How can small Sanitary ware manufacturing compete in Indian Market?
Indian sanitary ware market has exploded in last 10 years. In 2006, the market size of Sanitaryware was close to Rs. 1400 crores. At the moment, it has grown just a shade under Rs. 9000 crores. From multiple colour wares of sanitary ware products, the product has standardized to mostly white.
From the days of selling Indian Pans and 2 pc, western toilets and boring washing basins, the change in the design of wash basins, complete bathroom suite and water saving toilets have made inroad into Indian Market. Foreign companies and importations have increased as more and more tile companies too have started offering complete bathroom concepts. From 5 major organized manufacturers (Hindustan Sanitary Ware, Parry Ware, CERA and Johnson) the organized manufacturers have increased to 10 sanitary ware manufacturers in India. Still, the same old three companies HSI, Parry Roca ware and CERA top the turnover list in the same order. Saurashtra region of Morbi has become the major producers of sanitary ware in India. There are more than 100 units today in the unorganized sector. From high importation of Sanitary ware from China, Turkey, Spain the market has stabilized now to local and few sanitary ware companies.
Almost all the companies have gone for last mile delivery satisfaction by employing a trained plumber to facilitate the installation of the toilets, especially in bigger towns. From Functional Toilets to Lifestyle statement: The market was very low involvement functional toilets has given away to lifestyle aspirations. Be it customer or the companies all have moved to provide aesthetic and aspirational products from their own plants to diversification to faucets and importation of select premium end sanitary ware and collaboration with tile companies. HSI dreams to desire, Roca Parryware – bathrooms encompass the beautiful emotional moments, CERA – reflect my style.
Complete bathroom offerings: Almost all companies in the market are engulfing the customer by offering one stop solutions to the bathroom by diversifying or collaborating with contract companies to offer tiles, faucets, even geysers, mirrors and shelve, pvc pipes and wellness products. What percentage of customers buy other products are still a big question, but this approach enhances the engagement of the customer all the more with the company.
Companies investing in their showroom and display rooms in the sales counters: Gone are the days when the sanitary ware used to be stocked in warehouses or upper deck behind the shops, now they occupy the showcasing of the product in some cases with full water display. Companies with enormous range are left with no option but to invest in their showroom to showcase their wares.
Improved packaging: From hays covering the sanitary ware days the carton packing and clean units of sanitary ware have improved the aesthetics of sanitary ware buying, installing and transporting effectively. Companies are forced to move to Depots and C & F operations:
Earlier the dealers used to buy directly from the factory and have to invest in the complete truck purchases now with the depot operations the dealer investment in the stocks have greatly reduced and they buy as per the order placed by the customers as the inventory stock keeping units have increased. So, more number outlets have come increasingly to the manufacturers.
Increase in incentivization of Dealers: More and more companies are understanding the power of dealer incentives and have indulged in the same to bond the dealers to the product and have used them effectively to increase the sales. Companies like Kajaria, CERA, Jaquar have used very effectively get better market penetrations.
Attractive offers to Architects and incentives to interior decorators: Almost all companies have gone in for project selling by appointing business development executives who are well versed in satisfying the architects and interior decorators and added to that all these companies have their own architect.
How can small sanitary ware companies expand the market?
Most small unorganized sectors are making a big mistake trying to take on the large marketers who have the higher ad spend, better brand recall and higher resources in bigger cities. That is going to create a difficulty in scaling new heights. Direct competition is going to be difficult for the small companies to sustain.
1. Rationalise the products to few fast-moving items rather than having the wide range: Just concentrate on few sets of sanitary ware rather than unwieldy big range like larger companies. Ensure the product is completely quality oriented and functional.
2. Position in online presence: Have a greater web presence and good online catalogue for the product with product drawings and installation details: These companies must invest in a good web presence that can be downloaded by the customer, Architect and Interior decorators easily. Sites should help in getting the addresses and as well in able to sell directly to the customers. While delivery involves the local dealers, and pass on the complete profit to the dealer as if the dealer had sold the product.
3. Price the product very attractive to the customer: All the large companies spend lot of money in advertising, sales staff, promotions and incentives to the dealers. Cut them down to a minimum level. Study the big companies annual report give weightage to the salaries, travel expenses, advertising and Sales promotions and other selling expenses and profitability ratios. On the basis of which the small sectors should compete effectively on pricing. Work to create a value to the stockiest and as well give them the display sets free.
4. Create a project sales executive assistance to the dealers so that the sales staff is able to meet new projects and see the customers are satisfied. Once the builder uses the product try to keep associating it constantly. Deliberately do not have to go after the large real estate companies.
5. Go After cluster approach: Do not go after all the market. Take a cluster and concentrate on that market effectively so that resource spend can be maximized rather than spreading thin all over the country. Ensure the cluster has social specific advertisement and promotion to keep the brand alive.
6. Build Brand: On one area spend the money to build a brand and listen to the complaints of the customer and solve them fully. Provide some kind of incentives in pricing service or product offerings of combo nature to the builders who patronize your product and insist your brand name to be promoted in their projects.
7. Use the social Media effectively: Create a social media presence effectively to connect the customers and keep the customers interested in you. Try to go for loyalty bonus. Capture their address and send them innovative newsletters to them.
8. Try to bring in the internet of things to your product: Change the market rules. At least have one product that has technological advances in sanitary ware, like automatic seat lifting, water sensor release or an automatic start of the exhaust fans etc., that others are not thinking, even that sells very low quantity. In other words, constantly differentiate.
9. Make dealers, architects, interior decorators meet regular affair: Every year make it a point to meet the dealers’ architects and interior decorators to understand their feelings and emotions in marketing the products. Do not penny pinch meet them in good locations not necessarily in your factory.
10. Kill few products and bring in new products each year: Make an attempt to retire few products and bring in new products each year so there is a buzz in the marketplace. Try to go with complimentary products together to give the complete bathroom experience. You can give the tough fight to the larger companies.