Baron International Ltd is positioning the Aiwa brand as one that offers high technology and quality, against the positioning of the Akai brand which gives value for money.
Aiwa is also being positioned as a brand that offers not only the hardware, but also `software' solutions.
"We are going one step ahead with Aiwa by positioning it as brand that also offers entertainment solutions. Besides, Aiwa is definitely a high-technology brand and the positioning will be geared towards that," says Baron Electronics chief executive officer Kabir Mulchandani, who shoulders the unique responsibility of simultaneously marketing and promoting the products of two different companies, Akai and Aiwa, in the Indian television and audio products market.
It is with a view to promoting Aiwa as an `entertainment software' brand that Baron's marketing scheme for the brand clubs hardware with software, such as pre-recorded audio and video compact discs and cassettes.
"We are also looking at going into CD manufacturing ourselves. Growth in the software market is bound to spur growth in the hardware market," says Mulchandani. As against the low prices offered by the marketing schemes of Akai, the prices of Aiwa products will rise steadily once the initial offer is out.
According to Mulchandani, an average price increase of Rs 1,000 could be expected across the Aiwa range when Baron comes out with the next offer. However, clubbed with software, the products would be affordable, he says.
Although marketed by the same outfit, Akai and Aiwa will very much be rivals in the market place.
"Aiwa and Akai are competitors in markets around the world and they will be competitors in India," says Mulchandani, adding that he cannot rule out Aiwa eating into the market share of Akai or vice versa.
Two entirely different marketing teams will be working on the marketing and promotion of the two brands. The commonality will end at the stage of devising marketing packages, which will be handled for both by Mulchandani.
Significantly, Aiwa has given Baron a free hand in formulating the marketing strategies for its products.
Baron, which has made a name for itself in the marketing world by shaking up the television industry with its innovative marketing packages to corner nearly 18 per cent of the market for the Akai brand, has just bagged a five-year contract to market the Aiwa range of televisions and video products in India.
Mulchandani is targeting as much as 60 per cent of the audio market for Aiwa to make it number one in India in the first year of operations itself. The target for Aiwa televisions is 15 per cent.
The targeted market share is more ambitious for audio products because Mulchandani senses much more opportunities in the home audio (hi-fi) market in the country.
Baron is counting on an expansion of the audio market from the current 1,80,000 units to 4,00,000 units annually by the end of 1999 and the expansion of the television market to 3.5 million by the end of March 1999.
"The objective is to expand the market, not take somebody's piece of cake, although some of that is bound to happen if our brands grow faster than the market," says Mulchandani.
Aiwa's senior managing director (international sales & marketing group logistics division) says the company has no plans to take any equity in Baron.
"We were looking for a good partner in India and there is no need for equity investment," he says.
Mulchandani says Baron will pay a technical fee to Aiwa with growing localisation. Some parts of the Aiwa products, including the picture tube for its televisions, have already been localised.
