MARKETING MANAGEMENT

ASSIGNMENT NO: I

Product Failure OfONIDA CANDY

Submitted by Viswakeerthi R.S (137MB159)Onida Candy

Onida is an electronics brand of Mirc Electronics, based in India. Onida is well known in India for its color CRT televisions. Onida was started by G.L. Mirchandani and Vijay Mansukhani in 1981 in Mumbai. G.L.Mirchandani is the Chairman and Managing Director of M/s MICR Electronics Ltd. In 1982, Onida started assembling television sets at their factory in Andheri; Mumbai It was established as "Mirc Electronics" in 1981.Since then, Onida has evolved into a multi-product company in the consumer durables and appliances sector. Onida achieved a 100% growth in ACs and microwave ovens and a 40% growth in washing machines last year.Onida came out with the famous caption 'Neighbour's Envy, Owner's Pride'. Another popular theme of the ads was a devil complete with horns and tail in the 1980s. The devil was replaced by a married couple later. Onida has a network of 33 branch offices, 208 Customer Relation Centers and 41 depots spread across India. As on 31 March 2005, Onida had a market capitalization of 3014.6million.Mirc Electronics won an Award for Excellence in Electronics in 1999, from the Ministry of Information Technology; Government of India. Onida with its Sales & Marketing office in Dubai reported a 215 per cent export growth in two years, setting the base for an increased robust international presence.The shipments to the Gulf contribute almost 65 per cent of Onida's export revenue, while shipments to the fast growing East African market Uganda Tanzania, Kenya and Ethiopia and the SAARC countries accounted for 16 per cent of export revenues. In addition to the Gulf countries ONIDA has a presence in Russia, Ukraine and neighboring CIS countries. Apart from Television Exports to Russia Onida also exports DVD Players and High end LCD Televisions. Onida had a very good reputation for its CRT TVs until the mid 2000s.

Candy is the 14 inch Colour TV launched in 1999 with much hype. In the early 90's the Indian brands were ruling the roast with no serious external competition. Then came the rush of Global brands to the Indian market. The market began to get crowded and technology no longer became the key differentiator. Candy was a serious effort from Onida to invent a new segment in the crowded undifferentiated marketed. Candy was truly a Colour TV, in the market where all TVs were either black or grey, Candy came with four color variants. The concept was good. Have a TV which is colourful and targeting young customers.Candy was conceptualised based on certain customer insights. The young customers would like to hear loud which often created irritation with the grownups. Hence why not have a TV which has wireless headsets which would ensure privacy to the audience. The managers thought that the attractive colors on the cabinet and the cordless headset will act as a differentiator. Candy came in four colors: Berry Blue, Mint Green, Lemon Yellow and Cherry Red.The brand managers were too ambitious about Candy. The brand was priced well above the existing 14 inch televisions. Candy waslaunched at a 40 % premium over the other brands. Candy thought that customers will be willing to pay a premium for the differentiators that the candy offered. But the brand failed. In fact during 1999- 2001, the brand was selling like hot cakes but later the sales slipped. Ultimately Candy was no longer there in the market. Onida's market share in the Color Television (CTVS) market went up from 9.5% in 1997-98 to 11.7% in 1999 (In 2000, Onida's market share was 13%). However, almost 45% of its sales had come from the 21-inch segment. Onida therefore decided to increase its market share across all categories. Onida, which was better known as a 21-inch Television Company, wanted to rejuvenate the brand by entering the 14 inch and 20 inch segments.TargetingCandy focused sharply on young people; it was targeting people between the ages of 12 and 25. Market research showed that this age group was looking for personalized products. As a result, Candy was configured to meet this need. For instance, Candy could be configured to different channel choices.

Positioning ConundrumIn the late 1990s, Onida was eyeing the replacement market in which black TVs were exchanged for colour TVs. This segment accounted for 25% of the CTVS market. Onida positioned Candy to tap this market. Research carried out by Onida in 1998 revealed that 60% of TV repurchases were done by 24-to-35-year-olds...Product DifferentiationThrough Candy, Onida was planning to differentiate its product in the overcrowded CTVS market. When Candy was launched in 1999, it was seen as a bold attempt to stand out in the overcrowded Indian television market, which had seen nearly ten new entrants since 1995.Japanese brands like Sony, National Panasonic and Toshiba, and Korean brands like Samsung and LG, had entered the Indian television market at the same time...What went wrong?As mentioned above, Price was obviously the villain. The small TV market was the most price sensitive one and customers was not willing to pay 40 % premium for color alone. The brand failed to convince the TG on the value proposition of the brand. There was segmentation issue also playing spoil sport. Candy was not focused on the TG because some where the brand wanted to attract the replacement market ( New TV for Old) rather than positioning itself as a second TV. This put additional volume pressure on the brand which was at best a Niche brand.Because of the blurred segmentation, positioning also suffered. Instead of positioning as a youthful vibrant brand aimed at the youth, Candy was struggling to find the right positioning. It was trying to compete with the large TVs instead of creating a new segment. More over reports suggest that the four colors were not enough to create a vibrant brand. Some customers felt that the colors are too dull to be paid a premiumIn 2001, Candy came out with a variant Candy Duet which had two colors. The brand made a big mistake by introducing a 20 inch variant further diluting the brand.

Candy when it was launched was touted as the APPLE (brand) of Televisions. It was expected to do what Apple did to the Computer industry. The brand was to take aesthetics as the main attribute and revolutionize the market. But it neither had the aesthetics of Apple nor had the staying power. Candy is a case of poor marketing execution of a good product concept. An idea that could have carved a place in the market on its own. Onida had big plans for the brand. It planned to take Candy to the level of a multimedia brand but could not sustain the initial success. It failed to understand the value proposition of its consumers nor was it able to create a meaningful and sustainable differentiation. Somewhere in 2002-2003, the brand was quietly laid to rest.