Limited Addition?

Admen don't think it's a cure-all for anaemic sales. Marketing professionals are cautious about the extent of its success.

Yet over the past seven years or so, a growing band of corporations "" from automobile manufacturers like Ford, Fiat, Tata and Maruti to watch-makers (Titan), soft drink sellers (Pepsi) and even purveyors of soap (Doy) "" have been offering their customers limited editions of their products with mixed results.

So what draws corporations to this technique of stoking sales? And how well have they fared?

Says Manoj Tadapeli, head, marketing, Titan Industries, "Limited editions have a small role to play as far as sales are concerned. However they have the potential of building the image of a brand."

Even so, it's a tough call to take. "Introducing limited editions is not a tool to hide the limitations of a product. It has to enhance the current product and sustain interest," says Sandeep Pathak, general manager of ad agency, Leo Burnett.

Not surprisingly, it is the Indian automobile industry which has been challenged by intense domestic competition and slow growth over the past decade that has been at the forefront of launching limited editions "" much like its global counterpart.

In February 2003, Tata Engineering rolled out a limited version of the Safari, a sports utility vehicle (SUV), to sustain customer interest for the brand.

In the case of the Safari, the SUV category was upgrading to a price band of Rs 16 lakh to Rs 33 lakh, with the recent introduction of brands like the Suzuki Grand Vitara, Chevrolet Forester and the Mitsubishi Pajero.

Apart from new brands attracting a larger share of interest, the Safari was selling at the Rs 10 lakh price point. It was in danger of appearing like a poor cousin when juxtaposed with the new premium arrivals.

So a barrage of features were thrown in the 600 units of the limited edition Safari.

Apart from entertainment options like a Sony Playstation which doubles up as a 10 compact disc changer, the vehicle has features like a reverse guide system (a camera is strategically located on the rear bumper).

The vehicle also boasts of a 12-litre refrigerator to appeal to long-distance travellers. This helped in pushing up the price-tag of the vehicle to the Rs 11 lakh to 12 lakh price band.

At present, the company claims to have sold 50 per cent of its limited edition cars.

And if Tata Engineering has been using limited editions as a strategy to grow in the eyes of its customers, then car-maker Ford India has been using limited editions to lure buyers to its showrooms.

Industry experts point out that in the two-decade long global tenure of the Ford Escort, Ford Motor Corporation had 33 limited editions for the brand.

Even for the Indian market, the Escort had specific editions. For example, to celebrate 50 years of Indian Independence, the Escort had a special edition called the Ford Freedom in July 1997 ("special editions" are launched to commemorate occasions and hence are technically different from limited editions).

This was followed by the Ford Escort Anniversary edition in October 1997 to celebrate Ford's completion of one year of operations in India.

Says Vinay Piparsania, vice president-external affairs and director-sales operations, Ford India, "Limited editions create a buzz of excitement around products. They drive traffic into the showrooms."

He adds that limited editions are a proven strategy as they appeal to select customer profiles. Hence Ford uses limited editions to tap into niche customer preferences.

For example, while the Ford Ikon's Rally Sport edition was targeted at racing aficionados, the Ford Ikon Iris, launched in end-2002, was a limited edition which appealed to buyers who wanted not only the fuel efficiency of a 1.3 engine (1,300 cubic capacity) but also the comforts (like superior seats) offered in the 1.6 version of the Ikon.

Piparsania says, "The advantages of limited editions are that they allow you to test features that can be incorporated into the existing range."

For example, the Iris had features which were later incorporated into the Ikon NXT which was launched in early-2003.

But while planning limited editions there are obvious risks. One is in estimating demand.

As Piparsania points out, "Limited editions create an urgency to buy the car in a limited period." Before you realise showrooms might be seen sporting "sold out" signs as it happened in the case of Ford Freedom.

When the company introduced 400 units of the car with unique individual numbers on them, Freedom was sold in two weeks flat.

The reason: while the average price of the Ford Escort was Rs 6 lakh, the special edition Ford Freedom was selling at Rs 4.99 lakh.

Ford, typically, ran into a situation where its pricing was too tempting for a special edition buyer.

If Ford stood guilty of underestimating buyer interest then for Italian auto giant Fiat it was an issue of over-estimating the buyers' willingness.

When Fiat's Palio launched a special edition of 500 cars, the S-10, a signature line of cricket hero Sachin Tendulkar, it was modelled on the lines of Fiat's global signature edition of the Sicento endorsed by Formula One top gun Michael Schumacher.

According to dealers, the problem with the S-10 was its pricing. While dealerships were flooded with inquiries in the initial days of the announcement, buyers were put off by the price tag of Rs 6 lakh as it was nearly a lakh more than the Palio's most expensive model "" the GTX.

Another reason for the lacklustre response was the timing of the limited edition launch in April 2002.

In its enthusiasm to time the special edition launch with the birthday of its brand ambassador, Fiat launched the S-10 just six months after the Palio was launched in the country.

The excitement over the existing Palio range had not yet subsided and was driving in sales in any case.

At that time the company had told The Strategist that it has even received requests to export the S-10 to countries like England where cricket and Tendulkar are extremely popular. But dealers claim that the overall response to the S-10 was lukewarm.

According to Pathak, the special edition was a tribute to the cricketing hero and not really a revenue-driven decision.

According to industry analysts, the S-10 has been the best attempt by any auto manufacturer in the country but it failed due to the execution.

In hindsight, a cricket World Cup edition or Tendulkar's much-hyped 30th birthday after the cricket World Cup in 2003, could have been the right occasion for Fiat to roll out the S 10.

Unpredictability of buyer response is one reason why watch-maker Titan has not launched limited editions in a big way. As Tadapeli points out, in the case of special edition watches the investments do not justify the returns.

For example, just changing the dial of a watch will not cut ice with customers. Such attempts could be at best a new collection "" unlike automakers where adding bells and whistles to existing models can pass off as special editions.

Even Titan had its early lessons when it introduced a special edition of clocks based on four paintings made by renowned artist Raza in 1997.

Priced at a 100 per cent premium over its existing range of clocks, it failed to excite customers. Tadapeli says, "There was no market for clocks of that nature."

Limited editions also fail when there is not too much snob value attached to a product as in the case of soft drinks and soaps.

Consultants explain that low-ticket items like soft drinks or soaps are for personal consumption. Hence there is nobody watching the consumer at the point of consumption and appreciating the preference for a limited edition.

Soft drink giant Pepsi got a taste of consumer preference during the cricket World Cup of 2003.

When it announced that it was launching Pepsi in a blue form to connect with the colours of the Indian cricket team, along with pictures of cricket players on the bottle, there was considerable excitement generated.

But subsequently, Pepsi failed to cash in. Retailers claim that the 200 ml limited edition bottles which sold for Rs 15 was too expensive compared to the conventional 300 ml soft drink bottles that retail for Rs 10.

However to launch a limited edition you need to have a big brand. Soapmaker VVF discovered this in May 1997, when it launched limited edition soaps shaped like a Sachin Tendulkar bust.

Even though the intentions were noble "" the proceeds were to go to Child Relief and You "" the limited edition did little to the brand's prospects.

Tadapeli points out to other risks associated with limited editions: "If you do it with the low-end watches, it will not work."

Clearly, the snob factor is an issue. "And then again, If you produce less and the edition gets sold out quickly you miss the bus," he adds.

But Indian companies could certainly take a few pointers from top-of-the-line international brands on not missing out on limited edition opportunities.

When Ferrari introduced 399 units of Enzo as a tribute to its creator, the company sold it only on invitation. And the people invited to own this edition were existing wealthy owners of Ferraris.

When Rolls-Royce sold out to Volkswagen and BMW (one got the plant and the other got the brand), the company introduced the last of the production line series called the Rolls Royce Seraph.

What do Indian buyers of limited editions think about their possessions of pride?

Says an S-10 buyer, "I bought the S-10 for the incredible deal that the vehicle offers in terms of performance and the factory-fitted accessories. The value of a limited edition will matter at the point of resale."

Will value last the limited run?

Additional reporting by Gouri Shukla