Baron - Rewriting Indian Consumer Electronic Goods Marketing


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Case Details:

Case Code : MKTG007
Case Length : 7 Pages
Period : 1994 -2002
Pub Date : 2001
Teaching Note : Available
Organization : Baron International, Videocon, Philips
Industry : Consumer Electronics
Countries : India

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

The Baron Group

The Mulchandani family had started its consumer electronics business in the 1970s. The group began with marketing and distributing products under the Bush brand name. Under the leadership of J.R.Mulchandani, Bush emerged as one of the top brands in the audio cassette player market...

Fighting it Out

The 5 million unit, Rs 75 billion CTV market was characterized by cut-throat competition, with over 15 major brands competing fiercely with one another. CTV penetration levels in India were extremely low in the early 1990s. This factor, coupled with the proliferation of satellite channels offering incredible choice by way of software, and the large number of brand and model options available, resulted in a compounded growth rate of nearly 28% for the industry over the decade. Baron, being a late entrant in an already crowded market, in January 1995, believed that it needed innovative thinking and aggressive selling to succeed...

Baron's Mantra - Low Costs

If one were to summarize Baron's secret of success, it would be all about keeping the costs on the lower side and being able to sustain them. Baron's 'low maximum retail price (MRP) plus other charges' package was a major factor responsible for the smart pricing tactics. For instance, TCL products were imported in the form of CKD kits...

The Other Side of The Story

However, there was a darker side to Baron's success story. Problems existed on all fronts - dealers, customers and most importantly for the group itself.

The mind-boggling success came at its own cost as Baron had to bear the interest under the installment schemes and also had to settle for lower profit margins in the exchange schemes. After Baron entered the industry, the average price of a 20-inch set dropped from Rs 65000 in 1992 to Rs 10000 in 1999...

 

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