EBOs are better than MBO formats

Germany’s leading CDIT brand Siemens Home Appliances has launched its exclusive brand store in New Delhi. The company is increasing its retail footprint pan-India through EBO format. Ajaz Vakil, GM Sales – Built in Appliances, Siemens believes that Indian consumers are no longer bargain hunters and shares his rationale behind expanding through EBOs.

Siemens has recently opened store at Lajpat Nagar, New Delhi. Why did you zero in on this location?

Lajpat Nagar is an established CDIT market which has a good recall in people’s mind. Besides, it is not as expensive as Khan Market in New Delhi.

You are working on a franchise model. How are you identifying franchisees?

Currently, we are using our own expertise to identify franchisees – who understand the brand and have faith in it because we are not a price-driven brand. We give them quality and high end customers. Therefore the partner needs to have the same philosophy.

Which are your biggest competitors?

I have always believed one thing on completion: nobody is your competitor and everybody is your competitor. Nobody because the kind of products and features we offer, along with our commitment to customers is unparallel. And everybody because if we lose one product sale, it is an opportunity loss thus making everyone our competitor.

How are you trying to maximize conversion ratio at your stores?

We provide in-depth information on our products. For example, mentioning the water and power consumption on a washing machine. We even have cooking sessions, where customers can actually cook inside the store and see the benefits of a number of products such as the induction stoves, chimneys, dishwashers etc. The perception of the customer changes greatly after he is able to use the appliance. In addition, our catalogue is extremely transparent.

Siemens is exploring EBO format. Why do you think EBO is a better option for expansion?

We are present in the MBO format. The reason to opt for the EBO channel is because of the immense opportunities the format offers. A customer who enters an EBO wants to understand the product and its features and benefits well and the salesperson at an EBO is better equipped to provide him those details. However, in an MBO, the salesperson will only highlights various offers that the brands are giving and the customer mostly go for the best bargain.

What is your marketing strategy?

We are looking at becoming a mass premium player rather than a mass player. Therefore, our philosophy has always been to focus on BTL activities rather than mass advertising. The chances of convincing the customer are much greater through such activities.

How do you think the Indian market has changed and how are Siemens’ products being received?

Indian consumers have matured from just looking for bargains and special discount offers, at least in the CDIT category. Customers are actually looking for value for money products whose features seem practical and usable for him/her and an equally good service.

Please throw some light on your expansion plans.

We are planning to add three stores pan-India by the end of this year. As we are working on a franchise model, we will have to judge the economies for new stores. We are not looking at mall locations currently as our brand is not into mass retailing.