‘Onida’ for those of us growing up in the 1980s and 1990s was the go-to brand when it came to home-grown electronic appliances. With a market share of 13%, Onida ruled the Indian TV market for almost two decades before losing the ground to Japanese and Korean companies.
Superior products backed up by extraordinary design, persistent marketing and state of the art technology made Onida a household name in India.
Steps to Success
Onida, incorporated in 1975, was owned by the Mirchandani family and later acquired in 1981 by Mirc Electronics (also owned by the Mirchandani’s). What started off as a family business has now evolved into a multi-product brand in the consumer durables and appliances sector.
They inaugurated their first factory which was situated in Andheri East, a suburb in Mumbai, Onida house, a two-storey building. It was where television sets were manufactured and assembled. And since then, it has been doing tremendously well which can be demonstrated from the number of awards and accolades won by them.
In the 1990s, Mirc Electronics started exporting its electronic products to the Middle East which contributed almost 65% of Onida’s export revenue. In addition to the gulf countries, Onida also had its presence in East African countries (Uganda, Tanzania, Kenya, and Ethiopia) Russia, Ukraine.
Onida is a brand best remembered for its appealing yet “devilish” mascot. The consumers loved the devil and identified Onida with the devil. The tag line, Neighbour‘s Envy, Owner‘s Pride, was as captivating as the mascot.
This worked well for Onida, as it had come up with the branding from understanding the middle-class mentality prevailing during those days. During the 1980s and early 1990s purchasing items just to show off or to establish their own worth in society was a commonplace. The famous caption accurately targeted the insecurity and inferior complexity in the minds of the middle class and upper-middle class.
The devil turned out to be an angel in disguise as his naughty smile and message helped Onida withstand strong pressure from competitors.
Onida was in the top 3 brands in the market share behind BPL and Videocon. With advertising at its peak and everything going just right, Onida became a victim of liberalization and hit rock bottom due to its own mistakes.
What led to Onida’s downfall?
1. Internal management issues
The conflict between brothers Sonu and Gulu Mirchandani and brother-in-law Vijay Mansukhani over the control of the Onida group destroyed the brand equity. The main reason for the family feud was Onida’s most valuable asset, its trademark. It turned out to be “A Brother’s Envy, Owner’s Pride”.
Gulu bought out Sonu‘s stake in their company Mirc Electronics. But Sonu wasn’t going to remain silent, so he launched a range of electronic products under the Onida brand and through a company- Onida International.
The twist in the plot was that he did not wish to develop the electronic appliances himself but instead joined hands with a Japanese brand to market their products under the Onida trademarks.
This made things all the more difficult for Onida to recover and even though it tried, it failed miserably due to the conflict of interest within the management.
2. Failed Advertising
What set Onida apart from other brands was its marketing strategy. Onida was, and still is synonymous with the devil that represented the electronics company‘s public image. This mascot paired with its famous caption ‘Neighbour’s envy, Owner’s Pride’ created a huge impact in the minds of the target audience.
The main cause of Onida’s failure could be attributed to the frequent change in advertising agencies. As a marketer, the ownership of the brand should lie with the Company and not the agency. But what is seen is that the brand managers ‘outsource’ the strategy to the ad- agency.
Owing to India’s changing consumer tastes and stiff competition from international brands like LG and Samsung, it decided to part ways from its advertising agency Rediffusion and shifted to McCann Erickson.
But as usual, when the agency changes, the brand elements also change, regardless of the quality of the existing branding strategy. This change proved to be disastrous for Onida and the brand suffered for almost 10 years and has never recovered since.
Then Onida tried to stage a recovery by changing its agency, yet again, and the Devil returned in a new avatar and a new tagline “Nothing but the truth” but this new arrangement also could not pull Onida out of its own mess.
In 2007, Onida re-launched its campaign for A/C and with a new tagline “It can change your life”. Now the new campaign for the air conditioner features a new Devil and the tagline has again changed to “Experience the desire”.
If Onida hadn’t changed its marketing agency so many times, you’d probably be using their brand!
Onida which was already in deep trouble moved on to further confusion with an uncalled change in the positioning strategy. Even before establishing the earlier theme based on “truth” in the minds of the consumers, it decided to reposition itself.
3. New Entrants in the Industry
With the opening up of the economy, many Korean brands such as LG Electronics and Samsung made its way into the Indian market. Their aggressive pricing and distribution strategies and large scale of production gave a cut-throat competition to Indian companies such as Onida, BPL, and Videocon.
Onida which previously had a market share of 13% and was in the top 3 Electronic appliance companies in India, soon became a victim of liberalization. The older players like BPL and Videocon too, could not cope up with the dynamic conditions and compete with the low prices offered by Korean companies and eventually lost their market share to them.
4. Aging customer base
The consumers of Onida have grown older with changing times but the brand has failed to evolve itself to meet the needs of the current generation. Onida has attained brand amnesia and has forgotten what it really stands for.
5. No After Sales Service Provided
Onida did not pay much attention to the problems faced by the clients. Neither did it have a good after-sales service team in place to deal with the complaints. This created great dissatisfaction amongst the consumers which ultimately had an impact on their sales.
Will Onida make a great comeback?
Onida is on its way to charter a comeback in India’s consumer electronics market. In the next fiscal, the company is hoping to grow around 20%. A major portion of this growth will come from tier two towns, which are turning into mini-metros catering to the middle-aged and young millennials who are the drivers of consumption.
The company has taken proactive measures to reduce its debt. Interest costs bite into the company’s cash flow and is a major deterrent towards high profit margins. Hence, MIRC reduced its debt from ₹187 crores in FY16 to ₹66 crores in FY18.
Mirc believes that the only “same” now is constant innovation and improvement. And in the light of the same, it has launched new products such as refrigerators and televisions.
In 2018, it launched the Onida KY Super Thunder TV, which delivers 3,600 watts of sound, as market research had shown that Indians prefer the clear and loud sound on their televisions.
For instance, its semi-automatic washing machine, comes with a fitted brush in the center of the tub which helps in cleaning cuffs and collars.
Now it also has ACs that use voice commands through IoT (Internet of Things)
The brand has also strategically revamped its operations and focused on marketing and sales.
It has identified Contract manufacturing for third parties as an opportunity to leverage its infrastructure and give a boost to its revenues. It is in talks with MNCs and global brands to enter into strategic alliances, one of them being Reliance Industries (RIL).
The government’s focus on ‘Make in India’ is an excellent incentive for MIRC to pursue contract manufacturing with its facilities, manpower and other resources in place.
The agile and nimble approach of the founders has turned around the fortunes of the company pulling it out of the dark. It has climbed up the ladder from number 452 to number 377 on Fortune India’s Next 500 list for this year.
In a nutshell, even though Onida committed some basic and glaring marketing blunders, faced internal management issues and became a victim of increased competition owing to liberalization in 1999, it tried extremely hard to revive. And finally, after 2 decades or so, it can see some light at the end of the tunnel.