This strategy to take shape by April 15, 2000, will dramatically bring down the transportation costs of the company, which currently account for 10 per cent of its turnover. According to H & R Johnson managing director Vijay Aggarwal, this will take the operating profit of the company to 30 per cent from the current 22 per cent.

The tile major is also planning to produce exclusive designs for the southern regions, based on its in-house study about market preferences. According to the study, people in Kerala prefer dark and gaudy colours and had a tendency to buy whatever is costlier, while the people in Tamil Nadu are more conservative, but are willing to pay for quality. Similarly, people in Bangalore prefer soft colours and self-prints, unlike rest of south which goes for dark colour prints. To further understand customer preferences, need-gaps, service-gaps and decision-making process, the company has roped in IMRB and Gallops MBA to conduct an extensive market research in the southern and western regions of the country.

The company is planning to invest Rs 5 crore in the next six months to modernise its Karaikal plant to correct capacity mismatches in the plant. This will result in an additional turnover of Rs 45 crore at Karaikal and Rs 30 crore in Kunigal by March 2001, said Aggarwal.