Read the caselet carefully and answer the following questions:
1. What were the possible reasons for Candy’s failure? Why could it not sustain the interest it had drawn during the initial months of its launch?
2. ‘Proper positioning is important, especially in markets where competition is intense.’ Explain what could be the pitfalls in positioning a product?
Onida's market share in the Color Television (CTV) 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.
In May 1999, Onida came out with a unique product, a 14-inch CTV set nicknamed Candy. Candy came in four colors - Berry Blue, Mint Green, Lemon Yellow and Cherry Red-and was priced at Rs. 9,990.
Soon after the launch in Mumbai, G Sundar, executive vice-president of Onida, invited 80 dealers to discuss how to
make the Onida brand appealing to the youth. Onida finally decided to use the cricket World Cup as a vehicle to rejuvenate the brand. Sundar banked on the World Cup to push Onida ‘Candy’, the ‘cute, funky, nifty, little product.’ Since Candy came with a free cordless headphone, one could listen to the cricket commentary on TV without disturbing anyone at home. To capitalize on the fact that technology was no longer a driving force Onida decided to come out with a superior looking television to attract the customer. Onida was banking on quality technology and superior aesthetics to take Onida ahead in the future.
It seemed to be an ideal product launch before the World Cup. With this strategy in mind, Onida started marketing Candy more aggressively than its other products. Hoardings were put up at prime locations in Mumbai. Just before the World Cup, Candy was launched nationally. Onida sold almost 4,000 Candy sets in the first month of its launch in Mumbai. Dealers in Calcutta, Punjab, Tamil Nadu and Karnataka also received a good response. Onida expected to sell around 2,000-3,000 sets per month in each of these markets. In December 1999, six months after its launch, the brightly coloured Candy seemed to be a runaway success. The company achieved its national sales target in the Mumbai market alone.
In April 2000, Onida launched Candy in dual coloured television cabinets. Called Candy Duet, it was available in four colours – Black Currant, Raisin Cream, Berry Delite and Double Mint in the 14-inch version. Onida maintained the old price tag of Rs 9,990 for its new products. Candy Duet was also simultaneously launched in a 20-inch version in three colours, Cherry Ice, Cool Mint and Berry Delite, priced at Rs 12,990 (somewhat higher than its competitors).
Onida was eying for the replacement TV market, in which black TVs were exchanged for colour TVs, as well as an Add-On-TV market at the same time. The replacement market accounted for 25% of the CTV 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. It seemed that Candy was ideally placed to tap this age group. Onida also planned to create a niche market for Candy targeting youth. However, in mid-2001, after two years in the market, Candy seemed to be in trouble. Onida Candy was vying in an overcrowded CTV market. Company sources did not reveal the exact sales figures. However, some estimates from industry sources indicated that, in mid 2001, Onida sold only 3,500 Candy sets per month nationally with the Mumbai market contributing less than 500.
Onida planned to gradually bring variants of the product like video games, calculators built into the TV and possibly Internet facilities. The company was also planning wall or ceiling mounting for Candy and customised colour designing. Commented Sundar, “If successful, the Candy variety will be used for the large screen TVs. We will use the sub-brand to tickle the taste buds of the youth.”
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Marketing case study 