Putting The Price War to Rest

Putting The Price War to Rest

How Indian company Sheela Foam rebuilt its brand with IT

Establishing a brand name is a task that few companies do well. And, according to those that have, if there's one thing that's harder it's sustaining a brand.

That is because it takes more than just wisdom to understand what's needed to stay on top of the brand game. And more often than not, it isn't about building another fantastic product, but knowing the pulse of the customer.

With competition at its peak and demand on the rise, companies are trying to push each other out of the way to reach where it matters -- promising to deliver time and again. Promising to be different, promising the world to the consumer.

But some companies promise to deliver just a good night's sleep.

And that's what Sheela Foam -- the company that owns the Sleepwell brand of mattresses -- is known for. Founded in 1972, it has over 10 manufacturing units, 50 exclusive distributors and over 1,700 dealers across India.

But over the past few years, heavy discounting among channel partners attempting to sell volumes had become a serious problem. This price war wasn't doing very much good to consumer confidence in the product. A standard price is among the most basic requirements associated with a brand.

And worse, all the discounting among the channel partners was hitting authorized dealers who were now unable to retain their margins because customers, being customers, went to the lowest seller.

Thus, selling the brand was becoming difficult for authorized dealers.

"Selling mattresses depends on referrals from customers and the dealer's word," says Rakesh Chahar, CEO, Sheela Foam. Since referrals from customers are not very high, the company had to depend on its dealers. "To make a dealer recommend Sleepwell, it is important that he retains a reasonable margin in selling the product," he points out.

The company needed to enforce the MRP of its product. This is what led Sheela Foam to explore options in IT, and thus the project to control MOP (market operating price) was born. And the man responsible for its implementation was Pertisth Mankotia, head-IT, Sheela Foam.

Keeping the Bed-Bugs Away

"The most important challenge was to enable our dealers to retain their margins," says Mankotia. But, in addition, the IT team also had to track sales up to the customer level and build a customer database.

This was the only way it could revive customer confidence in the brand. One of the things that stood in the way of the IT team was the fact that they had to manage with a home-grown ERP system, and this meant that they had to customize it themselves without much help from the vendor.

Mankotia says, "There is no off-the-shelf product that caters to our requirement. Right from the order placement up to the stage when it is sold to the end customer, all business transactions are recorded in the system. We have been using this system for almost seven years."With the homegrown ERP -- which they call Greatplus -- they have not only automated their entire production process right from procurement to production, but have also successfully integrated it with their external channel partners.

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