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Tuesday, August 3, 1999

Kitchen Appliances slaps Rs 100 cr suit on ORG-GFK 

Chandan Dubey  
Mumbai, Aug 2: Close on the heels of Videocon International's legal action against ORG-GFK comes another case filed by the Rs 550-crore Kitchen Appliances India Ltd on the research agency for distortion and misrepresentaton of its market share and sales figures of its flagship brand Sansui. Kitchen Appliances manufactures the Sansui range of products while Videocon markets it.

``We take strong objection to the wrong portrayal of the market share of our colour televison brand Sansui by ORG,'' said Sansui's country manager Anil Khera.

According to him, ORG-GFK's report for May shows Sansui's market share at 4.6 per cent. The company, however, claims it had a higher market share of 7.5 per cent during the said period. ``We have sold close to 39,700 CTVs in May. Going by total market size for CTVs during that period the market share reported by ORG-GFK misrepresents actual numbers,'' he said.

According to Khera, they indicated their misgivings regarding the methodology and panel of dealers to ORG in July 1998 when they contacted us with a request to subscribe to their retail audit service.

As part of the legal document served on ORG, the company has demanded a damage of Rs 100 crore, a written unconditional apology to be published in leading newspapers and to desist from including the Sansui brand name in all future reports. The company will resort to ``appropriate civil and criminal action'' if ORG fails to comply with the demands within seven days, says the notice.

Kitchen Appliances has also threatened to approach MRTPC against the market research agency. Pertinently, Videocon International had slapped a similar case on ORG-GFK late last month, accusing the latter of misrepresenting sales figures of Videocon brand of CTVs.

There are voices of agreement from a few other players within the industry. ``The selection of panel of dealers by ORG is unscientific and therefore the final analysis is skewed,'' said an industry observer. According to another manufacturer and marketeer of a leading TV brand, ``The ORG figures are not able to capture and reflect the true state of affairs and misrepresent market reality more often than not.''

The industry's grouse against the retail audit company is two-fold: The size and composition of the panel -- at 2000 the total number of dealers tracked by ORG is very small given the total universe of 20,000 dealers. The panel does not include large dealers like Vijay Sales in Mumbai and Tamilnadu-based Vivek's, Vasant & Co and Jainsons who alone account for 25 per cent of sales in the southern state. According to sources, the agency does not change the composition of its panel from time to time. Further, the audit also ignores exclusive, company-owned showrooms. It is also felt that the research agency is not transparent about its panel and research methodology.

ORG-GFK is the only organisation which carries out retail audits of consumer durables in the Indian market.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.


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