DIAGNOSES Kurlon Ltd.

presents analyses of the

management case by Simon George
academicians and practitioners

Case Analysis I
R C Natarajan
Associate Professor (Marketing)
T.A. Pai Management Institute, Manipal
e-mail: cnutraj@mail.tapmi.org

T
he growth Kurlon achieved over a decade and a half is impressive (Case Table
1). The PBT has grown by an impressive 277 per cent over the previous year
(Case Table 2). Similar is the case of PAT to sales turnover ratio, which had
increased from 0.91 per cent the previous year to 2.86 per cent in 2001-2002. One
of the reasons for this increase in profits seems to have been the reduction of
advertising and sales promotion expenditures from 3.84 per cent to 3.51 per cent
and from 1.73 per cent to 1.15 per cent of the sales turnover respectively.
There are certain areas of concern that need managerial attention. The case
“Kurlon Ltd.” provides us the chance and the challenge to overcome the seemingly
insurmountable problems that any marketing manager is confronted with when the
sale reaches a plateau. The saturation of sales revenue causes concern that the number
is either stagnating, or, in case there has been an increase in prices, is actually falling.
The “problem” that stares at Mr. Shivram Bhat is nothing but the mismatch between
consumers’ needs and the company’s offerings. While the company produces prod-
The July-September 2006 ucts to meet the needs of different segments, the uniform strategy of same dealer-
(Vol. 31, No.3) issue of commission and single type advertising clearly indicates a lack of segment-by-
Vikalpa had published a segment marketing strategy. Therefore, it is imperative that we look at the consumer
management case titled
“Kurlon Ltd.” by Simon behaviour of each segment and their preferences closely before assessing what the
George. This issue company should be doing.
features four responses
on the case by R C Consumer Behaviour
Natarajan, Bikram Jit
Singh Mann, Salma The buyers of mattresses are of different demographic types. However, the buying
Ahmed and Ashfaque behaviour for mattresses somewhat reflects high-involvement. Though the case
Khan, and Zillur
supports this understanding, it also states that the survey by TSG reveals both variety-
Rahman.

VIKALPA • VOLUME 32 • NO 1 • JANUARY - MARCH 2007 123

seeking buying behaviour—in which case it is low-involve-
ment buying behaviour with some amount of differen-
tiation among brands—and dissonance-reducing buying
behaviour—in which case it is a high involvement buying
behaviour coupled with lack of differentiation among
brands. However, there is an absence of any break-up
between the two behaviours, and hence, I surmise that
even though variety-seeking may be the overt behav-
iour, the change of brand may be more due to dissat-
isfaction with the previous brand, which implies one
form of dissonance-reducing buying behaviour. This is
because one will not experiment aimlessly with items
that directly affect one’s sleep, especially when the
frequency of purchase is once in 3-6 years (p.124). The
consumer would rather spend time in collecting infor-
mation, feeling the product physically, evaluating it by
the look, and considering the price before deciding to
buy a specific brand, which may be different from the
one purchased previously. When all other factors are
the same, then the brand name may come into play in
the decision-making process. The case confirms that
brand name is the fourth item in influencing purchase-
decision (Case Table 9). It is thus clear that perceived
differentiation among brands is low in the minds of the
consumers. To this extent, the consumer may not exer-
cise the option before going to the point of purchase.
That is, even though a consumer is aware of different
brands and can readily state a brand like Kurlon as top-
of-the-mind recall, such cognition cannot be mistaken
for the affect that Kurlon is the most suitable brand for
him/her. This aspect is subtly visible in the case, where
Figure 1: Perceptual Map Based on Evaluation of Different Brands
Perceptual Map Based on Evaluation of Different Brands
8.5
8.0
Price Rating
7.5
7.0
6.5
Sulfex
6.0
5.0 5.5
124
Kurlon was shown as the top-of-the-mind brand scoring
90 points in the survey by TSG (Case Table 12), which
is the highest across all brands, whereas in brand loyalty,
Kurlon fell much short with an average score of 64.5,
third behind Centuary (69.3) and Starlite (66.6). A sim-
plistic interpretation of this difference of 25.5 points is
the ‘leakage’ between awareness and purchase-inten-
tion, implying that an awareness of the Kurlon brand
does not imply conviction about the brand’s suitability
to the consumers’ needs. Moreover, brand loyalty can
be ascribed only to those who are already users of Kurlon
brand, whereas the product category warrants attracting
more number of first-time buyers of mattress in addition
to a sizeable chunk of repeat purchasers. The maximum
points are given to ‘old one damaged’ as the reason for
purchasing a mattress in the body text, as the Case Table
8 states so clearly. Nevertheless, Kurlon needs to work
on converting the high brand awareness into purchase-
intention and purchase-decision in both the cases of first-
time buyers and repeat buyers of mattress.
Though the consumers gather data from advertise-
ments and friends/relatives, the dealer’s recommenda-
tion seems to have significant influence at the point of
purchase (softness and thickness are the two major fac-
tors, ahead of price (Case Table 9). Therefore, the func-
tional aspects override the price in consumer’s consid-
eration, and with price, they emerge as the major factors
in evaluation of brands. If we collapse these two func-
tional aspects into one, then we derive a perceptual map
of all brands (from Case Table 11) as shown in Figure
1.
Bedsy
Restoflex
Duroflex
Coiron Centuary
Kurlon
Relaxon
Starlite Aaram
Indifference Curve
6.0 6.5 7.0 7.5 8.0 8.5 9.0
Functional Rating
KURLON LTD.
 The indifference curve represents the trade-off focal points of three different marketing strategies.
between price and the functional aspects of mattresses Economy Segment
that the consumers seem to be willing to make. It is
If the sale of “Apsara” in Kurlon’s portfolio is any
evident that consumers clearly rate Restoflex and
indication (Case Table 4), this segment seems to be the
Duroflex higher than Kurlon in terms of value for money.
largest in terms of sales revenue. Needless to say, this
This explains why despite a very high brand awareness,
segment is expected to view price as the most important
Kurlon is unable to convert it into purchase behaviour.
aspect while deciding on the strategy. The focus of the
Target Segment and Marketing Strategy strategy for this segment should be to sell those products
that are most economical. This segment consists of
Three reasons emerge as important factors behind the
unmarried men/women or newly married couples. For
purchase of new mattresses: (a) replacement of old
a single man/woman, the likely product is single mat-
mattresses (repeat purchase); (b) addition to family and
tress (Apsara-3" 72"x30", 72"x36", 75"x36" and 75"x42")
(c) marriage of offspring (Case Table 8). These are both
while for the couple, it should be double mattress (Apsara
repeat and fresh purchases. In addition, “health con-
- 3" 75"x60" or 78"x72") instead of two mattresses. Pricing
cern” too emerges as an important reason. Thus, on the
of these variants has to be in consonance with the com-
basis of behaviour, the buyers can be segmented as
petitors’ prices. Since there is no indication about the
follows:
competitors’ prices, based on the perceptual map shown
• “Normal” buyers who are involved in replacement
earlier, the ideal price of Apsara 3" lies somewhere
purchase or purchase for marriage and addition to
between those of similar variants of the brands Coiron,
the family
Centuary, and Restoflex but not necessarily as low as
• “Therapeutic” buyers, who purchase mattresses on
Betsy. The prices of the competitor-brands are said to
account of their back and/or spinal chord ailments.
be 10 to 20 per cent lower than Kurlon—hence taken as
Notwithstanding the existence of the niche market
15 per cent lower in all— it is suggested that Kurlon
for orthopaedic variant, volumes are important in the
reduces the price of Apsara 3" variants by 10 per cent.
case of mattress marketing, and hence Kurlon should
Since competition in this segment is likely to be
evolve different marketing strategies for different seg-
fierce and price-based due to the near commoditization
ments.
of mattresses in this segment, the dealer’s role in influ-
Normal Buyers encing this segment is of paramount importance (p.125
and126). Therefore, dealer-margin for these variants
Demographically, the “normal” buyer segment includes
should be comparable to those of the competitors. To
those in the income level of Rs.15,000 or more per month,
ensure that the dealers push Kurlon to this segment, the
setting up their homes independently such as the newly-
company can have slab-system of incentives. It is re-
weds, the newly employed executive, the late youth who
commended that such incentives to the dealers can be
has purchased a house recently, the early middle-aged
in the slabs of 3 per cent, 5 per cent, 7 per cent, and 10
couples whose children are growing up and need bigger
per cent, of the MRP achieving 100 per cent, 120 per cent,
mattresses than the kids’ beds, late middle-aged couples
130 per cent and 140 per cent of the target respectively
whose offspring is to be married soon and so on. The
of Apsara 3" variants. Such a mix of commission and
commonality among all these categories is merely the
target-related incentives has the dual advantage of a
need for a “good” mattress that would give them comfort.
greater chance of increased sales and the possibility of
Within this segment, we can visualize sub-segments that
withdrawal in future, if deemed necessary.
may emerge in terms of (a) affordability (we may call
It is also useful to consider appointing pilot sales-
it economy segment) (b) expectation of comfort (we may
men (PSM) in a limited number for large dealer outlets—
call it comfort segment) and (c) expectation of conven-
say five per state to promote the sales of Apsara 3" to
ience—especially if the consumer is in a frequently
the economy customers. Their pay-package can be a
transferable job (we may call it convenience segment).
combination of fixed pay (60%) and sales-related vari-
Since economy and comfort are inversely related, one
able pay (40%). The maximum starting pay-pack for the
can expect to get either economy or comfort but not
PSM, including the commission, can be fixed at Rs.8,000
both—we shall consider these three sub-segments as the
per month. The performance-linked variable pay can

VIKALPA • VOLUME 32 • NO 1 • JANUARY - MARCH 2007 125

follow the slabs of Rs.1,500, Rs.2,500 and Rs.3,200 for
achieving 100 per cent, 120 per cent, and 140 per cent
of the target respectively. These targets are aligned to
the dealer’s target and hence there is consonance of
interests between the two. If this exercise is confined to
20 states across the country, then the maximum outlay
on account of this is Rs.9.60 million in a year. These PSM
should be trained in how to talk to the customer with
finesse about the economic superiority of the brand and
convince them to purchase Apsara.
Marketing communication regarding Apsara 3"
variants should be confined to vernacular women’s
magazines where the price points can be clearly com-
municated. Specifically, television should be left un-
touched for this variant and kept open for communicat-
ing about premium brands of the company.
Comfort Segment
This segment is expected to view softness and thickness
as the most important features in their decision making.
It can be seen in the perceptual map given earlier that
Aaram, Restoflex, and Duroflex are rated better than
Kurlon. This segment can quite possibly consist of (i)
those who only look for comfort—we may call them
comfort-seekers—and (ii) those who look for value for
money—we may call them value-seekers.
Comfort-seekers: This sub-segment cares mainly for the
comfort and does not ascribe much importance to price.
The complex buying behaviour reflected by this sub-
segment will consist mainly of reduction of post-pur-
chase dissonance and ego-expression in the form of
fitment with the décor of their bedroom, aesthetics, etc.
Their buying behaviour is likely to be characterized by
high involvement and an utmost sense of seeking both
functional quality and aesthetics, and hence, their brand
name will make a significant difference. Demographi-
cally, this segment consists of middle-aged couple be-
longing to SEC A1 and A2, with the earning members
being high-level executives or from business, with high
disposable family income, sociable, well-read with the
habit of reading English magazines such as Savvy, and
who travel frequently by air and are therefore exposed
to the in-flight magazines. The variant suitable for this
segment is Klassic 75"x60" and 78"x72" that can suit large
double cots—for the couple—and Klassic 72"x48" and
78"x42" for the single cots of their grown-up children.
This sub-segment is likely to be anchored in the same
city for a considerably long period and hence conven-
ience of folding or rolling is not an issue for them.
126
This sub-segment is unlikely to be concerned about
price and hence Kurlon can maintain the price of Klassic
variants at 20 per cent above those of similar variants
of the competitor-brands. The dealer may be paid a little
extra commission —a total of 30 per cent—on Klassic
variants. This will match the competitors’ commissions
of 35 per cent to 40 per cent of cheaper brands and the
dealer will gain the same commission for selling a higher
priced product to the quality-conscious customer. He
can sail on price-quality association in converting the
visit of these customers easily.
The medium of communication for this segment
should be high-end magazines such as Savvy, and in-
flight magazines. Portrayal of the executive class of an
aircraft can be used for relating to the quality of mattress
as well as the classic taste of the segment. Television
advertising in leading English and Hindi news channels
and certain specific non-Hindi speaking vernacular
channels should be used. Though they may be aware
of Kurlon brand name, the consumers in this sub-seg-
ment need to be reminded about the brand at the point
of purchase. This can be in the form of large acrylic
boards with lighting, containing life-size photographs
of attractive models, and Klassic mattresses with aes-
thetically appealing tapestry. At the dealer outlets,
especially in the larger ones in the major cities, the
salesmen attending to this sub-segment should be able
to speak good English, Hindi as well as the local ver-
nacular and should be highly conversant with all brands
and their offerings. Such customers should be handled
by the dealer himself. Post-purchase warranty for one
year can be an effective way of conveying quality-as-
surance to this sub-segment.
Value-seekers (A) : The customers in this sub-segment,
too, seek high quality; but they also seek value for their
money. They want high comfort and are willing to pay
the “just” price. They most likely belong to A2 and B1
SEC categories. These customers are likely to be in their
mid-thirties and the earning member is likely to be in
an executive position. A typical household may have
both parents working, with their children in middle
school. A hard day’s work should be followed by a good
night’s sleep for this sub-segment. More than the aes-
thetic aspect, the functional characteristics of the mat-
tress are crucial for them. The products suitable for them
are from the variants of both Super Deluxe 4" of sizes
72"x48", 75x60,” and 78"x72" for the couple and 72"x30",
72"x36" and 75"x36" for their children, and Klassic 78"x48"
KURLON LTD.
for the couple and 72"x30" and 72"x36" for the children.
Providing such a wide range of mattresses has the
psychological advantage that this sub-segment seeks to
derive — of considering various options and arriving
at the best buy.
The price for the sub-brands mentioned should be
10 per cent above that of the competitors for the specific
variants mentioned above to convey to these customers
the price-quality association. The dealer margin may
remain as they are now for Super Deluxe 4"; but the
dealers may be given incentives of 5 per cent on achieve-
ment of target for this variant. For the variants of Klassic
mentioned above, the prices may be kept 10 per cent
above the competitive price and the dealer-commissions
can be increased to 25 per cent with an incentive-package
up to 5 per cent on achievement/exceeding targets.
This segment is likely to read business magazines,
news digests, and high quality vernacular magazines.
They are likely to watch week-end programmes on TV
and are less likely to watch soap-opera serials. These are
the shows during which advertisements for Super deluxe
4" and Klassic variants mentioned above should be aired
in addition to magazines that provide news digest and
vernacular family-magazines.
Value-seekers (B): This sub-segment consists of parents
of to-be-married offspring. For them, this is a one-time
purchase—for each offspring—and reflects their love for
the offspring. Thus, their purchase is characterized by
ego-expressive, complex behaviour. Some of them may
seek value-for-money and the others may seek quality.
The product targeted at the former sub-segment is
Romantique and the variants for this sub-segment are
72"x30", 72"x36", 72"x48", 75"x36,” and 78"x36". The
product variants targeted at the latter are Romantique
72"x48", 75"x60", 78"x48,” and 78"x72". Since the parents
of the to-be-married offspring are likely to enquire about
the brands and dealers, word-of-mouth publicity is very
important. Hence, one of the public relations exercise
is to send a first-wedding anniversary gift coupon worth
about Rs. 300 to the wedded couple which can result in
a useful goodwill and can generate word of mouth. This
product can be priced at 10 per cent above the compet-
itive price and the dealer-commission can be increased
to 30 per cent, since this segment is likely to be influenced
by the point-of-purchase recommendations. This variant
can be advertised in major serials on the TV channels—
VIKALPA • VOLUME 32 • NO 1 • JANUARY - MARCH 2007
especially in vernacular languages—showing the brand
as an expression of love of the parents for their to-be-
married offspring.
Therapeutic buyers: These buyers form a niche. These
purchases constitute mainly single beds that are strong
and lend support to the spinal chord to prevent uncom-
fortable sagging. The sub-brand targeted at this segment
is Ortho 4" within which the sizes available are 72"x30",
72"x36", 75"x36,” and 78"x36". The wider-sized mattress-
es in this category can be dropped and can be made to
order. These mattresses can be promoted by informing
the doctors about the functional superiority of the var-
iant. They can be prized at 20 per cent more than the
competitive brands since the customers will associate
higher price with better quality. Given the important
purpose the variant serves, price will not be a negative
factor in the purchase decision. The “Ortho” variant can
be advertised through medical magazines that specif-
ically focus on bone-related aspects and orthopaedic
centres. Dealers should be paid a commission of 35 per
cent since the movement of this product may not be
frequent and therefore there has to be an incentive for
the dealer to stock this product. They also need to be
educated through booklets containing information about
different ailments relating to spinal chord, lumber-sac-
ral, and cervical spondylitis and suitable sleeping po-
sitions for such ailments written by an orthopaedic
surgeon or a consultant. These booklets can be given free
to the buyer along with the mattress, to get a word-of-
mouth publicity through the user, in addition to gen-
erating an awareness about the back-related problems
and establishing an association with the Kurlon Ortho
variant.
In summary, there is no need for product modifi-
cation. The problem faced by Kurlon is one of mismatch
between the segment’s needs and the value offerings.
If the company realigns the offerings in line with the
respective segment’s preferences, it can achieve greater
growth and profits. Some of the products can be simply
dropped from the list and only those mentioned in the
recommended strategy need to be continued. This will
enable better economy of scale of production and mini-
mization of the inventory to be carried at the factory,
regional warehouse and dealer-points. The strategies
suggested above are summarized in Table 1.
127
Table 1: Kurlon Ltd.: Summary of Segment-wise Marketing Mix Strategy

Segment Products Price Promotion Distribution

Economy Apsara 3" Less than the prices of
Restoflex and more than the
72"x30" prices of Besty for the
72"x36" respective sizes of the brands
75"x36"
75"x42"
Advertising Media: No change is recommended;
- Vernacular women’s magazines Kurlon should continue to sell the Apsara
3" variants through the dealer network;
- Family serials in Hindi and in vernacular
langauges in leading TV channels Commission to remain the same;
Point-of-sales promotion:
- Pilot salesmen for Kurlon in leading
mattress dealer shopsTrade-promotion:
- Slab-wise extra incentives for pushing
Apsara 3" variants

Comfort Klassic 5" 20% above the competitor’s Advertising Media: Dealer-Commission to be made 30%
seekers 75"x60" premium brand - English Magazines such as Savvy- In-
78"x72" flight Magazines of Jet Airways, Indian,
72"x48" and King Fisher
78"x42" - English and Hindi News Channels
Point-of-sales promotion:
- Life-size visual board at dealer
pointsTrade-promotion:
- Slab-wise extra incentives

Value- Super 10% above the competitors’ Advertising Media: Dealers to be given extra incentive of 5%
seekers Deluxe brands of specific premium - English Magazines that provide news on achievement of target for the variants
(A) 4"72"x30" varieties digest- Business magazines of Super Deluxe 4"
72"x36" - High quality vernacular magazines Dealer margins to be increased to 25%
72"x48" - Week-end programmes in vernacular for the variants of Klassic;Dealers to be
TV channels given 5% extra incentive for achievement
75"x36"
of target
75"x60"
78"x72"
Klassic
5"72"x30"
72"x36"
78"x48"

Value- Romantique 10% above the competitors’ Vernacular TV channels, especially in Dealer-commission to be made 30%
seekers 4.5" brands of similar varieties family serials
(B) 72"x30"
72"x36"
72"x48"
75"x36"
78"x36"
72"x48"
75"x60"
78"x72"

Therapeutic Ortho 4" 20% above the competitors’ Direct mail to doctors and orthopaedic Commission to the dealer to be 35%
buyers 72"x30" brands of similar varieties centres booklets (written by an
72"x36" orthopaedic specialist) on caring-for-
75"x36" back, spine-related ailments and right
78"x36" postures of sleeping to be given to
every buyer to be read and shared with
friends/relatives

128 KURLON LTD.

Case Analysis II
Bikram Jit Singh Mann
Reader
Department of Commerce and Business Management
Guru Nanak Dev University, Amritsar
e-mail: bikrammann@hotmail.com
T
he Indian mattress industry is a Rs. 27.50 billion
market wherein 73 per cent belongs to the estab-
lished cotton mattresses, the remaining 27 per
cent being contributed by rubberized coir mattresses, PU
foam mattresses, and spring mattresses. The rubberized
coir mattress market is worth Rs. 5.5 billion. The pyr-
amid for Indian mattress market has cotton mattress at
the bottom, rubberized coir mattress and then full PU
foam mattress above it, and finally, spring mattress at
the top. Kurlon Ltd. is a market leader in the organized
rubberized coir mattress market with a share of about
29 per cent. The problem the company is facing, perhaps
for the first time, is a decline in the market share.
The case states that the rubberized coir mattresses
are being bought mainly by the high income group
(households with income above Rs. 15,000). The pur-
chasing dynamics indicates that the predominant reason
for the purchase of a mattress is the need for replacing
the old damaged ones. Further, new mattresses are bought
every 3-6 years, meaning thereby that the life of a mattress
is relatively short. The four most important attributes
considered by a consumer for evaluating a mattress, in
their order of importance, are softness, thickness, price,
and brand name. Kurlon is not a leader in terms of the
first three attributes. It is perceived as an expensive
brand but still scores high on brand name. The customer-
based brand equity scores indicate that the real equity
of Kurlon lies in durability and reliability of its products.
Further these scores indicate that Kurlon scores high on
three loyalty variables of switching costs, liking, and
satisfaction, but is not able to convert loyalty into com-
mitment. Also, in terms of perceived quality, though it
scores high on reliability and durability variables, its
score is the lowest amongst the competitors in terms of
‘fit and finish’ variable. This is the main reason why the
customers, despite having the intention of buying Kurlon,
end up buying the competitors’ product. What could be
happening is that when a customer goes to buy a mattress
with the intention of buying Kurlon because of its re-
VIKALPA • VOLUME 32 • NO 1 • JANUARY - MARCH 2007
liability and durability, he compares different brands
and finds Kurlon lacking in ‘fit and finish.’ Simultane-
ously, the retailer promotes a competitive brand that
provides better margins to him, hence the loss of sale
for Kurlon. Thus, a customer who has walked into a retail
outlet to buy Kurlon, walks out buying a competitive
brand. Kurlon has five sub-brands namely, Apsara, Super
Deluxe, Romantique, Klassic, and Ortho. Apsara, the
economy model accounts for 31.64 per cent of the sales
while the super premium models, Klassic and
Romantique, account for 20.58 per cent and 18.16 per
cent of the sales respectively. These five brands are
available in approximately 94 variants/models to fit
different cot sizes of 72X30, 75X42, and 75X60. The
preferred thickness is 3", 4", and 5.” Though the original
objective of sub-branding was to facilitate consumers in
the purchase process to select their preferred mattress,
over the years, the five sub-brands have made the con-
sumer choice process more difficult and confusing.
The above-stated are some of the issues of interest
that require immediate attention of the management.
Kurlon is facing competition from the local players
because, as the manufacturing process for rubberized
coir mattresses explains, this is more of a commodity
business with no real product differentiation in terms
of the technology of the product. Kurlon, being a market
leader, has to act proactively to recoup its falling market
share and sustain itself in the long run. It has to take
certain decisions to leverage the brand equity so pains-
takingly built over the years and enhance the long-term
profitability of the company. Hence, the following needs
to be done by Kurlon Ltd. to take care of the fall in the
market share and enhance its profitability.
First, the company can earn a higher rate of return
than the industry average by following two competitive
strategies: low cost or differentiation. It may strive to
be a cost leader in the rubberized coir mattresses market
through economies of scale, as being a market leader,
it can exploit all sources of cost advantage. The company
129
 discontinued as with a shift in consumer preferences due
may concentrate on a ‘no frills’ brand, Apsara, and focus
to more purchasing power, target market for this brand
on cutting costs. As the company enjoys good brand
has started shifting to full foam and spring mattresses.
equity, it can command price at or near the industry
Super Delux may be discontinued and Apsara may be
average. This will help the company occupy the ‘value
promoted aggressively as an economy product for those
for money’ positioning as its products are considered
who upgrade from cotton mattress to rubberized coir
to be highly durable and reliable. ‘Value for money’
mattress. Klassic may be continued as a premium rub-
proposition is a highly successful positioning strategy
berized coir mattress.
in India. Differentiation can be brought about by intro-
Third, the problem of multiple variants/models can
ducing PU and spring mattresses which are an improve-
be solved with the help of an efficient supply chain that
ment over the cotton and rubberized coir mattresses. The
is backed by information technology. The fast moving
company cannot ignore the shift in tastes and prefer-
stock keeping units (SKUs) can be identified and the
ences of consumers that are bound to take place with
retailers may be advised to keep them in stock for off-
the overall economic development of the country.
the-shelf availability. On the other hand, retailers may
Mattresses are a lifestyle product and hence more pur-
be advised to back order the odd sizes in the supply
chasing power with the consumers will lead to their
chain and the order be replenished in the market place
buying better quality, more expensive mattresses. As of
within the least possible time.
today, international quality mattresses have a very
Fourth, the company needs to look into the reasons
negligible market. But, with the increase in the purchas-
for poor ‘fit and finish’ of its products. A major improve-
ing power of the consumers, already a latent market
ment is required for this product attribute as the outward
exists that is waiting to be developed and exploited. The
tangible part of a mattress helps a consumer form a
company should start aggressively selling quality PU
perception about the quality of the intangible inner
mattresses, for which it already has the know-how. The
product.
company cannot ignore spring mattresses which have
Last but not the least, the company may also explore
a longer life span and are a niche product as of today.
the option of entering into an alliance with an interna-
If such mattresses are attractively priced, these can be
tional company manufacturing mattresses. This will
successful in the market place as Indians are shrewd
provide the company with the access to the most ad-
calculators of ‘value for money’ of the products. The
vanced product line, latest technology, and an oppor-
company needs to invest in R&D and try to develop
tunity to exploit international markets through exports.
innovative product designs that have unique features
The company is operating in an environment that
like density, softness, and durability. This way, the
is very dynamic both in terms of competition and changes
company can differentiate its mattresses from those of
in consumer preferences. If the company does not take
the competitors, which is so very essential in this indus-
the right decisions today, it might not be there tomorrow
try.
just as it took certain right decisions forty years ago and
Second, rationalization of brands is the need of the
is a market leader today.
hour. Super premium brand, Romantique, needs to be

REFERENCES
Porter, Michael E (1985). Competitive Advantage: Creating Bijapukar, Rama (2001) “Can Indian Brands Survive?”
and Sustaining Superior Performance, New York: The Free Seminar, 498 (February), 14-17.
Press.

130 KURLON LTD.

Case Analysis III
Salma Ahmed
Faculty Member
Faculty of Management Studies & Research
Aligarh Muslim University
Aligarh
e-mail: SALMAAHMED6@rediffmail.com
K
urlon Limited, the largest manufacturer of
mattress in India, started as Karnataka Con
sumer Products Limited in 1962, with the inten-
tion of manufacturing accessory products and estab-
lished itself as a distinguished player in the comfort
industry. Its journey began by manufacturing cushion
seats and bare blocks made by polyurethane foam for
the automobile sector and moved into rubberized coir
mattress in 1965. Later on pillows, towels, and doormats
were also added to its product portfolio. Over the years,
sales had started to decline, which was a cause of worry
for the company. The company plans a strategy for
growth for the company.
Strengths and Weaknesses
The major strengths of the company are that it has been
the largest manufacturer of mattress with a leading
market position, has strong brand recognition, has top-
of-the-mind brand recall, and has a range of products
at various price points to offer. Further, this brand is also
known for its superior quality, comfort, and durability.
The company should leverage on the strengths of its
brand.
The consumer desires variety as indicated by the
study conducted by TSG (refer case) and Kurlon is
fulfilling this need by providing a wide variety of rub-
berized coir mattress — Apsara, Super Deluxe,
Romantique, Classic and Ortho — while also offering
foam mattresses. They are all in different cot sizes and
thickness too. The company has the strength of using
its own technology, process, and manpower to produce
PU foam mattress. It also had one brand for each cat-
egory. The major weaknesses were found to be low
dealer margins, high price, and low sales promotion as
compared to its competitors.
No mention has been made in the case about the
production process — how the orders are scheduled,
produced, and shipped to stocking points or retail
VIKALPA • VOLUME 32 • NO 1 • JANUARY - MARCH 2007
Ashfaque Khan
Manager, Redhat India
New Delhi
e-mail: akhan@redhat.com
warehouses.
Mattress buying is not a one-time activity. The typical
buying cycle of the consumer for a mattress is three to
five years. What the consumer looks for is comfort and
a good night’s sleep.
The buying criteria for the consumers are: (a) com-
fort; (b) durability; (c) cost and (d) lifestyle statement.
It is important to note, however, that shopping for
mattress is a confusing experience and with more places
to shop, more products to select from, and more options
in terms of variety than before, the confusion only in-
creases. Moreover, Indian consumers today are exposed
to different life styles and constantly want to upgrade
their standard of living. Also, they are constantly de-
manding more sophisticated, better quality, and wider
range of products. KSA Techopack estimates suggest
that the bed and bath market is at Rs. 1,800 crore and
growing at the rate of 25 per cent per annum. (Business
Line, Aug 19, 2004).
Suggestions
Kurlon should tap this opportunity and extend the
product range from mattress to pillows and mats and
move into home furnishing segment with an entire range
of upholstery, bed and bath linen, and curtains.
Speciality Chains
Kurlon should set up speciality retail stores (chains of
stores) which should act as one- stop-shop for all home
furnishing needs with active salesmen providing cus-
tomer support and help in the purchase decision. This
facility should provide its entire range of products–
mattress, bed linen, bath linen, etc. These outlets should
not only be established in the metros but should further
be extended to the Class A/Class B cities where the
consumers’ awareness and lifestyle are on the upswing.
Adopting a franchisee model for the speciality chains
is a way to penetrate the Class A/Class B cities. Along
131
with the setting up of speciality chains, shelf space in
malls and speciality chains like The Home Stores are
ways of spreading the mind-share. Further, since scale
and efficiency are the two critical drivers of success in
the retail industry, first movers are likely to do well.
Certain integrated players have entered the arena
to cash in on the improved lifestyle adoption like Godrej,
Blowplast, etc; Kurlon should tie up with them.
Superior In-Store Experience
Further, the focus should be on providing a superior in-
store experience, which further should be anchored in
the following objectives:
Location: High upstream locale to enable a superior
shopping experience.
Customer support: These outlets should be equipped with
well-trained salesmen with comprehensive sales train-
ing programmes. These employees could be trained at
various institutes like Ebony, NIIT, etc., where training
is imparted to frontline retail staff.
Management information system: Real time enterprise
management information system is desired to enable effi-
cient inventory control and back office operations to
manage the multitude of SKUs.
A Committed retail team: The quality and commitment of
workforce both at the front and back office is the top
determinant of success of retail stores. And it is noted
that the biggest deterrent facing Indian retailers is find-
ing the right people to run the show. A serious shortage
of manpower has pushed many companies to launch
specialized courses with leading institutes in the coun-
try. Therefore, the need of the hour is to develop skills
associated with visual merchandising, store manage-
ment, supply chain and logistics operations, and cus-
tomer service. Many institutes have emerged to fill the
need. NIFT, Pearl Academy of Fashion, RPG Institute
of Retail Management, Ebony Retail Academy, Welingkar
Institute of Retail Management, and The Home Stores’
Indian Institute of Retail to name a few. Many of these
cater to their in-house requirements. For instance, Tesco
is running a retail certification course with the Indian
Institute of Management, Bangalore and Integrated Retail
Management Consultants (IRMC), Bangalore. The In-
dian Institute of Management, Lucknow also plans to
start a course on Retail Management. Employees could
be trained from these institutes for efficient management
of retail centres.
A wide product range and distribution through
132
specialized retail outlets provide a one-stop shop for all
bedroom needs and should therefore be the focus of the
company’s growth strategy. The home furnishing seg-
ment does not have too many players and it does not
have any player in the branded segment. Kurlon could
leverage on its brand by extending it further to other
products. Therefore forward integration is the need of the
hour.
Target Market and Specialized Products
Kurlon could segment the market into two categories —
domestic needs and institutional needs. The later in-
cludes sectors like health care (hospitals, polyclinics,
nursing homes and the like), hospitality industry (ho-
tels), aerospace and defence, hostels and charitable
institutes, old age homes, etc. Need of each may be
identified and products may be specially designed for
them. For instance, a specialized mattress exclusively
designed for children who may need extra softness.
Good rearing of children has become the focus of the
educated and emancipated mothers today. Such prod-
ucts therefore would be welcome at homes; and also at
crèche and nursery. These could be sold through fur-
niture stores and specialty shops.
Women, who are the main decision makers in se-
lection of these products, could be approached with a
well-designed homecatalogue, publishing information of
all these products. Also advertisements through a fo-
cused magazine like Femina is suggested.
India has an ageing population that is prone to
developing sores and an increasing number of obese
patients requiring special mattresses. Special mattresses
can be developed to address sleep-related medical prob-
lems such as fatigue, bedsores, insomnia, back pain, leg
and joint pain.
A database of hospitals, number of beds in each of
them, their requirement for new mattress, accessories,
and replacement needs to be maintained. It would be
helpful in approaching them and fulfilling their require-
ments. Advertisements could also be made in medical
journals.
Corporations have a responsibility towards the
society and each of them has the resources to solve the
societal problems. What an organization needs to do is
identify the particular set of problems that it is best
equipped to resolve. In fact, if corporations were to
analyse their prospects for social responsibility using the
same framework, which they use to guide their core
KURLON LTD.
business choices, they would realize that corporate social
responsibility can be a source of opportunity and com-
petitive advantage too (Porter and Krammer, 2006).
Kurlon can tap this opportunity and can engage itself
in this social mission by providing mattresses free of cost
to the needy students in hostels and charitable houses.
Such social objective could go a long way in building
the image of the company.
New Products Line
From mattress and bedroom accessories, it could also
move into branded bedroom furniture to gel well with
the mattress being provided. As consumers are increas-
ingly becoming conscious of the quality of products they
are using and becoming brand conscious, the company
could even move into providing furniture and thereby
become a company fulfilling all bedroom needs.
Better Channel Management
The company should ensure that it manages its channel
partners well. Better management of each member of the
channel could go a long way in ensuring success for the
organization. It should therefore engage in management
of customers, dealers, and also its vendors.
CRM exercise: As is true for any branded and competi-
tive product, selling mattresses, bedroom accessories,
and branded furniture also bring into focus the cus-
tomer, and customer orientation. Kurlon should initiate
CRM exercise in a big way to improve relationship with
the customer, develop loyalty, and ensure long-term
commitment and contract.
Dealer management strategy: Dealers are a point of
contact with customers. They are the major influencers
in purchase decision. Therefore it becomes imperative
to keep the dealers happy. Dealer promotion schemes
should be initiated to motivate them to take personal
interest to push the products. A sizeable proportion of
the promotion budget should be allocated for the deal-
ers.
Supply chain management: It should develop its supply
chain and distribution network in order to become
competitive. It should engage in contract manufacturing
for its new products—bed-linen, furnishing, etc. It could
also resort to procurement from international vendors
and establish a strong sourcing strategy. Supplier selec-
tion should be purely on quality, price and performance.
Strong vendor management strategy could enable it to
reduce cost, as competition is severe from regional and
local players who provide their products at lower costs.
VIKALPA • VOLUME 32 • NO 1 • JANUARY - MARCH 2007
Since the home décor segment is growing, it should
move into designing of the products too. Therefore the
company should develop its strength right from design-
ing, sourcing, and manufacturing to managing retail
centres. Therefore, Kurlon now needs to work hand in
hand with suppliers upstream and customers down-
stream to bring down cost, become responsive, add
value at each channel, and bring value to the entire
supply chain.
E-commerce strategy: E-commerce is picking up fast in
India. According to Internet and Mobile Association of
India (IAMAI), there are 38.5 million internet users in
India, making the country the fourth in the world in
internet usage and the number is expected to reach 100
million in 2007-2008. B-to-C e-commerce has been grow-
ing at the rate of 100 per cent annually over the last three
years and is expected to reach Rs 2,300 crores or $ 510
million in 2006-2007 (Khatre, 2006).
Kurlon should create a web site of its own, publish-
ing detailed information about its product. Today con-
sumers have less time at their disposal—women who
take decision for the purchase of mattress are working,
and a web site would provide them ready information
at home itself at the click of a button. They can sift
through and conduct a preliminary screening before
going to the shopping centre for the final selection and
purchase.
This could also serve as an order point particularly
for institutions (for instance, a hospital or a hotel) for
which it would be a regular/ repetitive exercise. Also
it would be helpful to buy online if it were a second time
purchase activity (where the customer would probably
resort to purchase of the same mattress.)
This portal could also be used to publish informa-
tion on emerging research on the importance of restful
sleep, medical advice on sleep-related problems, sugges-
tions for using customized mattress for different kinds
of ailments and the like.
Use of Information Technology
The company should resort to use of information tech-
nology to integrate its business processes (an ERP
implementation could do) to enable operational efficien-
cies in its business. It is needed to integrate the functions
carried at its multiple retail chains. This would also give
a clear picture of inter-product profitability (with so
many SKUs) and inter-store profitability, which becomes
necessary to improve its cost and pricing structure in
the wake of regional players offering lesser price.
133
Explore Opportunities in the International Market
Till now, FDI is allowed for single-brand retailing. Morgan
Stanley report suggests that foreign competition would
intensify in categories like food and home improvement.
(Economic Times, August 17, 2006). Further, with the
entry of foreign players such as King Koil, a US-based
mattress manufacturer that received approval to enter
India (Business Line, 25 Jan, 2006), more competition is
expected. Therefore, geographical expansion to APAC
and the Middle East (which has a large Indian NRI base)
is suggested. However, the need of the hour is to eval-
uate these markets in terms of size, method of entry, and
how best to serve them. It would also be prudent to
identify a logistic hub. Singapore, for instance, is stra-
tegically positioned for serving as a hub for APAC
REFERENCES
Krammer, R Mark and Porter, Michael E (2006). “Strategy
and Society: The Link between Competitive Advantage
and Corporate Social Responsibility,” Harvard Business
Review, December, 78-92
Economic Times (2006), August 17.
Case Analysis IV
Zillur Rahman
Assistant Professor
Department of Management Studies
Indian Institute of Technology Roorkee
Roorkee (Uttarkhand)
e-mail: zrahman786@gmail.com
K
arnataka Consumer Products Ltd. (KCPL) was
established in 1962 and it started with manu
facturing cushion seats and bare blocks made
of polyurethane foam for the automobile sector. In 1965,
it introduced the concept of rubberized mattresses under
the brand name “Kurlon”. This particular product had
sluggish sales initially but the company compensated
for it through brisker sales of its other products. In the
year 1987, the company decided to revive the manufac-
turing of its own range of finished rubberized coir
mattress for the end user. By 1987, the company stopped
its line of bare block business and concentrated mainly
on finished mattresses.
In 1995, KPCL changed its name to Kurlon Ltd. The
company was consistently growing and became a leader
in the Indian comfort mattress industry over the years.
134
countries while Dubai for the Middle East.
Conclusion
The strategy suggested for Kurlon is opening up of
specialty chains, introduction of new product lines,
increasing product line, providing specialized and fo-
cused products, and segmenting market into domestic
and institutional sales. Going online could serve the
needs of both the segments. Developing strengths in
better customer management, dealer management, and
supply chain management would go a long way in
enhancing sales of the company. Further, in the wake
of competition increasing with entry of foreign players
it could also explore opportunities in the international
market.
The Business Line (2006). “King Koil get FIBP Nod to Start
India Operations,” January 25.
Khatre (2000). “E-Commerce Alive and Kicking,” Business
Outlook, September 5.
In the year 2001-02, for the first time, it was able to reduce
its expenditure on sales and, in the very next year, it
reported a drastic drop in sales and profitability. Kurlon
also exported its products with exports sales making 10
per cent of the total mattress sales. However, the sales
in some countries were getting saturated as customers
were developing a strong preference for full foam and
spring-based mattresses. The full foam mattresses were
also getting popular in many metropolitan cities. Kurlon
estimated that it could get into the full foam mattresses
business with an additional investment of Rs. 70 million.
Kurlon rubberized coir mattresses were available in
five categories which it offered in 94 varieties.
Problems Faced by the Company
The company’s performance, in terms of sales, witnessed
KURLON LTD.
a drop in 2002. This fall can be attributed to certain
policies followed by the company including segmenta-
tion of the market on all variables given in the book and
then targeting all of them, and that too, with the same
brand. The problems can be detailed as follows:
High number of variations under its brand name: In-
stead of being impressed, the customer is drawn away
from the brand. Further, the sub-brands have over-lap-
ping specifications, which would add to the confusion
at the customer’s end. This also leads to competition
amongst the sub-brands.
Ineffective Sales Promotion Strategy: Though the com-
pany spends an impressive amount on sales and distri-
bution, the strategies followed are not effective. There
is a need for re-allocating the expenditure. The promo-
tion schemes like coupons and slogan-writing compe-
titions are outdated.
National vs. Regional Brands: Kurlon faces competition
not from any national brand, but from strong regional
brands. The customer requirements vary in different
regions and a different marketing mix is required to
address them.
Segmentation: Kurlon manufactures product that is
needed by a vast majority of the population. Therefore,
it becomes very important for the company to carefully
segment its market, and that can be need-based segmen-
tation. Kurlon’s products are best suited for the health
of a person as they have more density which helps in
maintaining the straight posture of a person, so health
can be used as one of the parameters for segmentation.
This parameter can be used in combination with socio-
economic status and life stage. While currently, they are
using all the segmentation variables given in the book,
i.e., geography, socio-economic status, stage of life, and
health status.
Targeting: The company has targeted various segments
like, urban, SEC A1, A2, B1, B2, C, old age, newly-weds
and young couples, and persons with backache. To target
all these segments, it has introduced a variety of mat-
tresses (94), which makes it very confusing for the
customer to find out a mattress for his requirements.
Moreover, it will be difficult for the channel members
to remember all the features in all the products in order
to help the customer decide which mattress is most
suitable for his requirement. Further, the retailer is also
supposed to stock 94 mattresses and in different colours
that can take up the number of stock keeping units
substantially, which in turn increases the inventory car-
VIKALPA • VOLUME 32 • NO 1 • JANUARY - MARCH 2007
rying cost of the dealers and retailers. The reduced
margins that the company is currently providing to the
retailers may not be high enough to keep them interested
in selling Kurlon. Because of these factors, retailers may
not be selling the right mattress for a given target market.
Positioning: Positioning plays an important role in brand
building. Kurlon has used the same positioning state-
ment for quite some time. There is no doubt that it has
been a market leader since a long time, but the position-
ing has to change according to the market dynamics.
Further, its current product portfolio (towels, doormats,
etc.) does not match its benefit-based positioning or its
punch line (pure sleep, nothing else).
Product: The company started with the manufacturing
of bare blocks and later diversified its portfolio to in-
clude mattresses, pillows, towels, doormats, and bed
sheets. It seems that the company is diversifying into
home furnishing rather than just providing pure sleep
comfort. And, to do this, the company will have to go
in for its own outlets or exclusive retailers for distribu-
tion rather than selling through the regular channels of
distributors and retailers as in this case. It will have to
manage multiple distributors and retailers to sell its
different products and that may add to further confusion
in the marketplace.
Price: An evaluation of current brands on the scale of
1 to 10 revealed that the Kurlon products were most
expensive (price 10 to 20% higher than competitors) a
major factor for the increase in competitors’ sales. This
increased price gives a premium image to the company’s
products and that makes it even more difficult and risky
for the customers to make a choice in favour of Kurlon.
Promotion: Although the brand is high on the majority
of customer-based brand equity scores, because of large
variety of products and variants, and with not much help
coming from the retailer who may be getting lower
margins on Kurlon’s sale, the customer ends up buying
another brand. Kurlon may not even appear in his
consideration set. Moreover, its current promotion strat-
egies are outdated and do not support its wide range
of product portfolio.
Place: Ten per cent of the company’s sale of coir mat-
tresses are coming from exports. But, of late, its sales
in some of these countries have decreased or stagnated,
as customers in these countries are developing a strong
preference for full foam or spring-based mattresses. Most
of its Indian sales are coming from the South, which
again is under the threat from the competitors. North
135
India accounts for the minimum sales of the company
as the regional players are stronger there.
To be a basis for an effective strategy, a particular
core competency or resource must not only be valued
by customer but it must also pass the test of inimitability,
durability, appropriability, sustainability, and competi-
tive superiority 1. In the case of Kurlon, appropriability,
i.e., who captures the value created by core competency
or unique resource, is not working.
In case of Kurlon, its brand equity is not getting
translated into revenues for the company but rather the
retailers and competitors are getting benefited. The
Kurlon brand brings the customer into the store but he
ends up buying the competitors’ product. The key
problem areas are: Improper and confused segmenta-
tion, the high production costs, confused targeting, and
promotion of too many sub-brands.
Solutions
The company should currently focus on remaining the
market leader and increasing its market share and that
can be achieved by treating mattress purchase not as a
low involvement but rather, a high involvement buying
behaviour as consumers do not currently see a signif-
icant difference between brands which makes the mat-
tress purchase a dissonance-reducing purchase.
On the contrary, the company expects its buyers to
exhibit a variety-seeking buying behaviour; i.e., there
exists a significant difference between brands and it is
a low involvement buying behaviour and to address this
variety-seeking behaviour, it has launched a huge port-
folio of products/variants. But, there is a difference
between buying of a mattress and that of consumer
packaged goods.
Therefore, the company should look forward to
addressing a dissonance-reducing buying behaviour,
i.e., a high involvement purchase, where consumers see
little difference between brands, except may be in the
case of mattresses targeted towards backaches, where
the company can treat the buying of mattress as a complex
buying behaviour. And, because the customers do not
see any significant difference between brands, he ends
up buying simply on the basis of price or convenience 2.
In this situation, the company will have to give the
customers one or more positive cues which can help
them in justifying their brand choice. Further, brand
familiarity may give the consumers a reason to buy the
brand which they have heard of or seen the most. Here
136
Kurlon will be benefited as it scores better in most of
the customers-based brand equity scores.
If the company wants mattress purchasers to exhibit
a complex buying behaviour and therefore wants them
to go for detailed brand evaluation and acquire brand/
product/service knowledge, they must be provided with
the required time and proper setting to do so2. This
buying behavior can not be supported by the current
distribution channel that the company has. And to
support this kind of buying behavior, the company will
have to go in for company owned outlets.
Further, Kurlon can use the “product market expan-
sion grid” to review its opportunities for improving the
existing business3. The company should first consider
market-penetration as a strategy, then move on to market
development, product-development, and finally to di-
versification strategy. A brief of what needs to be done
in each cell of Figure 1 is outlined below:
Current Market – Current Product: Kurlon needs to
increase the sales volume in the present market by
increasing promotion and adopting aggressive market-
ing strategies. Exchange offers, reduction of cost, and
increasing the dealer network would help in greater
market penetration.
Current Market – New Product: Kurlon can launch PU
Foam mattress and Spring Mattress. Though, it has the
technology and manpower to produce PU foam, an
additional investment of Rs.70 million is needed for the
same. As PU Foam is cheaper, it can cater to the lower
middle income group; which will increase the profit
margins for the company.
New Market – Current Product: Reduction in the cost
of Apsara sub-brand would help in catering to the lower
middle group. Also, expanding into the global markets
by promoting good quality rubberized coir would in-
crease profit margins of the company and enhance the
brand image as well.
New Product – New Market: Introduction of new prod-
ucts like PU foam into rural market would help increase
sales and margins for the company as the rural market
has nearly the same number of high income group house-
holds as in urban India. But this would require extensive
Figure 1: Ansoff’s Product-Market Expansion Grid
Current Products New Products
Current Markets 1. Market-penetration 2. Market-development
strategy strategy
New Markets 3. Product-development 4. Diversification strategy
strategy
KURLON LTD.
awareness campaigns to promote advantages of PU Foam since there is an increased demand of PU Foam and spring
mattresses over cotton mattresses as they presently ac- mattresses in foreign countries, introducing these prod-
count for nearly 70 per cent of the total market. Further, ucts would help in capturing those markets too.

Acknowledgement • The author wishes to sincerely REFERENCES

acknowledge the contribution of the students of MBA (P),
Harvard Business Essentials (2005). Strategy: Create and
2006-2007, at IIT Roorkee in preparing the initial draft of
Implement the Best Strategy for Your Business, Boston,
this manuscript and extensively discussing the issues
Mass: Harvard Business School Press.
involved. Special thanks are extended to Mr. Himanshu P
Kotler, Philip (2003). Marketing Management, 11th Edition,
Chichilani and Ms. Diksha Sisodia of the same batch for
New Delhi: Pearson Education.
helping the author in preparing the final draft.
Kotler, Philip and Keller, Kelvin L (2006). Marketing Manage-
ment, 12th Edition, New Delhi: Pearson Education.

Don’t let the fear of the time it will take to accomplish

something stand in the way of your doing it. The time
will pass anyway; we might just as well put that passing
time to the best possible use.
— Earl Nightingale

VIKALPA • VOLUME 32 • NO 1 • JANUARY - MARCH 2007 137