Baron - Rewriting Indian Consumer Electronic Goods Marketing

Details

Themes : Innovation
Period : 1994-2002
Organization : Baron
Pub Date : 2001
Countries : India
Industry : Consumer Electronics

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Case Code : MKTG007
Case Length : 7 Pages
Price: Rs. 200;

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"I will not rest until I drag Joe (J.R.Mulchandani, Chairman, Baron International) to the streets."

- Venugopal Dhoot, Chairman, Videocon Group in the mid-1990s.

Baron - Rewriting Indian Consumer Electronic Goods Marketing: Shaking the Market

The Baron group entered the Indian consumer durables market in December 1994, and the markets were never the same again. Over the next few years, at the corporate offices of competitors like Videocon, Philips and Mirc Electronics, it was the same story - they were all making frenzied attempts to hold on to declining market shares. Baron's initial product offering, an Akai color television (CTV), was priced at Rs 13,000 - while the market price was Rs 16,500. This was clubbed with an exchange¹ offer on old music systems and TVs and free-gift schemes whereby 14-inch CTVs, mobile-phones, refrigerators and Bajaj Sunny mopeds were offered free on the purchase of a 21-inch CTV.

These moves, combined with Baron's full-page advertisements that appeared regularly in the national media, lured buyers all over the country. The move changed the CTV market share pattern very soon, with Akai's sales increasing from 2500 CTVs in 1993-94 to 4.29 lakh CTVs in 1997-98. In December 1998, Baron repeated the success story with the Aiwa brand in the hi-fi audio systems segment.

Within 5 months of the launch, Aiwa replaced Philips as the segment leader, garnering a 45% market share, as compared to Philips' 17.2% share. The launch of the TCL range of consumer electronics in 1999 also took the market by storm as the China based TCL was known for its dirt-cheap products. With almost every new scheme and every new tie-up, Baron unleashed a new war in the Indian consumer electronics market. A majority of the players began indulging in 'one-upmanship' on the pricing and promotion fronts. However, they soon realized that it was not very easy to match Baron's schemes and prices. The question on everyone's mind was the same. How did Baron do it?

The Baron Group

The Mulchandani family had started its consumer electronics business in the 1970s. The group began with marketing and distributing products under the Bush brand name. Under the leadership of J.R.Mulchandani, Bush emerged as one of the top brands in the audio cassette player market. However, in the next two decades, Bush failed to withstand the onslaught of companies that were financially superior and had greater marketing savvy.

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1] The old televisions/music systems collected through the exchange schemes were either sold in the secondhand market or the rural markets.