CG Electronics: Misjudging Consumer Trends
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prathibakbCG Electronics: Misjudging Consumer Trends
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prathibakbCG Electronics Limited - A Wrong Analysis of Consumer Behavior
C.G. Electronics Ltd. was a company incorporated in 1983 by Mr. Atul Seth and
over the years had emerged as one of the forerunners in the growing segment of
the electronics and home appliances market in India. Presently it has a market
share of 30 percent of the home appliances market. The company’s product
strategy has been to offer a wide product range right from mono stereo, two-in-
ones, sophisticated music system, televisions, refrigerators, washing machines,
and microwave ovens. C.G. Electronics marketing strategy also included offering
the above products so as to match the needs and budget of the middle class and
upper strata of the society.
In 1991 Rahul, son of Mr. Atul Seth took over as the Managing Director of the
company. Seeing the intense competition in the market in the post liberalization
scenario, Rahul was keen to go by the principle that once you have targeted your
customer , you follow him/her relentlessly with attractive offerings .In 1994 he
started with a well-focused promotion and distribution strategies. The promotion
included spending Rs 10 crores in advertising through holding exhibitions,
organizing special training programmes for their sales force, using mass media
appeal, offering freebies and various other sales promotion techniques. For
distribution, Rahul went about the task of selecting exclusive showrooms and
franchisees to display their wide range of products. The location for the exclusive
retail outlets was also selected so as to match the perception of the consumers as
an “exclusive showroom” for them.
Even after two years of the operating the new promotion and distribution
strategy, the sales of C.G. Electronics, was not picking up to the extent the
company had thought it would. Rahul directed the marketing manager to do a
study of the other retail outlets to know the trend. The results indicated that
there was a change in the consumers’ perception about purchasing consumer
durables. There was seen a preference for purchasing goods from retail outlets
having more than one brand.
Questions:
(a) Where do you think Rahul went wrong in his analysis of consumer behaviour?
(b) Discuss the change in the role of consumers today as compared to the
consumers five years ago.
