From a commercial perspective, it’s well-known that brands and businesses are constantly looking at ways to expand opportunities. On that note, one strategy that seems to have garnered interest is brand licensing. In simple terms, brand licensing allows a company to use another business’s intellectual property (IP), providing a mutually beneficial way to enhance market presence and drive growth. As per market reports, brand licensing helps drive brand awareness, income channels, advertising streams, among others. In 2023, the global market for brand licensing was valued at approximately $337.61 billion, with growth projections of around $470.55 billion by 2030, with a compound annual growth rate (CAGR) of 4.3% from 2024-30, as per Valuates Reports, a market research report website.
Established in 1990, Super Plastronics Private Limited (SPPL), a manufacturing company, has created its presence in this market by being a brand licensee of five brands, namely Thomson, Kodak, Blaupunkt, Westinghouse, and White-Westinghouse (Trademark of Electrolux). The company’s revenue from operations grew 22.92%, from Rs 460.69 crore in FY22 to Rs 566.29 crore in FY23, as per ROC filings (standalone financial statements) accessed by Tofler, a business intelligence platform. However, the company’s total profit decreased from Rs 31.88 crore in FY22 to Rs 22.62 crore in FY23. In a conversation with BrandWagon Online, Avneet Singh Marwah, CEO, SPPL, talks about Blaupunkt’s QLED TV strategies and sustainability practices in the Indian market, along with their marketing strategies. (Edited Excerpts)
According to your ROC filings, despite an increase in revenue from operations for the FY 22-23 period, there was a decrease in profit margin. Could you elaborate on the factors that contributed to this lower profitability, and what strategies do you plan to implement to enhance profitability in the coming year?
I think one of the key reasons is the investments that we’re undertaking, considering that we don’t have any sort of funding and we are not a public company. As a result, whatever profitability we achieve, gets reinvested in our company. Our asset value has increased, which has been by three times in a year. So, we plan to continue with our investment pattern. Despite profitability being an important aspect, our capital expenditure is currently diverted towards our manufacturing plants and the addition of other categories. As India is considered a price-sensitive market, one needs to be aggressive in entering a new product category. On that note, the narrative present is once these categories become a year or two old, the profitability factor starts to kick in.
Considering your licensing agreement with Blaupunkt in India, what market share are you aiming to capture, and who is your target audience?
I think Blaupunkt is a ‘legacy sound’ brand. We thought that a gap existed in premium affordable categories, and Blaupunkt has helped us fill that gap. In terms of smart televisions (TV), the move has exceeded our expectations because we thought the entry level for any TV was 32-inch but we started selling the 55-inch category. Behind this move, the main purpose has been to fill up the dearth of televisions, having outputs of 80 Watts, 70 Watts and 60 Watts in the premium segment, and the 60 Watts type in the full high definition (FHD) segment. So, we thought that consumers were buying sound bars, instead of TVs which already carry that sort of sound technologies such as Dolby Atmos, Dolby DTS, among others, which we have tried to fulfil. Furthermore, Blaupunkt has a reputation for its sound engineering technology which has enabled us to receive support from German engineers and gain a good value proposition from our consumers.
Could you elaborate on SPPL’s key strategic elements, such as its market positioning strategy, plans for differentiating from competitors, product pricing, and target audience?
In terms of positioning, the brand aims to provide customer-centric premium affordable categories. It’s meant for customers within the age group of 22-55 years. We launched, exclusively, on Flipkart, on account of the platform being our exclusive partner. Recently, we launched on Amazon. As a result, we started seeing an increased demand for premium categories. However, we still think that there’s a gap, especially after OnePlus and realme exited the market. Our strategy is to focus on sound while offering the best TVs we can to our customers. For example, a TV category that we have comes with a hand-free remote, which enables a customer’s voice to be their user interface. Concerning our marketing strategy, we emphasise implementing target ads for our customers. When we start growing offline, we’ll start paying attention to Above the Line (ATL) marketing and Below the Line (BTL) marketing practices.
Considering Blaupunkt’s expansion into offline channels for TVs, what challenges did SPPL encounter during this expansion? Additionally, how do you plan to leverage offline distribution channels to complement SPPL’s online sales strategy?
We haven’t faced any challenge, as of now, in terms of going offline because other brands of SPPL have already entered offline channels. We haven’t, completely, entered into offline channels because of factors such as the month-on-month kind of growth and out-of-stock situation. Now, we have decided that we will focus on offline, as it’s the type of market which is expanding, along with Blaupunkt’s presence in India. Our warehousing presence in India extends to more than 850 service centres, along with help from our channel partners. As we have been in this offline trade landscape for the last 30 years, we know the challenges present. Within two years, we believe that we will have around more than 7,000 billing counters across India.
What new marketing strategies are you planning for this expansion? Are there any specific plans for advertising through TV commercials, social media, or other channels?
I think we have a ‘strong’ presence across social media and digital marketing because we were working on a platform where digital matters the most, which has enabled us to gain a high amount of traffic. In terms of television commercials (TVCs), I consider the return on investment (ROI) to be low, and most of the brands that discontinue their TV ads do it because the variety of TVCs is very different, and with one TVC, one cannot target all the segments. If a platform shows the TVC of a small TV, then that platform can miss out on the presence of customers belonging to the middle class and the upper-middle class. We don’t want to just do a TVC for brand equity, for brand recalls, as our targets have always been how that ad can replicate sales. As a result, we have been paying attention to digital marketing through Google Ads, and platform ads such as Amazon Ads and Flipkart marketing.