Multi-Branding Strategy of Videocon Industries in the Consumer Durables Sector

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Case Details:

Case Code : MKTG116
Case Length : 17 Pages
Period : 1980 - 2005
Pub Date : 2006
Teaching Note :Not Available
Organization : Google Inc.
Industry : Consumer Durables
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"A multi-branding exercise, once initiated, can bring about a substantial consolidation of the core brand."¹

- Nabankur Gupta, Non-executive Director, Raymond India in 2004.

"A well-segmented, focused multi-brand approach makes sense - in the long run. Yes, in the short and medium run, it is a cost, because you need to support each brand with just x amount of money - the corpus gets spread over four brands, diluting the impact. But that's the short-term view." ²

- Ram S. Ramsundar, CEO, Electrolux Group, India in 2001. in February 2005.

Introduction

On July 07, 2005, Videocon Industries³ (VI) announced that it would acquire the entire shareholding of AB Electrolux (ABE)⁴ in Electrolux Kelvinator Limited (EKL), ABE's subsidiary in India. In the weeks following the announcement, VI took control of three plants of EKL.

The acquisition also included the marketing rights for Electrolux and Kelvinator brands in India and other SAARC⁵ countries. While the license for the Electrolux brand was for a five year period, the license for Kelvinator brand was for an unlimited period.⁶ The Allwyn brand, which was acquired by EKL in 1998, was purchased by VI.

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1] Gupta, Nabankur, "Multi-branding: The genesis," www.etstrategicmarketing.com, January 2001.

2] "On Record," www.agencyfaqs.com, April 30, 2001.

3] Videocon International, the consumer durables company was merged with Videocon Industries in July 2005.

4] AB Electrolux, headquartered in Sweden, is one of the world's largest producers and marketers of refrigerators, washing machines, cookers, vacuum cleaners, air conditioners, etc.

5] South Asian Association for Regional Cooperation (SAARC), headquartered in Kathmandu, Nepal is an association of seven South Asian countries which include India, Bhutan, Bangladesh, Sri Lanka, Nepal, Maldives, and Pakistan. SAARC, founded in December 1985, aims to promote friendship, trust and understanding among the member states and improve the quality of life of the people living in the region.

6] "Electrolux divests Indian operation to Videocon and signs distribution agreement," www.news.estrong.com, July 06, 2005.


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