Crompton Greaves Consumer Electricals Ltd today has approximately 55% market-share in the fan segment, which it aims to increase to 80% in the next few years. Mathew Job, CEO, CGCEL tells us more



Q] You have launched two new products with corresponding campaigns. What is the objective of the campaigns?
At Crompton, innovation has been our key focus area. We have always been a strong technology company. Our aim has always been to keep consumers at the heart of our innovation by trying to understand their pain points and accordingly design a superior solution. About 18 months ago, we launched anti-dust fans because consumer research showed us that keeping fans clean and having to clean them frequently is a consumer problem. We designed the product based on our conversations with consumers. While a lot of other brands have followed our innovation, we are confident that the fans we launched are significantly superior. This year, we have launched the ‘Air 360’ and the ‘Air 360 Deco’ range of fans that help consumers get adequate air in a 50% larger room area compared to regular fans, and the ‘Tricool’ Window Cooler that delivers 60% better cooling than a standard plastic cooler. We are supporting the launch with two TVCs aimed at reinforcing the brand connect with consumers and familiarizing them with how Crompton makes the #Hangoutathome a great experience through its wide range of innovative products.

Q] While your anti-dust fans have been a success, many players have come up with similar products that might be priced slightly lower. What is your marketing strategy to make consumers choose your product over others?

Our anti-dust fans are available in a lot more stores than those of other brands. Since we were the first in the market to launch the product, we have got first-mover advantage. Moreover, we have been consistently investing in marketing. Even in stores, when consumers are exposed to different products, our offerings speak for themselves. Our success is a combination of all these factors. Also, consistent marketing investments, ensuring the availability of the product and increasing visibility, has worked well for us. Thate we have grown our market share in this period almost fully on the back of anti-dust fans indicates that our strategy has worked.

Q] When the company de-merged from the parent company, you focussed on the premium fan market. Is it still the same?
Yes. Two years ago, premium fans accounted for 7% of our sales. At that time, we said that we wanted to increase it to 15% in three years. However, thanks to the success of anti-dust fans, we have managed to reach 20% in two years. While anti-dust fans are a big success, there is still a long way to go. We believe in bringing a few big ideas to the table, rather than working on a 100 small ideas. Indeed, working on a few big ideas and executing them well, will help us grow our mindshare, distribution share as well as market share.

Q] How big is the premium fan market currently in India?

The organized fan market is about Rs 6,0007,000 crore. Premium fans account for 10-15% of that.

Q] Which markets are driving growth for you? Are you also targeting rural and Tier II and III markets?
Our presence is primarily in the urban cities. We haven’t entered the rural market yet. However, entry into Tier I and Tier II cities is a logical progression. You start from the metros and eventually enter the mini metros. For different categories, we have a different market approach. We do want to enter the rural market at some point but we aren’t sure when it will happen. There is still huge growth potential in the urban markets and we are currently working on that.

Q] Last year you announced that about 2-3% of your revenue would be spent on reaching out to younger audiences? Where have you invested the money and how has it helped in building brand recall?
Since we started targeting the younger TG through our communication, spontaneous brand awareness has improved. This can be attributed to the targeted investments we have made. Our current brand positioning is to help you make your home a better hangout, which is a relevant proposition for the younger TG. Secondly, the protagonists of our campaigns are usually young, newly-married Indian couples. Furthermore, there has been a conscious attempt to talk to the younger audience through the creative, the consumer concept and consumer insights. We have also put a lot of thought into our media planning. We launched our new campaign during the IPL, which was a conscious decision aimed at bringing the younger audience under our fold.
Q] You spent Rs 60 crore on advertising and marketing last year. What part of the money was spent on which media platform?
For us, the initial objective is to build spontaneous awareness for all our categories. Even today, to build awareness in India, TV is the most effective medium. The biggest chunk of what we have spent so far has been on TV. While the figure we will spend this year is less relevant, in the last two years, we have found that the big players have been spending anywhere between 2-3% of their sales on advertising. That is what we have also done in the last couple of years. Since the demerging, we have increased our advertising spends from Rs 10 crore to Rs 60 crore. We have been able to bump up the figure by eliminating wasteful costs of about Rs 150 crore. However, how much we will spend this year and in the near future will all depend on the competitive scenario.

Q] Have you set any goals for the brand for the next few years?
Our goal is to grow faster than the industry. The market hasn’t been performing very well in the last few years. That’s why we don’t want to set any number now. We would rather look at our growth in respect to the industry; are we growing fast in the industry? Are we gaining share in the categories that we are playing in? Are we growing our profits at least in line with our sales, after making all these additional investments and advertising in capability building and building distribution? It has been two years since we demerged, and now we have realized that this is what we need to do, rather than set some numbers or other goals.

Q] How broad is your dealership network currently?
The availability of our products is of utmost importance to us - whether we have 1,000 direct dealers or 5,000 does not make too much of a difference. Two years ago, we had a 40% market presence in the fan segment, which has gone up to 50-55% today. The target is to increase that number to 70-80% and we hope to achieve that in the next two to three years. Even in terms of LED bulbs, while we were number 5 a few years ago, we are number 2 today. This has increased our reach from about 10% to 30%. It has also helped us increase our market share from 2% to almost 10%.

Q] What led to the growth for your LED portfolio?
We were the first ones to realize that consumers need products that are affordable. Thus, we were pioneers in bringing the product to a level where the consumer could switch from normal lighting to LED lighting, because we realized that consumers would not want to pay 5X-10X of what they were paying for normal bulbs. We launched the product and supported that with TV campaigns which stated that our product was 70% more affordable. Moreover, we also built distribution. The availability of the right product at the right price point, supported with a strong marketing campaign helped us make an impact.


Feedback: Category: CMO Interview Volume No: 14 Issue No: 48








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