Tailored Strategies Vital For India's Complex Market: B Thiagarajan

The air conditioning market, a pivotal sector in India’s consumer durables industry, continues to witness significant evolution and adaptation to changing consumer preferences and market dynamics. At the Pitch CMO Summit 2024, B Thiagarajan, Managing Director, Blue Star, in a conversation with Dr Annurag Batra, Chairman and Editor-in-chief, BW Businessworld, shared valuable insights into the current state of the air conditioning business and the importance of customer-centric approaches in diverse markets.

Market Trends

The growth is driven by the aspirational middle class, says Thiagarajan, adding, “While premium products are gaining traction, particularly in urban areas, the future growth trajectory lies in tier 3, 4 and 5 cities. India's vast and complex market requires tailored strategies for product marketing and growth. We've traditionally relied on the 4Ps (Product, Price, Place and Promotion) of marketing, but regional nuances demand a more nuanced approach."

Regional Marketing

Highlighting the regional disparities in marketing strategies, the MD emphasised the critical importance of focusing on smaller markets to drive growth and success in the air conditioning industry. He shares, "My concern is that many marketers and CMOs are based in Mumbai and Delhi, and most of them are not travelling to smaller markets. For Blue Star, 65 per cent of sales come from tier 3, 4 and 5 cities. With over 50 per cent of air conditioners purchased through consumer finance and the majority being first-time buyers or opting for entry-level products, there's a critical need for data and connectivity. Micro-marketing is the key and real-time tracking of sales in any city is essential for success."

Customer-Centricity And Pricing

Thiagarajan also emphasises the significance of prioritising customer needs in a price-sensitive market, highlighting the potential for increased profitability through a customer-centric approach to product development and pricing strategies. He highlights, "In a price-conscious market, being customer-centric can indeed yield higher returns. By understanding customer expectations, we can develop products at the right price points. This approach requires data to determine the optimal price point for different regions and customer segments. Ultimately, customer-centricity enables us to deliver value and increase margins."

Thiagarajan's insights highlight the evolving dynamics of the air conditioning industry and the need to understand regional markets and consumer preferences. As Blue Star navigates this competitive landscape, a customer-centric approach and data-driven decision-making will continue to drive growth and success for all.