The original price warrior returns with ‘mass premium’ products.
Remember Akai, the Japanese consumer electronics giant that turned the Indian TV market upside down in the nineties by playing the pricing game? The company’s offers, which included a free 14 inch colour TV with every 24 inch TV that you buy became the talk of the town and gave sleepless nights to its competitors.
But the brand, which was brought into India by the Mulchandani family-owned Baron International, lost steam midway. And Videocon, which then tied the knot with Akai to sell the brand in India, did not push it hard enough. An industry observer says “Akai, like Videocon, was a price warrior, so the Dhoots (the owners of Videocon) bought it merely to ensure that it was killed.”
That may or may not be true, but Akai is now planning another homecoming – its third. But the strategy is different this time. Global Brands Enterprise Solutions Pvt Ltd, the company which has signed up with Akai to sell its products in India as well as in the neighbouring countries, wants to position the Japanese brand as a “mass premium product”.
Pranay Dhabhai, managing director of the company, says “We want to position ourselves as a mass premium brand, which will be 5 to 8 per cent cheaper than the leaders (like Samsung and LG) but on a par with Indian and Chinese brands”.
Akai’s ambitions are also modest — it will be happy with a 4 per cent market share in various categories which would translate into Rs 450 crore of business.
In a break from the past, Akai products will not target only the Tier 2 and Tier 3 towns. The company will actively push sales in the larger cities, in premium stories and large retail chains. Talks are already on with both Tata’s Croma as well as Reliance to stack Akai’s products in these stores.
And yes, Akai is not looking at hiring any high-cost brand ambassadors. This time around, value for money is the new equation. So while the price point will be the same as other Indian and Chinese brands, the effort will be to give something that others don’t provide. For instance, the health proposition. Akai colour televisions will have a feature that will tell you the distance from the screen and you can automatically adjust the colour and the brightness to suit your eyes. Also, the TV sets will have high quality steel finishing, and USB drives so that you can watch movies stored in them directly.
The company is also applying to the Bureau of Energy Efficiency to get star ratings for energy consumption in all the products.
More importantly, Dhabhai and his team will not limit the Akai brand name only to TVs, audios and VCDs, as was the strategy earlier. The company is working on a plan to leverage the name for a slew of other products such as refrigerators, home appliances like microwave ovens, IT products like laptops, mobile phones, and, hold your breath — even invertors.
The question is whether this strategy of getting into too many product lines will dilute the brand equity. Dhabhai doesn’t agree, and says that the whole idea is to fully leverage the brand which has been seen positively in India and create various verticals with their separate sales force. The infrastructure costs, however, will be shared.
One factor that really went against Akai last time was the perception about poor after sales service. Dhabhai is obviously conscious of that and has set up over 200 outlets of “Quixerve” after-sales outlets across the country.
Global Brands is also changing the earlier method of outsourcing products. In its earlier avatar with Baron, most of the products were imported from various Akai locations. When Videocon took over the brand, the strategy was reversed and most of the production was done in India. This time around, Dhabhai plans to do a bit of both –while some of the products would be manufactured by OEMs in India, the premium ones would be imported.
But can Akai beat the consumer perception of being a price player? Dhabhal agrees that it is going to be a challenge and will take some time. “Our products and service will determine how successful we are,” says Dhabhai. And he does not rule out offering free goodies like they used to do earlier, but just once in a while to create hype.
The challenge of course is whether Global Brands can walk the talk and is able to make the subtle transition for a brand that was earlier synonymous with price cuts and freebies.
