Vip Case Study

1
Vithaldas Ishwarchand Piramal
(VIP)
A very intriguing package
Group no: 7
Members:
Nandhini K
Kiruthika M S
Lalith Kumar R
Vijay Prasanth R
Pradeep kumar.v
Karthik E
(UNIVERSITY OF MADRAS)
COMPANY INFORMATION
The company was incorporated on 27/01/1968
as aprivate limited company under the name
Aristo Plast Pvt. Ltd., and commenced its
activities by taking on job work in plastic
moulding. The Company became a public
limited company on 15/03/ 1973.
The name of the company was changed to V.I.P.
Industries Ltd., with effect from 16th June 1981.
Industry :Plastics - Plastic & Plastic Products
CASE INTRODUCTION
VIP industry has sway for over two decades in the
organized luggage market.
Customers perceives value for money.
Alfa is sold at much lower price. Alfa (VIPs
economically price brand) sells 1.5 lakh pieces a
month.
Market Research shows that an average Indian
family pulls out the suitcases merely for a
outstation travel a few times a year.
VIP has a wide range of market segment starting
from Rs 295 to Rs 6000 a piece.
KEY ISSUES
The brand becoming generic to the category and local

brands eating into the share of the company.
It entered a price war with the unorganized sector.
VIP was very dominant in the midsegment, it had no

presence in the luxury segment.
It failed to create barriers for the competitors.
It concentrated only on hard luggage.
Its advertisement for premium brand was not effective.
While VIP entered luxury segment, Samsonite entered the

middle segment.
CHANGE IN TREND OF
PEOPLE
People
are not exactly moving to premium

bags , but are moving to branded bags for
sure.
We find that the growth in airline travel and
the sale of branded luggage sales are
directly interlinked.
Correlation between sales data and travel
data is almost 0.95
SWOT ANALYSIS
Opportun
SAMSONITE- COMPETITOR
Formidable competitor-1997
Established its presence in the luxury segment of the
market. Vip- dominant in mid-segment
Garnered a market share of about 35% in a short period of
time.
Samsonite meanwhile also wanted to enter the midsegment ( 800- 2000 range).It launched the brand
American Tourister to enter this segment posing a major
threat to the market leader.
Samsonite -international contemporary look -appealed to
the new generation than VIP which was not perceived as a
vibrant brand.
HOW DID VIP HANDLE

SAMSONITE
To
counter the threat of Samsonite, VIP

launched Elanza and Caprese range of
premium luggage.
Elanza(Rs 3250) -made available through
select dealers only, in order to maintain its
premium image.
VIP set the price so high to preempt
Samsonites entry in the super-premium
segment of the market.
FAVORABLE FACTORS FOR

VIP
Steady economic growth propelled the travel

sector.
Convenience and variety gained prime importance.
Care for aesthetics increased importance for soft
luggage.
People no longer used same suitcase for all
occasions.
Hence luggage has transformed from merely a

functional product to a fashion or life style
product.
10
MILESTONES OF VIP
2011-VIP ushers in the four wheeling revolution in india with

the launch of its "360 wheeling" range.
2010-VIP Introduces "Superlite" lightweight bags that
enable you travel easier and pack more without the fear of
paying excess baggage fees.
2009-VIP launches water, dirt and stain resistant bags with
Teflon.
2008-VIP introduces the first of its kind business bags
Coupe to keep your professional and personal luggage
separately.
2006-VIP launches Aura a tribute to the modern Indian
woman who prefers to step out in style.
2004-VIP brings in the concept of single stem trolley for
exceptional control and effortless maneuvering.
11
ANSOFF MATRIX
MARKETS
MARKETS
NEW
NEW
P
RP
OR
DO
UD
CU
TC
ST
S
EXISTING
EXISTING
EXISTING
EXISTING
MARKET
MARKET
PENITRATION
PENITRATION
By offering
economic
Bybrand
offering
economic
price
and
durable
price brand
and
products. durable
products.
MARKET
MARKET
DEVELOPMENT
DEVELOPMENT
Acquired
Carlton to
Acquired
Carltonand
to
enter
global market
enter
global
Alliance
withmarket
Delsey.and
Alliance with Delsey.
NEW
NEW
PRODUCT
PRODUCT
DEVELOPMENT
DEVELOPMENT
Introduction
of new
Introduction
of new
brands
like Mantra
&
brands
like
Mantra
&
Skybags.
Skybags.
Diversification
Diversification
Diversified
in to
Diversified in to
manufacturing
manufacturingand
furnitures(Moderna)
furnitures(Moderna)
and
health care.
health care.
12
ACQUSITION OF CARLTON
For
targeting the premium end of the

market.
Targeted younger consumers through style
by offering printed and color bags.
Helped to enter European markets.
1)This buyout provided VIP with a lucrative
passage into the high-growth European market.
2)Carlton's strong brand and VIP's low
manufacturing costs provide VIP with an edge over its
competitors.
13
ALLIANCE WITH DELSEY

Delsey
-international brand from France- for

premium brand.
This alliance makes VIP the sole
manufacturer for the Delseys global hard
luggage range.
"We want to become the hard luggage
factory for the world," said Dilip Piramal.
Combination of high end technology from
Delsey and low manufacturing cost from
India.
14
REASONS FOR TERMINATION

WITH DELSEY
Delsey
was not willing to spend on the

brands advertising in India.
Delsey needed a more strategic
involvement to establish its premium
positioning. So they broke their ties with
VIP and forged an alliance with Beauty
Concepts.
Consumers are moving towards branded
luggage which reflects their lifestyle.
15
ADVERTISEMENT
Changed from Kal Bhi,

Aaj Bhi campaign to
Bye-Bye campaign.
Used Happy journey as
the base line.
Shahid Kapoor and John
Abraham became the
brand ambassador.
16
Marketing mix
17
PRODUCT
Carlton international brand premium segment.
Skybags - stylish
product - youth
consumers.
Alfa Aristocrat value for money low end people.
Mantra ladies.
Buddy- children.
18
PRICE
Price ranges from Rs.850 to
Rs.15,000.
Alfa
ranges from Rs.850 to Rs.3800.

Aristocrat ranges from Rs.2600 to
Rs.6700.
Skybags ranges from Rs.680 to
Rs.7200.
Carlton ranges from Rs.5000 to
Rs.14,950.
19
PLACE
Retail
outlets like The Carlton Store, VIP

Lounges and VIP Industries store.
More than 600 exclusive stores.
Lifestyle stores, hypermarkets, army
canteens and wholesale networks.
20
PROMOTION
Print
media.
Electronic media.
VIP Industries' 'Happy Journey' BTL
campaign.
Offered discounts.
21
BCG MATRIX
MARKET SHARE
HIGH
M
A
R
K
E
T
G
R
O
W
T
H
H
I
G
H
LOW
Cash cow
STAR
Dog
L
O
W
22
NET SALES
Net sales(in crores)
900
800
700
600
YEARS
500
400
300
200
100
0
2009
2010
2011
2012
2013
23
SALES SHARING
PROPORTION
sales sharing proportion
furniture; 4%
others; 0%
luggage item; 30%
Soft luggage; 66%
24
CURRENT PLANS OF VIP

Launched
a eco-friendly bag called

Acura(niche segmentation).
Going to launch new polycarbonate range
under VIP and Skybags.
Looking forward to launch a range of
luggage for women called Diva.These are
lightweight bags specially designed for
women travellers.
As a market leader VIP is looking to enter
more niche markets.
25
QUALITY CHECK IN VIP

THE
TUMBLE TEST
50 REVOLUTIONS & OBSTACLES : This test is been carried by tumbling the

bag in a tumbler at 50 cycles in a loaded condition.
THE
WHEEL TEST
32 KMS:Wheel is been carried for 32 kms in a loaded condition to check

the wear and tear for wheels.
THE
LOCK TEST
PUSH & RELEASE CYCLES : We check the locks durability by operating the
lock for 15000 cycles in one go continuously.
THE
DROP TEST
Dropping the bag 5 times on the ground at all corners and sides.
THE
HANDLE TEST
3500 TIMES : Tested by giving jerks to the handle for 3500 times in a
loaded condition.
THE
ZIPPER TEST
15000 TIMES, FORCE APPLIED TO SLIDERS & ZIPPERS : Force is applied to

sliders and zippers to test the strength of zippers and pullers.
26
CONCLUSION
Along with growth in airline travel, international
exposure and a lot of innovative work with
branded goods has helped the industry grow.
Brand repositioning efforts has paid off by
helping VIP to retain its leadership position.
By keeping in pace with the change in need of
the people with highly innovative work and
consistency in quality VIP will be maintaining its
outstanding familiarity.
As the consumer evolved, the product has also
evolved.
27
Keeping in pace with the taste of the

customer will help to maintain its
longstanding familiarity kal bhi aaj bhi
kal bhi and long and happy journey.
28
29

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1

Vithaldas Ishwarchand Piramal

The brand becoming generic to the category and local

It entered a price war with the unorganized sector.

VIP was very dominant in the mid- segment, it had no

It failed to create barriers for the competitors.

It concentrated only on hard luggage.

Its advertisement for premium brand was not effective.

While VIP entered luxury segment, Samsonite entered the

are not exactly moving to premium

HOW DID VIP HANDLE

counter the threat of Samsonite, VIP

FAVORABLE FACTORS FOR

Steady economic growth propelled the travel

Hence luggage has transformed from merely a

2011-VIP ushers in the four wheeling revolution in india with

targeting the premium end of the

ALLIANCE WITH DELSEY

-international brand from France- for

REASONS FOR TERMINATION

was not willing to spend on the

Changed from Kal Bhi,

ranges from Rs.850 to Rs.3800.

outlets like The Carlton Store, VIP

luggage item; 30%

Soft luggage; 66%

CURRENT PLANS OF VIP

a eco-friendly bag called

QUALITY CHECK IN VIP

50 REVOLUTIONS & OBSTACLES : This test is been carried by tumbling the

32 KMS:Wheel is been carried for 32 kms in a loaded condition to check

15000 TIMES, FORCE APPLIED TO SLIDERS & ZIPPERS : Force is applied to

Keeping in pace with the taste of the

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