NMIMS Case Study Aiwa returns with a new strategy for its TV

Integrated Marketing Communications

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1. Citing from your own practical experience which is the type of promotions which are important in the retail scenario for a product in a supermarket to sell?

2. Your start up is in the process of launching a new type of chocolate on the lines of Cadburys perk and Ferro Rocher? What is the strategy for the launch and what are the types of products variants and displays you are planning to ensure its success?

3. Case Study - Aiwa returns with a new strategy for its TVs
In the late 1990s, Japanese electronics brand Aiwa tied up with a maverick entrepreneur, Kabir Mulchandani, to sell its consumer electronic products. Founder of Baron International, Mulchandani, 26 at the time, had already disrupted the TV market through a tie-up with another Japanese player, Akai.
With a strategy that relied on heavy discounts, exchange offers and freebies, Akai was selling in huge volumes. But Mulchandani's relationship with it was strained. So, he decided to move and replicate the same magic with Aiwa in TV, audio, headphones and other electronics. Aiwa was ready to offer its completely knocked down (CKD) TV sets at a much lower rate than Akai. Mulchandani's strategy, however, did not work for very long. He lost money, faced alleged excise evasion cases and was forced to shut shop.
Aiwa is back now-this time with a fundamentally changed strategy. Today, when the brand launched its LED television sets, it made it amply clear that this would not be a price warrior. Instead, it is pricing these TVs between the more expensive Sony and Samsung on one hand and the mass market Chinese brands such as Xioami on the other.
"We have found the sweet spot. We are not a cheap product," says Ajay Mehta, managing director of Aiwa India.
"We will be 20-30 per cent cheaper than Sony and Samsung, but 10-15 per cent more expensive than the Chinese brands. We will lever age the fact that we are designed in Japan and produced in India," says Mehta.
Starting at Rs16,000, the TVs -ranging from 32 inches to 75 inches will cost up to Rs150,000. Aiwa India has tied up with Dixon Technologies as its contract manufacturer. Given its not-so-successful history in the country, Aiwa is taking great pains to shake off its "price-sensitive" image. So, it has decided not to sell online.
"We cannot succeed as a discount brand. That is why in the initial phase, we will not sell online where one has to offer discounts," says Mehta.
"We want consumers to experience the product and see the difference."
By December-end, it expects to be present in 600 stores in 20 cities. Talks are also on with one of the country's largest consumer electronics retail chains to stack Aiwa products.
Mehta's target is moderate: a 4-5 per cent share of the TV market in 4-5 years. Currently, 17-
18 million TV sets are sold in the country in a year and the market has been growing at 8-9 per cent per annum. But the big question is: will Aiwa's new strategy work?
Says a competitor, "There are so many brands, like Akai, which tried to make a re-entry. Or like Sharp, which had a Japanese pedigree, but did not make a dent."
"The Indian TV market," says this person, "is consolidated at the upper end with Sony and Samsung and at the afford able end by the Chinese, who are offering many tech features that only top brands used to give. So, it will be an uphill task."
The company set up its regional headquarters in India in February 2021 and despite the pandemic, launched its luxury brand of speakers. To reiterate its focus on quality rather than price, these speakers cost up to Rs60,000 (the brand also has an entry-level model priced at Rs2,500). Imported as a completely built up (CBU) product and launched in October last year. it hopes to double its run rate from Rs30 crore to 60 crore per month, though it will always remain a niche market.
Aiwa India is looking to launch other products, too air-conditioners, washing machines and refrigerators - in the next one to two years and hopes to hit $1 billion in revenues in 4-5 years. TV, however, will be its anchor product, accounting for over 40 per cent of the turnover.

The rest is up to consumers.

a. What is the strategy of Aiwa to relaunch its products in the Indian market? How is it priced and what do you think of the strategy?

b. What are the targets set by Aiwa for the Indian market? What other products are they planning to launch in the Indian market?

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Q3. ABC Pharmaceuticals Entry into the Chinese Market
Q3a. Strategic Rationale for Joint Venture or Strategic Alliance

Answer:

Regulatory Compliance: Navigating the complex regulatory landscape in China can be challenging for foreign companies. A joint venture with a local partner helps ensure compliance with local regulations and standards.

Market Access: Local partners provide established market access and distribution channels, which can significantly ease the process of introducing and scaling pharmaceutical products in China.

Cultural Insight: Understanding local cultural nuances and consumer behavior is crucial for successful market entry. A local partner offers valuable insights and helps tailor the product and marketing strategies to fit local preferences.

Shared Resources: A joint venture allows ABC Pharmaceuticals to leverage the local partner s infrastructure, network, and expertise while sharing costs and risks associated with market entry.

Q3b. Strategic Objectives and Potential Synergies

Answer:

Market Penetration: The primary objective is to quickly establish a presence in the Chinese market, tapping into the significant growth potential due to the country s large population and rising healthcare expenditure.

Operational Efficiency: By partnering with a local entity, ABC Pharmaceuticals can benefit from established operational efficiencies and reduce the time and resources needed to set up local operations.

Regulatory Navigation: The local partner s expertise in navigating the regulatory environment will help ABC Pharmaceuticals avoid potential pitfalls and expedite the approval and launch process for its products.

Enhanced Innovation: Collaboration with local partners can foster innovation by integrating local market insights and consumer feedback into product development and marketing strategies.