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Boom time?s here for consumer durables

None | By, Indore
Sep 05, 2006 01:25 AM IST

THE SEASON of big bang consumer promotions is about to dawn and manufacturers are betting on aggressive promotions, advertising, and marketing spends and a jump in the consumer spends to boost the sales.

THE SEASON of big bang consumer promotions is about to dawn and manufacturers are betting on aggressive promotions, advertising, and marketing spends and a jump in the consumer spends to boost the sales.

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HT Image

Consumer durable sales traditionally record a two to three-fold jump during the Dussehra and Diwali season. Good monsoon this year has raised the expectations of better volume growth in semi-urban and rural markets.

Says LG Electronics branch manager Shailen Santosh, “About 70 per cent of the (consumer durable) sales take place during the festive season. We have planned major product launches this season, as we want to give the consumers a chance to buy the latest appliances.” LG Electronics clocked a turnover of over Rs 200 crore in MP and Chhattisgarh last fiscal and projected a 70 per cent growth this fiscal.

The market for both CTV and refrigerators is shifting to the semi-urban and rural areas, as the penetration in the urban areas for these products is quite high. Hoping to cash in on the festive season, durable majors are looking at ways to stand apart from the competition.

Says Samsung Electronics senior branch manager Abhijeet Chandorkar, “Our promotional campaign will be focussed on high-end products like digital camcorders, LCD and Plasma TVs. Having said that we are not going to ignore other segments and expect good sales of CTVs and refrigerators in the rural market.” Samsung Electronics clocked a turnover of Rs 150 crore in MP and Chhattisgarh last fiscal and has projected a 60 per cent growth for the current fiscal.

Chandorkar doesn’t believe that gifts alone influence the consumer’s choice. “It is a combination of both. Customers go for the product in the higher range without bothering about the gift, but the gifts may influence the choice of low-priced products.”

Huge marketing budgets notwithstanding, not all consumer durables register robust growth in the festive season. Says Lotus director Gaurav Pahwa, “in the urban market, consumer durables like cell phones are unlikely to see a jump in volumes, but novel products like LCD TVs are expected to record brisk sales.” 

He said there was greater incentive for manufacturers to come up with unique promotional offers as both Eid and Diwali fall around the same time this year.

Marketing gurus, though, fear a drop in margins if the sales don’t pick up despite the promotional spends, a possibility that Santosh of LG dismisses out of hand. “Past figures show that the marketing spend is justified. We are talking about two to three-fold jump in the sales here.”

Also in the fray are popular brands like BPL, Videocon and Onida. No matter how the consumer durable companies fare in this   festive season, there is little doubt that the consumers will have a lot more to choose from   and emerge as the ultimate winner of this promotional warfare.

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