After a long wait, Voltas finally regained its No 1 position in domestic AC multi-brand outlets. Pradeep Bakshi, executive vice president and chief operating officer, Unitary Cooling Products Business, talks to tata.com about regaining the coveted spot and explains the strategies that brought about the change
What is the significance of the 18.3 percent market share for Voltas?
This crowning achievement comes after 12 consecutive years of losses, followed by a total turnaround, and then five years of competing against fierce multi-national competition.
Internal tracking revealed that the brand had reached and held the No 1 position for almost a year in primary sales; this restored the team's confidence, and fuelled its resolve to make that final push to the top. Now, we have complete confidence that we can continue to match – and even surpass – global competition.
Our strong performance this summer is reflected in various regional
For how long was Voltas at the No 2 position?
How did Voltas drive its sales up?
Voltas further developed and introduced a wide mix of products with a range of ‘right pricing’ options. Aggressive promotion and an expanded distribution network popularised the range, especially in tier II & III markets.
What are the key marketing moves that led to Voltas' gain in market share?
Meticulous market mapping of AC distribution resulted in extensive nationwide coverage. Our retail footprint has grown significantly in the past 4-5 years, from over 1000 consumer touch points to more than 5800 today.
A strategic shift from traditional sales and service dealers to a more penetrative retail aggregation model based on direct dealers and distributors helped multiply sales by opening up new opportunities.
Voltas pioneered the concept of energy-efficiency in air conditioners, later an industry norm. This paid dividends in terms of sales. The recent introduction of all weather ACs was also a strong demonstration of our product differentiation capabilities and brought in a significantly larger number of customer queries at points of sale.
In terms of brand positioning, Voltas has changed in response to the ever-changing consumer landscape. In the mid 2000s, with the advent of international brands, Voltas pitched itself as ’India-centric’. Advertising and promotional campaigns focused on ‘India ka dil, India ka AC’, to convey pride in being and buying Indian, giving the brand an identity to which the emerging AC market in India could easily relate.
This was followed by a more tangible hook of ’energy efficiency’. The ’Save karo India’ campaign was an instant hit with our target market, highlighting the brand's premium offering of star-rated ACs and low operating costs.
When savings and energy-efficiency became an industry-wide platform in the late 2000s, Voltas introduced the concept of ‘responsible usage’ of ACs as embodied by ‘sensible cooling’.
The recent 2012 summer campaign of an ‘all-weather AC’ was introduced after extensive research revealed that consumers across the country wanted their ACs to do much more than mere cooling. In response, Voltas introduced the unique concept of climate control, combining it with the brand’s established strength of being trustworthy.
The campaign injected novelty into a somewhat predictable category, and Voltas seized not only market share, but also consumer mind-share, with over 90 percent brand recall.
What will it take to widen the gap between Voltas and LG? What are the next moves being planned?
The nuclear family phenomenon is stimulating a housing boom in these towns as well as in tier I cities. With more and more people occupying new housing, the market is bound to grow. Our objective is to build the Voltas brand around this young end-user segment in India's emerging markets, and to be the No 1 brand not just in the market but in the consumer’s mind as well.
The team is geared up to take on the challenge of expanding our clear leadership in north and east India to west and south India also.
To offset rising end-user prices, we consistently promote the economic benefits and low ownership costs of star-rated products. Our 5-star product range has been beefed up in response to consumer demand, giving us the highest market share in that category. Our R&D team has consistently spruced up our product mix with higher star-rated products in the last three years. Value engineering has helped us pass on the cost benefit to consumers.
Our easy finance options help reduce the barriers to the buying decision. We are also keeping our distribution partners optimistic about the category, which has helped us receive maximum response in terms of market share in the retail market. Despite being a single-product company competing against multi-product brands, we will keep consumer interest alive throughout the year with our new ‘all-weather’ concept. We are positive about the ongoing fiscal year, and aim to close the year with sales of one million units.