Kurlon Ltd.

Team MarketingAshish (29041)Sudhir (29044)Parvati (29055)Sharat (29065)

Institute of Rural Management, Anand, Gujarat

If you limit your choices only to what seems possible or

reasonable, you disconnect yourself from what you truly want, and all that is left is a compromise

Kurlon Ltd

Kurlon Ltd. – Year end review

5 Cs

Company

• KCPL – established in 1962• To manufacture accessory products for the

purpose of relaxing and sleeping• Initial mfgtd – Cushion seats and bare blocks

made of polyurethane for automobile sector• Introduced the concept of rubberized coir• 1965 – Mattress under the brand name

‘Kurlon’• For 2 decades – bare blocks

Company• 1985 – capacity to produce 800 tonnes of

rubberized coir (60% was being sold as bare blocks)

• 1987 – Stopped its line of bare blocks• By 90s – Product Portfolio: mattresses,

pillows, towels, doormats, bolsters and cushion seats (wide range)

• Leader in Indian Comfort mattress• Export – 10% of total mattress sale

Context

Context: Current scenario of mattress market

• Currently, market is facing a decline• Market in foreign countries also getting

saturated• Consumers in these markets moving towards

foam or spring-based mattresses

Competition

Competition

• Major Players - PU Foam Mattress ( 5 %)– Sleepwell – MM Foam – Major Player - spring mattress segment (1 %)

Springwel

Kurlon vs Comp

• Opportunities– Brand Awareness (TOM)– Perceived Quality ( Durability)– Proprietary Assets (Name)– Strong Brand Name

• Threats– Brand Loyalty (Commitment)– Perceived Quality (Fit & Finish)– Price (6.7)

• Closest Competitor - Duroflex

Collaborators

• Dealers - After advt. the next most important source of information and influencer

• Low Spend of Kurlon on Trade Promotion – traders ‘push’ competitor’s products

• E.g – Finally I ended up buying another brand with some help from the retailer

Profit and loss account for 2001 and 2002 (Rs. Million) 3/31/2002% 3/31/2001%Income Sales 1165.68 1126.38 Other Income 8.31 6.47 1173.99 1132.85 Expenditure Cost of sales including selling and admn expenses Raw materials 549.26 48.7% 533.05 47.3%Manufacturing expenses 61.99 5.5% 46.17 4.1%Wages and salaries 39.28 3.5% 37.39 3.3%Transport 102.05 9.1% 99.03 8.8%Commision on sales 82.54 7.3% 75.31 6.7%sales promotion 13.36 1.2% 19.49 1.7%Advertising 40.97 3.6% 43.2 3.8%Other expenses 165.96 14.7% 196.17 17.4%Total 1055.41 1049.81 Bank and other interests 49.07 55.87 Depreciation 22.89 22.36

Total 1127.37 1128.04 Prior year item -2.58 6.84 PBT 44.04 11.65 Less: Provision for tax 10.5 1.3 PAT 33.54 10.35

Target Segment

• Normal buyers – involved in replacement purchase or purchase for marriage and addition to family

• Therapeutic buyers – purchase mattresses on account of back problems

Normal Buyers

• Income level of Rs. 15,000 per month• Purchase a good mattress for the ‘comfort’ factor• Economy segment considers price to be an

important factor – Apsara sales volume: price of apsara mattress should be in tune with competitors’ prices

• Comfort segment – can be divided into:– Those who seek only comfort, no matter at what price– Those who look for value for money

Therapeutic Buyers

• Purchases constitute mostly single beds to prevent

• Sub brand target is Ortho• Pricing can be modified so as to associate

better quality with higher price• Dealers need to be informed of the various

ailments

Product Line

• Apsara – Economy model (3 & 4 inches)• Super Deluxe – Premium model (3 & 4 inches)• Romantique – Super soft model (4.5 inches)• Klassic – Super premium model (5 inches)• Ortho – Designed for back problems (4 inches)

• Too many brands and sub-brands leading to confusion in mind of consumers

Category sub-brand-wise performance in 2003

ApsaraSuper Deluxe Klassic Ortho Romantique Total

No of models 25 28 15 10 16 94

Sales (Rs. Million) 342.01 145.01 222.48 175.13 196.27 1080.9

PBT (Rs. Million) 2.9 0.91 1.86 1.22 1.33 8.22

Brand EquityKurlon Restolex Starlite Aaram Centuary Duroflex

Do I know about it?

61.66 31.66 50 50.66 50.33 54.33

Does it offer me something?

69.2 58.8 69 59.8 64.4 70

Can it deliver?

60 48 67 56 60 65

Uniqueness(Reliability, durability)

75,85 58,60 68,65 62,59 62,68 65,70

Nothing else beats it

65 35 43 50 47 52

*Kurlon has a very low score on Fit n Finish as compared to its competitors

Trend

Ownership and Preference of Household for Mattresses*

Status Cotton MattressRubberized Coir

Full PU Foam Spring Mattress

Ownership 80 90 20 10Preference for next purchase 30 120 30 20% change -62.50% 33.33% 50.00% 100.00%

*No of Households Totalling 200

Major Issues• High no. of variation under its brand name

– Adds confusion• Ineffective Sales Promotion Strategy

– Reallocate funds’• National vs Regional brands

– Strong Comp from regional brands• Segmentation

– Using all segment variables• Targeting• Positioning (Pure Sleep nothing else) – towels, doormats• Price• Place

– Most sales from south– Foreign sales stagnating

Probable Solution• Current Market– Increase Dealer Promotion– Launch Spring & PU (70 mil) mattress - export– Create its own retail chain– Create a website for direct user interface– Special Mattress to cater to the health segment

• New Market– Reduce Price of Apsara (Rs 342 mil now out of Rs

1080 mil) would help go into a new segment of lower-middle income group

– Introduce PU for rural market

End

Contact – ashish1684@gmail.com