VIP remains a leader ‘Kal Bhi, Aaj Bhi, Kal Bhi’ with Strategic Changes
Established in 1971, VIP Industries Limited is the flagship company of the 200 million dollar DG Piramal Group. Its longstanding familiar Indian brand VIP is the largest luggage brand in Asia and the second largest producer of moulded luggage in the world after Samsonite. The first VIP suitcase was rolled out in 1971, and since then over 60 million pieces of VIP luggage have been sold around the world. In the organized Indian luggage market, VIP leads with a 60% market share, followed by Samsonite at 40%. In the international market Samsonite leads with 20% market share where as VIP follows at 6% with operations spread across 5 continents and in 27 countries. VIP’s product range includes a variety of hard and soft luggage – strolleys, suitcases, duffle bags, overnight travel solutions, executive cases, backpacks, and even school bags. Apart from the mother VIP brand, the company also owns other reputed brands such as Alfa, Footloose, Elanza, Buddy, etc. It also markets under license Delsey products in India. Moreover, it has acquitted the UK-based Carlton brand in a bid to penetrate the European market. VIP’s products reach over 8000 retail outlets across the country and over 1300 outlets across 27 countries globally. Ever since its launch, VIP has been an epic brand synonymous with luggage in India. Its products priced for masses, enjoyed a near monopoly till the mid’90s, and its sentimental, powerful, and long-playing advertising campaign ‘Kal bhi, aaj bhi, kal bhi….’ remained etched in public memory for years to come. However, the scenario started changing with the international leader Samsonite’s entry into the India market in 1997. After a few initial setbacks, Samsonite started cracking the Indian market and posing a challenge for VIP. Along with tha t, a gabble of unorganized players also started confronting VIP at the lower end. This propelled VIP to take stock of the situation and realign its strategies with the changing market situation. VIP discovered that while competition was heating up, the Indian luggage industry had also been growing owing to a number of favorable factors. Most importantly, steady economic growth had led to an increase in people’s disposable incomes, thereby propelling the travel sector, which in turn had boosted the luggage industry. Frequent travel for business was also on the rise with organizations going global. This was also redefining people’s need for luggage. Convenience and variety in luggage based on specific travel occasions had started assuming prime importance. People no longer looked at suitcases as just a means of safeguarding and securing their belongings, but also cared for aesthetics, which increased the importance of soft luggage. Design, style, and attractive colors also guided people’s purchase decisions. Hence, luggage had transformed from being merely a functional product to a fashion or lifestyle statement. And people were no longer using the same suitcase for all travel requirements, but purchase had become more need-based with consumers buying luggage according to a particular type of holiday, trek excursion or business travel. Further, luggage in the premium segment had been growing the most.
which were becoming a major criterion in luggage selection. VIP also started adding more variety. For example. VIP launched a television ad campaign entitled ‘bye-bye’ emphasizing a major shift in its marketing communication strategy. However. the Alfa campaign conveyed both the importance of a better quality luggage as well as the affordable price points of Alfa. In order to be in sync with the times. designs and colors to its traditional category of hard luggage. Samsonite. On the product front. leisurely holiday or business travel. Thus with its extensive product portfolio with over 250 products matching different prices. Following on VIP’s footsteps. Then in 2003. it rehashed its soft luggage portfolio since that was the category driving sales. The campaign. which catered to people who traveled widely and followed a particular lifestyle. maximum promotional attention was showered on to the power brand VIP to position it as an all-encompassing.000 under its Delsey range. In 2002. VIP covered the entire luggage segment and has been constantly innovating keeping in mind travelers’ requirements. young. good quality luggage for price-conscious consumers who otherwise had to make do with low-quality local luggage. In order to address varied traveler segments. VIP designed products for all travel needs. the age-old leader in luggage segment. also launched the American Tourister range for the mid-price segment in the range of Rs. Its mother brand VIP was developed as a slick lifestyle brand that focused on comfort and convenience for long-duration travels. VIP lounges where the brand was available etc. which initially offered only high-end collections. durations. innovative and quality products in a segment that was dominated by cheap. it also launched a collection for women called Aura and a business collection called Matrix in Nov’05. VIP decided to change this perception and reposition itself as a contemporary lifestyle brand. prices. The campaign informed consumers of the contemporized brand’s styles and colors. VIP realized that youngsters perceived VIP as a brand belonging to parents’ and grandparents’ era. it offered ranges like Elanza and also marketed high-priced products costing Rs. short weekend or daily travel.In the wake of these changes. VIP also aggressively promoted its prominent ranges to establish its new image. smart. VIP felt it needed to recreate the magic of its yesteryears with a more encompassing campaign that would reposition itself as a fresh. be it a long haul journey. contemporary lifestyle travel companion. its advertising campaign ‘Looking at me?’ introduced some new lifestyle products as travel companions. At the premium designer end. and exciting brand.000 in 2002. and prices. However. local products. Besides it also allowed the company to play around with styles. Thus. Alfa provided reliable. features. 12. began by airing a montage film that showed people bidding bye-bye to their kith and kin at the start of their journeys – an elderly lady waving to a car making its way out of the
. while Buddy was a school bag brand focusing on providing fun. Footloose focused on the daily or longer duration travel needs of the youth. it reserved the hard luggage segment primarily for exports since VIP and Samsonite were the only two hard luggage brands in the world. In addition. 800 – Rs. In order to reinstate its lifestyle proposition. designed by Lowe. 2.
gate. VIP ran an exclusive ‘Mystery Shopper’ program. By depicting the happiness associated with the start of the journey. Below-the-line activities were only used to complement above-theline communication in supporting new launches. women bidding bye-bye to men and coolies since new VIP bags were light. a doorman at a hotel waving to departing guest. VIP tried to make itself relevant to a new generation of consumers. The company also has forayed into retailing by opening exclusive stores that showcase all its product ranges. etc. rather than the brand featuring only at the far end of the process. since it mostly caters to business travelers whose needs are the same the world over. The ‘bye-bye’ television campaign was supported by an outdoor campaign as well. in order to retain its premium image. albeit in a limited manner. ‘Happy journeys began with VIP. Given VIP’s heritage and iconic status. On the other hand. and being most closely involved with luggage. For example. rather than just the luggage space that it occupied earlier. motivating trade force etc.” Further. LifeStyle and Witco. and through more vibrant. The time of departure was chosen for portrayal in the ads since the agency felt that this was the time that caught a range of emotions – people bidding farewell to their dear ones. It also designed interactive games to convey the superior features of its Alfa brand. to break the news of product launches or new stores. etc. VIP suitcases are made available at convenient retail locations with a self-select approach and appropriate display showcasing the large range of VIP products in an instore ambience set to attract. looking forward to the journey and to returning home. For instance. “To me. in one print ad. a mother bidding goodbye to her children. Media relation activities were also conducted. VIP’s distribution strategy also complements with its varied product range and new positioning strategy with the right products available at relevant outlets throughout the country.’ Other ads in the campaign presented more ‘bye-bye’ situations – people bidding bye-bye to Monday mornings. addressing niche audiences or audiences difficult to reach by mass media. The company hoped that this would increase consumers’ involvement with VIP during their travel planning process. without alienating its traditional base of loyalists. but the company refrained from any sales promotion activities in order to reinforce the new exclusive positioning. Richard Bronson of Virgin Airlines testifies. or the bubbly bye-bye tune and situations. It has opened stores called ‘VIP
. the underlying objective of the new campaign was to get VIP to own the travel space. A peppy ‘bye-bye. your idea and focusing on the essentials. It is about being true to yourself. Samsonite too does not indulge in any sales promotion activities. Its distribution strategy is also selective with the company retailing only out of high-profile stores such as Shoppers’ Stop. smart and youthful imagery such as a contemporary metro train in place of a workmanlike diesel train used in the ‘Kal bhiE’ campaign. goodbye’ track played in the background and the film ended with the tagline. business isn’t about wearing suits or pleasing stockholders. competitor Samsonite’s campaigns are carried out by its global agency and it doesn’t have any India-specific campaigns. VIP also has plans for a series of communications to the ‘bye-bye’ campaign that will portray its contemporary product range and strengthen its new stance as a travel companion. which encouraged the shop salesmen to better demonstrate its product features.
what do you think it is? 2. What strategy of segmenting and targeting the market has VIP followed? What segment(s) is the mother brand targeting? In what alternative ways can luggage market be segmented? 3. How was VIP positioned earlier in the minds of consumers? Why did it decide to reposition its image? Briefly state what steps it took to reposition itself and whether the attempt was successful. Even today. VIP’s distribution in the European market is primarily done for its premium Delsey and Carlton brands. price and distribution changes complement this strategy? How cohesive do you think VIP’s new marketing mix is? 6. How sustainable do you think the differentiation is? 4. one of the highest in the world and has over 65 million customers. Can you identify VIP’s prime source of competitive advantage from this case? If yes. Also. Identify the points of differentiation of the VIP brand from its prime competitor Samsonite. What was the difference between the ‘looking at me?’ and ‘bye-bye’ campaigns? What objectives did they both serve? How did they complement VIP’s productrelated decisions? 7. the VIP brand enjoys 97% unaided brand awareness. The brand’s repositioning efforts have paid off by helping it retain its leadership position.Lounges. 5.500 are also distributed through hypermarkets and malls.
1. 1. Do you think they convey a message similar to the communication message delivered by the brand?
. It also has an on-line store although online sales haven’t really picked up in India. Comment on VIP’s distribution strategy.’ Its ranges with products below Rs. What was the objective of VIP’s new communication strategy? Did the product. What message does it convey? Visit two-three outlets or exclusive stores selling VIP brands.’ which compete with the franchised ‘Samsonite Travel World.
One such communication triggered the dormant desire of finding a life partner for Venkat.Com worked for both of us.com in her conversations with Khan and even comical scenes in which the protagonists viewed some funny profiles on the site and enjoyed a good laugh. He believed that the biggest advantage of online matrimonial sites was their massive database.” said Preethi. religion. and while the final choice may be the children’s. adding. it is the 13th most popular online activity among Indian surfers. and a link to Simplymarry.com. Venkat was exposed to Shaadi.Preethi Meets Venkat Through Shaadi. with the advent of Internet and a change in youngsters’ preferences. “That’s why Shaadi. Owing to a close-knit social structure of India. He zeroed in on Shaadi.Com
“I didn’t want to fall into the traps of a typical Indian arranged marriage. family background. While traditionally the activity of matchmaking was left to the elderly aunts of the family. matching horoscopes. Often parents are seen posting their children’s profiles. Although online dating is ahead of matrimonial searches as the 10th most popular online activity. which offered people a wide choice of matches across both objective and subjective evaluation criteria such as education and career. families and friends still have an important role to play in online matchmaking.23e) on October 28 to promote its portal. etc. especially with 60% of the online population in India being below the age of 25. filtering profiles. While watching the film Metro. etc. tips.com after a little search. The site has a collection of videos of interviews of people expressing their feelings and opinions about their mothers-in-law. location. The movie depicted Konkana Sen Sharma and Irrfan Khan getting older and feeling the need to find a life partner. online alliance search has taken off with a frenzy. rather a catchy microsite. marriage bureaus. personal preferences. Sen Sharma was shown logging on to the website. especially with families breathing down your necks while calling for a decision. Smaller portals such as Simplymarry. and there were mentions of Shaadi. The movie propelled Venkat into online matchmaking.” Preethi and Venkat are among the 48% of Internet users who surf matrimonial sites for alliances. There is also a huge overlap between the two activities suggesting that people who date are also looking for a mate. “And I always wanted to choose my partner myself. parents extensively carry out activities like gathering information. Advertising seems to be harping on factors like wide profile choices. and then turning to Shaadi. text messages.23a-d). With 12 million urban Indians undertaking online matchmaking. relevant matches. Experiences of friends also guide in the decision-making. and newspaper matrimonials.com. for Mom-in-Law Day (Figure 3.com have also adopted viral tactics such as creating a website. Online advertising as well as conventional television and print advertising are popular media choices for most portals. personality. it does not enjoy the high user loyalty and brand premium of matrimonial websites. most importantly because the name had created a distinct impression in his mind
.” concurred Venkat.com for help. I believe it doesn’t give you the required time and opportunity to know and understand your wouldbe partner. and a joint selection process that satisfies the entire family (Figures 3. This is because Indian culture has yet not fully accepted the concept of dating before marriage and people do not register on a dating site for finding a life partner.
com as she was particularly impressed with its strict profile screening system. Could there be any deep-rooted motives behind the apparent one? 3.com as the leader with 987.1% audience mindshare.through the movie. A study by AdMomentux measuring ‘audience mindshare’ for television commercials. Preethi and Venkat had signed up a 6-month premium membership. The television commercial of Shaadi.com’s effectiveness after a month-long free registration.com’s television commercial depicting how a modern boy and girl followed traditional rituals when it came to marriage. was the most effective. One of prospects he mailed was Preethi. Questions: 1.com.com’s website and identify ways in which it may trying to alleviate any possibility of cognitive dissonance. Their choice was much like the rest of the consumers’. Shaadi. the two of them hit it off and decided to marry. appeal. likeability.com? Visit Shaadi. 5. Based on the case. Convinced of Shaadi.com showing the photographs of its various members received 36.com were the two biggest websites in the online matrimonial space. relevance and comprehensibility of the ad. with 43.com and Bharatmatrimony. Preethi had chosen Shaadi. also showed similar results.4% audience mindshare. they posted their success story like many others (Figure 3.com.000 unique visitors in July’07. Yet another study marked Shaadi. Bharatmatrimony. 6.
. She also appreciated the portal’s attention to details through features like password-protected photographs that allowed members to maintain secrecy. Map the five-stage buying decision process for Preethi and Venkat identifying the internal and external influences that could have shaped their decision on choosing Shaadi. What beliefs did Venkat and Preethi hold regarding online matrimonial portals? What was their attitude towards Shaadi. identify the various cultural and social factors that influence the decision of match-making through online matrimonial portals.24) who had also found the right partners through Shaadi. based on parameters like top-of-the-mind recall. What motivated Venkat to go for online matchmaking? Identify the cues that triggered him into action.8% mindshare. When they found each other and finally decided to marry in a year. etc. Jeevansathi’s commercial came in third with 18. What communication factors seem to be reinforcing purchase decision? Do you think consumers should experience cognitive dissonance after subscribing to Shaadi. 2. each with 33% user preference. and the simplified search technology that increased the relevance of the matches.com? Why? 4. brand differentiation and preference created by the ad. Another study by JuxtConsult pegged the websites’ shares at 28% and 29% respectively as on April 2007. Why does most communication for online matrimonial portals harp on joint family decision-making? Do you see any attitude change strategies adopted by any of the websites in their communication? Explain.