Branded luggage companies hike ad spend to lift demand

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Mumbai: Branded luggage majors, VIP Industries and Samsonite India, are pumping in more money into their business to counter sluggish growth. They are not only hiking their marketing and advertising budgets by 10-15% over the previous corresponding period, but also charting plans to expand their distribution network in the country by 2009-10. According to industry experts, this measure is aimed at giving adequate support to the brands, gaining a good bargain in new rentals and re-negotiating existing rentals. It will also help woo customers by adopting a consumer pull strategy to meet their evolving travel needs.

These measures come at a time when the travel bag segment grew by just 8-10% in the second half of 2008, as against close to 15% during the previous corresponding period.

According to Sudhir Jatia, managing director, VIP Industries Ltd, "Recent consumer surveys say that there has been a postponement in purchase at the higher end of the segment. Consumers have become more prudent and are looking for more value from their purchases. In effect, demand has not reduced but has been deferred for various reasons, which can the addresses by tactical measures."

VIP Industries Ltd recently invested Rs 25 crore in a new advertising campaign with actor Shahid Kapur. Jatia said, "This is to support the brand and pull consumers into our stores; increased footfalls will generate more sales." He said that VIP's new theme--Whatever your trip, we have a bag for you--gives the consumer a reason to come into a VIP store and select a product which satisfies his/her need. VIP is also planning to double brand stores to 200 by 2009-10, he added.

Meanwhile, competitor Samsonite India too has charted out plans to expand its exclusive franchisee stores from 180 to 230 by 2009-10. Sudip Ghose, director, marketing, Samsonite India, told FE, "With this, we will be able to attract more customers, especially business travelers, who contribute 80% to our overall travel luggage business. We will be hiking our advertising and marketing spends by 10% year-on-year. Investments will cater to launching a new marketing campaign, which will revolve around both the Samsonite and American Tourister brands."

Samsonite India also plans to launch a new line of high-end travel bags with Korean leather by 2009-10, apart from enhancing availability of Timberland luggage, targeted at the youth.