“We want our products to be at arm’s length to customers”–Gautam Ghosh

Now that you have donned a new hat, how are you going to use your 27 years of experience to accelerate the growth of MMD in India?
MMD, the brand license holder for Philips monitors, aims to become one of the top 5 players in the monitor's space in India. The company recently kick-started India market revitalization by launching an extensive range of new LED and LCD monitors, which is in direct competition with the likes of LG, Samsung, AOC, and Acer.

There are 2 main sides of our line of busi­ness-channels and customers. On the custo­­mer's side, we don't face any issue in terms of brand recall or recognition in India. We are apparently one of the oldest brands present in the country. However, looking at the current situation, we have decided to focus more on the channel's side. Customers are anyway aware of the Philips brand but just being aware does not suffice our requirements. They need to know where to find our products.

So, our strategy is basically ‘arm's length marketing' wherein we are grooming and trai­ning the distributors to position our products at the arm's length of the customers. Once this is done, the chances of getting picked up are high. It is all about the reach of the products. What we have realized is, we don't have to dwell too much on the customer end but need to activate our channel partners.

Since you will be spearheading MMD's business in India, what will be your approach in providing strategic business direction for the Philips brand?
We are looking at positioning ourselves as one of the top 5 brands in the Indian market by the end of 2011. As far as the company's direction is concerned, we are directed to see ourselves in the league of top 5 brands in terms of numbers, penetration, and value.

And in order to achieve this position, we want to build a strong channel ecosystem and at the same time, address the customers' need as well. Any advertisement in a consumer magazine would reinforce the brand but won't create a new customer for us. We will focus more on the channel's side and take help from channel publications to ensure that channel is continuously fed with information about Philips, our future plans, strategies, etc.

What was the intention behind going in for a regional distribution model?
In order to gain the leadership position in the Indian market, starting 2011, MMD India has adopted a tier-2 distribution model, wherein it has started working with regional distributors, who in turn, will directly sell to the retailers. The 4 RDs that the company has engaged to take its products to the Indian market are: Global Infonet (North), Nook Micro Distribution, a subsidiary of Redington (South), Roop Technologies (West), and Technocrat (East).

I have realized from my experience that India may be one country but actually things are little different. Each state is different and it is very difficult for us to go to the state level in terms of distribution. And since every region has a peculiar buying behavior, we decided to go to the regional level. To initiate the channel, we thought it is important to have a regional distribution system so that we can do our marketing focused on regional requirements and address the buying behavior of the region. Earlier, everything was done through national distribution system. Seeing this scenario, it definitely makes sense to go for regional distribution model, so that we can focus on regional buying behavior. This is probably where my experience came in handy.

But do you think it is a viable option to do away with NDs as well as sub-distis?
Earlier, the company used to work with NDs like Redington, ACS and prior to these two, Compuage and Priya Distributor were other two distributors as well. But soon, after I joined MMD India, I realized that these big players are not equally strong in the different regions. If a distributor is based out of South India, the majority of its marketshare will be coming from that particular region only. They are not strong in other regions. At the end of the day, their effectiveness is more in their own region. So, de-facto, going with the RDs makes a lot of sense.

The reason for eliminating sub-distis is that probably we wanted to have first hand experience of the retail behavior of customers when they walk-in any showroom, ie, the last point of sales. Besides, we need to know the retailers first hand. With the involvement of sub-distis, it is difficult to track retailers.

Having said that, we are not taking any kind of unconventional approach towards the market. The partners with whom we are working are tried and tested. All our RDs have been in IT distribution for a fairly long time now.

What are the factors that drive your product innovation?
Though our products are not very unique, what drives innovation is to stand-out from the crowd and address the need of the hour. Besides, we insist on bringing values to our products so that while we are serving the purpose of giving visual output through our monitors, we are also giving our customers value additions like ultra-thin monitors and other innovative features.

Moreover, we have a very strong R&D and not to forget, our competitors also make monitors, but MMD only makes monitors. Like them, we are not into consumer appliances space. Our entire focus is on monitors.

Will there be more focus on B and C-class cities concerning your products? Also, how are your products being priced, looking at India being a price sensitive market?
India lives in these class cities only. Another reason for adopting regional distribution system is to cater to the demands of these cities. The NDs get their business from big metros and urban cities. Their focus is not on the small towns. But, RDs like Technocrat would go to these small cities because the company gets its business from these B and
C-class cities.

Our products are competitively priced and we wish to be among the top 3 players in terms of pricing. Very soon, we are going to put a calculator on our website which will guide our customers that even if they pay some extra amount to buy a value-added product, how soon they can recover their money. We probably have the largest variety of products but at the same time, we are not going to focus on the bottom of the pyramid pricing. Our products won't be the cheapest and will not be available at the price of a local brand. It would come amongst the branded products pricing.