Mohan Padmanabhan
‘AIM’, ‘Delite’ and
‘Vaxlite’ may be pedestrian: another set of ‘me-too’ products,
collected from the panwallah for 50 paise, used and thrown away. But the real enigma is
‘i kno’, especially from the marketing point of view. Labelled as the collection
series, these upmarket sturdier matchboxes (priced at Rs 1.50 for a box of 40 sticks with
coloured flints). 100 per cent outsourced from the cottage sector and marketed by ITC with
its vast supply chain network, mark the beginning of a new marketing journey- a journey to
help befriend the ubiquitous, but hardly noticed matchbox, which can be made to carry much
more than mere friction sticks.
Senior company officials say that the
project is one more in the line of ITC’s new businesses based entirely on the
outsourcing model, and aimed at improving the lot of Indian SMEs and preparing them for
international competition.
Speaking to Business Line recently
on the brand-building exercise being taken up to make these designer matchboxes go places,
Mr. Rajeev Gopal, CEO, Safety Matches Business of ITC, said, "We are trying to
convert the matchbox into a high involvement product from being a low involvement
one."
The consumer spend in this segment is
pegged at a handsome Rs 1,250 crore per annum, and the industry turnover at this point of
time is said to be around Rs 800, riding on the back of some 24 billion matchboxes sold
annually. While admitting that converting a matchbox into a high involvement product for
the not so discerning customer was a Herculean task, Mr. Gopal feels it can be done in
stages- distribution first, and then the big bang.
ITC, with core strengths in paper and
board, printing and packaging, brand building, trade, marketing and distribution and a
proven supply chain management, has taken up this challenge. Says Mr. Gopal: "We are
trying to do our bit for the obscure SSI matchbox units, which are dime-a- dozen, but
capable of delivering high quality under strict supervision." The company is now
working with as many as 20 SSI match units in places like Sivakasi, Kovilpatti and
Gudiyatam in Tamil Nadu, and the experience has been extremely rewarding, he points out.
The 50 paise matchboxes account for 92 per
cent of the Indian market today, and "our aim is to gradually scale up this 8 per
cent segment through quality matches which would be picked as value for money". The
initial burst is to make the product as visible as possible, kindle customer curiosity and
then see if that punchline could be built around the brand.
What are the Chinese Pyramids or the Easter
Island of Statues? General knowledge questions like these are featured at the back of the
i kno series, which can be collected. According to the CEO, a matchbox is very much an
eastern concept, and what better way to re-kindle knowledge among young minds through
safety matches.
The Mangal Deep range of carborised
matches, competing with Homelite, and prices the same at Rs 3 for a box of 150 sticks is
strictly aimed at the Indian housewife- the helpful tip for her on the pack is "add
about one-third a cup of white vinegar to your rinse cycle, and your clothes can come out
brighter". Some carry interesting cooking recipes too.
There are also mini crossword puzzles on
the back of the inside boxes. Mr. Gopal says the matchboxes, launched only some six months
back, will have to first go through the distribution chain in the first year, after which
serious brand-building will begin. He conceded that 2003-04 will be a crucial period.
Asked on the experience of working with totally unorganised SSIs, he says they are open to
ideas, and ITC was helping them build infrastructure and also step up a notch or two in
terms of quality. "We are doing out bit to help them raise their capabilities to
upscale at short notice, as volumes drive this market," said Mr. Gopal. On the kind
of volumes required, he said there are bundles of 600 matchboxes, and "we need to
push at least 10,000 bundles per month".
Asked why ITC zeroed in on matchboxes, Mr.
Gopal said the company has had a long association with this product, from 1991 to 1996,
when complete matchboxes outsourced from the market were being exported (as part of the
company’s merchant exports business) to countries in Africa, South America, West Asia
and New Zealand.