The Onida Challenge

For Distribution and Supply Chain Management (MBA 441)

To be submitted to:
Prof. Suresh A. S.

Prepared by: Group 9

Anindya Biswas (1527605)
Arjun Thomas (1527607)
Ashwin Kumar C (1527608)
Praneet A. K. (1527616)
Sachin R. (1527619)
Anushree Choudhary (1527634)
Shamayita Guha (1527651)

Onida The Situational Challenge

Introduction
One of the most popular home grown brands of the bygone decade, Onida saw the light of the
day in 1975 and was trademarked to the Monica Electronics, which was then ultimately acquired
by the Mirchandani family via Mirchandani Electronics in 1981 and renamed as Mirc
Electronics.
In 1982, Gulu Mirchandani with his brother-in-law Vijay Mirchandani alongside Sonu
Mirchandani had started assembling Television sets at their factory in Andheri, Mumbai. Onida
has come a long way since then branching into the consumer durables as well as the appliances
sector. A few years down the line, Onida has witnessed a phenomenal 100% growth in the sale f
Air Conditions and a growth of 40% in washing machines.
Mirc Electronics had received an Award for Excellence in Electronics from the erstwhile
department of Information Technology, Government of India. Today, Onida has found its way to
the fast growing East African Market as well as having a commendable presence in Russia,
Ukraine and the neighboring CIS Countries. The product portfolio for Onida stands as thus, as of
today:

LCD / LED TVs/ Monitors

Televisions
DVD and Home Theatre Systems
Air Conditioners
Washing machines
Microwave Ovens
Inverters

The Industry Scenario Today

India is expected to become the fifth largest consumer durables market in the world by 2025. The
consumer electronics market is expected to increase to US$ 400 billion by 2020. The production
is expected to reach US$ 104 billion by 2016.
The sector is expected to double at 14.7 per cent compound annual growth rate (CAGR) to US$
12.5 billion in FY15 from US$ 6.3 billion in FY10. Urban markets account for the major share
(65 per cent) of total revenues in the consumer durables sector in the country. Demand in urban
markets is expected to increase for non-essential products such as LED TVs, laptops, split ACs
and, beauty and wellness products. In rural markets, durables like refrigerators as well as
consumer electronic goods are likely to witness growing demand in the coming years as the
government plans to invest significantly in rural electrification.
The Government of India has increased liberalization which has favored foreign direct
investments (FDI). Also, policies such as National Electronics Mission and digitization of

television and setting up of Electronic Hardware Technology Parks (EHTPs) is expected to boost
the growth of this sector.
The consumer durables market is anticipated to expand at a CAGR of 14.8 per cent to US$ 12.5
billion in FY15. Also, the demand from rural and semi-urban areas is projected to expand at a
CAGR of 25 per cent to US$ 6.4 billion in FY15, with rural and semi-urban markets likely
contributing majorly to consumer durables sales.

Reason for Brand Sustenance Failure

To be able to survive in the market, every brand needs to remain relevant at all points of time and
need to improvise upon itself. The story of Onida is no different. The giants BPL, Videocon and
Onida had tasted success in the early 1990s but with the entry of the Korean Giants LG
Electronics and Samsung, they all fell victim to liberalization. They could not match up with the
advanced technology nor could they match up with their product feature offerings all the while
playing the game of volume.
Most of the companies had started to fade out by this time and Onida had stopped using the
Iconic devil as part of its promotional campaigns and replaced it with a couple. However, the
sales saw a downward dip because of this and the management upon reinstating the devil back in
2004, learnt a valuable lesson that the Onida Devil absence was one of the prominent reasons for
the non-increment of the sales figures.
However, apart from this, Onida had few other issues which have been discussed as below:

1. You or Me The Fight for Onida

While the tagline of Onida was Neighbors Envy, Owners Pride, internally this was
not the case. The popularity of Onida Electronics meant that the company had garnered a
lot of Good will in the 1990s, which also meant that the aforementioned was a valuable
asset to the Mirchandani Brothers. Thus one brother, Gulu Mirchandani was just not
going to be a passerby and let his brother rake all the moolah, especially after having to
pay him a huge sum for his stake in Mirc Electronics and thus the fight began between
the brothers and the brother-in-law, which inadvertently destroyed the image of ONIDA
in the public eyes.
Post this Gulu Mirchandani had bought the shares of his brother Sonus stake in Mirc and
started to sell range of electronic products under the Onida brand via the company Onida
international where Sonu had an 80% stakes.
But then Sonu went ahead and formed a joint venture with a Japanese company and
started selling their products under the Onida Brand.
Later on, Onida had tried to stage a recovery after the successful re-launch of the brand
and the return of the Devil. But the family feud made things difficult for the brand all the
time.

2. Change is not always good

The fight mentioned above had already eroded the brand. This erosion was then
furthermore helped by the replacement of the Onida Devil, when considering the

changing consumer tastes, Onida decided to shift its advertising agency gears from
Rediffusion to O&M. Thus the brand elements went for a toss in the scenario and the new
Tagline, Change is always Good proved to be worse. The brand suffered for almost 10
years and has never recovered since.
The agency changed again and with it came back the devil with a new tagline, Nothing
but the truth. But the truth remained that it did not do Onida any good. Again in 2007,
Onia launched its A/C line with the new Tagline, Enjoy in Your Life. Then for the
same product line Onida goes ahead and introduces a new Devil with a yet again newer
Tagline, Experience the desire.
Which brings us to Onida as it is today, the Onida devil replaced by a new age couple as
the protagonist with the tagline, Tumko dekha toh yeh khayal aaya (translated:
Designed keeping you in mind). Onida thought that each time they would change the
tagline it would attract more customers but the results were opposite, the brand lost its
image and the company lost its customers as well as its value.

3. Brand Amnesia
ONIDA has actually reached a stage of maturity where it is trying to capture market share
by radically reinventing themselves and trying to prove itself relevant to the customers,
forgetting that their core customers have also gotten old alongside them. This
phenomenon is known as Brand Amnesia.

4. Forgetting the basics

Onida had forgotten the basic fact, that for products that require a high level of
involvement, the sales cycle just does not with the sale of the product, but it extends to
after sales support as well. Purchasers of Onida Television had reported a lot of issues
which were regular in nature but they had support staff to contact to, which created a lot
of dissent among the consumers.

Relaunching Strategies
The relaunch strategies for Onida could be either of the following kinds:

a. Repositioning Strategies
ONIDA could adopt the following Repositioning Strategies so as to ensure that they have
a greater visibility in the market:
1. Pan India Market Research for Consumer Preferences and choices: Knowledge
of the market and the consumers choices and preferences is of high importance in
todays scenario. To give itself a fresh new start and alongside trying to establish itself
through usage of e-commerce websites Onida should also invest itself in R&D in Tier
II and Tier III cities so as to gauge the consumer perception towards their products as
well as understand their purchase patterns.
2. Targeting and Positioning itself strongly in Tier II and Tier III cities: Onida
should continue to target Tier II and Tier III cities wherein there is still some minimal
brand recall which should help reposition the brand and strengthen its hold. With the

oncoming of the digital age, and arrival of Set Top Boxes, having a TV is a necessity
even in the lowest strata of the society.
We see that one of Onidas latest offering is the Android TV with the i-Genius
Technology, however, what we feel as a group is that Onida should invest more in
developing a basic LED TV with high picture resolution and superior surround sound
and then launch it in the Tier II/III market at affordable prices stating it as source of
entertainment to help one relax at the end of the day.
Onida should market it as an aspirational product targeting those who want an
upgrade but do not have the sufficient means of doing so.

b. Communication Strategies
Onida should consider adopting the following channels as part of its communication
strategies to help ensure that the brand reaches the customer:
1. Sponsor small scale events in Tier II and Tier III cities: Tier II/III cities in India
always host small scale shows as well as are on the lookout for sponsor for such
shows. By sponsoring such shows, Onida would also help in Brand Recall.
2. Promotional Events: They should not only opt for e-commerce distribution in Tier I
cities but should also opt for shelf space in convenience stores such as Big Bazaar,
Star Bazaar, Spar etc. where the footfall is prominently big. Similar to Videocon, they
also should engage in dealer promotions. They also heavily promote itself alongside
the Make in India campaign. Furthermore, it can also promote itself by giving out
seasonal sales during Diwali or Dusshera as a promotional platform.
3. Celebrity Endorsement: The Company should go for a better adverting. The
company can rope in a celebrity to endorse its brand. This way the brand can be
benefited from celebrities brand equity. We suggest rope in a sports icon or a
Bollywood star rather than the inconspicuous couple (as per the current ads) where
the recall value is poor.
4. Online Presence: The company should make its presence not only felt online through
e-commerce websites but also in other Social Media such as Facebook, Twitter so as
to engage customers with monthly promotional events as well they can resort to
releasing product launch teasers on YouTube.
5. After Sales Service: As mentioned earlier, Onida has a lot to do in terms of After
Sales Services as it had previously faced a lot of flak for being a poor service
provider. Therefore, Onida can prove itself to be a differentiator by trying to build
relationships with the consumers from Tier II and Tier III cities.
One such example can be, when a consumer belonging to these target segments visits
the stores the store manager can try and build relationship by asking the customer to
recall their favorite memory associated with Onida.
c. Product Strategies
1. Line Extension: The Company should go for line extension in value segment so as to
target more customers in the lower segment. They should introduce more variants in

14, 20 and 21 segment. These products will target the young and first time buyers.
These buyers will have an emotional attachment with the brand and as they graduate
to the high end segment, Onida can target them with its high end products. Onida is
now in one of the most difficult times. The brand needs to come out with a product
that will change the game. Changing the mascot is secondary at this point of time.
2. Marketing Mix: Onida is facing a marketing problem and more than a branding
problem. Everything is fine with the brand. People recognize the brand. The issue is
on a larger perspective. It needs to concentrate on its entire marketing mix not just the
brand elements. Onida needs to convince the consumers that its products are better
designed and technologically superior. It is about managing perception. Features can
be copied by competitors easily but changing perception is a difficult task.

d. Network Strategies
The organization should promote relationship building with the dealers. This is because,
dealers are of utmost importance in Tier II and Tier III cities and they are the ones who
primarily influence the target consumers in their purchases. Incentive Schemes to dealers
would also prove to be beneficial to the organization in increasing market visibility. They
should also make attempts to have exclusive dealers in these semi urban towns so as to
promote their brand to the customers who already have a brand recall about Onida.
The channel strategy that Onida should have is that they should follow the below channel
structure:
Tier I
OEM Suppliers Manufacturers Distributors Wholesalers Retailers
(might be convenience Stores, Mass retailers etc.)
Tier II/III
OEM Suppliers Manufacturers Distributors Wholesalers Retailers
Resellers
Dealers
Agents

Conclusion
If we look at Onida, as an organization, we would be able to see that the brand lost its way due to
the turbulent internal management and getting influenced by the rapid changing market and
trying on too many things at once. All this was happening whilst the brand did not have any
uniform positioning strategies in place, which made this brand from being one of Indias most
admired to almost being a lost brand. They did not even have the basic post sales service which
is a blunder in itself.
In contrast, when we would look at the foreign players who entered the Indian CD industry late
yet were the early ones to reap benefits at the turn of millennium we would be able to find what
separated them from Onida. These were some of the factors:

Extensive Product Line

Heightened use of Superior Technology
Effective Distribution Channel
Better use of the promotional strategies

Today, we can say that the battle is still not lost for Onida, considering the Make in India
campaign is gaining ground. To revive itself to the Indian Consumer mind, Onida should
definitely do the following:
Do extensive R&D and provide the customers with a varied range of products that are not
only stylish in looks but are affordable as well.
Do a competition analysis and not just go by the trend of placing themselves extensively
only in e-commerce websites such as Flipkart, Amazon, Snapdeal etc.
Do an aggressive promotion in Tier II and Tier III cities to initiate brand recall among the
older generation and engage customer in stores by asking them to fill feedback forms
when they come to visit the stores and then acting upon those feedbacks.
Campaigns such as these would definitely attract the eyeballs in metros as well as in non-metros
and hopefully provide Onida with their much needed market share.