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When 27-year-old Avnish Sujan was thinking of buying a flatscreen TV the choice was actually quite easy to make; it was a toss-up between LG and Samsung.

Thats, in essence, the challenge yesteryear leaders Videocon and BPL face as they try what may well be their last credible attempt at dethroning the Korean giants from the leadership position in the Rs 20,000 crore Indian consumer durable industry.

While some brands like BPL have seen a spectacular fall in market share in the last one year, some like Onida have seen a much smaller decline. Others like Videocon retain a large share of the production of TVs but its no longer under the brands owned by them like it once was.

Indian companies have lost their market position because the Korean brands have been aggressively promoting their goods through advertising and marketing activities while offering a wide range in terms of the number of models at varying price points, says Ramesh Shah, director of large city based electronics retailer Sony Mony.

BPL and Videocon are now positioning themselves for a shot at the top position they once enjoyed. Whilst Videocon is positioning its products on the health platform and has roped in stars like Shah Rukh Khan for a mega budget Rs 50 crore ad blitzkrieg, BPL is banking on its 50:50 joint venture with Sanyo to help provide the cash necessary to reenter the market and attack distribution channels.

The tie up with Sanyo will provide adequate working capital, says BPLs Nambiar.

BPL lost maximum share to the foreign companies, says Vineet Nigam, assistant general manager, ICRA. Till the mid 90s, Videocon commanded a 30 to 40 per cent market share and now even with associate brands like Akai, Sansui, etc, it has a 21 per cent share, adds Nigam.

The decline in BPLs market share and that of other Indian brands has been on account of the disparity in the cost structures of Indian companies, which have built infrastructure in the early 90s financed by rupee borrowings at the then high costs of capital, says Ajit Nambiar, chairman and managing director, BPL Limited.

To tackle the Korean brands hold over metro dealerships some Indian manufacturers are targeting small town and rural India where their brands might be more powerful than the imagery of tech superiority that the Korean giants may have built.

Rural areas are very attractive for growth. Urban markets too present three distinct areas: the second TV opportunity, huge replacement market and upgradation from black and white to colour screens, says Vipinchandra Mauli, vice president, marketing, Mirc Electronics, which owns the Onida brand. Onida has seen sales increase from 5.1 lakh units in 00-01 to nine lakh in 2003-04. This year we plan to cross the one million mark in units sold, says Mauli.

Bollywood boost

Videocon claims that after it signed Bollywood actor Shah Rukh Khan as brand ambassador, sales have shot upwards. We averaged monthly sales of two lakh units earlier.

"After having signed Shah Rukh Khan sales have shot up to 2.5 lakh units per month (a 25 per cent growth), says Venugopal Dhoot, chairman and managing director, Videocon International.

The BPL brand still has recall value. The effort is on to revamp the product line up and at the same time cut costs, says V G Rajagopalan, head of marketing, BPL Limited. The company plans to re-enter the colour television market by October 2004 with 18 CTV offerings.

Displacing the Koreans will not be easy

The Korean companies are dominating the consumer electronics market and itll be difficult for other companies to dislodge them. They have financial resources and are committed to the Indian market, says Nigam.

According to him, LG dominates the market with 20 per cent market share in colour television and 27 per cent in air conditioners, while Whirpool dominates the refrigerator segment.

There is a shift in consumer expectations from functional benefits to aspiration and emotional benefits. Distribution and availability is another important aspect. Besides, service is also critical, says Jagdeep Kapoor, managing director, Samsika Marketing.

Just ads may not be enough

Consumers mainly look for price and quality. In that sense, a Shah Rukh Khan commercial cannot drive sales if Videocon does not offer these.

On the other hand, while BPL Sanyo is acceptable as a brand, the company will have to provide good service and support, says Jyoti Mitra, branch head, Borivali, Vijay Sales.

Both Videocon and BPL can make a comeback because they still are powerful brands, says Vikas Kalani, chief operating officer, Sharuskie Marketing Consultants.

Videocon has introduced freshness in product design and communication. Similarly Sanyo had high perceived technology but the brand is sleeping, so BPL should do something about that, says Kalani. Voices

Are you likely to buy any Videocon consumer durable after watching the Shah Rukh Khan commercial?

No, I wont buy any Videocon products just because of Shah Rukh Khan or even Amitabh Bachchan for that matter. Ill do a survey with friends and look for quality, after sales service and price.
Suchitra Sachdev,
Housewife, Mulund

I wouldnt mind buying a Videocon product but Im not interested in cinema, so the advertisement doesnt matter.
Nilson Varghese
Lawyer

I will see the utility of the product before buying it and not which star endorses it. I have a Videocon washing machine and it is a quality product.
Shashank Mishra
MBA student <