The Hindu Business Line : Sumeet hopes to scale a summit

WHEN multinationals such as, Whirlpool, LG, Samsung, Electrolux, Matsushita (owner of the brand National) and Indian brands such as BPL, Videocon and Godrej are vying hard for a fraction each of the Rs 4,000-crore home appliances market, Sumeet, the kitchen appliances brand, popular among Indian households for close to four decades, is waiting to plunge into the segment.

On offer from Sumeet will be products such as washing machines, microwave ovens, irons, toasters, juicers, pressure cookers, all readying for a global launch in another two-three months. But, despite the pedigree it has as a maker of quality kitchen appliances, its success, to a great extent, hinges upon product pricing and marketing support, feel industry watchers.

The company is proposing a high-decibel launch. "We want our products to hit the market with a big bang. We have earmarked a substantial sum for an aggressive promotion campaign, and the launch will be supported by continued marketing efforts," says Vivek Mathur, Chairman, Sumeet group of companies.

The market out there is getting tougher by the day as global brands rush in for a pie of the Indian market. So, what's prompted Sumeet to foray into the highly competitive home appliances market?

Explains Mathur, "See... it's not something that happened last night. We have been planning to expand for the last three years. We are more accustomed to the consumer culture here than most of the multinational brands and we slogged enough to develop these products with partial technical collaboration from world leaders such as Fagor, Galanz and Breville." The group's Executive Director, Virendra Lal, adds that the forthcoming venture is not a shot in the dark as the company has done a market survey through a couple of top consulting firms.

Sumeet has already test marketed the new products for which, Mathur says, the market feedback was very encouraging. "Our products are better suited to local tastes and preferences," he elaborates. Mathur reiterates that Sumeet, as a kitchen appliances major, tasted success and has enjoyed high brand acceptance all these years. "We have a very high level of unaided brand recall. So it should not be a problem for us to establish ourselves in the new segment as well," says Mathur, adding that since Sumeet has an established retail network, "it's very easy for us to penetrate the market".

Sumeet, says the Mathur-Lal combine, is also a multinational brand, with a strong presence in the West Asian markets since 1974 and the markets in South East Asia since 1976. It entered the North American markets in 1982. In fact, almost a mandatory requirement of most Indian families migrating West, was a Sumeet mixie in tow. This has reinforced the brand image. "We are doing well in all these markets. There is a great amount of brand awareness. In America, people recognise Sumeet as a top Asian brand. In the East-Asian markets such as Malaysia and Singapore, our kitchen machines are moving like hot cakes, though they are priced much higher than our competitors there such as Braun and National," says Mathur. He points to the Malaysian preference for Sumeet to prepare specialised recipes such as Chicken Rempah, for which they need to make a stiff paste of various spices. "They feel only Sumeet can do that," he emphasises.

The company claims to have chalked out a multi-pronged strategy for its foray into the new market. "We are going to pitch our new products on the planks of economy, efficiency, longevity and value for money," says Mathur. "Our basic corporate philosophy is to give top quality and good value." According to him, the new products are designed to last and to survive rough handling. "You can take our mixies for that matter. We have units that are even 25-26 years and still working. The same thought process has gone into our new products as well." Sumeet, he says, understands the Indian psyche much better than any other players in the market, explains Mathur. "Why, in Sumeet pressure cookers, even the gasket will last a lifetime," he claims.

Mathur points to the development of the new washing machine - Eco Princess. In India, he says, many households buy water today. And power is also very expensive. "So, obviously, the Indian consumer wants a washing machine that does not consume much water and power and gives good results at the same time. So it has got to be tough... I mean... it must survive rough handling. Our Eco Princess is developed with all this in mind."

The same thought has been put into Sumeet microwave ovens, which are made of stainless steel. "We understand the nitty-gritty of the Indian cooking much better. Indians do not eat, bread, pizzas or burgers all the time. We prepare curries and gravies, so we need an oven which is easy to clean. We use a lot of water while cooking... so the body cannot be just powder-coated steel or plastic. Hence we went in for stainless steel. Moreover it's very user-friendly," elaborates Mathur.

The company is also planning to have around 2,000 service centres in the country. "It's Sumeet's tradition to give good a service backup for the customer. All the proposed 2,000 service centres will be staffed with company-trained mechanics," says Executive Director Lal.

Sumeet products are not going to come cheap. In fact, the products will be priced on a par with any other multinational brand in the market. "I don't think the Indian consumer would hesitate to shell out a few hundreds more for a product that will give him what he actually wants. He is not just price-sensitive.. more than that, he is value-sensitive. He looks for value for the money he pays, he doesn't just buy any product that is foisted on to him by global majors," argues Mathur. He expects a market share of 7-9 per cent across all categories Sumeet is entering in two years from the launch. The Rs 100-crore Sumeet hopes to hit a Rs 1,000-crore mark in sales in the next five years and Rs 350-crore in the next couple of years. The expansion project is to be funded through internal accruals, low-interest debt and private placement of equity. According to Mathur, the company has plans to go public "but not at least for another two-three years".

Despite Mathur's optimism about Sumeet storming the market with his new products, retailers are more circumspect and cautious. "There was a fairly good response for the products in the market," says B.A. Srinivasa, Director, Vivek Ltd, a leading consumer durables retail chain and main dealer for Sumeet products for decades. Sumeet had test-marketed the products through several outlets of Viveks. Srinivasa said the market out there, particularly that of white goods, was very competitive. "It's really very stiff," he said, adding, "The success of Sumeet's new appliances depends on their pricing and the marketing support the company is going to extend during the months after launch." He says people recognise the brand Sumeet well. "That's one major advantage the company has." Concurs V.G.P Rajadas, Senior Director, VGP group of companies, one of the major distributors for Sumeet products in Tamil Nadu, "There is great amount of brand loyalty for Sumeet in the market." According to him, the products Sumeet test marketed are "really very good".

Sumeet has recently reorganised its distribution channels by appointing one super distributor - the Hagemeyer, global distribution services group of the Netherlands - to distribute Sumeet products for markets the world over. Prior to this arrangement, says Mr Rajadas, there was a small slide in the market share for Sumeet (for its existing products) in India. Some multinational brands such as National, Braun and Indian brands such as Butterfly and Meenu Mix ate into Sumeet's share in the market. "Now, after the distribution revamp, the brand is again picking up fast," says Rajadas. He points out that though Sumeet may not be able to gain a substantial market share immediately, since foreign brands such as LG, Samsung, Whirlpool have already established their presence in the market with a big marketing budget, it will certainly make it to the top slot in the long run. Both Rajadas and Srinivasa of Viveks, emphasise that product pricing and marketing support will matter a lot and make a difference to the brand.

An LG official is circumspect while commenting on Sumeet's impending foray. Says he: "To succeed in a category like microwave ovens, investment is required in pushing sales, on advertising and promotions as it is a growing category. However, we welcome competition, and more players will help grow the category. But, the test will be in terms of quality and pricing. It is too early to comment on their strategy now though." The market will wait, watch... and pass judgment, once the products hit the market.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Sumeet hopes to scale a summit

The wide-awake manager

`India would be among top 10 watch markets'

The demotivated dealer salesman

Food for retail thought

More brand per brand

How to win at negotiations?