This is the story of the all-time market leader of air conditioners in the Indian subcontinent. The situation of Voltas was quite a roller coaster. The company was the leader in the early times, with a market share of 40% in 1990.
But after liberalization, Voltas saw a massive decline in its market share, and soon the Tatas worried that they might have to pack their bags from the air conditioning market as their share was as low as 6%, with big brands like Samsung, LG, and the American company Carrier capturing the Indian market in 1993.
But then something remarkable happened in the first decade of the new century that made Tata-backed Voltas the market leader again.The secret to its success was its big bang strategy. Voltas has now shifted his entire focus to the retail market, which was ignored earlier.
But Voltas learned from their mistake, and now they are the marketing company. So who manufactured their ACs? They have entered into a 50% partnership with Fedders International for the same.
For any product to lead the market, it has to excel in both its tangible value and its perceived value. Let us understand them one by one. Tangible value is the real value of a product. In ACS, it was its cost, efficacy, utility, etc. After the partnership, the cost of their ACs dropped by 20%, from Rs 10,400 per unit to Rs 8000 per unit.
Also, they shifted their plant from Thane to Dadra because of the tax exemption. This gave Tesla massive power to focus on competitive features like air purifiers. Voltas did research on how much electricity a household in India can bear for ACs and found a golden number of Rs. 1000 per month.
So they created highly efficient ACs, which made the consumers happy.To emerge as a brand and create perceived value for the customers, Voltas created a buzzword that changed the future of not only Voltas but the entire air conditioning market. The buzzword was intelligent cooling.
You all remember the Mr. Murti advertisement in which the person has many transfers in different parts of India. The campaign was for their all-weather awnings, a great product for the Indian market. They also created a 0.6-ton air conditioner for just Rs 9999/- to penetrate the large segment that uses air coolers.
With all the strategies, Voltas has remained the leader for the last 10 years.
