The Hindu : Business : Honest pricing key to Kinetic gameplan

Online edition of India's National Newspaper
Saturday, May 22, 2004

Business

Business

Honest pricing key to Kinetic gameplan

By K. T. Jagannathan

CHENNAI, MAY 21. It is different. Not just in pricing but in marketing campaign, too. So asserts Sulajja Firodia Motwani. If she were to be believed, the Pune-based two-wheeler maker, Kinetic group, has an entirely new approach to these issues.

The Joint Managing Director, Ms. Motwani, says Kinetic always believed in the "honest pricing" of a new product. The idea of dropping prices after a while does not quite appeal to her. Why should you make the initial buyers feel cheated by dropping prices subsequently? After all, they have come forward unhesitatingly to endorse an untested new product. Right pricing of a new product, Ms. Motwani said, will help build volume and allow that much leeway later on to drive the price up if the consumer demand is positive.

Kinetic always believed in right pricing, she asserts. It launched Zing, its scotterette, at Rs. 22,999 ex-showroom, Chennai. After almost a full year into the market, the price was hiked to Rs. 23,999. The Zing, she claims, has garnered a market share of 25 per cent in this segment, selling around one lakh units. Spurred by its success, Kinetic has now launched Zing 80, a feature-packed vehicle at around Rs. 26,000 ex-showroom, Chennai, some Rs. 5,000 lower than the competitor. The timing of the launch of Zing 80 is not lost on Kinetic. After all, it comes just when the colleges are about to recommence. Zing sort of vehicles are targeted at college students.

If it takes a different route to pricing, Kinetic believes in a segmented season-centric approach to its marketing campaign. For scooterette, May-June is the right period for ad campaign as colleges reopen. If it is harvest season, Kinetic will go on ad binge for its motorcycles. Scooters will hog much of ad spend during festival seasons. Kinetic spends about Rs. 50-60 crores annually on marketing. Given the size of the group, Ms. Motwani feels the budget is adequate. It is proposing to come out with a limited edition of Comet, a 250cc sports vehicle, soon to redo what Aquila had done to Kinetic brand. Kinetic, it may be recalled, has already proposed to Hyosung Motors of Korea on the possibility of making Aquila for it in India. Ms. Motwani is confident that a 30 per cent saving in cost is possible if Aquila is made in India.

The JMD is quite upbeat over Kinetic's recent acquisition-cum-alliance deal with Italjet. This saw Italjet sell seven scooter models — 50cc to 250cc — to Kinetic lock, stock and barrel. It also results in Italjet buying these products from Kinetic to serve its needs in a cost-effective manner. If Ms. Motwani were to go by, Kinetic will launch at least three of Italjet products within this year. She presages a sales volume of 18,000-20,000 for these in the current year. When it launches the entire range of Italjet products, Kinetic is hopeful of a volume of around 2-2.5 lakh numbers in a year.

Even as it is securing its position in the two-wheeler market, Kinetic, Ms. Motwani says, is into revamping its other businesses. Growing engine design services, making tool room as an independent profit centre are among myriad initiatives at the Kinetic group, points out Ms. Motwani.

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