LED is the new redBusiness Standard, May 19, 2015

Eveready rebrands itself with an aggressive campaign and a new basket of products

Eveready's "Give Me Red" campaign that dominated the advertising space in the early 1990's, but lost much of its colour subsequently, was introduced about two decades back. It followed the introduction of the red plastic shielded leak-proof batteries which replaced the earlier range of white ones. Now, once again the Eveready brand, which was hitherto identified with dry cell batteries, is regaining its lost colour . And the company is actively branding itself as a portable power and lighting company. In fact, the Kolkata-based company, which has recently launched an aggressive "switch to the brightest LED bulbs" campaign, wants its LED bulbs to be the face of the brand in the coming days. It has already spent close to Rs 9 crore on advertising during the ongoing IPL.

"We are an established leading brand in the battery segment. LED bulbs is something we will try and push to make the face of the brand in the future," Eveready managing director, Amritanshu Khaitan said. Amritanshu Khaitan, the third generation in the Brij Mohan Khaitan family, who has been spearheading the process of reinventing its business with a range of new-age products like LED bulbs, portable chargers for mobile devices, has tasted quite a bit of success since he joined the company in 2011. While, in 2011-12, Eveready posted a net loss of Rs 79.85 crore on revenues of Rs 980.30 crore, the company has turned profitable in the last couple of fiscals. For the fiscal ended March 31, 2015, the company's net profits more than doubled to Rs 49.02 crore from Rs 13.6 crore in the previous year. And net sales in 2014-15 stood at Rs 1,277.76 crore compared to net sales of Rs 1,152.33 crore in the previous year.

The turnaround has been well reflected on the bourses as well. The company's stock price has gone up by about 400 per cent in the last one year. With the market for its core business - dry-cell batteries - stagnating, the company's diversification into lighting products, especially LED bulbs, perhaps convinced the investor community that Eveready's business strategy is back on the right track.

While, the battery business continues to be its mainstay, the company expects the share of revenue from different segments to change in the near future. "Currently, battery contributes for about 65 per cent of the revenue. Going ahead, I think it should come down to 50 per cent and revenue from lighting may go up to 25 per cent from the current level of 10 to 15 per cent in couple of years," Khaitan noted.

Eveready is especially keen on the LED business, buying into its future potential and confident about the product that it has developed. Khaitan said, "In the case of LED bulbs, it is a new thing. Everyone is starting from scratch. We are very confident about our product's success."

Eveready has asked buyers to "switch to the brightest LED bulb" in its campaign, but this claim has been contested by rival Havells. In the advertisement campaign, for which Eveready tied up with Bollywood star Akshay Kumar, the company compared its LED bulbs on three parameters - lumens per watt, lumens and the maximum retail price (MRP) vis-a-vis similar LEDs from competitors such as Phillips, Syska, Bajaj, Halonix, Surya and Havells.

Thus, the campaign by Eveready "Check lumens and price before you buy" was an invitation to consumers to compare these two attributes of a bulb. And the advertisement claim was that these attributes in an Eveready product ensured that the LED bulb would be brighter than the rest. Havells contested the campaign on grounds that lumen was not the lone attribute determining the value of the product. There should be other factors that the customer takes into account. And therefore, it claimed in its suit that the advertisement was misleading.

However, in its judgment dated March 17, the Delhi High court dismissed Havells's appeal, observing that the "advertising campaign is not misleading" and "the factors compared are material, relevant, verifiable and representative features." Havells could not be contacted to confirm whether it would be challenging the order in a higher court.

As of now, the advertisements are quite frequently aired as Eveready is one of the sponsors of IPL this year. "We are increasing our expenditure on marketing. In 2014-15 the marketing expenditure was about 60 crore compared to Rs 35 crore a year ago. This fiscal it would be around Rs 75 crore," Khaitan said. Apart from regular advertising during matches, Eveready is also sponsoring the fall of every wicket during all IPL matches. The company is spending about 15 per cent of its annual advertising budget on IPL sponsorship.

"We actually started actively entering the category in February. I expect in three years' time, the LED business could be anywhere between Rs 700-1,000 crore for the company. Price of LED lamps is also expected to come down by 25-30 per cent as volumes build up", he added. Eveready's market share in LED bulbs is about five per cent, which it hopes will go up to 10 per cent in a year closing the gap with the market leaders in the segment, namely Philips, Cyska.