The Hindu Business Line : Show time

With the launch of its plasma, LCD, flat and slim panel televisions, home theatres and DVD players, Kenstar is aiming for a spike in growth from what it sees as "the future of the TV industry."

KENSTAR'S range of televisions

You're using Aishwarya as your brand ambassador?' asked a reporter looking at the brochure distributed at the press conference Kenstar called to announce its entry into high-end TVs. "No, that's a European model, and at Kenstar, our product is the hero," said Rahul Sethi, the company's Managing Director.

That's the credo this company claims has driven its performance in the ten years of its existence. Launched in 1996 as one that made microwave ovens, mixer-grinders and small appliances, Kenstar has gone on to launch major appliances such as washing machines, air-conditioners, air-coolers and refrigerators, among other categories. Now, it's entered another section of consumer durables _ high-end televisions _ and expects to garner 4 per cent share in a year of its launch. This year, demand is estimated to touch two lakh units in this category.

The Rs 325-crore company, whose equity is held by the Videocon group, took two years to decide which TV segment it should venture into. "There are so many brands, so much range, I could have taken a model from each of the group companies but I've to live up to my brand equity," says Sethi, explaining that it was a well-deliberated decision. However, it's not as if its connection to Videocon helps it wangle better terms from dealers and distributors - the two companies compete in certain categories. Kenstar, though, sources some products from Videocon's facilities, and on its own design platform. "The advantage of Videocon's economies of scale are passed on to my company," says Sethi.

Kenstar, he claims, is a company of many firsts - it launched a microwave oven at Rs 9,990 when other brands were selling at a minimum of Rs 15,000, it sold these ovens at Rs 3,990 when others were selling at Rs 7,000 ("and threw out the OTGs"), it was the first to launch an upright mixer-grinder, the first to launch a top-loading washing machine with the tumble-dry feature (till then found only in front-loading ones), condensed the number of air-cooler models to five when there were no less than 27 in the market, and so on. Its imagery has been European, from the very beginning, and aesthetics, along with innovation, has been a priority, says Sethi, claiming that it's a brand with the largest range in appliances.

With the launch of its plasma, LCD, flat and slim panel televisions, home theatres and DVD players, Kenstar is aiming for a spike in growth from what it sees as "the future of the TV industry." In the first year, in which it's restricting itself to the South, it expects a turnover of Rs 135 crore from TVs, and is projecting total turnover to stand at Rs 470 crore in 2006-07. This past year, microwave ovens contributed Rs 70 crore to Kenstar's turnover, refrigerators Rs 50 crore, washing machines Rs 45 crore, air-conditioners Rs 55 crore, coolers Rs 60 crore and mixer-grinders Rs 25 crore, with food processors, irons and other small appliances bringing in the rest.

Despite its presence in many categories, Kenstar is most often associated with microwave ovens. How will it overcome that image to make a dent in the TV space? Sethi admits it's a challenge but says an umbrella brand campaign, to be launched at the beginning of the festive season, will help. Kenstar, since its launch 10 years ago, has in reality been adding products to its range year after year, Sethi says. The third largest player with 14 per cent market share (after LG and Samsung) in the microwave oven segment, it is "rubbing shoulders with stalwarts who don't have one product or the other in all appliance and consumer durable segments Kenstar is present in," he adds.

For its TVs, whose unique feature is something called `Picture Enhance,' the company is following a different strategy. Instead of launching them in the cities and then moving on to towns, it's introducing them in smaller places first and then going on to the bigger ones. This serves two purposes, says Sethi: Launching them in smaller places makes for extensive word-of-mouth publicity, and the sales and marketing teams' morale and excitement don't flag as there are the big-city launches to look forward to. The first launch was in Mangalore, and the most recent, after covering places such as Hubli, Vijayawada and Kochi, was Chennai. And the South was a natural choice as the market there is "very well defined, the approach to business is very focused and disciplined and Kenstar enjoys respect and brand equity," says Sethi.

B. A. Srinivasa, Director of Chennai-based retail chain Vivek, says making a mark in the TV segment won't be an easy task for Kenstar. While commending the company for its focus on microwave ovens, he says consumers who buy those may have different aspirations when it comes to a television. Its claims that it has innovated in many categories is true, he says. (In fact, top-loading tumble-wash machines are the best-selling models in Italy and France, but in India, where "mass" models appeal, a company needs to have solid marketing muscle to push these kind of products, he said.)

"Kenstar's business is due more to the relationships it developed with the trade and its promos rather than consumer pull," says Srinivasa, adding that though it is present in washing machines and refrigerators, it has not acquired significant numbers there. According to him, the company is looking for business, not leadership, in that quarter. It already has the logistics and the distribution in place, and is taking a chance to see if it can gain something extra for little extra cost.

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