Companies

Blue Star aims to acquire higher market share with ad campaign featuring cricket Virat Kohli

Our Bureau Chennai | Updated on October 16, 2019 Published on October 16, 2019

B Thiagarajan, MD, Blue Star, poses with look-alikes of Virat Kohli, at the launch of an advertisement campaign, in Chennai on wednesday   -  Bijoy Ghosh

Aims to increase its share in the AC market to 15 per cent by FY24 from 12.5 per cent now

Air-conditioning and commercial refrigeration company Blue Star is looking to boost its share in the room AC market with a new marketing strategy that will comprise an advertisement campaign featuring Indian cricket team captain Virat Kohli and network expansion, among others.

The company’s new strategy comes on the back of the room-AC market getting complex with new competitors, reduction in the average age of buyers, and the firm’s aspiration to penetrate deeper across the country.

The growth outlook for the room-AC market is also seen bright as the penetration in this segment is currently just 5-6 per cent in the country.

The company, which forayed into the room-AC market in 2011, aims to increase its market share in the segment to 15 per cent by FY24 from 12.5 per cent now.

Blue Star intends to garner mass appeal cutting across geographies and demographics. The company expects Kohli’s brand endorsement to help in the northern region of the country, to meet its incremental sales and share targets.

“Though 60 per cent of our sales come from tier III, IV and V locations, we have to get into many geographies and customer segments, reach out to institutions and individuals, and expand both digital and conventional channels,” said B Thiagarajan, Managing Director, Blue Star, while announcing the firm’s new advertisement campaign with Kohli. “So it (the market) is getting complex and hence requires a different strategy to grow from 12.5 per cent market share to 15 per cent.”

The strategy will also include products across price points, expansion of exclusive stores from 200 to 250, and significant increase of e-commerce sales.

Thiagarajan said that ad spend as a percentage of the company’s revenue would not change despite the association with Kohli, with whom the company has a brand endorsement contract for 14 months.

He said the festival season demand has been satisfactory due to uptick in sales. The company is doing better than the market. “We estimate the market to grow10-12 per cent and us to grow15-17 per cent.”

In Q1 of this fiscal, the company recorded a growth of 25 per cent in the room-AC business compared with the industry’s 22 per cent.

Published on October 16, 2019
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