Philips eyes 37% jump in sales via Vardaan

Riding on the success of its low-cost 'Vardaan' range of colour televisions (CTV) aimed at the rural markets, consumer electronics maker Philips India is targeting sales of 550,000 CTVs in 2004, a 37 per cent increase over its sales of 400,000 CTVs last year.

"To achieve that we are increasing our adspend to Rs 32 crore this year," said D Shivakumar, vice president (consumer electronics).

The company also launched a range of innovative top-of-the-line LCD TVs, DVD players and the "mirror TV", whose silver coated screen could double up as a mirror.

Philips is currently number six in the CTV market which is led by the Korean companies LG and Samsung.

"We realised that we cannot be the price driven if we are not the cheapest manufacturer. We are market leaders in niche products like plasma and LCD TVs where the margins are higher," said Shivakumar.

But the company is trying to make sure that it retains its foothold in the mass-market products. "CTVs comprise 60 per cent of the consumer electronics market and its a long haul in India. We'll surely look to get into the top three in the next 5-6 years," he said.

"The leadership in CTVs has changed hands six times in the last decade and it will happen again," he added.

He however said that Philips will not be a part of the price-cut game being played out in the in market.

"It is already hurting the industry badly. We claim to make well designed, quality products at affordable prices. At 2 per cent we have the lowest return rate in the industry," he said.

He said in keeping with an aggressive sales growth, the company is planning to enhance its dealer network to 190 from 108 last year and add 2,000 more distributors to its existing network.

Philips has resorted to non-taditional communication activities such as wall-paintings and graffitis in rural markets to promote its 'Vardaan' range.