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Pricing Strategy
Of
Onida washing machines
318
Roll no.
R318B59
Introduction
History
Onida was started by G.L.Mirchandani and Vijay Mansukhani in 1981 in
Mumbai. In 1982, Onida started assembling television sets at their factory in
Andheri, Mumbai. Since then, Onida has evolved into a multi-product
company in the consumer durables and appliances sector. Onida achieved a
100% growth in ACs and microwave ovens and a 40% growth in washing
machines last year.
Onida Today
Today Onida is one of the popular electronics brands in India. Onida has a
network of 33 branch offices, 208 Customer Relation Centers and 41 depots
spread across India. As on 31st March 2005, Onida enjoyed a market
capitalization of Rs.301.46 crore. As the Chairman and Managing Director of
Mirc Electronics, Mr Gulu Mirchandani is responsible for formulating,
incubating and delivering emerging technologies and services in the area of
consumer electronics. Under his leadership and guidance, Mirc Electronics
won an Award for Excellence in Electronics in 1999, from the Ministry of
Information Technology, Government of India. Mr Gulu takes personal
interest in conceptualizing and delivering various designs which appeal to
Indian consumers. He also takes great pride in people management practices
at Mirc Electronics and personally interacts with personnel at all levels,
to be used normally. So what you`re left with are impeccably clean clothes
and the secrets of how to keep them that way.
Question: 1
For the assigned product and brand, delineate the pricing strategies adopted
by the company. Also highlight the impressions as viewed by the competitors
and customers, according to you?
Answer:
Price is the only element in the marketing mix of a firm that generates
revenue. It is the only P out of 4 Ps which generates revenue. Price is cost at
which company sell their products. Price is all around us. Price includes
rents, fees, rates, wages, salaries, commission etc.
In the given case study my product is washing machine and brand is Onida.
Now I will explain the price strategies adopted by Onida for washing
machines as below. But before answering the question there are few things to
get familiar with like:
Objective of Onida washing machine
Because of the recession going on the main objective of Onida washing
machine is survival like any other company. But this survival is their short
term objective. But their main objective is to maximize their market share.
They are doing this because due to increase in sales their overall cost of
production will decrease. This leads to proper utilization of resources.
Demand for Onida washing machine:
The demands for washing machines are more elastic. (Elastic means
percentage change in price is less as compare to percentage change in
demand.) Because if there is less change in price the demand for washing
machines is largely affected. For example the prices of washing machines are
less in festival session then there will be more demand for these products
service contract. Onida provide warranty card along with their washing
machines and also provide after sales services for a stipulated time
period for free.
Answer:
In this I am comparing Onida washing machine with washing machines of
Samsung whose price is more than Onida and LG washing machine whose
price is less than that of Onida. The prices and features of these companys
washing machines are given in the table given below. These washing
machines are of same capacity and almost have same features.
Price (Rs)*
Main Features
Type
Loading Type
Loading Capacity
Program Options
Auto Restart
Automatic Drainage
Child Lock
Prewash Soak
Heavy Wash
Normal Wash
Light Wash
Number of wash baskets
Other Features
Spin Shower Facility
Detergent Dispenser
Auto Power Off
End-of-Cycle Buzzer
LG WP-9031
Samsung WT 7600
8,690
7,690
8,490
Semi Automatic
Top
6 kg
Semi Automatic
Top
6 kg
Semi Automatic
Top
6 kg
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From the above table we see that Samsung provide high price washing
machine than Onida and LG where as LG provide less price or below price
washing machine than Onida and Samsung. The main reason for price
differentiation is as below:
From customer point of view:
SAMSUNG:
The reason for the high prices of Samsung washing machines is
that they have high brand image in the market and they are cashing their
customers loyalty.
Their customers are because the washing machines of Samsung are of higher
quality that is why they are charging higher prices and offers product of
premium value.
Their product fall in high price quality. So people are willing to pay higher
price.
ONIDA:
Onida provide their product at medium price, although there washing
BIBLOGRAPHY
www.mouthshut.com
www.truthatonida.com
www.rediffprices.com
www.wikkipedia.com
www.google.com