The Hindu Business Line : ‘Onida gets younger over time’

Onida, which once had an enviable share (over 15 per cent) of the Indian market for television sets, is one of the very few home-grown consumer electronics brands to have weathered the onslaught of Korean and Japanese players and retain a d ouble-digit market share.

Gulu Mirchandani, a mechanical engineer from BITS Pilani, along with brother Sonu Mirchandani and brother-in-law Vijay Mansukhani, promoted Mirc Electronics to make televisions under the Onida brand. Prime Minister Rajiv Gandhi had then ope ned up imports so that India could watch the 1982 Asian Games on imported TVs, and Jumbo’s Manu Chabbria seized the opportunity to flood India with Sony exports from Dubai. It was not until the mid-1980s that the brand’s fortunes turned. Its advertising campaign – a devil and the tagline, ‘Neighbor’s Envy, Owner’s Pride’, did the magic. The brand outperformed not only many Indian players but even overtook global brands.

Of late, the devil (younger and more modern) is back with a thud. Apart from CTVs, the company’s portfolio now contains air-conditioners, DVD players, washing machines and microwave ovens.

The brand still retains its premium position in the CTV market with 12 per cent share. CTV contributes about 60 per cent of the company’s revenues with other appliances contributing the rest.

Today’s market is different from that of a decade ago. More disposable income, better brand awareness, more demand for products with improved features … How does Onida fit in?

Onida as a brand has grown stronger owing to its robust designs, stringent quality standards and customer focus. There is always freshness and vibrancy attached to it and we feel it is a brand that is growing younger over a period of time. We have always been about giving the consumer an over-engineered product so that he gets the maximum value and therefore Onida is always relevant to the consumer and to the market.

Apart from established players such as Samsung, LG, Panasonic, Sony, there are a lot of private labels coming up in the market. Retailer Vivek’s has its own TVs and DVD players, and Reliance has similar plans. What would be your mark eting strategy given this scene?

The market is big and growing for all players to grow. We carved a niche, which will sustain us in the future too. Additionally, we believe the company needs constant innovation to offer more value. Customers are intelligent and are willing to pay for new designs, latest features and after-sales service support. We could also make specific designs under the Onida brand and offer to large-format retailers. We do not envisage any difficult in selling to them.

Where does the brand Onida stand now in the market?

Ranking in terms of market share for May 2007, according to ORG/GFK figures, is No 3 in the CTV market (Onida – 9.6 per cent share, IGO – 2.9 per cent); in DVD - No 3 (with 10 per cent share); washing machines - No 5 (4.4 per cent); air-conditioners - No 3 (with 7.9 per cent) and microwave ovens, we are No 5 with 6.9 per cent share.

Our aim is to grow strongly in the CTV category with a 16 per cent market share target for the year 2007-08, and our focus will be on the 21” and 29” flat segment.

Onida was also present in the audio segment for a brief while.

We have a presence in the HTS (home theatre system) segment and are in the process of consolidating before launching a fresh set of offerings.

What’s your turnover target for the current fiscal and are you on track to achieve that?

We closed fiscal 2006-07 with a revenue of Rs 1,650 crore. Our target for the year 2007-08 is upwards of Rs 2,000 crore, and we are on track to achieve it due to the tremendous success of our air-conditioners and strong marketing support for all other products.

Any plans to penetrate new markets?

Globally, we are strengthening our presence in the Gulf. Domestically, we are increasing our presence in all product categories. We are also partnering upcoming organised retailers and strengthening our dealer network in both urban and rural markets. Our marketing spend this year will be around Rs 80 crore.

What is your manufacturing model?

We have a mixed model and effectively use both in-house and outsourced facilities for manufacturing. We have three facilities for end-to-end operations at Wada, near Mumbai; one at Noida and one near R oorkee in Uttaranchal.

Are you planning to expand your portfolio through new product lines or new variants in the existing portfolio?

A new range of microwaves is being launched this year. However, the focus will be on our new range of LCD TVs which will be launched later this year. This has been developed indigenously with Rs 100-crore spend on a dedicated production line and R&D. However, we will still import panels from LG and Samsung.

Onida has already launched the slim series of air-conditioners and ultra slim TV this year. Very soon, we will be introducing a 29” slim and 21” ultra-slim model, catering to the rapidly emerging slim TV segment. We will also launch a new range of fully automatic washing machines.

What’s the present brand recall in the market?

Our brand recall among our target audience is among the top three. In terms of top-of-the-mind recall, our score is 10 (while LG is at 38 and Samsung is at 12).

India is a price-sensitive market. While some brands target volume, some target value. What’s Onida’s choice?

Which market is not price-sensitive? Is Wal Mart’s success not proof enough that even the US is? Actually, India is a value-sensitive market. Onida has always catered to this market, and will continue to do that.

More Stories on : Interview | Consumer Electronics

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
The challenge of innovation

‘Onida gets younger over time’

Nurturing brand equity

A big deal for Wipro

Marketing with capital M