Blanket discounts and lowering prices are not strategies Samsonite believes in following, says EP Suresh Menon, CEO, Samsonite South Asia Pvt Ltd. He talks about how Samsonite has upgraded the luggage category and is penetrating smaller markets
BY SALONI DUTTA
Q] What were the insights behind the recent campaign for High Sierra?
High Sierra, a brand we acquired in 2013, and launched in India in 2014, is a leading backpack outdoor gear brand in the US. Initially, we did a lot of activity on Digital aimed at the new generation, with the aim to create a digital brand. What we found is that while it is interesting to engage on Digital, for new brands in India, you still have to communicate offline as well. That’s how we decided to do a campaign on TV and in-cinema. Last year, 4% of our turnover came from High Sierra. We will invest in another campaign for High Sierra in mid-June this year. It’s high priority because the backpack market in India is huge and growing. Footwear is another category we are developing in High Sierra as we see it becoming a lifestyle brand and not just a backpack brand.
Q] How has the brand journey of Samsonite been in India?
Every activity we do to connect with the consumer is marketing for us. When Samsonite entered India in 1999, a market leader was our competition, and we didn’t have the budget to advertise heavily at the time. We also realized that an environment for selling well-priced luggage did not exist so we started with a retail programme. For the first five years, our retail brand stores were our only communication and acted as a medium to communicate with the consumer, giving an experience to the consumer to come and discover the brand and product at the store. This helped us immensely. When we started off, the price points in the market were between Rs 2,000 and 3,000. In a couple of years, we started selling products between Rs 10,000 and Rs 15,000. Today we sell products priced between Rs 25,000 and 30,000. Hence we upgraded the market, and that is the key to our success. Our continued strategy is how can we create a market and upgrade the consumer.
Q] What is the brand’s USP?
Samsonite, as a brand, is focused. We are specifically talking to consumers in our price segment that is business and family travellers. Even the communication and media we pick is focused. We don’t want to reduce prices or give discounts to enlarge our market size. Uniqueness is important to our customers and we respect that.
Q] How does your media mix differ for the various Samsonite brands?
For Samsonite, we primarily use OOH at airports, along with PR and Print specific to travel and business magazines. For American Tourister, we primarily use TV because it is a more mass product. We also use in-cinema and OOH. For the campaign we did in March last year, we took OOH space in C and D class towns where the impact of OOH is much more and the entire town can be covered with two or three hoardings. For High Sierra, we began with Digital and continue to do so. We also used TV and in-cinema. We have a policy that we won’t advertise American Tourister at the airport because it is reserved for Samsonite, and similarly for the other brands.
Q] What is the market-share of the various Samsonite brands?
Competing with the market is not our outlook, we believe in upgrading and creating a market for ourselves. The price bracket in which Samsonite operates, we have a market-share of more than 90%. American Tourister’s key competitors are VIP, Skybags and Delsey. According to our strategy, there we have over 50% market-share. We are not present in the under Rs 3,500 price bracket, which is where competing brands are extremely strong. It’s a big market but we are clear about not entering it unless we can offer the right product to the consumer at that price.
Q] How does Samsonite approach smaller markets?
There has been an explosion of hypermarkets in small towns. This is useful for us as hypermarkets are one of the lowest cost distribution channels. They keep a profit margin of 10-15%, which is 45% in a retail store and 40% in a departmental store. Therefore, the product reaches the consumer at a much lower price point, helping us penetrate the smaller markets. We also use the channel of canteen and military stores as the cost of distribution is 6-8%. We also started our distribution to smaller markets through small stores two years back.
Q] How do you plan to increase Samsonite’s retail presence?
We have about 280 retail stores currently and will add another 40-60 in smaller towns in the coming year. So far, most of the stores are for Samsonite, but now we are expanding American Tourister stores in B and C class towns. We pick towns based on their market potential, population, profile and look at what competing brands are doing. We also look at brands such as Bata and Titan Watches and how they are faring.
Q] How do you plan to market Hartmann?
Hartmann is a brand which is 175 years old, and one we acquired last year. It’s not our priority for the Indian market at the moment as the luxury market here for any category is miniscule. However, we are seeding the brand and within 5-7 years, the market will probably grow. We have opened a store in UB City, Bengaluru and plan to open stores in Mumbai and Delhi soon. These stores themselves will be a connecting point with consumers. We will also participate in luxury exhibitions.
Q] How do you plan to leverage e-commerce?
Last year, 4.5% of turnover came from e-commerce including luggage. The industry is still in its nascent stage in India and the infrastructure is a problem, with not enough delivery systems available. One doesn’t know which direction the industry will go, because right now nobody is making money in e-commerce. They are spending money and discounting brands, which is the model being followed currently. We are clear about engaging with e-commerce in a purposeful manner. There might be promotions but our brands are not discounted on e-commerce sites.
Q] What are your marketing plans for 2015?
We have specific vehicles for each brand and plan to spend Rs 60 crore this year. We will have a campaign for Samsonite at airports in the second half and through the year we will target magazines. For American Tourister, we will have one campaign in March and another around September-October. High Sierra is completing one campaign and we’ll have another in June-July. We also have Lippo, a colourful and feminine luggage brand, which we haven’t launched in India. We may launch it this year or next year.
ABOUT THE BRAND
Samsonite, created in 1910 by entrepreneurial Colorado native Jesse Shwayder, is one of the world’s leading luggage brands. Showing commitment to innovation, the unique hard side collections made with Curv material and the soft side ranges created with Advanced Hybrid Technology join a wide spectrum of business, casual and personal accessory products in upholding Samsonite’s position as a market leader and trend-setter. Samsonite is pursuing several strategic initiatives designed to capitalize on the underlying business strengths, grow and diversify the revenue stream, improve profitability and enhance the resiliency of the business.
FACTS
Creative Agency: Project-based; High Sierra: Cheil, Korea
Media Agency: Initiative
Digital Agency: Samsonite: Trinetra Focus Digital; High Sierra & American Tourister: Eccentric Engine
PR Agency: Perfect Relations
MARKETING TIP
Spend time at retail outlets to understand what the consumer wants.
CMO FILE
EP Suresh Menon joined as CEO in January 2012 to head the India and Middle East operations for Samsonite South Asia Pvt Ltd. Menon has over 30 years of experience in general management, strategy, marketing and sales with esteemed brands. Earlier, he joined Samsonite as Director – Sales & Marketing in 1999 and rose to the position of VP – Sales & Marketing in his tenure of seven years. He joined Carlton Travel Goods Ltd, UK as CEO & President – International Business, VIP Industries Ltd in 2006. In 2010, Menon moved to TARZ Distribution India Pvt Ltd as CEO and engaged in the distribution and retail of luxury brands such as Dior, Givenchy, Davidoff and Calvin Klein in India, before joining Samsonite again.
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