Videocon has given a new spin to its comeback strategy and this time its playing on the cricket field rather than resting on the sex appeal of Bollywood to hawk its wares.
With Bollywood icon Shah Rukh Khan failing to catapult the consumer durables major to the No 1 slot in the colour televisions market, the Rs 3,997.89 crore Videocon International has decided to invest Rs 100 crore to bag the sponsorship rights to international cricketing events organised under the aegis of the Board of Control for Cricket in India for the next two years.
The company has become the lead sponsor for the trophy, prize money for the winning team, man of the match and man of the series awards.
The company is to sponsor all the international cricket matches to be played in India till March 2006. We will spend Rs 100 crore on promotions of cricketing events.
We hope to see a 25 per cent annual sales growth of colour televisions as a result, says Venugopal N Dhoot, chairman, Videocon group of companies. According to Dhoot the cricket promotions budget will be funded via internal cash accruals.
Despite Videocon featuring Shah Rukh Khan in ads since 2001 the company lost market share says Dhoot.
Sales grew by 30-40 per cent after Shah Rukhs ad campaigns, says Dhoot.
But the companys market share in the colour TV (CTV) segment across all the four brands it sells viz. Videocon, Sansui, Akai and Toshiba dropped to 20.1 per cent in the year 2002 from 21.3 per cent in 2001, according to Dhoot.
A celebrity endorsement is very useful for an unknown brand but for a known brand, its possible that there may not be much benefit, says Sushil Jiwarajka managing director Slora International.
Videocon is staking a lot on cricket considering that its net profit for the 12-month period ending September 2004 was Rs 177.48 crore.
We think that cricket is the best medium for promoting our products and thats why we have signed agreements with BCCI. Major portion of our advertising budget will be spent on cricket, says Dhoot.
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