March 06, 2003 | Financial Express

Voltas cuts air conditioner prices, chalks out fresh thrust

After the annuncement of the Union Budget, Voltas Ltds Cooling Appliances Division(CAD) has slashed the prices of its room, split and window air conditioners (ACs) range from Rs 600 to Rs 1,200 falling under the capacity bracket beween Rs 16,500 for 0.5 tonne to Rs 24,000 for 2 tonne, informs Mr Kawaljit Jawa, vice president (marketing and services), cooling appliances business division, Voltas Ltd.

The company is also planning to manufacture and market a new range of ACs (cassette-type, ductable and slimline) targeted at small offices and resturants-for the first time.

According to Mr Jawa, with the move, the company hopes to market 500 tonnes of cassette type ACs, 15,000 tonnes of ductable ACs and 20 per cent of 90,000 tonnes of slimline ACs, within a year. "For the purpose, we are planning to invest Rs 15 crore in the first six months of our operations," he adds.

As part of its retailing strategy, the company had entered into retail segment last year." And this year, we plan to focus on this segment with a survey called Micro Management of Territories(MMT). It is actually a a survey done by our marketing agency Euro RSCG. The survey reveals that to promote our entire range of ACs, we need to penetrate the top 16 cities. Because, these 16 cities currently contributes 85 per cent to the total AC market," he adds.

According to Mr Jawa, the company is now planning to increase the number of its retailers from 409 to 751 and dealers from 269 to 307, within a year.

Apart from retailing, the company is also planning to strengthen its brand positioning this year. As part of the strategy, the company is planning to extend its one-year co-branding strategic tie-up with Citibank, HSBC and Westside showrooms to two-years, informs Mr Jawa. "In addition, we are also planning to enter into a massive co-operative strategic tie-up with dealers who as retailers will get compensation from us for advertisements, sales of our AC range on a 50:50 basis. This strategy will be restricted to exclusive sales and service dealers," he adds.

As part of its exports plans, the company is planning to sell around 10,000 tonnes of rooms, windows and split ACs to Middle-East countries such as Qatar, Saudi Arabia, Muscat, Dubai and Nepal, according to Mr Jawa. In addition, the company is now planning to export its ACs range to Bangaldesh, this year.

Explains Mr Jawa: "With the move, we hope the new initiatives to contribute an additional 15 per cent to our overall sales turnover. Besides, with the announcement of this years Union Budget, there is going to be a net effect on the branded AC segment, wherein a migration from small scale industries (which currently contributes 20 per cent to the total AC size) to branded AC segment is likely to happen 90 times more."