Panasonic has International Strategies to penetrate in Indian TV market

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Panasonic were the principal sponsors of the now defunct Toyota Racing Formula One team.
Panasonic were the principal sponsors of the now defunct Toyota Racing Formula One team.

Panasonic focuses on India

Panasonic’s latest camera

Just like the other electronic major companies like Samsung, Sony, Toshiba, LG etc, Panasonic is trying to establish its stranglehold in the Indian consumer electronic space with its new products that come with latest technology. Panasonic will introduce in December a camera Panasonic DMC-GX1. It is the company’s latest Micro-Four Thirds camera. It has a shooting capacity of 16 MP. It records 1080 p video and possesses a fast auto focus speed of 0.09 seconds per photo. It is equipped with a 3-inch touch screen, dust reduction system, one button exposure adjustment, hotshot for accessories like a new viewfinder and pop-up flash. The camera comes with a 14-42 mm kit lens. It will arrive at the market next month with a probable price tag of $800.

A quality camera at a lesser price

If you are not prepared to invest $800, you can go for Panasonic DMC-3D1 that costs $500. This camera has a 12 MP CMOS sensor, HDMI out, 3.5 inch LCD, twin 25 mm ultra wide angle lenses, Panasonic’s Venus processing engine, 4x optical zoom with image stabilisation, full HD 1080 p videos and real 3D image facilities. It has a quad CPU image processor. This will arrive in the market next month.

A camera with Skype video calling facility

Indians can go for Panasonic DMP-BDT310 camera that has its flagship 3D deck with many fancy tricks. There is a Skype video calling facility, built-in Wi-Fi, Viera Cast web content, 2D-3D conversion facilities, DLNA networking, iPhone control and a host of other facilities. You can enjoy even two HDMI outputs. It comes in handy if your receiver is not set for 3D yet. The only defect in this camera is that 2D-3D conversion is not up to the mark. Moreover there is no online content and it comes with a price tag of Rs.19500. Probably it should have been priced around Rs.12000 for the Indian market.

Past mistakes in Indian market

Panasonic has around 6000 retail outlets in India. It is increasing this number to 9000 by March 2012. It is also planning to double its advertisement expenses from the present Rs.200 crore per annum to Rs.400 crore by that time. Panasonic is also planning to use Bollywood and sports to promote sales. But the company should be wise enough to spend more on cricket rather than any other sports. Cricket is like a religion in India that binds all the people. Daizo Ito is the President of the Indian arm of Panasonic Corporation which is headquartered in Japan. In the past, the company admits that it made mistakes by bringing into India its modified consumer electronic products meant for US and European markets. This approach did not endear the customer to the company as Indian requirements are quite different from American or European requirements.

Cube, a combination of Windows and Split AC

Panasonic has its production facility at Noida, Delhi for LCD televisions. The company is also constructing a new facility at Jhajjar in Haryana State for the manufacture of washing machines and air conditioners that are presently imported by the company for the Indian market. The investment cost involved is Rs.100 crore. The new facility is built on 72 acres of land. It will start its operations in November 2012. It will produce one million air conditioners every year. This includes the production of Cube, a split AC at the cost of a Windows AC. The company is importing Cube currently from Thailand. Due to the massive floods that has affected Thailand, it has become difficult to import any product from Thailand. It may take some time for the situation to stabilise for normalcy to be restored. After one year, the company will start manufacturing washing machines from this plant. It will also produce 25000 welding machines from this plant every year. It is also expanding its capacity at its Noida plant. Currently Panasonic makes 7.5 lakhs LCD TVs from this plant. The capacity will go up to one million units in April 2012. Now Panasonic is set to aggressively compete in the Indian market and take on its competitors by the scruff of the neck. India is a growing economy and all the world majors right from automobile companies to consumer electronic goods companies have invested heavily in Indian markets to establish themselves. Even luxury car majors have opened their shops in India. India is world’s fifth largest economy next to USA, Germany, Japan and China. In Asia, India is the third largest economy next to Japan and China. In terms of purchasing power, it is second in the world with huge domestic savings. Therefore Panasonic’s strategies to shore up its presence in India make sense.

Targeting to increase market share in India

In the current financial year, Panasonic expects revenue of around Rs.5500 crore from its Indian operations. Panasonic derives 50% of its total sales of $100 billion from outside Japan. India contributes 1% of the company’s total sales and 2% of the company’s overseas operations. But this figure is set to increase drastically in future. This is because Panasonic is growing at a dramatic rate of 20% p.a. as compared to the growth rate of 5% - 6% globally. Panasonic has set a target of $2 billion revenue by 2012-13 and further to $5 billion by 2015. This includes exports from India. Panasonic has a market share in single digits only in two countries in the world namely South Korea and India. The company is targeting to touch a market share of 15% in India by March 2012. The company is appointing region-specific brand ambassadors to canvass for its products.

Festival sales

Panasonic is developing specific products for Indian usage. It has come out with Cube, a split AC at the same price of a Window AC. The company launched a low 78 W power consumption LCD TV with sound quality adjusted to Indian conditions. The company is taking steps to customise its international products with India-specific usages. By doing all these things, the company is trying to correct its past mistakes and make an impact in Indian competitive market. Recently the company launched a variety of festival schemes on the eve of Diwali, an important Hindu festival in India to boost up its sales. It launched discounts and free gifts for the buyers of its products. The festival season starts in India in October and continues till the middle of January. Consumer electronic companies derive 30% - 40% of their sales during this festival season.

Foraying into healthcare segment

Panasonic is also planning to foray into healthcare segment in India. Three years back, the company made a comeback to India, realising its potential. Home appliances, cameras, TVs, air conditioners and washing machines are growing in sales. Every company tries to occupy the available space. The company is planning to introduce ECG machines to launch its entry into healthcare segment in India. Healthcare segment in India is a huge market opportunity for the electronic players. Medical electronics is growing at astronomical rate. Apart from ECG machines, Panasonic also wants to introduce diabetes detectors (India has the largest number of diabetes patients in the world), blood bank refrigeration, rechargeable batteries, solar cells and security cameras. The company is also looking forward to collaboration with local Indian companies in these fields. The company is also scouting for collaboration with local Indian IT companies to develop software for such advanced products. The Korean companies Samsung and LG are well established players in these segments. Panasonic realises that only through local collaboration with Indian companies can it dethrone the Korean competitors. It is really wonder that a company like Panasonic that had been in India for the last three decades has failed to gauge the Indian market pulse and allowed its competitors to overtake it in every segment of the market. Now the company is making amends for its past mistakes and recruiting a lot of Indians to understand the Indian market and to penetrate into tier II and tier III cities. The company has named its production facility at Jhajjar as Panasonic Techno Park.

Targeting Middle East market

Globally, Panasonic receives 70% of its business from B2C products and the remaining 30% from B2B products. Now it wants to change this composition to 50-50. The company also wants to target Abu Dhabi market. A large number of Indians are working in Dubai and logically, Panasonic’s products in Indian market will find an equal welcome in the Middle East also. Panasonic launched Viera LCD TVs in 22” and 24” priced at Rs.14500 and Rs.16900 for the Indian market. Its Lumix 14 MP digicam costs only around Rs.5000. It has launched five new variants of direct cool refrigerators. The company wants to grow 100% in the TV market and 130% in the AC segment over last year.

Toasters and coffee makers

Panasonic Home Appliances India Ltd, the Chennai-based company is planning to add toasters, sandwich makers and coffee makers to its products. Panasonic is planning to double its mixer grinders and electric cookers to six lakhs and two million units respectively. Panasonic holds a 51% stake in this company and it is listed in the Bombay Stock Exchange. The expansion of capacity will be at an investment cost of $3 million (Rs.14 crore) over two years’ time. The company exports 1.5 lakh electric cookers and 80000 mixer grinders to Bangladesh, South Africa, Panama, Sri Lanka, Singapore, Maldives, Nigeria and Peru. Obul Reddy family has a 19% stake in the company. For the quarter ended 30.06.11, the company produced a net turnover of Rs.32.74 crore and a net loss of Rs.2.9 crore.

Different products for different regions

Even though different regions in India welcome different types of products, there are certain commonalities among all regions. Panasonic is promoting flat-panel televisions, large screen, digital cameras and inverter-based home appliances in tier-I cities in India. In tier-2 and tier-3 markets, Panasonic is promoting direct cool refrigerators, LCD TVs and entry-level home theatres. It has attained leadership position in Plasma TVs. But market for Plasma TVs is going down. Consumers do not want to buy Plasma TVs any more. Many companies have stopped producing Plasma TVs.

Reduction of price gap without compromising quality

Indian market is evolving and developing. Lot of changes are witnessed in this growing market. A brand like Panasonic has to struggle to establish its brand value through quality, overcoming the price barrier. Panasonic should explore reducing the price gap without compromising on quality of its products. Panasonic has unleashed new products in various categories, overhauled its retail strategies and stepped up its marketing and advertising spends. All these things will go a long way to shaping up the fortunes of the company in the tough Indian market.

Share price manipulation?

In the month of July, the share price of Panasonic Home Appliances rose by as much as 45% in the Indian stock markets. This caused a surprise because the market indices have been nose-diving in that period. Only speculators would have pushed up the prices in this counter. It is noteworthy to observe that Pacific Corporate Services owns 11% stake in Panasonic Home Appliances. Pacific Corporate Services is a holding company of Sanjay Dangi, who was banned by SEBI (Securities Exchange Board of India, which is the market watchdog in India) from the market for colluding with promoters of 4 companies to rig up their share prices. The market watchdog SEBI should probe about this.

Slashing of jobs

In the month of April, Panasonic announced slashing of jobs upto 35000 globally as a part of its restructuring programme. But Panasonic India is not a part of this scheme. In fact the Indian arm of Panasonic is planning to increase its recruitment by adding 3000 to 4000 jobs every year for the next two years. From this, it can be seen how much importance Panasonic is giving to its Indian operations. Indians feel that Windows AC is noisy and disturbing and moreover it blocks the light through the window. On realising this, Panasonic came out with a product called Cube to suit the Indian market tastes. It has the best features of both a Windows AC and a split AC. It can be mounted very near to a ceiling or at the Window level. It has the key features of better air flow, faster cooling and a reduced noise level. Its highly efficient diagonal propellant fan ensures a wider air discharge. It comes with a 1.25 tonne and 1.5 tonne capacity priced from Rs.15000 onwards. At present, Panasonic employs around 12000 people in India.

Scanning printers

Panasonic has started a 24 x 7 call centre to attend to the complaints of its customers. It will be geared to provide solutions for the product categories ranging from industrial components, home appliances, business solutions, digital and professional audio visuals, health & beauty appliances and car products. The customers can access this number even late at night to get solutions. The toll free numbers are 18001031333 and 18604251860. Consumers can also send their complaints to the company’s email helpline at Panasonic launched its new laser multifunction printers MB 1900, 2010 and 2030 series. The printers give a maximum speed of 24 PPM with print/copy/scan/fax and networking capability. The print resolution is 600 x 600 dpi. The printers offer facilities for scanning and copying of magazines, books, newspapers and even smaller objects. This is done through its A4 compact flatbed.

Undersea video shooting

Panasonic’s pistol grip camcorder records full HD videos in MP4 format and can record still images also. It is waterproof upto a depth of 10 feet. It can shoot one hour of underwater video in one go. It has an electronic image stabilizer, 2.6 inch free angle LCD display, 5x optical zoom, mini HDMI out, 1 cm macro mode, and stereo microphone. It also supports SDXC cards for storage. The user can take still even while shooting videos. This is done through separate buttons for still recording and video. It has an intelligent scene selector, intelligent auto mode, nine point auto focus system and a face detector. Panasonic has opened its R&D centre at Gurgaon in Haryana State.

Entry into tablets

For those who find regular tablets very delicate and complicated, Panasonic has introduced its Toughbook Slate. It has a 10.1 inch matte multi touch display with 1024 x 768 resolutions. The display will be readable under direct sunlight also. It has an active stylus for precision that is fitted neatly in the tablet’s body. It has other features like Wi-Fi, GPS, 3G/4G connectivity and Bluetooth. It has Android operating system. Its battery life lasts for 8-9 hours. When it is launched, the price is expected to be around $1100.

Panasonic headquartered in Japan

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