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Samsung and Sony are not the only exceptions though... Almost all durable giants are working in the same fashion and are launching a host of products under their name. Whirlpool has recently launched many new products across categories and has also revamped its range of washing machines with 11 new models in the top-load and front-load range, with innovative features like 1-2-3 wash and ‘Sports Wash’. It has also launched new models of frost-free refrigerators and ACs with unique MPFI technology. LG is also betting high on a wide range of LCD TV and Commercial ACs this time. Similarly, Panasonic India is making efforts to promote green technology and is focusing heavily on office automation product like projectors, laptops and telephone and cameras (with swilling capabilities). Asserts Sabiha Kidwai, General Manager – Marketing, Panasonic, “We are investing almost Rs.10 crore this season and the key growth drivers for Panasonic will be high-end televisions and washers. Besides that, ACs and refrigerators are forecasted to show tremendous growth too!” Shantanu Das Gupta, VP – Marketing, Whirlpool of India also echoes out, “We are focusing on consolidating the already significant presence in ACs and increasing our presence in water purifiers & microwave ovens.”
But besides technology and innovation, raw materials contribute to a significant chunk of the operating cost structure for this industry. But here’s a relief – in 2009-10, declining prices of copper, steel and plastics are expected to drive down raw material prices. This will lead to improved overall operating margins for the companies. Moreover, the excise duty cut, CRR cuts and reduction in petrol prices are playing the fairy for the sector. Citing the benefits from the cuts by the government, Mahesh Gupta, Chairman, Kent RO Systems Ltd, explains, “To keep intact the existing customers and woo potential buyers a further cut-off of 2-5% would help keep the sales up and going. Moreover, we even expect that this cut in excise duty from 14 to 10% would prove beneficial and help us emerge strong from the crisis situation”.
Then there are also revamped retail plans that makes tomorrow appear better than the current gloomy now! For instance, Sony has changed the branding of its exclusive retail store from Sony World to Sony Centre. Then there is Das Gupta of Whirlpool who claims, “We work very cohesively with all our trade partners including traditional and modern trade formats. We have increased our presence to more than 12,000 outlets across India and are continuously increasing the same”. Similarly, other durable giants plan to increase their presence in the interiors of the country and are looking at increasing the number of channel partners. They also plan to leverage the shelf-space provided by major retail outlets like Big Bazaar, Reliance Retail, et al, to increase visibility by manifolds. LG is also targeting a robust 15% growth, focusing on tapping the bottom of the pyramid – the rural markets, through low-end range products.
But the bottom-line remains - summers this year are surely not going to be cool. Credit availability will haunt the customers, and for the companies, it will become more difficult to customise products without passing on the cost to consumers. And yes, if current exchange rates continue, the consumer durable giants will not be able to avoid increase in price thereby stifling consumer demand further! After all, dear consumer, the consumer durable industry isn’t proving so durable, eh?
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Source : IIPM Editorial, 2009
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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