‘People aren’t upgrading for the sake of it’

Sudip Ghose was appointed head of marketing, VIP India, in April 2013. At the helm of the marketing function, Ghose is looking to make changes to the company with a new growth plan that includes the appointment of different agencies for each of its brands. Edited excerpts:

How has the last year been for VIP in terms of growth?

We are (on track to) growing 20 per cent this financial year. We’re yet to make our business plan for the next financial year, but we’re estimating that to be our growth.

You took over from Manish Vyas in April 2013. What’s your mandate and what plans do you have?

The biggest thing I felt was that we have great brands but we just need to segregate them. We’ve got the high end brand (Carlton), we’ve got brands in the mid category (VIP - mass premium, Skybags for youth) as well as the lower end (Aristocrat and Alfa). We need to differentiate the brands and that’s very important. That’s what we did this year and plan to continue it next year.

Where do you see most of the growth coming from – is the high end category or the lower one and which is your flagship product?

It’s funny because all the segments are growing very well. People are moving from unbranded to branded luggage. The people in the branded categories are looking to upgrade. People have realised that luggage is a home outside of home. I keep telling people, ‘Why compromise on the luggage that you’re buying?’ When you’re travelling and your luggage breaks, your whole travel, whether it’s business or personal, the whole purpose goes. So, it’s important to have good quality luggage that gives peace of mind to the consumer.

People aren’t upgrading for the sake of it, but because there is something extra that you get with each brand.

VIP is our biggest brand and our flagship product. Skybags is generating maximum growth currently.

When we spoke with VIP in 2012, the company had 600 exclusive retail outlets. What’s the number currently?

We have about 850 retail outlets. Including dealers and in all including franchises it would be around 3,000.

In 2012, VIP’s philosophy was to have one advertising agency for the entire portfolio. But that has changed over the last year with Law & Kenneth appointed for Skybags and McCann winning VIP.

What caused that change and will we see the appointment of more agencies for your other brands?

The philosophy changed because all the brands need to grow. Like companies have different sales teams, they need to have different advertising agencies, because the output is far better. We’re not putting pressure on one agency. For the agency, their livelihood depends on that one particular brand. It’s like when a salesman goes to an outlet to sell five brands, he’ll get one big order for one brand and then nothing else because the customer has spent it all on the brand. Similarly if you have one agency for all the brands, two ads could end up doing well and the others could get neglected. The agency still gets away with it because they’ve done well for two brands. But that’s one thing I can’t afford to happen. So each brand will remain with one agency and that’s their bread and butter. I’ll judge the agency on that one bit of work and there’s no in-between.
We’re just going into a pitch for Carlton to appoint the brand’s first agency. Caprese is another brand under VIP Industries and that’s handled by an agency called Company.

The other two brands are handled by the in-house marketing team.

Any campaign scheduled to break soon?

One campaign is about to break later this week or early next week for Skybags. The thought for the campaign is ‘Back is the new front’ and it’s a 360-degree campaign.

What’s the current market share for VIP Industries?

We have a 50 per cent market share in the branded category. Our nearest competition is about 35 per cent (Samsonite).

What about digital. How big is the medium for the company?

This year it’s going to be really big. I’ll be spending about eight per cent (of the media budget) on the medium. To give a perspective of how much that has grown, it was about two per cent. We just appointed 22Feet for Skybags and they might handle another brand under the fold, though discussions are yet to be finalised.

We’re looking for digital agencies for Carlton and VIP.

You’ll be spending eight per cent of your marketing budgets on digital – what is the revenue expected from digital?

It’s very difficult to say and that’s one of the biggest problems with digital as a business. On my e-commerce platform, I currently spend a very negligible amount. That’s the reason I want to put more money and with young consumers I see digital as a must for growth.

Any trends you’re seeing in the luggage industry?

People have started experimenting with luggage. At an airport, you’ll now see different kinds of luggage. Earlier it was only black and blue. We made a commercial about the same trend for Skybags. So, we’re trying to put more emphasis on the fact that bags make you look good. People are now ready to spend money on luggage.

Are you looking to enter new categories? Any plans for the accessories and children’s categories?

We do have accessories, but we’ll be focussing more on luggage now. We’ll probably come back to promote accessories later.

We have plans to enter the children’s category, but for now we’re looking to target adults. In international markets, each member of the family travels with an individual bag. But in India, the child’s clothes invariably find their way into their parents’ bag. So, we’re selling first to the father and the mother, before moving to the child.