Monday, 26 April 2010

Strategy: Why Videocon wont “pakad life ka any signal”!

Glued to swanky Videocon ads aired on television these days? The advertisements depict various stories trying to connect emotionally with the viewers. Be it “naye kharche ka signal”, “naye job ka signal” or “naye dosti ka signal”, the company scores well when it comes to creativity. They have also managed to showoff India’s biggest brand Sachin Tendulkar every now and then. 100 cities in 100 days look aggressive from outside. But advertisement can only create awareness about a product; strategically the company seems to be lost out, before the battle really begun!

There are many reasons than one. First of all, “Pakdo Life Ka Har Signal" message given in the ads with the company’s reasoning that it underlines Videocon’s commitment to deliver an efficient service through a strong network. When you launch a new product, customer looks at the novelty. What is the value add if I switch from the existing one. And when it comes to changing service provider and number, the reason should be really out of the box. Videocon has emphasized on good signal or connectivity. But when you compare the level of competition, Videocon seems to be in a totally different space. Each service provider is focusing on value added services, promising customers better utilization of money. Good connectivity is not a ground to compete anymore. It is assumed that it has to be good.

Vodafone is trying to empower customer with its Power to you campaigns. DoCoMo is going for caller tunes and low calling charges. Aircel is focusing on connecting with social networking sites with its Pocket Internet add-on. Airtel is again promising on lower call rates and higher value added services. Videocon seems to be boarding the bus when everyone else seems to have taken the flight!

Industry is burgeoning with new entrants. The leaders, the likes of Airtel and RCom are facing problem retaining customer. The prices are falling, profits are hurting, and outlook seems to be bleak. Analysts are shrugging off telecom companies. 3G spectrum is only going to add to the worries of these companies by increasing the capital investments, not promising quick returns.

fOoD fOr ThOuGhT: Videocon doesn’t seem to be in the right industry at the right time. The strategy also isn’t promising. The brand value isn’t so high that people go gaga about the product. Hope somebody is listening and taking corrective steps before it is too late!


  1. Sensible post :)
    Ads are everywhere!!

  2. Like you know, reliance started the 1p/sec scheme and now it's with all the companies!

  3. @magiceye: Thnx a lot for the appreciation!

  4. @♫♪♥W!nK♥♪♫: Thnx a lot! Yeah you are right...

  5. nice post....its an excellent analysis..,..

  6. Nice post...!!! Sensible.. but i would have loved a bit more deeper analysis.


  7. @Azad: Agree with you. I actually compared ARPU (Average Revenue Per User) matrix of existing players. Their top and bottom line, analysts guidance for next three years. Videocon's 14000 cr capital inv in next three yrs, the possible return on investment and BEP. I didnt put it as it would have become too technical. I found data regarding suscribers per service provider a lot inconsistent. They have revealed how many gross additions but not net additions per month, so on and so forth.

  8. Well, I do not completely agree to the point. May be because I am not aware of the ongoing saga of Videocon launching its telecom services.
    "Good connectivity is not a ground to compete anymore"... I do not agree to this. This is THE basic thing which is still very very important to start with. Even today, I would not agree that vodafone or airtel or for that matter any other service provider, has very good connectivity. People do tend to change their service provider for this reason.
    Having said that, I do agree that Videocon needs to come up with other things as well. But then they are a new entrant and I am sure they'll pick up. Good that they have started with getting basics right (this is assuming that they really are providing better connectivity).



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