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Richa Mishra

NEW DELHI, June 11

IS it all about competitive pricing in the consumer electronics category? Domestic consumer electronics major, Oscar International, which is expecting a turnover of Rs 400 crore for 2003-04, seems to believe so. "Oscar's current success has been achieved on the basis of its strategy of offering quality products at `honest prices'," says the Chief Operating Officer (COO), Mr Kishan Kalani.

Commenting on how the company has been maintaining profit margins with such competitive pricing, Mr Kalani told Business Line that from the beginning Oscar's strategy has been to deliver products to the masses at the correct price points. It has been able to do this by a series of measures such as controlling overhead costs, low dealer margins, and cash purchases to avail best prices.

Besides these steps, spending on an awareness campaign rather than a high decibel campaign with fancy budgets, deep penetration in rural and semi-urban areas (where volumes are high) have also been some of the measures taken by the company, he stated.

"The emphasis has been on high volumes with low margins. With all recent studies and surveys indicating that a majority of growth in consumer electronics will come from the rural and semi-urban areas, Oscar is upbeat about its performance in the coming years, having established a good brand worth in this segment," Mr Kalani added.

Oscar has sold over 3.5 lakh units last fiscal and is eyeing sales of over 4.5-lakh colour TV (CTV) sets in 2003-04. It is not only the CTV segment that the company is focussing on, but in the fast-growing video compact disc (VCD) market, Oscar has sold five lakh units in 2002-03 and is targeting sales of over 10 lakh VCDs this year, he said.

Elaborating on the company's marketing strategy for the VCD segment, he said that offering VCD players at a marginal price difference from the grey market and enhancing the offer with a firm warranty and service backup has resulted in boost in sales.

"The market-share of the grey market has come down in the last three years owing to the entry of branded players, but it still controls the largest chunk of the VCD market at a whopping 75 per cent," he said.

"With rising awareness on part of consumers and impending import duty cuts on critical components (branded players are hit by smuggling of MPEG cards by grey market) we see tremendous growth at the cost of grey market in the coming year," Mr Kalani said.

In 2002-03, the company slashed prices of VCDs from Rs 2,990 to Rs 2,490 and thereby narrowed the price differential between grey market and an Oscar VCD. The flat TVs were available at under Rs 10,000 and DVDs at below Rs 5,000, he said.

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