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Tag: products

  • In LG management reshuffle, Sanjay Chitkara is new chief marketing officer while Sanjeev Agarwal is sales boss

    Chitkara is new LG CMO, Agarwal sales head

    By Writankar Mukherjee

     

    LG Electronics India, the country’s largest electronics company, has replaced its heads of marketing and sales as part of a top-level reshuffle seen as a reaction to its failure to keep pace with revenue target.

     

    LK Gupta, chief marketing officer, has put in his papers after leading the role for five years and will be replaced by Sanjay Chitkara, who was earlier heading sales administration. Amitabh Tiwari, who was heading sales, will switch roles with Sanjeev Agarwal, who was the head of business excellence.

     

    They will report directly to company MD Soon Kwon, a senior company executive said.

     

    “Probably, the headquarters felt a big change was required since LG India is falling short of its revenue target,” the person said, requesting anonymity. “While changes in top management is an annual affair undertaken every December, but never before have there been such sweeping changes like now.”

     

    A detailed questionnaire sent to LG India’s corporate communications team on Wednesday to confirm the management changes and its business plans remained unanswered.

     

    The company has also made some changes in its product group heads and split the role of the head for refrigerators.

     

    Manish Gupta, the product group head for televisions, will now head microwave oven. Vijay Babu, who was heading microwave ovens, will look after frost-free refrigerators while Praveen Gosain-presently regional manager for East zone two that includes markets like Orissa, Jharkhand and Bihar-will head direct-cool refrigerators. Vishal Karan, who was the regional manager for Bengaluru, has been made the chief of modern trade. All the changes will be effective from January.

     

    While LG India is yet to give any indications about its sales this year, trade sources expect the company to fall short of its revenue target of 20,000 crore for the current fiscal. Last year, it grew marginally to 16,200 crore from 16,000 crore in 2010, falling short of a target of 20,000 crore.

     

    Trade sources say during Diwali, LG sales grew by 10% against a target of 15%-20% growth.

     

    LG has been trying to reposition itself as a premium brand. However, industry insiders say it has made limited success in this regard and Indian consumers regard Sony and Samsung more premium brands. The only major exception is the 3D TV segment where LG has emerged the market leader with 37% share, as per GfK-Nielsen retail audit for January-October 2012.

     

    India is identified as one of LG’s key growth markets and the company had earlier expected its Indian operations would outgrow the parent company by 2015.

     

    Source:The Economic Times

    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

  • Tata group company Titan Industries is finalising a plan for an edutainment vertical to tap the country's 330 mn population under 15 years of age

    Tatas eye big foray into edutainment

    By Anshul Dhamija & Reeba Zachariah

     

    India’s oldest industrial house, the Tata Group, is sketching big plans for children’s edutainment market, a move signalling the tea-to-telecom conglomerate’s interest to tap business opportunities around the country’s 330 million population aged below 15 years.

     

    Bengaluru-based Titan Industries, a Tata Group company, is expected to finalize business plan for edutainment vertical, positioned as ‘after school education through gadgets and technology’, within a month, people familiar with the development said. This will be among the biggest growth drivers for watch and jewellery-maker, which is the fifth largest Tata firm by market valuation.

     

    The company’s new business division wants to develop a network of about 160 edutainment stores, expected to rake in more than $1 billion revenue by the end of the current decade. Titan scanned several business models targeted at the children’s market, including toy retailing, before narrowing its focus to edutainment stores.

     

    Titan’s edutainment business strategy will combine content with 3D and simulation technology with themes like ‘journey across time’, which sits well with the company’s watch business too. The company has prepared an extensive case study, with inputs from design architects, to be presented to the board of directors later this month.

     

    The edutainment business will be deemed to be formal only after the board approves it. A questionnaire to Titan Industries spokesperson remained unanswered at the time of going to press.

     

    Titan reported Rs 8,840 crore ($1.63 billion) revenue last fiscal powered by the watches and jewellery divisions. The company has explored plans to boost its top line revenue to $10 billion by 2020. The company, in which the Tatas hold more than 25% stake, closed the Friday trading on BSE almost flat at Rs 307.

     

    Tata Group companies with surplus cash on their books have been asked to draw up plans of how they would utilize their cash surpluses in adding value to shareholders. Titan had surplus cash of nearly Rs 800 crore at the end of last fiscal. The flagship edutainment stores will be more than 80,000 sq ft, located in the suburbs of the big metros, attracting investments of Rs 100 crore each. The stores in smaller cities will vary between 8,000 to 10,000 sq ft.

     

    Titan will start work on rolling out the initial stores in two southern metros, once the board approves the business plan.

     

    The $100-billion Tata Group’s interest in edutainment tracks the growing investments in this space. Last month, Bollywood star Shah Rukh Khan acquired 26% stake in the India franchise of Mexican edutainment brand KidZania, scheduled to open first store in a Mumbai suburb March next year.

     

    Source:The Economic Times

    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

  • While the sales growth in the previous fiscal was mainly driven by price hikes, volume growth will be critical in the current year to sustain growth

    Strong branding, high ad spends key to growth of consumer goods cos

    By Jwalit Vyas

     

    Consumer goods companies which have consistently invested in their brands in the past few years are likely to outperform their peers who curtailed their advertisement expenditure in a high inflationary environment.

     

    During the last fiscal, companies such as HUL, Dabur, Marico, Nestle and Jyothy Laboratories had significantly cut down their advertisement expenditure to protect their margins as high raw material prices were hurting. For instance, HUL brought down its advertisement to sales ratio in FY12 by 250 bps to 11.5 per cent, the lowest in the last three years. Similarly, Dabur India’s domestic advertisement to sales ratio was at 10.6 per cent, its lowest in the last four years. Jyothy Laboratories’ advertisement to sales ratio was only 6.5 per cent.

     

    Compared to this, companies such as GSK Consumer Healthcare and Colgate have a higher advertisement to sales ratio and have been consistent in their brand investments. While GSK Consumer Healthcare’s advertisement to sales ratio has been consistently over 15 per cent for the last few years, it has been around 13 per cent for Colgate. This will allow these companies to sustain their sales growth and enjoy higher pricing power. Also, these companies will have flexibility with their spending in the coming quarters.

     

    Strong branding also allows these companies to have a better pricing power and, hence, higher profit margins. The PBIDT (profit before interest, depreciation and tax) margins of GSK Consumer and Colgate are the highest among the lot. In FY12, PBIDT margins of GSK and Colgate were above 22 per cent and 24 per cent, respectively, while that of others were below 20 per cent. HUL, Dabur India and Marico’s PBIDT margins were 16 per cent, 17 per cent and 12 per cent, respectively.

     

    Interestingly, in the June 2012 quarter, companies which lagged behind have also started to increase their advertisement spends. Dabur, HUL, Marico and Jyothy Laboratories increased their advertisement spend by 51 per cent, 30 per cent, 60 per cent and 77 per cent, respectively. This is likely to continue in the coming quarters as advertisement spend is the key driver for sustainable growth.

     

    While the sales growth in the previous fiscal was mainly driven by price hikes, volume growth will be critical in the current year to sustain growth. As gross margins are likely to improve for all the consumer products companies due to stabilising raw material prices, the rise in advertisement spend will offset this and restrict the improvement in profitability. However, GSK Consumer and Colgate will have no such constraints. Also strong marketing activities in the earlier quarters will ensure strong volume growth for these companies.

     

    Source:The Economic Times

    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved