Samsung invests Rs 250 crore in electronics business this festive season

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Samsung India Electronics added a touch of gold to mark the onset of the festive season by introducing the Rose-Gold 75ES9000 model, in its LED Smart TV range. Priced at Rs 7.5 lakh, Mahesh Krishnan, Vice President-Consumer Electronics, Samsung India confirms that the television is targeting SEC A+. “In fact, this one is looking at an even higher category,” he adds. Samsung has slated to sell 1,000 units of the same model within six to 12 months. Krishnan also optimistically declares that approximately 4.5 lakh units of flat panel televisions are expected to be rolled out during the festive season.

As per figures pronounced by the company, Samsung’s market share in the Flat Panel Television category is 30 percent and the target market share has been set at 35 percent. “The Smart TV series 7 and 8 is the bestselling product for Samsung and it contributes also 15-20 percent as far sales are concerned,” Krishnan adds.

Consumer speak
Indicating a significant shift in consumer trend in the country, Piyush Kunnapallil, Product Head (Flat Panel TV) at Samsung India Electronics, is of the opinion that customers are increasingly inclining towards purchasing the LED televisions, which offer superior picture quality with a small premium. “LED TV, as a percentage of total market was around 15-20 percent and this year it stands at about 40 per cent. So, it is more than double in terms of contribution. Overall, the growth in the market itself, in the LED category, is in excess of 80-90 percent. Therefore, the replacement rate is actually quite high.” Kunnapallil also adds that the promotion of Samsung’s LED range hinges itself on an unadulterated sales pitch, which promises additional and better features by not charging a very high premium.

Mahesh Krishnan, Vice President-Consumer Electronics, Samsung India

Mahesh Krishnan, Vice President-Consumer Electronics, Samsung India

Krishnan also adds that the propensity of the customer, driving an LED purchase is also because of the wish to go beyond watching just broadcast content.

Gearing up for the festive season, Samsung has announced a plethora of offers for its customers. “As part of the festival promotion, the purchase of a 46-inch and above size Samsung Smart LED or Plasma TV models in Series 7 and 8, entitle consumers to a Galaxy Tab 310. LED TV Series 5 will get consumers a free Skype camera and Wi-Fi dongle,” says Krishnan while detailing some of the offers in store. According to Krishnan, consumers demand offers during the festive season and this strategy is fairly juxtaposed to LG Home Appliances, which has steered away from offers and discounts this season to offer only additional warranties. Krishnan, however, says that Samsung’s range of washing machines, refrigerators and microwave ovens are perennially available in the market with a warranty, which stands for a decade. The offers, thus, are added incentives for the festive season.

Samsung India Electronics’ estimated marketing budget for this period are earmarked at approximately Rs 250 crore and a sales revenue of about Rs 3,000 crore is expected from the entire consumer electronics business during these three months. “Our focus is primarily television for the product promotion aspect specifically. However, for building visibility and awareness on offers that can be availed, we use a more localised approach and focus on mediums like radio and in-store interaction,” says Krishnan without divulging figures on the media mix.

Smart selling
How does a brand add visible value to its product range in a multi-brand store where the consumer is left spoilt for choice? Kunapallil explains that for Samsung what works is the placement of their products. “We are placing our LED TVs right next to the regular LCD televisions. So, in an ideal situation, if a customer walks in, he is lured towards the LED simply because it’s much brighter and offers a picture quality, which a notch higher than its LCD counterpart.” Adding to this insight, Krishnan says that at the point of purchase, the product is ultimately sold through interaction, both with executives and the product itself. The effort thus, is also towards improving these conversations and making sure they are consistent and factual.

In a statement on the growth of Samsung’s consumer electronics business, Krishnan also reveals that in 2011, Samsung India scored revenue of approximately Rs 20,000 crore. And, the consumer electronics segment contributed almost Rs 10,000 crore to the total figure.

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