Wafer-thin margins in the consumer durables industry has brought a shift in marketing strategy with major white good manufacturers now offering combo products instead of discounts to woo customers.
While, companies like LG Electronics have tailor-made packages comprising entire range of white goods, others like Samsung Electronics India is currently offering a combo of LCDs and home theatres. While, such kind of offers help manufacturers to boost sales, it also ensures a saving of anything ranging between Rs 5,000 and Rs 25,000 for the customers with most of it coming from high-end products.
?There has been a 40-50% decline in offers like discounts, gift vouchers and other schemes over the last one year as it could not help companies sustain margins. Instead, they are now coming up with innovative marketing schemes like combination of products to consolidate profits,? says Venugopal Dhoot, president of Assocham and chairman of Videocon Industries.
?With rising input costs and other environmental factors continuously putting pressure on margins, such multiple product packages enhance footfall at our stores especially during festive and marriage seasons,? says V Ramachandran, director (sales & marketing), LG Electronics, adding that the company has scrapped the discount schemes since last six-to-eight months.
Adds R Zutshi, deputy-managing director of Samsung India, ?Prices of consumer durables have already reached a threshold limit and there is no scope to pull it down further. So there has been a shift in trend from normal discounts to solution marketing, more prevalent in high-end products, that helps to woo customers.?
Presently, Samsung has LCDs and home theatres under its combo offer as the company feels that it would be more successful at the category level instead of extending it across the product range.
?Due to high volumes, consumer durables have really low margins and with volumes going up under discount offers and other schemes that were there earlier, the margins were squeezed further,? says an industry analyst, adding that companies have completely suspended such schemes and are now looking at more innovative ways to sustain market share in the industry.