 "Akai")
When Rip Van Winkle returned to his village after 20 years he found there were new houses where yesterday there had been fields, and there were now roads where there had been meadows.
Similarly, reviving a dead or dying brand — sometimes called ghost brands or zombie brands — is an attractive idea but is fraught with danger. How will the brand fit into the changed market scenario? In all probability, loyalists have moved on; so will it be a able to woo a new set of customers? Above all, how does one ensure it won’t fall by the wayside all over again?
For Japanese brand Akai, which is trying to make a comeback in the Indian consumer durables market, the whole move looks all the more audacious because it had a roller coaster first innings and left the country under a cloud. But the brand is hopeful. “As a legacy brand, we have positioned ourselves as a challenger. We are focused on giving buyers the right kind of quality at a competitive pricing,” says Anurag Sharma, director, Akai India.
Akai’s approach is interesting for two reasons. First, it is returning not on its own but in a partnership with Hometech Digital that has a 10-year licence to sell Akai products in India. Hometech Digital is part of New Delhi-based Paras Group which already sells some products of Sony, LG Electronics, Nikon, Tata Sky, Motorola and Gionee. Second, its pricing strategy. Akai has shifted its brand strategy from the earlier “lowest price” warrior to a “competitively priced” street fighter. Sharma says the consumer electronics market can be divided into four categories: Category A includes market leaders Samsung, Godrej and LG; Category B is dominated by the likes of Videocon and Panasonic; Category C has players such as Intex and Micromax; and Category D comprises the grey market. Akai sees a great opportunity in the huge gap between Category A and Category B players. Akai is back in action here with a portfolio of LED TVs and washing machines. It is hopeful that the right positioning will help it woo a large section of buyers sitting between these two stools.
No doubt the opportunity is immense: the Indian consumer durables industry is expected to grow from $9.7 billion in 2015 to $20.6 billion by 2020 to become the fifth-largest in the world by 2025.
Analysing Akai’s comeback move, Nitin Karkare, chief executive officer, FCB Ulka, says, Akai TV, had disrupted the market many years ago through a combination of technology and price. The TV market has evolved manifold over the years. Technology and features dominate the conversation, much like in the case of mobile handsets. That apart, two Korean brands (Samsung and LG) have stolen the march in the electronics consumer durable segment. “Japanese technology is no longer the polestar,” says Karkare. “Akai will need to identify the next disruptor game plan to make a mark again in this market.”
Initially, Akai is pushing the brand in tier II and tier III cities. It has soft launched the products in Punjab, Delhi, Uttar Pradesh and Rajasthan. It has a network of 200 distributors with 3,000 sales outlets at present.
A big challenge for Akai, says Sharma, would be to win back the confidence of distributors and retailers. Akai is going all out to woo retailers by offering them healthy margins. The brand will be sold at the market operative price (MOP) — the lowest price at which a retailer can sell a product as set by the brand or the manufacturer — as opposed to the maximum retail price (MRP). This allows the retailer to fix/alter the discount at his convenience. While in some cases, such MOP pricing may lead retailers to compromise their margins, the flip side is they will have the flexibility to offer discounts to customers when they deem fit.
Learning from its past mistakes, Akai is also investing heavily in its after sales service network to help cement its bond with buyers. It has 55 after sales service centres across four markets.
Currently, Akai imports LED TV sets (in completely knocked down and semi knocked down form) and assembles them at Noida and Dehradun facilities. By next year, the company is looking to sell 200,000 TVs and 100,000 washing machines. Targeting a market share of 10 per cent by 2020, Hometech plans to pump in about Rs 150 crore on branding and marketing-related activities over the next 15 months. In the next phase, Akai will launch a range of refrigerators in the third quarter of 2017.
Even as Akai firms up its India strategy, the big question is will it be able to put its messy past behind and build a trusted brand all over again? For one, Karkare hopes not many will remember the unpleasant exit of Akai. Since the brand is starting from scratch it would do well to focus on the value it offers rather than fall back on nostalgia, he sums up.
