'SPRING'-ING TO THE TOP
K Madhavan, Managing Director of Peps Industries took over a sick manufacturing plant in 2006 and turned it around. “The Mattress Man of India”, as he is called, is confident of more than doubling his revenues and crossing
the Rs 1,000 crore mark in two years
At the age of 55, most professionals, start planning on life post retirement. However, going against the tide, K Madhavan started his entrepreneurial journey at 55 when he took over Peps in 2006, after spending over 30 years “living, breathing, thinking mattresses.” Madhavan says that the industry was dominated by a tiny group of highly consolidated wholesalers with one or two major players around. “From the consumer’s end, I realized that good sleep is important to fuel and replenish and that is possible only if you have quality products available as an end consumer. To make that happen at a scale that I envisioned, I needed to take the Entrepreneurial path,” he says.
Today, a little over a decade later, the Managing Director of Peps Industries, Madhavan says, “Over a period of 12 years we have established ourselves as the India’s top-selling spring mattress brand with a CAGR growth rate of around 33%. In the year we started our operations, the company turnover was Rs 4 crore and today in 2018, Peps has a turnover of over Rs 300 crores.”
A Disruptive Start
Remembering how the journey started Madhavan says, “We cashed in on a golden opportunity and took over a sick manufacturing unit that was for sale and converted it into a profitable unit.” In a disruptive move, Peps then associated with Restonic USA - the fourth largest spring mattress brand in the world – and brought in spring mattress as a product category to the end consumer. This at a time when the Indian market was dominated by Coir & Foam mattresses and spring mattresses had a market share of less than 2% of the total mattress market.
In fact, in 2012, Peps signed a 25-year licensing agreement with Restonic.
Building Brand Peps
When Peps started, the industry norm then was to talk about the product and its benefit. However, the challenge for the new entrant to the industry was that it had a product – spring mattress, that customers were unaware of. A major challenge was educating the customer about spring mattresses when the traditional mindset for Indians was that only a firm mattress is good for sleep and Madhavan says he had to use a similar language as other brands, with the focus being on good sleep. However, soon other brands started emulating the messaging. Madhavan says, “It wasn’t long before the market caught up with us. And every player started talking about the need for great sleep. We lost the plot with our customer then. For the customer didn’t know who started talking about great sleep first. Was it Peps or
some other brand? We weren’t making a difference to him; were fast losing out on our emotional connection and our product laden communication for great sleep was mirrored across several brand communications.”
This had the company going back to the drawing board and reflecting on how to connect with the consumer. “We ideated on what happens when you get a good night’s sleep? You wake up refreshed. That insight became our focus of key communication. We utilized marketing tools to communicate and connect with this emotion. Of waking up refreshed. We found that given today’s lifestyle, an average adult sleeps less than seven hours a night. We felt the need to create awareness about sleep hygiene that led to the creation of the Peps campaign: ‘live the #pepslife”. Peps positioning now was focusing on the aftereffects of a good night’s sleep, i.e. waking up energized. He says, “At a time when other brand campaigns spoke about sleeping well, our focus was to highlight the importance of waking up fresh. ‘Disruptive innovation’ has been at the core of the brand and the organizational DNA.”
Madhavan also notes that the consumer has changed in the last three decades, from a disinterested to mildly interested, today’s consumer has evolved to be an informed buyer. What must also be kept in mind is the shelf life of the product - with some people changing their mattress once in 10 years, and the low priority given to the mattress, by consumers, when compared to other consumer durables and household products. He also points out that consumers are willing to compromise easily on the mattress quality if it doesn’t fit into their budget.
At Peps, the focus is on creating meaningful relationships and connecting on an emotional level with the consumers, employees and distributor networks. Madhavan says, “The sense of belonging and connect has to be inclusive. This has to reflect in the core identity and values of the brand. You have to continuously be on top of every strategy and tactic that resonates these values.” He also candidly shares an example of how the brand recently dropped the ball in staying connected with the customer. “Our radio advertisement ran past the Diwali period with the tagline of ‘This
Diwali Season’. We should know as a brand that while we timed our ATL in line with the festive season and connected with the joyful emotion of the customer, by continuing to play the advert post-Diwali, we didn’t keep pace with the changing emotions of the consumer. The consumer has moved on from the joyful emotion to that of other. While our communication stood still at the previous emotional pit-stop defying the brand focus when talking to the user base,” he says.
Though mattresses as a product is a low involvement category, Peps’ vision is to move out of the bedroom as a mattress brand and move into homes and living spaces. To build a brand connect, Peps aims to reach its audience across all platforms, as and when they are ready to listen, be it during their daily commute to work or in between commercials when watching a movie, Social Media platform such as Facebook, Instagram and also hoardings, articles, write-ups etc. Speaking of Digital, Peps and Flipkart recently entered into a partnership which gave the e-commerce company exclusive rights to sell Peps Industries’ products and its two allied brands Hypnos and Cirrus. With this, the company looks to conquer the online segment as well.
The Dreammakers
Peps Industries recently announced its new brand positioning - ‘DreamMakers’ and in line with its core brand philosophy to help Indians sleep better and as a part of a strategic brand repositioning exercise, the company released its latest #DreamMakers series. The campaign highlights Peps’ proposition of a good night’s sleep as vital to chasing dreams. K. Madhavan, Managing Director, Peps Industries says, “Peps has led by example concerning disruptive innovation in the mattress category. With the new brand narrative, we seek to bring a fresh perspective in the spring mattress category via product innovations that will shift focus from great sleep to waking up refreshed with a purpose. Thereby, harnessing one’s ability to perform at their peak to chase and achieve
their goals.”
Speaking on the insight behind the campaign he says, “The millennials have goals and ambition that drive them to dream of bigger things and with no fear whatsoever to chase their dreams. This resulted in our current brand positioning of being a #Dream Maker. We aspire to be that brand which gives wings to a consumer’s dreams as he
wakes up from a refreshed sleep. Via our incremental product innovation and a 360-degree communication approach, we intend to take on the mandate of being DreamMakers as a brand platform. And connect in a way that allows the brand to go beyond the product and connect with the consumer’s emotions by speaking to his
hopes, dreams, aspirations and anxieties."
Seamless Communication
Peps is also in the process of streamlining its communication, and making it seamless, across platforms to ensure that the user engagement is simple and clutter free. The coming year at Peps will see the firm integrate seamless messaging across all platforms of communication – right from the voice IVR to design, style, packaging, point of sale-online and offline-will all have same consistent messaging.
On a final note, Madhavan says that today Peps is present not just in India but also in Sri Lanka, Bangladesh and Nepal as well. He adds, “We have grown in size today with our current channel strength of 4000-member dealer network spread across India, with 140 company-owned and franchise based “Great Sleep Stores” - a concept of creating a bedroom ambience to focus on the personalized buying of a mattress after experiencing its feel. Our
distributor network is around 187, poised to increase the channel width dramatically in the coming fiscal. We diversified our product portfolio to Affordable Luxury, International Luxury and Ultra Luxury. This ensures that
all the consumers have access to a quality sleep and wake up refreshed.”
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