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Tuesday, May 30, 2000

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SPL gets aggressive in the rural market -- Spots core areas in UP, Kerala, Punjab

Ratna Bhushan

NEW DELHI, May 29

SPL Ltd, marketer of the Somany range of tiles, is making an aggressive foray into rural markets, small towns and mini-metros.

In the rural market, SPL has identified core focus areas in Uttar Pradesh, Kerala and Punjab. ``We are tapping villages even with population between 50,000 and 1,00,000,'' Mr. Abhishek Somany, Senior President, SPL Ltd, said.

Apart from increasing dealer network in these regions, the company is in the process of setting up small outlets in villages.

From SPL's perspective, the primary intent of the exercise will be to absorb transport costs. The marketing exercise will include organising roadshows, putting up wall paintings and hoardings, hosting mason meets and promoting the tiles through SPL's own delivery vans.

While the vans will travel across mini-metros, they will also stop at villages and talk about the tiles' salient features. SPL will spend Rs. 70 lakhs on below-the-line advertising this financial year. The spurt in spends, however, will be seen between A ugust 2000 and February 2001 to coincide with the peak construction season.

In another expansion thrust, SPL is spreading its reach across the South and Maharashtra, regions where it has not really penetrated.

Cross-country consumer studies reveal that southern states along with Maharashtra are currently the big emerging markets for branded tiles. Owing to the fact that natural stone is cheaply available in the North, the tile market has reached near saturatio n point there.

Floor tile production at SPL's plant at Kadi in Gujarat has been upped by 7,000 sq mt for the purpose. Commercial production at the plant is expected to commence around September and will predominantly cater to markets in the southern belt and the west. The company is also exploring possibilities of acquiring a plant in south.

Meanwhile, SPL is opting for a marked change in its tack. It is planning to focus on floor tiles, which are fast replacing natural stones owing to scarcity of the latter. ``We don't want to miss the boat by focusing on walls as we have traditionally been doing. Our association has always been more with wall tiles, but in recent times bigger growth has been recorded in floor tiles,'' Mr. Somany told Business Line.

Floor tiles are growing at an annual 25 per cent, while those for walls are growing at 12-15 per cent per annum.

The company has earmarked Rs. 45 crores investment for floor tiles for the period between September 1999 and September 2000. Of this, Rs. 25 crores has been commissioned for vitrified tiles. Another Rs. 35 crores will be pumped in as investments for wall tiles between November 2000 and June 2001.

SPL's communication strategy will be geared towards promoting floor tiles, against the earlier more generic advertising. ``There's no real need to generate mass-scale awareness for wall tiles which already exists in large doses. However, we do need to pr omote usage of floor tiles,'' Mr. Somany said.

SPL will spend roughly 50 per cent of its ad budget on floor tile advertising, with the rest of the budget being split between wall tiles and generic advertising. The need to opt for specific advertising also arises from the fact that apart from the maso n who plays a predominantly active role in tile purchase patterns, there is a growing tribe of consumers who are directly involved in tile purchase.

The advertising will be substantiated with direct mailers to architects and interior designers.

SPL's tiles are currently available across 500 outlets. ``Though these are multi-brand stores, we have ensured that up to 80 per cent of the tiles stocked in the outlets are SPL's,'' Mr. Somany said.

The company proposes to increase the number of outlets to about 650 by March 2001.

Foundation stone

Floor tiles first began to find acceptability in Maharashtra, Goa and Kerala around 1993-94. The movement was spearheaded by the quarter of Spartek, Bell, Murdeshwar Ceramics and Regency. The reason why floor tiles were accepted b etter in these regions had a lot more to do than just aesthetic appeal.

Floor tiles are easier and quicker to lay and are easier on the maintenance front. With a whole lot of resorts and airports springing up in these regions, it was a logical fallout that marketers of floor tiles had it better here. The trend began to take a firm root in 1998. Tiles were no longer stodgy, hygienic coverings in drab white or ivory.

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