’s brand ambassadors.

Marketing spend

A major portion of Hitachi’s marketing spend is allocated towards below-the-line activities. Mr Jain explains that innovation as a value proposition is best communicated by providing direct customer experience and by establishing the credibility of our claims through the media.

Hitachi’s flat panel division will, over the next couple of years, strengthen its positioning as a premium brand by continually bringing to market innovative and value-added premium products, which leverages the Hitachi group’s core competence – R&D, on which it spends 4.5 per cent of group revenues.

Hitachi, which holds a market share of 18 per cent in plasma televisions as of now in India, plans to steadily strengthen its portfolio of ever improving innovative ultra thin technologies in both the plasma and LCD segments. Later this year, it will be introducing ultra thin plasma televisions.

This will be followed by introduction of LED-based ultra thin LCD televisions which will be energy saving.

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