In the harsh face of economic recession, many companies lose market share, but some manage to retain their customers. A few rework their strategies to stimulate demand. Mr K. Hari Prakash, Assistant Vice-President, Sales, Valvoline Cummins Ltd, talked about two such companies in a BL Club lecture organised by Business Line and presenting sponsor Central Bank of India at Saveetha Engineering College.
Denmark-based construction toy company Lego released a commercial in early 2011 to increase sales. The 30-second ad shows a father and son team creating a toy bus that navigates the roads of a desert city. Plastic vultures swoop down and helmeted construction workers drill near souvenir shops that sell hairpieces of vintage actors. The commercial was a runaway hit in the country, accelerating sales for the Father and Son Road Trip set.
“Besides the racy narrative, the sales pitch that a father and son can have fun at home is a departure from the company’s focus – children,” he said. Another product that blended innovation with attractive pricing is the Snuggie range of sleeved blankets. This piece of home-wear, which looks like a “bathrobe worn backwards”, was introduced through an infomercial in the US in the fall of 2008, mainly in the US. Varied brands such as Snuggie, Snuggler and Doojo came out with what was popularly dubbed a “slanket”. It was released at $14.9 in the US in 2009 and went on to become a sales phenomenon, selling 4 million pieces as of December 2009. A television commercial offering it at $19.9 is said to have further improved sales.
Companies that venture to fight the slump in demand through innovation in product design and pricing, a “risk that strategists have to take in recessionary times”, succeed in beating recession.