MARKETING MANAGEMENT

ASSIGNMENT NO: I

Product Failure
Of
ONIDA CANDY







Submitted by
Viswakeerthi R.S
(137MB159)
Onida Candy

Onida is an electronics brand of Mirc Electronics, based in India. Onida is well
known in India for its color CRT televisions. Onida was started by G.L. Mirchandani and
Vijay Mansukhani in 1981 in Mumbai. G.L.Mirchandani is the Chairman and Managing
Director of M/s MICR Electronics Ltd.

In 1982, Onida started assembling television sets at
their factory in Andheri; Mumbai It was established as "Mirc Electronics" in 1981.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 came out with the famous caption 'Neighbour's Envy, Owner's Pride'.
Another popular theme of the ads was a devil complete with horns and tail in the 1980s. The
devil was replaced by a married couple later. Onida has a network of 33 branch offices, 208
Customer Relation Centers and 41 depots spread across India. As on 31 March 2005, Onida
had a market capitalization of 3014.6 million.
Mirc Electronics won an Award for Excellence in Electronics in 1999, from the
Ministry of Information Technology; Government of India. Onida with its Sales & Marketing
office in Dubai reported a 215 per cent export growth in two years, setting the base for an
increased robust international presence.
The shipments to the Gulf contribute almost 65 per cent of Onida's export revenue,
while shipments to the fast growing East African market Uganda Tanzania, Kenya and
Ethiopia and the SAARC countries accounted for 16 per cent of export revenues. In addition
to the Gulf countries ONIDA has a presence in Russia, Ukraine and neighboring CIS
countries. Apart from Television Exports to Russia Onida also exports DVD Players and
High end LCD Televisions. Onida had a very good reputation for its CRT TVs until the mid
2000s.


Candy is the 14 inch Colour TV launched in 1999 with much hype. In the early 90's
the Indian brands were ruling the roast with no serious external competition. Then came the
rush of Global brands to the Indian market. The market began to get crowded and technology
no longer became the key differentiator. Candy was a serious effort from Onida to invent a
new segment in the crowded undifferentiated marketed. Candy was truly a Colour TV, in the
market where all TVs were either black or grey, Candy came with four color variants. The
concept was good. Have a TV which is colourful and targeting young customers.
Candy was conceptualised based on certain customer insights. The young customers would
like to hear loud which often created irritation with the grownups. Hence why not have a TV
which has wireless headsets which would ensure privacy to the audience. The managers
thought that the attractive colors on the cabinet and the cordless headset will act as a
differentiator. Candy came in four colors: Berry Blue, Mint Green, Lemon Yellow and
Cherry Red.
The brand managers were too ambitious about Candy. The brand was priced well
above the existing 14 inch televisions. Candy was launched at a 40 % premium over the other
brands. Candy thought that customers will be willing to pay a premium for the differentiators
that the candy offered. But the brand failed. In fact during 1999- 2001, the brand was selling
like hot cakes but later the sales slipped. Ultimately Candy was no longer there in the market.
Onida's market share in the Color Television (CTVS) 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.
Targeting
Candy focused sharply on young people; it was targeting people between the ages of
12 and 25. Market research showed that this age group was looking for personalized
products. As a result, Candy was configured to meet this need. For instance, Candy could be
configured to different channel choices.

Positioning Conundrum
In the late 1990s, Onida was eyeing the replacement market in which black TVs were
exchanged for colour TVs. This segment accounted for 25% of the CTVS 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...
Product Differentiation
Through Candy, Onida was planning to differentiate its product in the overcrowded
CTVS market. When Candy was launched in 1999, it was seen as a bold attempt to stand out
in the overcrowded Indian television market, which had seen nearly ten new entrants since
1995.Japanese brands like Sony, National Panasonic and Toshiba, and Korean brands like
Samsung and LG, had entered the Indian television market at the same time...
What went wrong?
As mentioned above, Price was obviously the villain. The small TV market was the
most price sensitive one and customers was not willing to pay 40 % premium for color alone.
The brand failed to convince the TG on the value proposition of the brand.
There was segmentation issue also playing spoil sport. Candy was not focused on the
TG because some where the brand wanted to attract the replacement market ( New TV for
Old) rather than positioning itself as a second TV. This put additional volume pressure on the
brand which was at best a Niche brand.
Because of the blurred segmentation, positioning also suffered. Instead of positioning
as a youthful vibrant brand aimed at the youth, Candy was struggling to find the right
positioning. It was trying to compete with the large TVs instead of creating a new segment.
More over reports suggest that the four colors were not enough to create a vibrant brand.
Some customers felt that the colors are too dull to be paid a premium
In 2001, Candy came out with a variant Candy Duet which had two colors. The brand made a
big mistake by introducing a 20 inch variant further diluting the brand.

Candy when it was launched was touted as the APPLE (brand) of Televisions. It was
expected to do what Apple did to the Computer industry. The brand was to take aesthetics as
the main attribute and revolutionize the market. But it neither had the aesthetics of Apple nor
had the staying power. Candy is a case of poor marketing execution of a good product
concept.
An idea that could have carved a place in the market on its own. Onida had big plans
for the brand. It planned to take Candy to the level of a multimedia brand but could not
sustain the initial success. It failed to understand the value proposition of its consumers nor
was it able to create a meaningful and sustainable differentiation. Somewhere in 2002-2003,
the brand was quietly laid to rest.