Transistor, what? This may well be the reaction of the cell phone generation. But this device that caught radio waves which brought with them news and music were once popular.
Eveready Industries is trying to tune in the transistor, again.
With FM stations soon to hit towns with less than 1 lakh population, the battery major plans to revive the radio segment. It will bring out ‘transistor’ sets for Rs 500 mainly for the rural and semi-urban markets.
The company also expects this move to charge up its core business — batteries, on which the transistors run. The Rs 1,300-crore battery category is growing at about five per cent.
“Radios may be declining as a category, but there is still a market today. With the launch of Eveready radios, we expect demand for batteries, especially the declining D size battery segment, to pick up,” says Amritanshu Khaitan, Executive Director, Eveready Industries.
Throwaway price
At Rs 500, Eveready expects good sales numbers from the rural market where the brand, which reaches some eight lakh outlets, is well known.
But the going may not be as easy for Eveready faces stiff competition from unbranded Chinese FM sets that sell for as little as Rs 150.
It may also find the going tough because most mobile phone handsets today have an inbuilt radio, and consumers may not opt for a standalone transistor.
But Khaitan is undeterred, banking on the size of the market. “There will be no added cost as we are outsourcing the radios and distributing them through our network. FM radio may be for cities today, but radio as a segment is also expected to get a boost as FM stations will reach out to towns with a population of 1 lakh,’’ he says.
Besides, the branded radio market has just one player. “The radio segment is estimated at Rs 100 crore with just a single branded player, Philips. Eveready radios will have different colour shades and will be made available pan India. We see our entry into the radio segment as an extension of our core business of batteries,” adds Khaitan.
Batteries contribute 60 per cent of Eveready Industries’ sales of Rs 1,030 crore. It is a market leader with a 50 per cent share in the segment, followed by Nippon and Panasonic.
AD BUDGET
Setting aside an ad budget of almost Rs 30 crore to build the brand with the same baseline ‘Give Me Red’ (since 1992), the 100-year-old brand expects to a heritage rub off on new categories such as portable power products and lighting instruments, apart from radios.
The new campaign for its latest offering of Eveready Ultima batteries (pegged at a premium pricing of Rs 20) with actor Akshay Kumar as brand ambassador, is also expected to build equity for its new and future products including the radios.