Friday, August 24, 2007

One more DVD player

When creating products (check this post out esp for the comments) is so easy, what stands out? I mean, adding a name to a product is so easy if you have the money; with Chinese sourcing, anyone can sell any electronic device. Watch out for the ecophilo range.

I read recently that Godrej has launched a DVD player, which made me think. Does it look any different from Samsung, LG or Philips? Does it do anything differently? Godrej is not even in the TV segment of the consumer electronics market. Give the customer a good reason why they should buy any new DVD player when everybody seems to be sourcing it from China (complete with stamping their name on it), unless you think that the average customer would walk into a store, see the Godrej name, be happy that he has found a reliable DVD player and walk out with it? This was my initial hunch, but it turns out that the story is bigger than that.

Many of these DVD players area actually manufactured/assembled in India (by a few players - contract manufacturers included) with the key components imported and Philips make a small sum out of every DVD manufactured. Also, most of these plants are located in tax free Uttaranchal so it looks like there is a scramble of sorts to open some plant in Uttaranchal and/or sell something produced there- either with an intention of fattening margins or with an intention of passing on the benefits to the customer as part of a strategy (Bajaj is doing this very well - it slashed 30,000 on a model recently).

But even so, does this make sense to Godrej? As a brand, their mindshare is not in electronics - refrigerators yes, washing machines and airconditioners, perhaps yes - the name spells reliability for these kind of equipment, but DVD's? Where to from here? I mean, will they launch a home theatre system? Or branch out into the computer electronics space? Or into the already crowded televisions space? I think Godrej is losing its way here, unless this is part of a strategy to make a splash in electronics. Then again, is there a long term vision here to compete with an LG or a Samsung in the DVD space - or is this a flanking strategy? Unlike an LG or a Samsung which are inherently into electronics for a while and have a head start, Godrej is a newbie here. These are my thoughts. Answers?


Mohan said...

One possible explanation is if they are targeting rural market. Assuming LG and Samsung aren't yet household names in rural area, it makes sense for Godrej to try to make use of their brand recognition to get into rural electronics market.

Neelakantan said...

Possible, but i would think that LG and Samsung have decent recall these days with their recent forays into mobile phones via Reliance.

Anonymous said...

Everybody seems to be widening their product basket to extract the most from the trade. Onida another India Player traditionally in electonics space is now selling washing machines!!! The Phillips which occupies the "Radio" heartland is advertising its water purifiers. A brand like Godrej has a huge dormant goodwill which they have not tapped beyond their their traditional categories. For the last 2 years there seem to be some rumours of Godrej planning a JV with Panasonic to make an electronics foray. Let's wait and watch