Onida Market Share Vs Profit

It all began with just a vision. In the year of 1981, Mr. GL Mirchandani and Mr. Vijay
Mansukhani started a company called Onida with just a goal of manufacturing television
sets and going beyond convention. By the end of that year, we started assembling
television sets at our factory in Andheri, Mumbai. With the passage of time, superior
products and the combination of a distinctive voice, a cutting-edge advertising strategy,
and purposeful marketing ensured that Onida became a household name.

What really sets Onida distinct from others is that we have always tried to pave our own
road and create a niche by understanding what exactly does the consumer need. What is it
that others are not offering?

Is there an inherent consumer need that is not being met by the current products in the
market? Is there anything we can significantly add, upon entering the category? Is there
something that the other product players have overlooked, which we can address? Only
when do we have an affirmative answer on any of the above, do we work on the
offerings. Thus, when we say, our products are different; we are so because we cater to
something that others do not.
MILESTONES
• 1981: Mirc Electronics Pvt. Ltd. was established.
• 1983: Technical collaboration with JVC for CTV
• 1986: Established an in-house R&D facility
• 1988: Speaker plant commences operations-Iwai
• 1990: Tuner plant commences operations
• 1991: PCB plant commences operations
• New manufacturing plant at Vasai commences operations
 • 1992: Crossed 1 million CTV sales
• 1994: Plant at Wada commences operations
• 1995: ISO 9001 certification
• 1998: Award for excellence in electronics
• 1999: First to develop Internet enabled CTV in India
• 2001: AV Max award for best Aesthetics
• Commenced project to expand CTV capacity to 1.2 million sets
• 2002: Launched „KY Theatre‟ - the 1st complete Home-Theatre package.
• Launch of rural brand IGO.
• 2003:Operations started in Russia.
• 2004: MIRC product is being sold in every 27 seconds! Launch of Onida AC
• 2005: 100000 TV‟s have been shipped to Russia in super quick time.
• 2005: Launched LCD T.V‟s
• 2006: Mirc Electronics has been ranked 2nd as per total income in Consumer
Durables/ Domestic Appliances sector in Dun and Bradstreet‟s India‟s Top
500 companies 2006.
• 2007: Certificate of Merit awarded to MIRC for “Excellence in Quality” by
Elcine Dun & Bradstreet
• 2008: MIRC Electronics enters the field of Mobile handsets under the
flagship brand “Onida”
• 2009: Launch of commercial AC segment through VRF, ductables &
commercial air conditioning solutions &launch of Induction cooker under
the rural brand IGO.

Financial Resources
1800 1650 1655
1517 1568
1600
1343
1400 1192
1200 982 1009
1000 770
Rs in Crores
800
600
400
200
0
1
Year

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

2008-09 2009-10
2004 - Onida launched the airconditioner in the Indian Market
Following were the basic assumption for entering in this business

Indian Consumers :

India has the YOUNGEST POPULATION GLOBALLY

Indian Consumer – Outlook

India has a total of 208 mn Households ,Of these 6 mn are “ Affluent “ and 75 mn are “
Well Off “ - Consumer Electronics target the Affluent , Well Off and Climbers
 Indian consumers do not follow the consumption patterns seen in other Asian
countries.
 As Indians have grown richer, they have begun to spend more on vehicles,
phones consumer goods and eating out in restaurants
 According to recent research on consumption patterns they have tended to greatly
increase their spending on clothes, personal care and household goods.
Based on the few stated macro assumption following steps were adopted to
introduce the category in the India market.

1) Superior products supported by Strong manufacturing & Research capabilities

backed with International collaborations

2) To establish & build dedicated channel for handling this product category.

3) To understand the consumer preferences based on their usage pattern.

a) With the soaring summer heat, we saw a need for an AC with powerful
cooling.

b) And in addition due to the raising electricity consumption, the need for
energy efficiency as well. Hence, the thought of an ultra slim powerful
 AC with unique APM cooling technology that cools even at 48 degrees
and is the most energy efficient in the country which constantly keeps
your electricity bills in check

Onida‟s performance in last 5 years

350000

300000 10%

250000

200000 8%
4%
150000 300000
2%
100000 200000
165000
1% 125000
50000
60000
25000
02005 2006 2007 2008 2009 2010
1 2 3 4 5 6

Year Volume Market Share

Current Status of Brand Onida is No.4 in India split air-conditioner market.

 The Number 1 in this category is LG , followed by Samsung & Voltas.

Current Trends in the industry.

1) AC is seen as a necessity & comes higher-up in the consume priority list.
2) Market growing at 25% CAGR per annum.
a) Current market size is approx 3.0 Million units
b) Current category penetration is less than2 %
3) Shift from window to split.
4) Channel structure has changed from a service dealer to a retail dealer.
5) Channel expectation has gone up in terms of earning potential.
6) Customer acquisitions & customer retention is high cost activity.
7) Customer expectation has gone up in terms of product & service.
 8) Since the entry barrier is very low Competition have become intense due to
entrance of many new players.
9) Price erosion of 10~12% year on year.
10) Commodity prices have gone up by 5~7%.
11) Drop in profitability by 15~20%
12) Major Multi national companies are investing heavily in this category in terms of
product offering, marketing & retailing.
13) New technologies are being introduced by companies like LG , Samsung ,
Panasonic , Daiken , Hitachi , carrier.

Set of constrains for Onida.

1) Does not own the technology.
2) Not in a position to offer complete solution.
3) Back end support for handling large project.
4) Limited visibility & reach.
5) Limited resources.

Problem Statement

Given the opportunity & the current trends, what approach should Onida adopt &
why?
1) To go for aggressive marketing campaign & make it big .
2) To offer good products & make excellent margin with limited quantity.
3) To maintain existing market share & build profitability.
4) To increase market share & become No.1 by lowering the profitability .
 Deliverables

1) First Round ( 10th -16th December, 2011) – A synopsis of 1000 words in doc/pdf
format, providing answer to the above mentioned problem statement.

Judging Criteria:-
Analytical Rigor, Solution’s Creativeness, Justification- Both in terms of
implementation & the cost involved with it.

2) Second Round ( In Campus on 24th December, 2011) – Deliverables & Judgment

criteria’s will be communicated to the 6 finalists.

Important Information:
 Solution format: Font Size – 12, Font Type – Book Antiqua, 1.5 line spacing and
the file should be a Microsoft Word Document/PDF.

 The cut-off date should be kept in mind as late entries will not be considered.

 Contact Persons:
Aman Jain [ 9619208709, amanjain.838@gmail.com ]
Atul Mirje [ 9819848927, starimpact@gmail.com ]
Sankalp Chugh [ 9172135694 , er.sankalp@gmail.com ]

www.simsrasiamarketing.com