The Hindu Business Line : The truth be told ...

NOTHING but the truth — this is the new message the re-launched Devil from Onida is sending out after being brought back nearly 18 months ago. Doing away with its stern and forbidding look, the Devil is now going to be more approachable and consumer-friendly.

Declares Vivek Sharma, Mirc Electronic's Vice-President (Marketing, Sales & Service), "Nothing but the truth is a message from Onida that stays clear of tall claims and over-hyped benefits. It is the platform on which communication for all Onida product categories will be built."

By bringing back the Devil a year-and-a-half ago, Onida witnessed 50 per cent rise in sales. His re-introduction was meant to make consumers graduate to new categories such as air-conditioners, microwaves and DVDs. However, now Onida has realised that it has to do much more than just bring back the Devil. Today, the company wants to give out one unifying message for Onida across all product categories that would distinguish the brand and allow it to escape getting caught in price wars and heavy promotions. Besides, it wants to move `beyond televisions,' as the title for its current annual report suggests.

"Our predominantly single-product company is evolving into a multi-product consumer electronics conglomerate; our television - focused company is emerging as a major Indian player in air-conditioners, washing machines, DVD players and microwave ovens," claims Gulu Mirchandani, Chairman and Managing Director, Mirc Electronics.

But CTVs continue to dominate the sales for the home-grown consumer electronics company. They contributed 66 per cent towards its topline while non-CTV products have enhanced their share at over 30 per cent, according to G. Sundar, CEO, Mirc Electronics. For the quarter ended September 30, 2005, Mirc posted a 21 per cent growth in sales and a 25 per cent jump in profits. Sundar claims that Mirc managed to improve its average selling price as against a drop of over nine per cent for the industry and the momentum achieved is expected to continue. However, Mirc reported an 18.11 per cent growth in its topline to Rs 1,192.51 crore in 2004-05. While a sharp spike in the cost of raw materials affected margins at one end, intense competition translated into price erosion at the other. As a result there was a decline in PAT (profit after tax) by 36.51 per cent to Rs 27.78 crore in 2004-05.

According to Nabankar Gupta, Founder & CEO, Nobby Architects & Strategic Marketing Consultants,

"Onida has only remained a consumer electronics brand and its entry into the white goods segment has been low-key. It has not been able to pull its electronics brand towards white goods and is still seen as a home-grown Indian brand."

Besides, industry pundits think Mirc still considers the Koreans chaebols as competition instead of trying to compete with local players such as Videocon, which has multiple brands within its portfolio. While Onida did try out a multi-branding strategy in the past, it gave it up too soon, but that is what will take the brand forward, they say.

Explaining Onida's branding strategy, Mirc's VP Marketing, Sharma says, "We cannot support sub-brands in each category. There has to be a unifying master brand across categories and we have to treat Onida as the master brand. Today, the Devil is conveying a single message about the master brand, Onida, since we realised that a sub-brand strategy cannot work."

But a unifying brand strategy may not hold the key to growth for the consumer electronics company, which is trying to graduate into the white goods segment.

Observes M.G. Parameswaran, Executive Director, FCB Ulka, "One umbrella brand is not going to work unless it is injected with more sub-brands. There will be a problem with an umbrella brand in the long-term and there has to be a clear and strong sub-brand strategy."

At the same time, creating sub-brands is also an expensive proposition. Though Onida does sport models such as Oxygen, Poison and KY Thunder, these are sub-brands, which are used for differentiation at the trade level for its CTVs.

According to D. Shivakumar, Executive Director & Senior Vice-President (Consumer Electronics), Philips, "In the durables industry, most of the players cannot afford more than one brand as the margins are so slim." At the same time, graduating from a colour television company into white goods is not going to be an easy task. While the recall value of the Onida brand is high with its CTVs, the company may just need a separate sub-brand for its range of white goods.

Says Amitabh Tiwari, Business Head, LG Electronics India, "While it is a logical extension to get into white goods, it is not easy to make profits since investments are high in this segment compared to CTVs. The consumer's mindset is still strong as far as its CTVs go and the company should come up with a sub-brand for its white goods to score over the MNCs in the business."

More than a branding strategy, it is access to technology which is the key for any durables player. While Onida has a technical collaboration with JVC, it sources components from other relatively unknown Chinese companies, especially for its high-end LCD (liquid crystal display) TVs. "Onida is best known for its TVs, and its LCDs have not caught up in the market mainly because it continues to source its components from a variety of unknown companies from Taiwan. Consumers are still not confident about buying Onida LCDs as the source of the products is not reliable," claims a sales executive from Vijay Sales, a consumer electronics retail chain.

Distribution also remains skewed for the company. Its stronghold is certain States such as Maharashtra, Andhra Pradesh and Tamil Nadu but weak spots are the Northern and Eastern States.

Besides, Onida's shares have remained flat for a while. It has remained at its number three position for the past few years with a 11.5 per cent volume share in the CTV category. The challenge to grow its shares are mainly branding and innovation.

Being a challenger brand, Onida is now trying to get its Devil to convey the message about its products in a simple way. Says Mirc's Sharma, "Onida needs to stand for something simple, singular, focussed and relevant to consumers with a multi-category presence. It will be a master brand strategy whereby Onida is the brand and the Devil is the mascot or the brand ambassador through whom this message will be given."

So while the personality of the Devil is being changed to make him more approachable and customer-friendly, Onida is making sure it leaves out all the technical mumbo jumbo associated with advertising in this category. `Nothing But the Truth' is a simple message that focuses on substance, delivering tangible consumer benefits from solid product features, according to Sharma. For instance, for its televisions, the communication highlights the benefit of superior and powerful sound with stunning pictures, for DVDs it is their ability to play scratched discs, for washing machines it emphasises the power of water, for air-conditioners, it's all about powerful cooling and for microwave ovens, it is faster cooking.

Says K. S. Chakravarthy, National Creative Director of ad agency Rediffusion DY&R, which is in charge of this campaign, "We are pitching it as a counterpoint to clichés, hyperboles and beliefs that surround durable and electronics advertising and generally surround life." Onida has earmarked an ad budget of Rs 25 crore for its new campaign.

Bringing back the Devil to communicate the virtues of its products should enhance the recall value of the brand. Observes Shivakumar: "The Devil has remained one of the most recognised symbols in the durables industry, especially in the '80s, when it struck the right chord with consumers. It will be critical to see how the brand will take it forward." This time the Devil advocates `Nothing But the Truth,' and hopefully Onida will live up to that promise.