In Catalyst

1988: Electric rice cookers marketed in India.

1997: Nearly ten years later, the market is still not as large as it should be.

Indo Matsushita Appliances Co Ltd (Imaco), the manufacturers and marketers of National electric cookers, was incorporated in September 1988. Electric rice cookers were imported from Matsushita (the owners of the National/Panasonic brands) in Completely Knocked Down condition and assembled in Madras (now Chennai) and sold under the Nippo brand. The company commenced commercial production in October 1990. Imaco launched the first electric rice cooker brand in India and is now the largest player in the market. It would actually be more appropriate to say it is The player in the market with a marketshare of over 92 per cent. In terms of cookers made by Imaco (but sold by others), the company has a 96 per cent share. The market size right now is around 2.75 lakh units a year. Other brands in the market are Philips, Singer, Crompton, Forbes, Vijay and Inalsa. Imaco makes OEM supplies to Philips and Singer.

N. Balachandran, Company Secretary, Imaco, says that the market survey that the company had commissioned came to the conclusion that the company would be trying to change something that was traditional. Imaco, however, was confident that it could persuade people to change within two years and then the sailing would be smooth. Now we know how the Indian consumer reacts to anything that is averse to tradition: Ignore the product. Witness: Kellogg's attempt to change the Indian breakfast habit. A category witness would be microwaves. The fact that these products are picking up has more to do with repositioning and education rather than consumers suddenly flocking to the stores to buy them. But the company had one defence for its expectations: Consumers converted very fast to LPG from kerosene as cooking fuel. So what happened ? Well, for one thing, a shift in fuel did not mean a break from tradition -- one could cook any kind of food faster with the new fuel; and the second reason was more to the point - rice is not staple food to the north Indians and south Indians preferred the pressure cooker because it was used as a multi- purpose cooker.

Actually, the whole equation boiled down to that of convenience: the shift in fuel was very fast because of the perceived convenience; the shift in case of electric cookers and microwaves is slower because the perceived convenience is lesser. The electric cooker was launched as a RICE cooker and the perception that it could cook only rice stuck. As already mentioned, rice is a staple food in the south and sales were more. Balachandran says that even now there is a skew towrds the south in the company's sales (3:2, to be exact). At the time of its launch, rice cookers were bought for their snob value and only later did people realise that it was also a utility product.

T. Shrikanth, Regional Sales Manager, Imaco, says that the cooker started to sell well at a later stage but usage was less. And here was the problem for the company: For the product to actually pick up, perceptions had to change and the usage was the product was, to say the least, minimal. Also, the reference group is important for perceptions and the company had another problem here: Very few people used the cooker and still fewer used them in imaginative ways. Whenever a reference to electric cookers were made, the reaction was muted and the others in the reference group were naturally not motivated to buy the product. What the brand needed then was a repositioning-cum-education strategy.

What did the company do? Till 1992, the company advertised the product on telvision and print in a major way. In 1993, it woke up to the fact that advertising a product that had nearly no reference in reference and peer groups was useless. It decided to tackle education on a person-to-person basis and stopped major advertising. At present, the advertising is regional and is based on the regional head's budget.

Currently, the promotion strategy is that of displays and demonstrations at the reatailer level and participation in all major consumer exhibitions. One of Imaco's strategies to increase the penetration of its electric cooker was to adopt parallel selling -- the product was offered free with Videocon refrigerators for a period of time. What looked like a good strategy at that time backfired when people failed to treat the product with due respect -- it was just a freebie that might or might not be useful to them. Most of these people OWNED an electric cooker but did not USE it. This, in the end, did nothing to change perceptions about the product, and eventually, this bomb, too, proved to be a dud. As sales figures show, there was a quantum jump in sales (around 50 per cent) in 1993-94 over 1992-93.

This is the point of time when Imaco shifted its focus from advertising to education. The company also started cookery classes at a very nominal price. This helps the company in : one, making people aware that an electric cooker is not just a rice cooker; two, tracking down earlier customers who haven't been using their cookers; and three, spreading awareness and promoting the product by offering the course to people without electric cookers. These classes are offered in the metros (except Mumbai) and Bangalore, Cochin, Hyderabad and Madurai. 1993 was also the year in which the electric cooker was repositioned. It was no longer an electric RICE cooker. It was an electric cooker. And to press the point, the company also introduced two-way and three-way separators which showed customers that the cooker can also be used to cook items other than just rice.

Luckily for the company, the repositioning coincided with the huge increase in the amount of satellite programmes and more and more Indians were increasingly inundated with foreign and modern Indian cook shows. This was also the time when Indians started to look out for different cuisines and styles of cooking. And, says Shrikanth, ``more men became interested in cooking.''

But what is lacking in this market is the presence of a competitor. The onus of creating and developing the market is on Imaco and a short study of pioneers and imitators in the marketplace is heavily loaded against the pioneers. The point is this: A 92 per cent marketshare doesn't mean a fig if the market is still in its early stages. Whatever change in mentality for acquiring the product -- the shift from snob value to utility -- does not mean that the market has matured. There is still a long way to go and some well known brands such as Philips and Crompton are still just testing the waters. Some competition right now would help Imaco, the new entrant and the industry itself.

One more company, say BPL, which is planning to enter the product category, would be welcome for one reason: The new entrant would also spread awareness and expand the market. Then, the basis of competition would shift to product features, options and the resultant versatality. Imaco is already gearing up for things to come by offering an upgrade to a non- stick pan to existing electric cooker owners. One of the keys to business success today is customer focus and building a relationship with the customer in the consumer durables business. However, Imaco lost track of customers who came in through the parallel selling route. And some of the other customers (through corporate gift schemes etc) don't register with the company. Now, Imaco needs a customer database and finds that it doesn't actually have a complete one. The offer of upgrades and cookery classes will hopefully help the company track its unknown customers.

The future? The total sales of electric cookers in India including some mini-metros, is six lakh units in the last seven years. However, there are an estimated 22 lakh SEC A,B households in the metros except Calcutta and another 4.6 lakhs in Bangalore. The category has nothing else to happen except grow.