Saturday, October 13, 2007

Khaitan : The Name is Enough

Brand : Khaitan
Company : Khaitan Electricals
Agency : JWT

Brand Analysis Count : 282

Khaitan is a well known name in the small appliance market especially in the Fans Category. Khaitan is a heritage brand which has a history of four decades. The brand came into existence during 1960s .
The brand is currently in a diversification mode extending itself to become a major player in the small appliances market. Khaitan now holds around 16% share in the Rs 1400 crore Indian Fan Industry.
Although the fan industry size is huge, the industry players are facing issues of competition from unorganized sector. Unorganized sector holds around half of the total market.It has to be noted that in the early 1990s the market was in the hand of four of five players like Usha, Polar, Khaitan etc . But later regional players hit the market with low priced fans which eroded the market share of these major players.
Facing this critical issue , Khaitan decided to enter the small appliances and electrical market since 70% of the revenue was dependent on fans. The entry ( related diversification) is aimed at reducing the risk of dependence of a single product category.
Khaitan was a brand built on trust. The brand was consistently positioned as a trustworthy brand and the tagline was " The name is enough ". From my childhood days itself , I have seen the ads of Khaitan and its popular voice over " What to say about Khaitan, the name is enough" . The brand was trying to communicate its core values of Quality and Trust. Although the ads were poorly executed, the communication strategy was consistent all through these years.
Inorder to reinforce the quality proposition, Khaitan introduced an innovative concept of Replacement bonds which was the guarantee from the Chairman Mr. SK Khaitan that the company will replace the fan if it has any manufacturing defects within one year of purchase.

In 2007 , the company diversified into small appliances (Heaters, Mixers,Iron) Electrical ( CFL,Circuit Breakers etc) . It is commonsense for a brand like Khaitan to enter the small appliances market because of the challenge it faced in its core fan business. I would say that it was late for Khaitan to diversify because the small appliance market has become equally crowded and highly competitive.
Khaitan knew that when entering a new market , it needs to change the perception of a " Fan Brand". The brand chose to take the Celebrity Endorsement route and signed the EX- Bollywood diva Karishma Kapoor as the brand ambassador. The new campaigns featuring Karshma is already on air. It is interesting to note that Khaitan is wise enough to retain the original tagline for its new range of products. The small appliance range is sub-branded as Hommate.
Watch the TVC here : Khaitan

Although Khaitan has diversified, it has not forgotten its core business.The brand has taken on the unorganized sector with a low priced variant Zolta. Interestingly , while the entire fan category is facing price competition, Khaitan has launched Designer Fans priced in the range Rs 10,000 - Rs 1,00,000. The new designer range is branded as Fantasy. Khaitan is also trying to strengthen its distribution by launching two company owned outlets Khaitan Fantasy and Khaitan City. Khaitan Fantasy will sell only designer fans while Khaitan City sells all range of products including small appliances.

Like any heritage brand, Khaitan is also trying to make itself relevant in the Indian market which has seen sweeping changes both interms of Competitors and also consumer taste and preferences.