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issue: December 2009 APPLIANCE Magazine

34
Making the Most of Festival Season


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Adite Banerjie, India correspondent

Appliance makers are staging big promotions to spur sales during India’s fall festival season.

Autumn is India’s festival time of year. Back-to-back festivals start with Dusshera in late September and go on through Diwali in mid-October. The festive season even extends right up to Christmas. This is season when consumer product manufacturers and retailers gear up in an effort to attract sales of big-ticket items. Traditionally speaking, this is the time when, across all regions of India, families set out to buy consumer durables. It coincides with the harvesting season, when farmers and rural consumers are cash-rich.

This year, however, retailers and manufacturers were a little anxious about sales trends. Even though recessionary trends have abated, bad monsoons in most parts of the country did not bode well for sales of consumer durables. Though sales of durables were not radically hit because of recessionary trends during the last year, the fear is that the bad monsoons and drought-hit status of several states in India will lead consumers to restrain their festival shopping. Media reports, too, suggest that even though there is an upswing in shopping trends—particularly as sales of cars have picked over the past few months—shoppers are wary of spending on consumer durables. One reason could be the job losses that have happened across all sectors. Another reason is the inflationary trend in food prices.

Indian Households Cut Back Spending

Retailers estimate that households are currently spending 15–20% more on food items and this may have curtailed expenditure on non-food items. Moreover, overall growth rates of modern retail formats have dropped from 35–40% over the past few years to about 10–15%. There is a growing preference for ‘value-for-money’ formats, and as the trend shifts from premium, lifestyle products to value products, marketers must realign their marketing strategies.

It’s not surprising that leading appliance marketers like Samsung and Whirlpool were pitching big during festival promotions. Samsung had a budget of Rs 250 million (more than US$5 million) for this year’s festival promotions. Samsung appliance promotions include giving a free vacuum cleaner with the purchase of a fully automatic front-loading washing machine. The company also increased the warranty offers on refrigerators to eight years. Purchase of a Samsung refrigerator now entitles the consumer to a complete warranty on the product for one year, an additional four years’ warranty on the sealed system and eight years warranty on the compressor—but it applies only to refrigerators purchased during the festival season.

Consumers who purchased a Samsung LED TV 40 in. or larger received a 22-in. Samsung LCD TV for free. Samsung currently has three LED Series models across 32-, 40-, 46-, and 55-in. screen size segments priced in the range between Rs 69,900 and Rs 350,000. Consumers purchasing a 32-in. LED TV or any Samsung Plasma or LCD TV with a screen size of 37 in. and bigger also received a Samsung DVD Player Model H1080 as a freebie. Consumers purchasing a popular size 32-in. LCD TV received a DVD-490 player as a gift, Those buying LCDs in 22- and 26-in. sizes received a pack of 50 DVD movies for free.

“We are looking at a business of Rs 17 billion (approx. $360 million) from our Consumer Electronics Business during the September–October 2009 period, which will translate into a 40% growth over our sales in the corresponding period last year,” states Mr. R. Zutshi, deputy managing director, Samsung India.

Whirlpool India also hoped to increase its sales by 35–40% over the last year and aimed at a sales target of Rs 6 billion (approx. $129 million) during the festive season. It introduced a new line of semi-automatic washing machines in three capacities. It also launched new microwave grill and convection models and new color finishes for its refrigerators.

Scratch-and-Win Appliances

Every consumer who bought a Whirlpool appliance during the festival season not only received a free gift but also an opportunity for additional value-added offers. All were awarded through a card with three scratch offers that were handed over to the consumer when the Whirlpool appliance was purchased. With the first scratch, consumers were guaranteed to win either a Whirlpool microwave or a Reebok wristwatch worth Rs 2599 (about $55). Whirlpool planned to give away 25,000 microwaves during the offer period.

The second scratch-off entitled the consumer to get a special offer on Whirlpool Purafresh Deluxe, the company’s very successful Reverse Osmosis Water Purifier, at a special price of Rs 11,999 (approx. $255), down from the regular price of Rs 15,950 (approx. $340). The third scratch-off was an offer to consumers to purchase a Whirlpool Microwave 20 Litre Grill, the electric model, at a special price of Rs 4990 (approx. $105) against a regular retail price of Rs 6490 (approx. $140).

Clearly, appliance makers like Samsung and Whirlpool did their utmost to ensure that the festive season was a win-win for both themselves and consumers.

 

Read more of Adite Banerjie’s India Reports at: ApplianceMagazine.com/india

 

 

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