Voltas :Restructuring its Operations

Voltas :Restructuring its Operations

Background Voltas Limited commanded a market share of over 40% of the domestic A/C segment in 1987 In 1999 its total market share dropped to 6% The company management decided to focus on restructuring its operations so as to regain its lost market share. Wanted to position Voltas as one of the top three A/C brands in the market

The Problem. Voltas had concentrated on the commercial segment, which was growing at a constant rate of 5% every year rather than domestic A/C segment which had a rapid growth rate of 15-18% The increase was due to the relaxation in the excise duty and to the entry of MNC s and Subsequent decreases in prices due to competition The MNC s are way its domestic A/C market share Also people looked at voltasas an engineering company rather than a consumer durables company The promotion strategy was also not in tune with the changing times

The solution To strengthen its operations partnered with Fedders, US based air treatment company Feddersinvested 20 crorefor a 50% equity stake It proved beneficial for voltasin terms of technology, knowledge as well as capital. Revamped its HR strategy to recruit right professionals for increasing productivity Realized that the products were up to the mark but the marketing, distribution and customer services strategies need modification

The Solution The company started selling products through 700 retailers instead of it 400 distribution centres as consumers preferred buying products from stores. Also increased distributers to 450 and removed the ones not performing well. Installed ERP Package to establish link between the dealer and the company Opened call centres in 16 branches across the country Initiated a policy that the call has to be attended within 3 rings or 11 sec whichever was earlier

The Solution Created new promotional strategy Targeted three segments- young generation, traditional family and consumers that gave importance to timely and effective service Euro-RSCG created different adds for ach of the segment and these adds had a humorous touch to it to draw attention towards the brand. By all these measures Voltas could improve its market share by 11% and its market position changed from fifth to second within a short span of time.

Kellogg s Positioning Strategy In India

Kellogg entered the Indian Market in September 1994 with cornflakes, wheat flakes and Basmati rice flakes It had good technical,financial and managerial support but its products failed in the Indian market. Even a high profile media launch failed to make an impact on the market place Background

The Problem Indians boiled their milk which made the flakes soggy Also average middle class family did not have breakfast on regular basis Those who did, consumed milk, biscuits, bread, local dishes like dosa, paranthas etc. One major reason of failure was the fact that it did not suit Indian breakfast habits Kelloggs india also asserted that they were not here to change the breakfast habits but only to launch a healthy product.

The Solution Kellogg launched- chocos (September 1996) and Frosties (April 1997) in India It was successful and sales picked up significantly This was followed by the launch of Chococ Breakfast Cereals biscuits Started focusing on Indianising its flavors Resulted in the launch of Mazza series (August 1998) in three local flavors Mango Elaichi, Coconut kesar and Rose

The Solution Kellogg understood that quantity mattered to Indian consumers than quality In 1995, Kellogg had a 53% share of the Rs150million breakfast cereal market By 2000, the market size was Rs 600 million and its share had increased to 65% The effort to develop products specifically for the Indian market helped kelloggmake significant inroad into the Indian Market.

Direct Marketing : Eureka Forbes

Introduction Eureka forbes was one of the first direct selling companies in India Vacuum cleaners and water purifiers were new concept for the Indian Consumers It thus had to establish first the concept of vacuum cleaners and water purifiers in India before it could sell Eureka as a brand in India

Launch In India Employed, Eurochamps, who projected the image of The friendly man from Eureka Forbes Thus for an average Indian Customer Eureka Forbes became synonymous with smartly dressed salesman who come to their houses and cleaned up houses in a jiffy or showed how air/water purifiers were indispensible Initially targeted metros but then also went to small cities an towns In 1992-1993 profits decline by 50% in comparison to previous year In the following year it suffered a loss of 42.5 million However gradually the products were accepted in Indian Market and company sales picked up.

What Did it do? Eureka Forbes believed A relationship does not end with a sale. It actually begins. It gave a lot of importance to Customer Relationship Management (CRM) Its customer service network comprised over 400 Customer Response Centers, covering 98 towns with more than 4000 sales personnel. It also set up a 24 hour-365 day virtual call centre

The Problem The profits were soaring high but Eureka Forbes was not satisfied Though many household bough vacuum cleaners, its usage was limited. The housewives preferred the traditional cleaning method than the bulky product Also maids were available for cleaning, the need for vacuum cleaners was not felt.

The Solution Changed its advertising strategy in November 1999 Instead of friendly salesman the advertisement now featured a maid servant using the vacuum cleaner Also launched a consumer training drive to support the campaign The new campaign aimed at establishing the fact that vacuum cleaners were easy to use and even maidservant could be trusted with it Eureka forbesregistered a 20% increase in sales volumes fro m this ad campaign