Having pioneered the built-in-kitchen appliances category in India, Sanjeev Dayal, Head - Sales & Marketing, KAFF Appliances India Pvt. Ltd., is taking aggressive steps to expand this niche category.
What has been your marketing approach since you started operations in India?
We are following all possible routes in terms of marketing to reach out to our audience. We are going with full force on the ATL and BTL fronts. Our television commercial runs on nine top channels at prime time – 8 pm to 11 pm. We cover leading newspapers as well as magazines including in-flight ones. Besides, we participate in top exhibitions focusing on both B2B and B2C.
How much is your total advertising and marketing spend? What is your media mix?
Our total marketing spend this year is about Rs 20 crore. About 50% of this goes for television. Out of the rest, around 80% goes towards newspapers and magazines and the rest for exhibitions and external and internal branding.
With a niche product line, are you focusing on the top end of the market?
We are looking at reaching out to the masses through our communication. We did a survey recently and found that there are a lot of people in the low and middle level of the market, also called the aspirational level, who have at least one KAFF product at home. There is a huge potential if we go all out to the masses, and that is our focus.
Which product line of yours is the fastest running and on which one are you focusing to create a market?
Our electronic chimney segment is the one that sells the most. We are focusing on our entire product range and trying to bring in more premium products. For example, we recently introduced wine chillers, induction cook tops, standing barbeques, built-in refrigerators, etc. We also have modern kitchen accessories at the top end. If we look at the buying pattern of customers, they first buy the chimney and there we have a clear advantage from competition.
You launched in 1996. What were the challenges that you had to face in building your brand?
Yes, it has been 15 years in this business and just like any other brand in India, we too had to face our share of hurdles. The challenges are still there. The first and foremost challenge is to meet the requirements of customers.
This being a niche category, was there awareness amongst customers for modern kitchen equipments and accessories when you began operations?
We had to actually create this market in India. Around 1996, the Indian economy was just opening up. People were not aware about such products and did not have enough exposure to see their benefits in other countries either. When per capita income started going up, people travelled to other countries more often. They now know the benefits of such products. The industry has come into prominence only in the last five years.
What has been your growth rate in the last five years?
Last year, we grew approximately 181%, but the base was very small, enabling this kind of growth. When you are focusing your energy in a non-penetrated market, such growth rates are expected. As the base increases, we may not find similar growth. This year too, we are looking at a growth of around 150%. As the turnover increases, say in a couple of years, we would be talking about 20-30% growth.
How big is this base right now, the market size?
In the category that we are present, which includes kitchen appliances, kitchen accessories, ventilating fans and hardware, the industry size would be around Rs 600- 650 crore and we have about 33% of the market share. New opportunities in the market are immense and in a few years’ time, we may see the industry size go upto Rs 1,500 crore.
What is your view on competition in the category?
I do not see any competition right now. I wish there was fierce competition, because it would keep us on our toes. When I joined the company two years ago, there was fierce competition. But now, when I look back, I do not see anybody. Those players are still present in the market but they have not been aggressive enough to exploit the tremendous potential of this market. As competition increases, the industry size will grow. I am told that Whirlpool and LG are planning to enter this segment. It will be a great advantage for us because when they come, they will create a buzz about the category. That will help us eventually, because when the customer comes to the market, the first choice for them remains KAFF.
Do you plan to start manufacturing your products in India?
We are currently sourcing our products from Germany and Italy, and I think that arrangement is really working well. We have not thought of manufacturing these products in India.
Would it not give you a cost advantage to manufacture products here or is it that sourcing from Germany and Italy helps the brand build that trust among consumers?
Actually, sourcing works out to be an advantage for us. There is a full- fledged facility in these countries with good R&D facility. So we plan our sourcing based on market requirements and get those products developed and bring them here. If we start manufacturing those products here, by the time we come out with the product, the trend might have changed. The gestation period of manufacturing such products here would be pretty long. Also, running a manufacturing unit is a daunting task. The world is becoming flat and to succeed, one should focus on the expertise that they have. There are people who have expertise in manufacturing and are content being OEMs (Original Equipment Manufacturers) while there are some who have expertise in marketing and that is what our strength is. As of now, we are very keen to continue with this system.
What has been your distribution strategy?
We have a two-tier marketing and distribution system, one through the regular distribution network and another through the franchise route. The main reason for our growth has been our distribution network and we are expanding our base every day. Two years ago, we had a network size of about 1,300 dealers whereas now we have around 3,000. Apart from regular dealers and distribution channels, we have a chain of over 112 exclusive KAFF galleries all over India and we are opening around 5-6 new galleries every month. This is the actual reason for our growth. No amount of paper or television advertising will take a brand where we are today. When you advertise, customers want to see your products. For that, you need to have a presence and display of products.
How important is after-sales service in this product category?
It is extremely important. We have a complete service back-up across the country. In most places, we have our own team. However, in a few remote areas where our technicians cannot reach, we have franchise service centres.
You came out with a television commercial last year. How did it help the brand?
Last year, we brought out a brand-centric ad. This time, we are running a product-centric commercial focusing on only four products. In a short commercial, if the products depicted are few, it may end up creating an impression in the minds of consumers. The ads are creating a lot of brand awareness for us and we have seen tremendous response, especially for our high end products.
How are you using digital media to build your brand?
We are present on digital media, but in a limited manner. Currently, we have people in our team for digital and social media. We have taken small steps in that direction, but have a long way to go.
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