NEW DELHI: At a time when companies are cutting marketing spends, Tata brand Voltas
is stepping up its marketing expenditure. From the earlier 2-3 per cent of sales
turnover, it is now earmarking 4 per cent towards marketing.
Its share of voice (a measure of a firm's relative marketing and advertising reach) in the AC segment alone stands at 20 per cent, while its share of marketing expenditure in the pool of AC players is just 10 per cent.
“Our share of expenditure is less than our share of voice which shows that we are now into smart marketing. Earlier we were lying low on below-the-line activities and social media. We are catching up now,” says Mr Pradeep Bakshi, COO, Voltas Unitary Products Business Group (UPBG).
In the last one year, Voltas has shored up its performance in ACs. “With 22 per cent market share, today Voltas is the largest selling AC brand in India, uprooting Korean firms such as LG and Samsung,” Mr Bakshi claims.
While the industry contracted by over 20 per cent, Voltas' performance, he says, was almost flat, with a negligible one per cent dip. The firm's total capital expenditure for the year stands at Rs 80 crore, which will provide for marketing, research and development. Voltas spends 2 per cent of its sales revenue in research.
“We are currently building a Research and Development facility in Pantnagar (Uttarakhand) primarily for air conditioners. For this we have already bought two laboratories in the area,” he said. The company is also adding another manufacturing line at their Pantnagar plant.
An extensive market mapping and dealer network expansion over the last five years, along with the introduction of a new advanced product range, seems to have worked for the brand. It is increasing its focus on energy-efficient air conditioners, with its marketing communication following suit. According to Mr Bakshi, almost 25 per cent of Voltas' business comes from its 5-star rated ACs, while the industry average sale of 5-star rated products is just 15 per cent.