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INTRODUCTION
s we know, modern life is changing rapidly and only change is imminent
and unavoidable in this universe; and this human kind in the changed form of a
consumer is not a king now but he has become an emperor. Now a day,
marketing is the core concept of any organization and this marketing activity
turns around the consumer. So present era can be termed as era of
consumerism.
Said Charles dickens of French Revolution in A Tale of Two Cities, written 100
years ago: It was the best of time; It was the worst of time. Today there are many
blessings: extremely high productivity because of mechanization and automation,
the promise of computer and internet, the rapid growth of global trade, and the
end of the cold war. Human kind today has capacity to end the hunger in the
world and to cure many epidemic diseases.
Here in its full capacity the industrial innovators have done many more
innovations to satisfy the needs of the target segment and to meet their lifestyle
necessities and washing machine is one of those innovations. Now, life is quite
busy, daily household works need some convenience, and washing machine
provides this facility.
Washing machine as a consumer durable item was considered to be luxurious
home appliance in India 10 or 15 years ago; but after the invent of new
economic policy ,the scenario has been improved by many folds. Now it has
become a necessary goods in nuclear or service class family and the same thing
is happening in middle-class income group of India, which is now 300 million in
number, approximately equal to the population of U.S.A . So there is a great
scope for this item in the changing way of consumer behaviour in India and
realizing this fact MIRC ELECTRONICS LTD.; a premier player in colour and
black & white television has jumped into the market of washing machine.
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But we have already said that the scenario is quite different now and there is a
tough competition in this segment. Washing machine sales volume in India has
crossed 1 million mark 1 year ago but it is also a point to be noted there are so
many established companies engaged in this market. Therefore, it has to
compete with them. For this purpose, company is taking many efforts as the part
of their marketing strategy to promote its product.
Selecting Mumbai as one of the business cities, MIRC ELECTRONICS LTD.
started awareness creation by doing various activities. Sales promotion consists
of a diverse collection of incentive tools, mostly short –term design to stimulate
quicker or greater purchase of particular product by consumer or the trade. Sales
promotion includes tools for consumer attraction e.g. Free coupons, cash refund
offers, discount, premiums, prizes, patronage reward, free-trial, point of purchase
display and live demonstration. Here company is looking Mumbai as a great
prospect because of capital city of to be proposed state of Vidarbha and as a
leader in TV segment in this region.
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OBJECTIVE OF THE STUDY
he importance of this study in today’s marketing scenario is obvious;
when the visible opportunity for the market is very less due to tough competition.
The 4 P’s given by the Marketing Guru Philip Kotler are not sufficient to remain
competitive in the market. Besides those 4 P’s one company must also bank on
two mare P’s and these are Pre-empt (to do something before your competitors
do) competition and Pace. In today’s scenario, being a big fish is not enough but
being a bigger fish with faster speed is required to sustain. Here Mirc Electronics
is taking some extraordinary efforts to become a bigger fish in washing machine
market in Siliguri city. Here our aim is to study those efforts or strategy as termed
in marketing field of the company. The points of the study are-
Strategy of the company for promotional activity
Company’s pricing policy
Company’s customer relationship management
Awareness level of the product
Impact of company’s policy on distributor/dealers
Criteria seen by the dealers and customer for taking particular dealership
and the product respectively
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MIRC ELECTRONICS LTD :COMPANY
PROFILEPAST OF THE COMPANY
he company was establishment in 1981 as a private limited company
called MIRC Electronic Limited in Mumbai. Before that it was working under the
name of Monica Electronics having its main office in Delhi. It became the pioneer
of electronics watches India 1977. In 1982, India’s first Video Cassette is
manufacture by MIRC Electronics Ltd.
India’s first monitor television was launched under the brand name “ONIDA” and
Onida became the authorized service center of JVC in India in 1983. In 1985
research & development department is established at Onida. In 1987, they have
launched the stereo system & one separate international marketing division was
established in 1988. After that the continuous launching of the new product was
done until 1988. In 1989 they launched VCR’s , in 1990 Air-conditioners & Black
& White Televisions were launched , in 1991 they launched the training school
for service technicians also launched the VCR with auto head cleaner. In 1991,
MIRC Electronic Ltd. has launched the fully automatic machines and in 1992,
they launched semi automatic washing machines. In 1995 they got the
commencement of Wada plant, which was one of the best in Asia with all the
sophisticated machinery; also they got the ISO Certification. From 1996 they
started launching different range of TV’s like 2100 series, KY series, Unique
collection and 21” IQ CTV.
COMPANY MILESTONE-
1981 : MIRC Electronics Pvt. Ltd. was established
1982 : CTV production started at Nand Bhavan, Mumbai
1983 : Technical collaboration with JVC, Japan for CTV
1985 : Established in-house R&D wing
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1986 : Production expanded and moved to a new factory at Kalina
1987 : Moved to own factory building "ONIDA HOUSE"
Iwai, Speaker plant commences its operation
1990 : Tuner plant commences operation
1991 : Akasaka, PCB plant commences its operation
New CTV manufacturing plant at Vasai commences operations
1992 : Crossed 1 million CTV sales
1994 : Moved to a fully automated Plant of 600K CTV per year at Wada
1994 : Moved to a fully automated Plant of 600K CTV per year at Wada
1995 : ISO 9001 certification obtained from BVQI
1998 : Award for excellence in electronics by ministry of IT
1999 : First in India to develop Internet enabled CTV
2000 : Launched the KY Thunder, Profile Series
2001 : AV Max award for best CTV
Launched Onida Black, flat CTV range
Multimedia projectors launched
Commenced project to expand CTV capacity to 1 million
2002 : Completed plant expansion project to increase capacity from 600K CTVs
to to 1.2 million CTV's per year.
Launched 'KY Theatre' with circle surround sound, the first complete
IHome Theatre package
Launch of 'Igo'- the economy brand
Launched VCD player
2003 : Launched world's first LCD remote 'i-Control'
Launched Air-conditioners
Launched Rear Projection TV, Plasma TV & DVD Players
Launched Fully Automatic front loading Washing Machines
A MIRC product is getting sold every 27 seconds
Operations started in Russia
2004 : Launch of the 'Oxygen Series' CTV
Crossed Sale of 250,000 CTV's in October month
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Launch of Microwave Owens
Mr.Gulu Mirchandani, CMD awarded 'Man of Electronics for the year' by
CETMA
2004- 05 : Achieved 1.20 million CTV sales
2005 : Launch of 'POISON' range of CTV's
2009 : ONIDA's Brand relaunch campaign 'Tumko Dekha Toh Yeh Design Aaya'
to communicate its philosophy of thoughtful product features that are designed
keeping customers in mind.
COMPANY PRODUCT RANGE
At present, the company offers different models of semi automatic and fully
automatic Washing machines. These different ranges of models are-
SEMI AUTOMATIC WASHING MACHINES-
ONIDA HYDROSHAKTI 3.5 KG
ONIDA HYDROSHAKTI 5.5 KG
ONIDA ECOWASH 5.5 KG
ONIDA HYDROSHAKTI 6 KG
ONIDA HYDROSHAKTI 6.5 KG ( METAL BODY)
ONIDA HYDROSHAKTI 6.5 KG (FULLY PLASTIC BODY)
FULLY AUTOMATIC
SFL60 6KG
WASHING SYSTEM (without dryer)
LILIPUT 6.5 KG
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Company Performance in the last few
years
Period 2003 2004 2005 2006
No of months 12 12 12 12
Sales Value(Rs mn)
Audio Systems 31.4 15.3 4.1 1.1
Television 5029.4 6515.9 7506.9 6743.8
Music player 52.8 20.9 8.5 1.7
Washing Machines 1.1 29.6 132.1 98.9
Others 111 304.1 321.1 306.6
Sales Volume(Units)
Audio Systems(Nos) 27553 11323 7947 766
Telivision(Nos) 799888 1068609 1191757 970607
Music player(Nos) 8263 1785 1024 246
Washing Machines(Nos) 497 4204 18846 14782
Unit realisation(Rs per unit)
Audio Systems(Nos) 1139 1354 516 1405
Telivision(Nos) 6288 6098 6298 6948
Music player(Nos) 6394 11687 8322 6955
Washing Machines(Nos) 2284 7035 7011 6689
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QUALITY OBJECTIVE OF THE
COMPANY
he general objective of the organization is to achieve and sustain quality
at competitive price in the domestic and export market.
The product shall be designed and developed to meet the customers’ quality
requirements including safety and reliability.
Material supply and delivery shall be in line with stated specification with
continuous efforts to improve cost of procurement and reduce inventory level.
There shall be strict adherence to specifications and during manufacturing and
inspection with emphasis on statistical defect analysis and prevention in order to
continuously improve operational in the order of cost of manufacturing, quality
and capacity utilization.
The sales distribution network and logistics shall be organized such that there is
easy and timely availability of the products to the customer while reducing
working capital deployment in finished goods inventory and debtor.
There shall be constant endeavor to increase customer satisfaction by reducing
field failure rate, continuously and by providing timely and efficient after sales
service.
Feedback continuously obtained from customers, both internal and external, shall
be used.
Employee shall be deployed with right competence while shall be continuously
upgraded with training programmes.
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PRODUCT PROFILE
irc Electronics Ltd. Has introduced washing machine with the latest
feature and technologies at a cheaper price. The washing machine manufactured
is broadly classified as-
SEMI - AUTOMATIC
FULLY - AUTOMATIC
SEMI-AUTOMATIC MACHINE :
Semi-automatic machines manufactured are available in different models
according to its capacity and technical feature. The types of machines are semi-
automatic due to technical specification. Fuzzy logic operation is not available in
semi-automatic type.
1) HYDROSHAKTI—3.5 KG
The new Hydroshakti 3.4 kg is an aesthetically designed washing machine with
galvanized powder coated steel body that occupies little space. Its size might
deceive for a moment. The unique Hydroshakti wash technology gives clothes a
powerful and superior wash.
FEATURE—
● Compact and space saver
● Detachable drain hose
● Strong and sturdy
● Twin timer
● Rust proof design
● Heavy duty design
● Liquid balancing system for effective spin drying
● Thermally protected motors
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2) HYDROSHAKTI-5.5 KG
Hydroshakti 5.5 kg is very durable and of good quality washing system.
FEATURE--
● Unique 4-way wash system
●Up to 30% saving on detergent
● Galvanized powder coated steel cabinet for longer life
●Scrubber board
TECHNICAL FEATURES-
●High Ribbed Hydroshakti Pulsator-
The uniquely angled position of the high ribbed pulsator is in Onida Hydroshakti.
The ribs and 20 fins in between empower the water with tremendous force. It is
almost like a miniature typhoon.
●Hercules wash motor-
This is powered by the improved 400 watts, 320-rpm ,Hercules motor and a 180
Watts , 1400 rpm spin motor.
●Spin tub-Stainless steel/enamel coated spin tub to prevent it from damp.
3) ECOWASH 5.5:-
According to the customer’s needs and preferences this machine is most
economical in all respect by fulfilling all the needs.
FEATURES-
Unique scrubber board
400 Watts wash motor
Advanced high ribbed pulsator
180 watt spin motor
4) HYDROSHAKTI 6.0:-
This is provided with Pulgitator technology.
Pulsator + Agitator = Pulgitator
Pulgitator wash technology makes this washing a unique buy.
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FEATURES-
Galvanized powder coated steel.
Auto braking.
Power wash 400 watts of Hydroshakti motor.
4 way wash systems.
5) HYDROSHAKTI 6.5(XXL):-
This is available in two models
Plastic body
Metal body
A) PLASTIC BODY- Its cabinet is made up of fully plastic body that is having life
long warranty.
Features-
Large capacity of 6.5 Kg
Rust proof fully plastic cabinet for longer life
Fine hair filter
1 + 3 pulsator
Mice proof design
B) METAL BODY - It is manufactured with two material metal and plastic
outside cabinet is of metal and inner body is plastic special painted cabinet
integration technology makes this machine different from any other . A steel outer
case coupled with plastic inner tub makes it safe and reliable and promises a
noise proof wash.
FEATURES
1 + 3 pulsator this unique mechanism directs the flow of water into each and
every part of your clothes.
Large capacity 6.5 Kg of pure washing pleasure
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LILIPUT 6.5 KG WASHING SYSTEM(WITHOUT DRIER)
● Capacity 6.5 kg
● Weight 12 kg
● Motor 270 watts
● Gear Box
● Buzzer
● Rat Mesh
FULLY AUTOMATIC MACHINE
A highly advanced washing machine that has minds its own! The thinking ONIDA
pro fuzzy can select its own wash modes most suitable for your clothes. With 6-
Kg capacity and 1500 wash combination the ONIDA pro fuzzy can handle any
wash load and fight the stubborn stains.
FEATURES –
One touch fuzzy logic operation
Bio-soak wash course
Fast wash course
Mega pulsator wash system
Auto power off
Self-diagnostic features
Auto balance corrector
Water saver
Smooth ergonomically curved design
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MARKETING RESEARCH PROCESS AND
RESEARCH METHODOLOGY
arketing managers often commission formal marketing studies of specific
problems and opportunities; they may request a Market Survey, a Product
Preference Test, a sale forecast by region or an advertising evolution. Marketing
research is the systematic design, collection, analysis and reporting to data &
finding relevant to specific marketing situation facing the Company.
Effective Marketing Research involves the five steps as shown in the figure.
Before making the research plan, the researcher should be very clear about the
objective of conducting that research. It should not be defined too broadly or too
narrowly to him. The research design details the Procedure necessary for
obtaining the required information. The basic Purpose is to design a study that
will help in reaching out to our objective. It will help the decision maker for more
accurate and balanced decision.
Exp lo ratry Stage
Fo rm u lati n g th e p ro b lem
D eterm in e in fo rm ati on n eed
an d so urce
C o n clu sive stage
D e sig n th e re se arch & C o lle ct th e d ata
P ro cess an d ana lyze the data
R ep o rt & u se in fo rm ati o n
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RESEARCH PROBLEM:- It tries to sharpen and precise the mgt. Problem in
hand. The research Problems covers in total the management problem, but it
focuses only one core issue, which is to be highlighted while carrying out the
research. The result out of the study would not only answer the research problem
but also look into other issues, which were highlighted while discussion.
The important tasks that are involved in the formulation of the problem are-
Discussion with the decision maker
This is the most important part of the formulation of the research as it is
done to help the decision maker. Therefore, a proper discussion at regular
intervals is must. The brainstorming sessions help in refining the problem and
understanding the context of the problem.
Interview with expert: -
This gives an outsider an accurate view of the problem in hand. Here, the
discussion was held with the distributor and other persons.
SECONDARY DATA ANALYSIS:-
This is very much useful in formulation as well as analysis of the problem
because it uses the output of research already carried in this area. Actually in this
case maximum emphasis was given on secondary data, as we are studying
company’s strategy prevailing now, and it can be gathered through established
and well distributed facts & information. We are not so much concerned with the
primary data for what company is doing, as what company is doing is secondary
in nature itself.
Qualitative research:-
The other important step in the formulation of research problem is the use of
qualitative research. All the issues and especially some critical ones cannot be
made quantitative. A qualitative research was done by visiting many dealers
informally , going to market and discussion with people. Actually this was done to
know about the impact of strategy adopted by the company. And the finding of
the research has been shown in recommendation part.
Environmental context:-
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The whole problem then has to be viewed in the environmental context. That’s
why a study on the industrial scenario in the consumer durable sector was
undertaken. It help’s in understanding the industry in which the company is
operating and the major factors affecting the industry.
METHOD0LOLGY:-
This section helps in giving a shape to the work outline. It indicates the general
methodology followed for the study.
The study would use a combination of qualitative as well as quantitative and
primary as well as secondary sources. The major study would be based on
outcome of the session with executive of the company and with the
distributors/dealers.
DATA COLLECTION PORCEDURE:-
Data collection is a very important part of the project and the result or the whole
study depends on the tools and technologies used for data collection.
STAGE 1:- Data would be collected from the local newspaper advertisements or
the internet. The first phase is exploratory in nature, all the possible sources
would be exploited to get the data.
STAGE 2:-Data is collected from company’s official and from distributors /
dealers. The survey would be an interview cum questionnaire schedule.
Data Sourse
Secondary
Internal External
Primary
Survey
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Sales RecordsCredit Records
INTERNAL DATA
BooksMagazinesJournalsPeriodicalsCompany website
EXTERNAL DATA
TeliphonicGroupIn-DepthMail SurveyQuestionnareDelphi technique
SURVEY
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DISCUSSION WITH COMPANY’S EXECUTIVE
There views were taken regarding company’s present status in Siliguri city, their
objective and what steps they have taken so far to overcome the previous
drawbacks.
What types of plans they are making to tap Siliguri market and Vidarbha region.
How much they give importance to customer relation management as their
marketing strategy point of view.
What extra effort they are doing to generate awareness among the people.
What was the market situation in July 2009 (at the time of relaunching the
product) and improvement has been occurred so far after introducing the present
strategy.
DISCUSSION WITH DISTRIBUTORS AND DEALERS-
How much they are satisfied with present schemes (regarding margin, timegiven
for payment, dealer enhancement scheme) .
How much do they affect the decision process of customer.(Please refer
recommendation no-2).
What suggestion they would like to give to increase sales.
Their opinion about price, service, technology etc was also taken .
DISCUSSION WITH CUSTOMERS-
How much are they aware regarding the company’s product?
What they feel regarding the after sales service of the company (regarding the
company of which they are having the product).
Suggestion for the company (Mirc Electronics Ltd.) they would like to give on
consumer point of view.
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WAHING MACHINE INDUSTRY: AN
ANALYSIS ON NATIONAL PANORAMA
BJECTIVE
The study is conducted with the following objectives under consideration:
* To understand the evolution of the washing machine industry in India and to
study the various factors contributing to its growth viz. social, cultural,
technological and economic.
*To examine the product profile of the industry and to study the structure of the
market in terms of market shares of different types of washing machine
segments.
*To study the major players in the industry with their product mix, marketing
strategies and highlight their future plans.
1) GROWTH AND EVOLUTION OF THE WASHING MACHINE INDUSTRY IN
INDIA :
Washing machines made their mark in the Indian market in the eighties.
Videocon was the first company in India to introduce washing machines. Over
the years, it has remained a market leader, with a overall market share of 35% by
adopting flexible strategies, which are modified as and when the need arises.
Initially, the challenge was to wean away homemakers from their traditional
methods of washing clothes. But then, owing to high prices, the market appeared
to be limited only to upper income urban households. The 1990s saw a change in
the socio-economic scene in the country. Rapid growth, increase in the number
of working women, changing life styles and higher aspirational levels with
exposure to satellite television and easy consumer finance meant that demand
for consumer goods rose phenomenally. Sales of semi-automatics outstrip those
that in the fully automatic segment. This has been due to a variety of factors,
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price being one of them. As semi-automatic washing machines are cheaper than
the fully automatic ones. The semi-automatic varieties are in the range of Rs
4,500 to Rs 10,500, fully automatics for Rs 13,000 to Rs18,000 and new
generation fuzzy logic machines come for above Rs18,000.Moreover fully
automatic machines require continuous water supply (for each wash cycle, the
water is changed 2-3 times), which is a rarity in most Indian cities. However, the
fully automatic machine seems to be gaining market share on the back of a
growing demand for fully automatic machines. As shown in table 1.1while semi-
automatic washing machines formed about 65% of the market share at the time
of the study conducted by Orient Paper Industries Ltd. (OPIL) and LG Electronics
of Korea it was predicted that its share would fall to 30% in the year 2005.
Table 1.1: Production Estimates analysis carried by OPIL and LG Electronics
Year Production(’000s) Fully-automatic(%) Semi-Automatic(%)
1994 450 30 70
1995 600 35 65
1998 1030 55 45
2000 1490 55 45
2002 1970 61 39
2005 3000 70 30
In India (just as in USA), top-loading machines (technically referred to as vertical
or V-axis) account for 95% of all machine sales (in USA it is 98%), unlike Europe
where front-loading (H-axis) machines dominate. Problems with bending, water
leakage and child safety concerns work against H-axis machines.
Washing machines sales by type Type %
Top Load(twin tub) semi-automatic 79.5
Top Load fully –automatic 14.8
Front load 5.7
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According to the report now the total number of branded washing machines
selling in India is about one million and the current market penetration is about
3% the highest being 8% in the urban areas. It is estimated that the automatic
models will grow faster and the larger sizes will gain market share due to the
reducing prices, rising levels of disposable income and availability of consumer
financing and also due to the increasing replacement demand. However it is
estimated that the 5-Kg will remain to be the largest selling segment as it suffices
the requirements of nuclear families.
Table 1.3: CIER survey of Market Growth Rates
Year Percent
1990-91-1996-97 22.8
1996-97-2001-02 17.2
2001-02-2006-07 15.0
It is evident from the table 1.3 that the market is growing at a decreasing rate but
as seen in Table 1.4 that in spite of the decreasing trend in market growth rates,
the market in absolute terms is increasing and is expected to grow in future also.
Table 1.4: CIER survey of demand for washing Machines
Demand: Past and Future
Year Numbers ( in Thousand )
1990-1991 210
1991-1992 260
1992-1993 310
1993-1994 375
1994-1995 450
1995-1996 600
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1996-1997 720
1997-1998 860
1998-1999 1010
1999-2000 1190
2000-2001 1380
2001-2002 1590
2006-2007 3200
Table 1.4: CIER survey of demand for washing Machines
The washing machine market has expanded beyond expectations from around
450,000 machines in 1994-95; the industry has recorded a rate of expansion
higher than 20%. According to CIER Market Forecasts and Indicators. This high
rate of growth is attributed to
a) Relative low base and low penetration ratio in the past
b) Changes in the lifestyle of the expanding middle class
c) Expanding monetary incomes
d) Rising participation rate of women
e) Impact of TV advertising on mental makeup of women in particular and the I
I urbanized families in general
f) Thrust of the MNCs in the market with their global brands
g) The product upgradation
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2: PRODUCT PROFILE
Front-loading washing machine
A clothes washer, or washer, is a machine designed to wash laundry, such as
clothing, towels and sheets. The term is mostly applied only to machines that use
water as the primary cleaning solution, as opposed to dry cleaning (which uses
alternative cleaning fluids, and is performed by specialist businesses) or even
ultrasonic cleaners.
History
To clean clothing it is necessary to rub and flex the cloth to break apart solids
and help the soap penetrate. At first this was done by pounding or rubbing the
clothing with rocks in a river, and later developed into the corrugated wash board.
In Roman times a person would whiten clothing by rubbing it against a rock while
letting soap lay on it. The soap was made of animal fat.
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Irreler Bauerntradition shows an early Miele washing machine in the open air
museum Roscheider.
Clothes washer technology developed as a way to reduce the drudgery of this
scrubbing and rubbing process by providing an open basin or sealed container
with paddles or fingers to automatically agitate the clothing. The earliest
machines were often hand-operated. As electricity was not commonly available
until at least 1930, these early machines were often operated by a low-speed
single-cylinder hit and miss gasoline engine.
Because water usually had to be heated on a fire for washing, the warm soapy
water was precious and would be reused over and over, first to wash the least
soiled clothing, then to wash progressively dirtier clothing. While the earliest
machines were constructed from wood, later machines made of metal permitted
a fire to burn below the washtub, to keep the water warm throughout the day's
washing.
Removal of soap and water from the clothing after washing was originally a
separate process. The soaking wet clothing would be formed into a roll and
twisted by hand to extract water. To help reduce this labour, the wringer/mangle
was developed, which uses two rollers under spring tension to squeeze water out
of the clothing. Each piece of clothing would be fed
Washing machine milestones
19th-century Metropolitan washing machine
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A vintage German model
The first English patent under the category of Washing and Wringing Machines
was issued in 1691 by Miss Bea Ferguson. A drawing of an early washing
machine appeared in the January 1752 issue of "The Gentlemen's Magazine," a
British publication. In Germany, Jacob Christian Schäffer's washing machine
design was published in 1767. In 1782 Henry Sidgier was issued a British patent
for a rotating drum washer. In 1862, a patented "compound rotary washing
machine, with rollers for wringing or mangling" was shown at the 1862 London
Exhibition, done by Richard Lansdale of Pendleton, Manchester.
The first United States Patent titled "Clothes Washing" was granted to Nathaniel
Briggs of New Hampshire in 1797. Because of the Patent Office Fire of 1836, no
description of the device exists, and it is not known what kind of washing device
Briggs invented. A device that combined a washing machine with a wringer
mechanism did not appear until 1843, when John E. Turnbull of Saint John, New
Brunswick patented a "Clothes Washer With Wringer Rolls."
Electric washing machines were advertised and discussed in newspapers as
early as 1904. Louis Goldenberg of New Brunswick, New Jersey invented the
electric washing machine around the late 19th century to early 20th century. He
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worked for the Ford Motor Company at that time, and all inventions he created
while working for Ford under contract belonged to Ford. The patent would have
been listed under Ford and or Louis Goldenberg. Alva J. Fisher has been
incorrectly credited with the invention of the electric washer. The US patent office
shows at least one patent issued before Mr. Fisher's US patent number 966677
(e.g. Woodrow's US patent number 921195).
US electric washing machine sales reached 913,000 units in 1928. However,
high unemployment rates in the Depression years hit sales; by 1932 the number
of units shipped was down to about 600,000.
The first laundromat opened in Fort Worth, Texas in 1934. It was run by Andrew
Clein. Patrons used coin-in-the-slot facilities to rent washing machines. The term
laundromat can be found in newspapers as early as 1884 and they were
widespread during the depression. It is almost impossible to determine who had
the first laundromat. England established public wash rooms for laundry along
with bath houses throughout the 19th century.
Washer design improved during the 1930s. The mechanism was now enclosed
within a cabinet, and more attention was paid to electrical safety. Spin dryers
were introduced to replace the dangerous power wringers of the day.
Early automatic washing machines were usually connected to the water supply
via temporary slip-on connectors to the sink taps. Later, permanent connections
to both the hot and cold water supplies became the norm. Most modern front-
loading European machines now only have a cold water connection (i.e. cold fill)
and rely completely on electric heaters to raise the water temperature.
By 1940, 60% of the 25,000,000 wired homes in the United States had an
electric washing machine. Many of these machines featured a power wringer,
although built-in spin dryers were not uncommon.
Bendix introduced the first automatic washing machine in 1937, having applied
for a patent in the same year. In appearance and mechanical detail, this first
machine is not unlike the front loading automatic washers produced today.
Although it included many of the today's basic features, the machine lacked any
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drum suspension and therefore had to be anchored to the floor to prevent
"walking".
1910 advertisement
Many of these early automatic machines had coin-in-the-slot facilities and were
installed in the basement laundry rooms of apartment houses. After the attack on
Pearl Harbor, US domestic washer production had to be suspended for the
duration of World War II. However, many US appliance manufacturers were
given permission to undertake the research and development of washers during
the war years. Many took the opportunity to develop automatic machines,
realizing that these represented the future for the industry.
An improved front loading automatic model, the Bendix Deluxe (which retailed at
$249.50), was introduced in 1947.
General Electric also introduced its first top loading automatic model in 1947.
This machine had many of the features that are incorporated into modern
machines.
A large number of US manufacturers introduced competing automatic machines
(mainly of the top loading type) in the late 1940s/early 1950s. Several
manufacturers even produced semi-automatic machines, where the user had to
intervene at one or two points in the wash cycle. A common semi-automatic type
(available from Hoover in the UK until at least the 70's) included 2 tubs: one with
an agitator or impeller for washing and/or rinsing; another, smaller, tub for water
extraction or centrifugal rinsing.
One early form of automatic washing machine manufactured by Hoover used
cartridges to program different wash cycles. This system, called the Keymatic,
used plastic cartridges with key-like slots and ridges around the edges. The
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cartridge was inserted into a slot on the machine and a mechanical reader
operated the machine accordingly. The system did not commercially succeed
because it offered no real advantage over the more conventional program dial,
and the cartridges were prone to getting lost. In hindsight it can be seen as a
marketing gimmick rather than offering any really useful functionality.
Since their introduction in the late 1930s/mid 1940s, automatic washing
machines have relied on mechanical timers to sequence the washing and
extraction process. Mechanical timers consist of a series of cams on a common
shaft. At the appropriate time in the wash cycle, each cam actuates a switch to
engage/disengage a particular part of the machinery (e.g. drain pump motor).
The timer shaft is driven by a small electric motor via a reduction gearbox.
On the early mechanical timers the motor ran at a constant speed throughout the
wash cycle, although it was possible for the user to truncate parts of the program
by manually advancing the control dial. However, by the 1950s demand for
greater flexibility in the wash cycle led to the introduction of electronic timers to
supplement the mechanical timer. These electronic timers enable greater
variation in such functions as the wash time. With this arrangement, the electric
timer motor is periodically switched off to permit the clothing to soak, and is only
re-energised just prior to a micro-switch being engaged/disengaged.
Despite the high cost of automatic washers, manufacturers had difficulty in
meeting the demand. Although there were material shortages during the Korean
War, by 1953 automatic washing machine sales in the US exceeded those of
wringer-type electric machines.
In the UK and in most of Europe, electric washing machines did not become
popular until the 1950s. This was largely because of the economic impact of
World War II on the consumer market which did not properly recover until the late
1950s. The early electric washers were single tub, wringer-type machines,
automatic washing machines being extremely expensive. During the 1960s, twin
tub machines briefly became very popular, helped by the low price of the Rolls
Razor washers. Automatic washing machines did not become dominant in the
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UK until well into the 1970s and by then were almost exclusively of the front-
loader design.
A 1950s model
In early automatic washing machines, any changes in impeller/drum speed were
achieved by mechanical means or by a rheostat on the motor power supply.
However, since the 1970s electronic control of motor speed has become a
common feature on the more expensive models.
Early front loading machines, especially those manufactured in Mediterranean
countries (e.g. Italy), had low spin speeds (e.g. 800 rpm or less). Nowadays, a
spin speed of 1200 rpm is common and a peak spin speed as high as 1600 rpm
is available on many machines. Now models in Europe have speeds of 1800 rpm
and a few European washing machines have a spin speed of 2000 rpm.
However, because they were not susceptible to gravitational forces, some early
top loading machines had spin speeds in excess of 1000 rpm, although some
were as low as 360 rpm. Most US top-loading washers have spin speeds less
than 1000 rpm.
In the early first decade of the 21st century, the British inventor James Dyson
launched a type of washing machine with two cylinders rotating in opposite
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directions; which, it is claimed, reduces the wash time and produces cleaner
results; however, this machine is no longer in production.
In the early 1990s, upmarket machines incorporated microcontrollers for the
timing process. These proved reliable, so many cheaper machines now
incorporate microcontrollers, rather than mechanical timers. Washing machines
are a classic application for fuzzy logic. Miele, from West Germany, was the top
of the line front load washer, and was introduced in Kananaskis, Alberta by
Glenn Isbister starting a revolution in Laundry in Canada.
In 1994, Staber Industries released the System 2000 washing machine, which is
the only top loading, horizontal-axis washer to be manufactured in the United
States. The hexagonal tub spins like a front loading machine, only using about
third of the water as conventional top-loaders. This factor has led to an Energy
Star rating for its high efficiency.
In 2001, Whirlpool Corporation introduced the Calypso, the first vertical-axis high
efficiency washing machine to be top-loading. A washplate in the bottom of the
tub nutated to bounce, shake, and toss the laundry around. As this happened,
water containing detergent was sprayed on to the laundry. The machine proved
to be good at cleaning but gained a bad reputation due to frequent breakdowns
and destruction of laundry and the washer was recalled with a class-action
lawsuit and pulled off the market.
In 2007, Sanyo introduced the first drum type washing machine with ‘Air Wash’
function. This washing machine uses only 50L of water in the recycle mode.
In 2008, the University of Leeds created a washing machine that uses only a cup
(about 0.5 imperial pints (280 ml)) of water to carry out a full wash. The machine
leaves clothes virtually dry, and uses less than 2 per cent of the water and
energy otherwise used by a conventional machine. As such, it could save billions
of litres of water each year.
Modern machines
This section is missing citations or needs footnotes. Please help add inline
citations to guard against copyright violations and factual inaccuracies. (June
2010)
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Modern washing machines are available in two configurations: top loading and
front loading.
Market Share
Market Top Loading Washer Front Loading Washer
European Market Share 10%** 90%
US Market Share 65% 35%
It should be noted that while 10% of European washing machines may be top-
loading they are not of the same design as North American machines. Rather
than washing the clothes with an agitator, they also use a horizontally-mounted
drum. The clothes are loaded through a hatch in the drum wall. Their design is
otherwise similar to that of a front loader. These machines may work well for
small apartments as they take up less floor space than a conventional front
loader.
Top-loading
The top-loading design or V-axis clothes washer, most popular in Australia, New
Zealand, Canada, the United States and Latin America, places the clothes in a
vertically-mounted perforated basket that is contained within a water-retaining
tub, with a propeller-like agitator in center of the bottom of the basket. Clothes
are loaded through the top of the machine, which is covered with a hinged door.
During the wash cycle, the outer tub is filled with water sufficient to suspend the
clothing freely in the basket, and the movement of the agitator pulls the clothing
downward in the center towards the agitator paddles. The clothing then moves
outward and up the sides of the basket to repeat the process. Top-loaders are
not well-suited to cleaning large objects such as pillows or sleeping bags due to
the tendency for them to just float on the surface of the water without circulating,
and the aggressive agitator action can damage delicate fabrics.
In most top-loading washers, if the motor spins in one direction, the gearbox
drives the agitator; if the motor spins the other way, the gearbox locks the
agitator and spins the basket and agitator together. Similarly if the pump motor
rotates one way it recirculates the sudsy water; in the other direction it pumps
water from the machine during the spin cycle. Because they usually incorporate a
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gearbox, clutch, crank, etc., top-loading washers are mechanically more complex
than front loading machines but are generally lower maintenance since there is
no need for a door seal (described below). However, the electro-mechanical
components in conventional top-load washers have largely reached maturity.
The top-loader's spin cycle between washing and rinsing allows an extremely
simple fabric softener dispenser, which operates passively through centrifugal
force and gravity. The same objective must be accomplished by a solenoid-
operated valve on a front loader. Another advantage to the top loading design is
the reliance on gravity to contain the water, rather than potentially trouble-prone
or short-lived front door seals.
Arctic BE1200A+ is a front loading budget model sold in 2008 with 6 kg load,
LCD indicator, 1200 RPM
Front-loading
The front-loading design or H-axis clothes washer, most popular in Europe and
the Middle East, mounts the inner basket and outer tub horizontally, and loading
is through a door at the front of the machine. The door often but not always
contains a window. Agitation is supplied by the back-and-forth rotation of the
cylinder and by gravity. The clothes are lifted up by paddles on the inside wall of
the drum and then dropped. This motion flexes the weave of the fabric and forces
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water and detergent solution through the clothes load. Because the wash action
does not require the clothing be freely suspended in water, only enough water is
needed to moisten the fabric. Because less water is required, front-loaders
typically use less soap, and the aggressive dropping and folding action of the
tumbling can easily produce large amounts of foam.
Front-loaders control water usage through the surface tension of water, and the
capillary wicking action this creates in the fabric weave. A front-loader washer
always fills to the same low water level, but a large pile of dry clothing standing in
water will soak up the moisture, causing the water level to drop. The washer then
refills to maintain the original water level. Because it takes time for this water
absorption to occur with a motionless pile of fabric, nearly all front-loaders begin
the washing process by slowly tumbling the clothing under the stream of water
entering and filling the drum, to rapidly saturate the clothes with water.
Front-loading washers are mechanically simple compared to top-loaders, with the
main motor normally being connected to the drum via a grooved pulley belt and
large pulley wheel, without the need for a gearbox, clutch or crank. But front-load
washers suffer from their own technical problems, due to the drum lying
sideways. For example, a top loading washer keeps water inside the tub merely
through the force of gravity pulling down on the water, while a front-loader must
tightly seal the door shut with a gasket to prevent water dripping onto the floor
during the wash cycle. This access door is locked shut during the entire wash
cycle, since opening the door with the machine in use could result in water
gushing out onto the floor. For front-loaders without viewing windows on the
door, it is possible to accidentally pinch fabric between the door and the drum,
resulting in tearing and damage to the pinched clothing during tumbling and
spinning.
Nearly all front-loader washers for the consumer market must also use a folded
flexible bellows assembly around the door opening, to keep clothing contained
inside the basket during the tumbling wash cycle. If this bellows assembly were
not used, small articles of clothing such as socks could slip out of the wash
basket near the door, and fall down the narrow slot between the outer tub and
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basket, plugging the drain and possibly jamming rotation of the inner basket.
Retrieving lost items from between the outer tub and inner basket can require
complete disassembly of the front of the washer and pulling out the entire inner
wash basket. Commercial and industrial front-loaders used by businesses
(described below) usually do not use the bellows, and instead require all small
objects to be placed in a mesh bag to prevent loss near the basket opening.
This bellows assembly around the door is the source of problems for the
consumer front-loader. The bellows has a large number of flexible folds to permit
the tub to move separately from the door during the high speed extraction cycle.
On many machines, these folds can collect lint, dirt, and moisture, resulting in
mold and mildew growth and a foul odor. Some front-loading washer operating
instructions say the bellows should be wiped down monthly with a strong bleach
solution, while others offer a special freshening cycle where the machine is run
empty with a strong dosing of bleach. In the past, suggested remedies have
included adding vinegar to the laundry detergent, running an empty cycle with
bleach every few weeks, wiping the door gasket with a diluted bleach solution
every other week, and leaving the front-loading washer door ajar between loads.
Further comparisons
Top-loading washers do not suffer from continued maintenance problems and
needs no regular freshening. During the spin cycle, a top-loading tub is free to
move about inside the cabinet of the machine, using only a lip around the top of
the inner basket and outer tub to keep the spinning water and clothing from
spraying out over the edge.
There are many variations of these two general themes. Top-loading machines in
Asia use impellers instead of agitators. Impellers are similar to agitators except
that they do not have the center post extending up in the middle of the wash tub
basket. There is also a top loading variant of the horizontal axis design that is
loaded from the top, through a small door in the circumference of the drum.
These machines usually have a shorter cylinder and are therefore smaller, but
offer the efficiency of a front-loader while eliminating the problems of the flexible
bellows. This kind of washing machine is sold and popular in Europe, especially
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in small households, because it offers the same drum system as front-loaders,
just with a smaller footprint.
Many front loading machines have electrical heating elements to heat the wash
bath to near boiling. Chemical action is supplied by the detergent and other
laundry chemicals. Front loaders use special detergents that are designed to
release different chemical ingredients at different temperatures. This is so that
different type of stains and soils will be cleaned from the clothes as the wash
water is heated up by the electrical heater. Front loaders also need to use low
sudsing detergents because the tumbling action of the drum folds air into the
clothes load that can cause over-sudsing. Due to the concentration of water and
detergent, though, the sudsing issue of front-loaders can also be controlled by
simply using less detergent without lessening cleaning action.
Tests comparing front loading and top loading machines have shown that, in
general, front-loaders wash clothes more thoroughly, cause less wear, and use
less water and energy than top-loaders. As a result of using less water, they
require less detergent to be used, or conversely, they can use the same amount
of detergent with less water, which increases detergent concentration and
increases the amount of chemical action. They also allow a dryer to be more
easily mounted directly above the washer.
Water leakage
Top loading machines are less prone to leakage. Front loading machines require
a seal on the front door, and similarly the front door must be latched during
operation to prevent opening, lest large amounts of water spill out. This seal may
leak or require replacement. Many current front-loaders, though, can be stopped
and added to or removed from, by way of keeping the water level in the
horizontal tub below the door level.
Energy usage
Some top-loader advocates have argued that a top-loader leans more towards
efficiency with dramatically faster wash times, although comparisons of energy
use show this to be wrong—front loaders use less energy, water and detergent
and clean more effectively than the best top loaders.
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Water usage
Front loaders generally use less water than top-loading residential clothes
washers. Estimates are front loaders use anywhere from about one third
(About.com) to one half (Consumer Energy Center) as much as top loaders.
Compactness
Front loading machines may be installed underneath counters. A front loading
washing machine, in a fully-fitted kitchen, may even be disguised as an ordinary
base cabinet/unit. They may also be convenient in homes with limited floor area,
since the dryer may be installed directly above the washer.
Spin-dry effectiveness
Front loaders also offer much higher spin drying speeds of up to 2000 RPM. This
makes it possible to dry clothes very quickly by hanging them on washing lines or
airing racks or can substantially reduce the length of time required in a tumble
dryer.
Noise
Front loaders tend to operate more quietly than top loaders, since there is less of
a tendency to imbalance.
Accessibility and Ergonomics
Front loaders are more convenient for little people and those with paraplegia, as
the controls are front-mounted and the horizontal drum eliminates the need for
standing and/or climbing.
For people who are sufficiently tall and can stand, top-loaders may be easier to
load and unload, since reaching into the tub does not require stooping. However,
this issue can be mitigated due to the offering of risers (usually with storage
drawers underneath) to raise the front loader door opening closer to the user's
level.
Rinsing
Washing machines perform several rinses after the main wash to remove most of
the detergent. Modern washing machines use less water due to environmental
concerns, however this has led to the problem of poor rinsing on many washing
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machines on the market, which can be a problem to people who are sensitive to
detergents. The Allergy UK website suggests re-running the rinse cycle again.
Maintenance wash
Washing machine manufacturers are now advising users to perform a regular
maintenance wash which cleans the inside of the washing machine. A
maintenance wash is performed without any laundry on the hottest wash
programme, using either one of the following: white vinegar, a detergent with
bleaching properties (it is not advisable to put actual bleach inside the washing
machine or you could use a proprietary washing machine cleaner. The purpose
of a maintenance wash is to remove any mould, bacteria, old detergent residue
and gunge. If using white vinegar, it is important to allow the washing machine to
fill for about 30 seconds before adding the vinegar, as the first bit of water goes
into the sump.
European standards
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The EU requires washing machines carry an efficiency label
Capacity and cost are the main considerations when purchasing a washing
machine. If intended for use by a small family, a capacity of under 5 kg should be
sufficient (thus saving energy and running costs).
Washing machines display an EU Energy Label with grades for energy efficiency,
washing performance and spin efficiency. Grades run from A to G (best to worst),
providing a simple method for judging running costs and performance. For
example a "Triple A" (AAA) rated machine indicates lowest energy consumption,
best wash and best water extraction (i.e. spin) performance. This has had the
desired effect of driving customers toward more efficient washing machines and
away from less efficient ones.
One important factor that's missing from the energy labelling scheme is the
washing machine's rinsing performance, which can adversely affect allergy
sufferers and people who are sensitive to laundry detergents and chemicals. It is
advisable to check an independent consumer report on how well a washing
machine can rinse before purchasing, as newer washing machines use a lot less
water than older ones.
This section requires expansion.
United States standards
Top-loading and front-loading clothes washers are covered by a single Federal
Standard regulating energy consumption. The Federal Standard effective up until
January 1, 2011 includes no restriction on water consumption. Therefore, washer
manufacturers face no legal restriction on how much unheated rinse water may
be used, in washers manufactured before that date.
Many US-market clothes washers are more energy-efficient and water-efficient
than required by the mandatory Federal Standard, or even the more stringent
Energy Star standard. Manufacturers may be motivated to exceed legally-
mandated standards by a program of direct-to-manufacturer tax credits.
Excessive energy conservation in the laundering process may lead to less-than-
satisfactory cleaning, and excessive water conservation may lead to poor rinsing.
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Commercial washing machine
Commercial washing machines in a self-service laundromat
A commercial washing machine is intended for more frequent and long-term
usage than a consumer washing machine. Because function is more important
than style, most commercial washers have a sharp-edged square appearance,
often with stainless steel exteriors to minimize rust and corrosion in a constantly
moist environment. They are built with large easy-to-open service covers, and
the washer mechanisms are internally laid out in a manner that does not require
access to the underside of the unit for service. Often commercial washers are
installed in long rows with a wide access passageway behind all the machines to
allow maintenance without moving the heavy machine.
Many commercial washers are built for use by the general public, and are
installed in publicly accessible laundromats or laundrettes, operated by money
accepting devices or card readers. The features of a commercial laundromat
washer are more limited than a consumer washer, offering just two or three basic
wash types plus an option to choose wash cycle temperatures. The common
front-loading commercial washing machine also differs from consumer models in
its expulsion of wash and rinse water. While the consumer models pump used
water out allowing the waste line to be located above the washer, front loading,
commercial machines generally use gravity to expel used water. A drain in the
rear, at the bottom of the machine opens at the appointed time during the cycle
and water flows out. This creates the need for a trough behind machines which
leads to a filter and drain. the trough is usually part of a cement platform built for
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the purpose of raising the machines and can be seen behind washers at most
laundromats.
Commercial washers for business (still often referred to as a washer/extractor)
can include extra features that are never seen in the consumer market. Many
commercial washers offer an option for automatic chemical injection of five or
more different chemical types, so that the operator does not have to deal with
constantly measuring out soap products and fabric softeners for each load.
Instead a precise metering system draws the detergents and wash additives
directly from large liquid-chemical storage barrels and injects them as needed
into the various wash and rinse cycles.
Some computer-controlled commercial washers offer the operator complete
control over the various wash and rinse cycles, allowing the operator to program
custom washing cycles.
One special type of continuous-processing washer is known as the tunnel
washer which does not have separate, distinct wash or rinse cycles, but
combines them all in sequence inside a single long large-diameter rotating tube.
Industrial washing machines
A 1980s Belgian 180kg load industrial washer in Hotel Hilton, Brussels
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A 1980s Belgian 90kg load industrial washer.
An industrial clothes washer can be used to batch process up to 300 pounds
(140 kg) of textiles at once, and can be used for extremely machine-abusive
washing tasks such as stone washing or fabric bleaching and dyeing.
An industrial washer can be mounted on heavy shock absorbers and attached to
a concrete floor so that it can extract water from even the most severely out-of-
balance and heavy wash loads. It may be mounted on hydraulic cylinders,
permitting the entire washer to be lifted and tilted so that fabrics can be
automatically dumped from the wash drum onto a conveyor belt once the cycle is
complete.
Washing machine manufacturers
Alliance Laundry (Speed Queen)
Antonio Merloni under the brand names Asko, Ardo, Philco and Servis
Arçelik - including the brand names Beko, Blomberg, Altus and Arctic
Bosch - including the brand names Siemens, Neff, Balay, Profilo and
Constructa
Candy - including the brand names Hoover and Zerowatt
Continental Girbau
Dexter Laundry
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Dyson (No longer produced)
Electrolux - including the brand names AEG, Frigidaire, John Lewis, Rex,
Tricity Bendix, Zanussi and Zoppas
Fagor - including the brand names Brandt, Thompson, Ocean and
SanGiorgio
Fisher & Paykel
IFB
GE - including (in the United States) the brand name Hotpoint
Haier
Hitachi
Indesit - including the brand names Hotpoint-Ariston, Creda and Scholtes
LG
Mabe - including the brand names Easy, Centrales, Dako, Moffat
Miele
Mueller Eletrodomésticos
Pellerin Milnor
Samsung
Smeg
Staber
Whirlpool - including the brand names Admiral, Amana, Inglis, Kenmore,
Maytag, Magic Chef, Estate, Kirkland and Roper
Thor
Bendix
Gorenje
V-Zug - including the brand names Sibir and Gehrig
Schulthess - including the brand name Merker
Amica
Vestel
Washex
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Role in women's liberation
The historically laborious process of washing clothes has at times been labelled
"woman's work" and women from all classes tried to find ways to get relief from
doing laundry.
In 2009, L'Osservatore Romano published an article entitled "The Washing
Machine and the Liberation of Women" that was controversially meant to
demonstrate that the washing machine had done more for the liberation of
woman than the contraceptive pill and abortion pill, which are often associated to
Women's Day. The article shocked Italian feminists and provoked criticism from
Opposition MP Paola Concia. A study from Université de Montréal also
presented a similar point of view to that of L'Osservatore
2.1 Segmentation : Washing machines can be segmented on the following
bases-
2.1.1 Segmentation based on Functions:-
Washing machines can be classified as washers, semi automatic and fully
automatic machine on the basis of their functions.
* Washers: Washers are simple machines, which wash clothes but do not dry
them. They are minimal in functions and are mainly manufactured in
unorganized sector. These are single tub machines and are very low in price.
These machines are becoming obsolete in the urban areas due to their
inefficiency in performing certain functions.
* Semi automatic or Twin tub: These machines have two tubs, washing tank and
drying tank. They perform more function than the washers but the sequencing
and duration of each stage of the process like washing, rinsing and drying
operations have to be controlled manually. Clothes need to be physically
transferred from one tub to the other.
*Fully automatic: These are compact machines in which clothes are washed and
dried automatically in a single drum. Depending upon the type of fabric and total
weight of the clothes the wash combination is selected and the wash cycle is
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carried out automatically. Fully automatic washing machines require a continuous
stream of water for operating smoothly. Fully automatic washing machines can
be further categorized based on the way the clothes are loaded in the machine.
--Top Loading: In these types of machines, clothes are loaded from top. The
advantage offered is that clothes can be added or removed from the machine
even when washing is in process. Majority of the machines available today fall in
this category.
-- Front loading: In these machines, clothes are loaded from the front. They are
supposed to be superior in temperate climates, and are typically used in tumble
washing machines. Among the domestic manufacturers IFB and Electrolux are
the only one's with front-loading option.
* Fuzzy Logic: These are the most advanced machines, which work on the
principle of fuzzy logic. They sense the type of fabric and the dirt content on
clothes and adjust the intensity of washing action accordingly. These washing
machines require a continuous stream of water for operating smoothly.
2.1.2 Segmentation based on the kind of Wash Action Washing machine can
also be segmented on the kind of washing action employed in the machine.
Essentially there are three types of washing action, which are as follows:
*Pulsator wash: The rotation of the motor driven impeller generates pulses which
create strong turbulence in water, helping the detergent solution to penetrate
deep into the fabric. Pulsator wash is absolutely harmless to clothes as water is
used to brush against them.
* Agitator wash :This kind of washing action is somewhat akin to washing by
hands since the agitator rubs against the clothes like a brush.
*Tumble wash: The steel drum into which the clothes are loaded rotates
clockwise and then anti clockwise. Thus, the detergent gets to mix evenly
ensuring a thorough wash. This action is considered most efficient in temperate
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Table 2.1 The comparison of the three washing action on some parameters
TYPE PULSATOR
WASH
AGITATOR
WASH
TUMBLE WASH
Detergent Any detergent Any detergent Non foaming
Construction Simple
construction and
lightweight
Manufacturing is
complex on
account of
frequent
subassemblies
compel assembly
of the machine
many parts and
Service Low and easy Medium Difficult to
maintain due to
complicated
construction
Water
Consumption
Low Medium Medium
Example- BPL Sanyo Whirlpool IFB industries
2.2 Features Available in Washing Machines
Some of the features available in the washing machines are as follows-
*Wash combination: Many different types of wash combinations are offered
which differ in intensities such as gentle, normal and heavy wash suited for
various fabric types.
*Hot wash cycle: The user has the choice of washing at temperatures ranging
from room temperature to 95 degrees Celsius.
*Pre wash cycle: The user can remove major dirt portions from clothes in the
machine itself before performing the actual washing operation.
* Half load program: The user has the option of reducing the spin speed and the
water quantity depending upon the number of clothes to be washed.
*Inlets: There are specific arrangements for the introduction of bleach agent and
fabric softeners.
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3: DEMAND DETERMINANTS OF THE INDUSTRY:-
1.PRICE
The demand for washing machines is price sensitive and as the prices have
fallen due to increased competition among various old and new entrants, the
demand has risen. The demand is price sensitive because of low levels of
disposable income. However, with excise duties not likely to fall further (they are
already at the 18% levels India was to achieve under the WTO) in the near
future, slashing prices cannot remain feasible as a strategy for too long.
2. LOW PENETRATION LEVELS
According to the ORG-MARG reports rural India constitutes about 64% of the
total number of households. However, rural penetration levels remain lower than
in urban areas as seen in Table 3.1 Rural penetration levels of refrigerators stand
at 2% and washing machines 0.5%. These figures reflect the potential demand
for players to exploit. Now as the rural India is upgrading the companies can try
to tap this market, which offers huge potential.
3. INCOME LEVELS
With rising levels of real disposable income and the consequent change in
aspirational levels, branded durables have become a thing of proud possession,
especially for the emerging middle class. A survey by NCAER shows that in
coming years consumers will be willing to spend more than187.04 Rs(at 1986
prices) on washing machines. This creates the demand for washing machines.
4. AVAILABILITY OF FINANCING
Availability of hire-purchase schemes is one way of making price-sensitive
consumers spend as these schemes help in delayed payments schedule. With
financial institutions and commercial banks vying to catch the attention of
consumers, the schemes lead to increased discretionary spending power.
5. PRODUCT CUSTOMIZATION
According to the National Council for Applied Economic Research (NCAER), lack
of electricity is a major reason hampering the growth in demand for durables in
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rural areas. Moreover, at many places where electricity is available, it does not
remain for long or the voltage is too low. Perhaps Indian companies need to
follow the African example. There the consumer durables market witnessed a
boom when companies introduced fans, refrigerators and TVs that ran on
kerosene and batteries. Something innovative on similar lines can be thought for
the Indian market as well.
6. REPLACEMENT DEMAND
As newer and better products invade the market and people have larger
disposable incomes, the demand for replacing older products is slated to rise.
Companies have, thus, embarked on discount and exchange schemes, which
help break the inertia and the sense of guilt associated with disposing off an old
refrigerator or a washing machine. This helps bring forward the replacement
cycle in the market.
In an India Today-IMRB survey on consumer spending among 2,045 people
spread across six cities, about 20% of the respondents admitted to having
replaced at least one durable product in the past three years.
Experts have said that the replacement market in India will remain active due to
wide income disparities, which exists in our society.
7. INCREASED MARKETING EXPENDITURE
As the competition in the industry is increasing, the companies in the market are
increasing their expenditure on advertising, sales promotion and distribution. This
helps in creating awareness and subsequently leads to creating demand. The
consumer durable companies are also entering the rural markets looking at the
huge potential it offers.
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Players in the industry:
1. VIDEOCON APPLIANCES:-
Videocon Appliances manufactures washing machines, air conditioners and
refrigerators.
MANUFACTURING FACILITY:
The company has a manufacturing facility at Chittegaon, Aurangabad,
Maharashtra where all its products are manufactured. The company is in the
process of setting up a new facility at Banglore, Pune and Chengalapattu.
PRODUCTS:
The company has products for all the segments. It has substantial presence in
the mass market.
ALLIANCE:
A joint venture proposals to set up two separate companies - one each for
washing machines and airconditioners - was cleared by the Foreign Investment
Promotion Board (FIPB) in February 1997. The company in both, its ventures
with the Japanese company, Matsushita, would be holding a 30 per cent stake,
while the Japanese company would hold the remaining 70 per cent stake.
DISTRIBUTION:
The company focuses on the mass market and operates primarily through
regular dealers. It also has company owned dealer points. The company now
outsources its servicing to the independent service providers in both the urban
and rural areas.
2 . B P L SANYO UTILITIES & APPLIANCES LTD.
The company manufactures domestic appliances like washing machines,
vacuum
cleaners microwave ovens and other home appliances.
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48
PRODUCT: BPL has a wide range of semi Automatic and fully Automatic
washing Machines. It claims that all its washing machines come with a unique
Pressure cleaning Technology in which an angled Pulsator creates powerful
waves of water that jet through the weaves of the fabric and dislodge deep-
seated dirt without damaging clothes.
MANUFACTURING FACILITIES:
It currently has manufacturing facilities at Noida, U.P.
DISTRIBUTION:
The company sells through both regular dealers and company owned dealer
points. The company plans to expand its distribution network and increase the
retail points to 2,400 from 1,500. The thrust is likely to be in the grade B and C
cities and the company hopes to use the distribution chain as a vehicle to piggy-
ride the frost-free models.
3 GODREJ-GE APPLIANCES LTD.
Godrej –GE is a 60:40 joint venture between Godrej &Boyce and US based GE
formed in 1993.
INVESTMENT:
In the year 1996 –97 it invested Rs 220 crore on two hi-tech plant –A washing
machine plant at Shirwal(300000 units per annum capacity)and third refrigerator
facility at Mohali (500000 units per annum capacity).
PRODUCTS:
Washing machines are marketed under two brand names, Godrej and GE. The
washing machine takes clothes in from the top, but is claimed to deliver the
benefits of a front-loading machine. The machine is designed to save space and
offers 18 wash programmes with the option of varying the temperature. The 5.5
kg Smartwash Fuzzy Logic System was the first to offer a 24 hour programme.
SALES MANAGEMENT:
In September 1998 they instituted a new sales and marketing structure. Now it
has a same sales for both refrigerator and the washing machine. In GGEA the
sales function is looked after by two V.Ps who directly report to the M.D. This
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leaves the marketing department free to concentrate on the long term strategic
planning.
DISTRIBUTION:
GGEA has a network of 6000 direct dealers and 6000 distributors spanning
across 2500 cities and towns. GGEA has a resource sharing agreement with the
Phillips and Dunlop which helps it to curb the rising transportation cost.
CONSUMER FINANCING:
It has taken up the consumer financing in conjunction with Country wide finance
and 4% of its 1997 –98 sales came through the finance schemes and is expected
to double this year. The company has an advertising budget of around 4% of its
turnover. Godrej GE Appliances Ltd (GGEAL) is in the process of finalising a
‘strategic' arrangement' with SBI-GE Caps to finance the purchase of white
goods.
MARKETING STRATEGY:
They have decided to address different consumer categories on the basis of
need, price, and features. Simultaneously, they are making sure that the Godrej
brand remains, to emphasise the quality it is related with – reliability and
durability. The old sub brand names were retained while trying to create a new
image around them as these had been substantially invested in.
4. LG ELECTRONICS
LG group had entered the Indian market in April, 1997, with three products –
colour televisions, refrigerators and washing machines. South Korean white
goods giant LG electronics has begun exports from its Indian manufacturing
base. The rural market accounts for 30% of its sales and it hopes to increase it to
50%.
PRODUCTION:
LG was importing the fully automatic washing machines in 1997. By mid 1998 it
established its own facility at Noida.
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DISTRIBUTION:
LG sells in more than 2000 towns and cities with a population of 1 lakh persons
and above. It also intends to reach as many as 50000 plus towns. The company
has 40 distributors and 2000 dealers and plans to increase the no to 100 dealers
and 3000 dealers. Branch offices at the end of every month have just the 40% of
the requirements of the next month, with the rest being replenished by 15th. LG
gives no promotion schemes to the dealers as it wants the consumer oriented
thinking do the job. It just banks upon the consumer pull and does not let its
pricing power be diminished by the retail trade which could easily be tempted to
give discounts. Normally in case of schemes the shops bait customers on price
by sacrificing their own margins and availing the sales volume scheme money
from the companies. LG also does not allow much credit to the dealers, which
saves it the capital and also incentives the dealers to make intelligent demand
projections and move the products fast of the shelves.
SEGMENTATION AND MARKETING STRATEGY :
It has segmented the market on the ‘reason to buy ‘ basis . The fully automatic
washing machine was called the Chaos+3 a water punch that detangles clothes
before washing them efficiently. The advertising was straight and simple. The
company believes in value marketing and will not sacrifice value for keeping the
price low or large volumes.
SUPPLIES: The plant keeps no more than 15-20 days of imported parts.
5. ELECTROLUX - KELVINATOR:-
Electrolux enjoys 4 to 5 per cent of the total market share, but it has around 30
per cent of the front load washing machine market. IFB and Electrolux are the
only two players in the front load segment. The company is trying to break
ground in washing machines. In a 0ne million unit market dominated by top-load
machines, it is trying to make inroads with Electrolux's front-load models, which
AB Electrolux specialises in worldwide. It has also taken over the white goods
facility of is planning to import two new products directly from Sweden.It has
already launched its first washing machine earlier this year, which has got a good
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response from the market. The expansion of the Shahjahanpur factory is
complete it is geared up to make four lakh units annually.
DISTRIBUTION:
They are also planning to expand our dealer network by an estimated 15 to 20
per cent this year from the existing level of 2,000. The company wants to get into
every town with a population above 20,000 ultimately. The process of market
mapping is currently on.
MARKETING STRATEGY:
Electrolux has lined up a major marketing and advertising thrust and doubled its
advertisement budget for the year to Rs 20 crore. There would also be a
considerable trade push, through commercials, visibility campaigns. The
company would also participate in local events to promote the products. The idea
is to identify with local moods and concepts.
6. WHIRLPOOL OF INDIA LTD:-
BACKGROUND:
Whirlpool Corporation of US ,entered the Indian market in 1987 with a joint
venture with the Madras-based TVS group. In 1995, the company bought a
controlling interest in Kelvinator India and subsequently merged its operations
under the banner of Whirlpool of India. In Pondicherry it has acquired a washing
machine plant from the TVS group in 1996.
MANUFACTURING FACILITIES:
The company has manufacturing facilities at Pune,Faridabad and Pondicherry for
the refrigerators and washing machines.
DISTRIBUTION:
The after-sales services for its products is provided by its more than 30 servicing
branches spread across the country. The company has an integrated sales and
distribution network of over 4000 dealers.
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MARKETING STRATEGY:
Whirlpool unleashed a massive brand building campaign. Whirlpool was
positioned as a company that listened to the customer and then developed a
product around it, not the other way round. The company believes that the brand
has the ability to command a premium: 3-5 per cent over other brands. Whirlpool
tracks four areas of Brand building [through external agencies] - top-ofmind
awareness, brand awareness, brand preference and advertising cut-through.
The company emphasizes on being the manufacturers of quality products, and
will not subscribe to the price war in the domestic market. With its white goods
portfolio now considerably expanded, the company expects to break even at the
end of the year.
7. SAMSUNG INDIA ELECTRONICS LIMITED:-
The Consumer electronics and white goods major Samsung India Electronics'
(SIEL) has so far invested nearly Rs 100 crore in the country its stake in the
Indian subsidiary from has been raised from 51 per cent to 74 per cent.
MARKETING STRATEGY:
SIEL which felt that it was lagging in brand image awareness had spend $10
million during 1998 to promote image.
Analysis AND DATA Interpretation
The analysis part is very much important as on this basis, we would be able to do
SWOT analysis and based on this analysis ,recommendation would be given to
the company with special reference to Siliguri city.
Data Collected from dealers
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REASONS FOR TAKING PARTICULAR DEALERSHIP:
Sr.no Criteria No.of Dealers Percent(%)
1. Brand Name 22 27.5
2. Customer
Demand
20 25
3. Margin 16 20
4. Quality 20 25
5. Others 02 2.5
Total 80 100
27%
25%20%
25%
3%Brand Name
customer Demand
Margin
quality
Others
From the above data, it is observed that most of the dealers give their preference
to brand name & quality.
Their (Onida dealer) Satisfaction level regarding margin, incentives ,privileges ,
other assistance given by the company (sample size-36)
Very much satisfied 5
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Satisfied 15
Not satisfied 16
Very much satis-fied
Satisfied Not satisfied0
2
4
6
8
10
12
14
16
18
NOW THE QUESTION WAS ASKED FROM THE UNSATISFIED DEALERS
THAT WHAT MIGHT BE THE REASONS FOR THEIR UNSATISFACTION
(YOU CAN TELL SOME OTHER REASONS TOO )
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Customers
don’t ask for
particular
brand
Don’t get much
support for
sale from
company
Product
components
are not easily
available
Lack of
adequate
support from
CRC, so after
sales service
period is long
No. of dealers
(out of 16)
12 8 8 6
CRC-customer Care Center:
From the above data it can be concluded that the dealers were unsatisfied on
more than one reason. Here it is also reflected that people are also not very
much aware regarding the company’s washing machine so dealers were unable
to sell the product even after the product has good quality and better
performance.
Their rating for different companies on the basis of product awareness,
availability, product quality and after sales service
Name of the
company
Product
awareness
Product
quality
Product
availability
After sales
service
Videocon 10 8 6 7
Whirlpool 9 8 7 7
LG 9 8 6 8
Samsung 8 7 6 7
Electrolux 7 8 6 7
onida 4 8 4 6
IFB 6 7 5 7
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Here from the above content it is quite clear that Videocon,Whirlpool
LG ,Samsung have great awareness level, as far as product quality is concerned
approximately all companies are having good product quality(in the technology
available) . But the leader i.e. Videocon is now getting itself in a difficult situation
as far as to make available of the product in the dealer’s shop is concerned
(N.B.- This is a point to be noted) . Regarding after sales service provided by the
different companies, it can be concluded that LG is having best customer service
and Onida should take learning from that and try hard to improve its customer
care center’s performance.
WHEN CUSTOMER COME FOR TAKING WASHING MACHINE, WHICH
BRAND THEY NAME FIRST –(GIVE THE RANKING )
1st Videocon
2nd Whirlpool
3rd LG
4th Samsung
5th Electrolux
6th IFB
7th Onida
8th Others
Here from the above information we can say that Videocon, Whirlpool, LG ,
Samsung have their stake in customers’ heart in well amount and Mirc
electronics must take a glance on these observations and do some extra efforts
to catch the competitors.
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From customers:
First, we enquired about the people having w/m or not WHO CAME TO
DEALER’S SHOP.
Sample size = 100
Total No. of person having washing machine = 58
Total No. of person not having washing machine = 42
58%
42%persons hav-ing w/m
persons not having w/m
It can be concluded that there is a big population that is untouched and there is a
great scope for promotional activity.
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FROM PERSONS HAVING WASHING MACHINE, WE TOOK THE DETAILS
REGARDING COMPANIES, OF WHICH THEIR WASHING MACHINE IS
Videocon 28 48.27%
Whirlpool 10 17.24%
LG 4 6.89%
*BPL 6 10.34%
Onida 2 3.44%
IFB 1 1.72%
Others(Samsung,
Daewoo,etc)
7 12.76%
48%
17%7%
10%
3%2%
12% Videocon
Whirlpool
LG
BPL
Onida
IFB
Others
Here it can be said that videocon is the market leader and way ahead than its
nearest competitor.
(* BPL is going to exit itself from w/m sector. So there is a opportunity for the
company to capture that market.)
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DO THEY KNOW THAT ONIDA HAS COME UP WITH WASHING MACHINE
WITH SOME NEW FEATURES AND IMPROVEMENT (CHECKING
AWARENESS LEVEL)
Yes 15
No 85
Yes
No
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Here from the above chart it is quite clear that there is a dire need to create some
programme where it can be revealed that company has done some innovations
regarding the product and if it is better than others then on what basis.
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Customer Rating to Onida’s corporate image.
Rating Scale No. Of Responses Remarks
9-10 26 Excellent
7-8 34 Good
5-6 20 Satisfactory
1-4 10 Poor
No Rating 10 can't say
From the above it can be concluded that ONIDA is a good brand in the eyes of
customer and this reputation can be encashed in Washing Machine segment.
CUSTOMER CRITERIA FOR PURCHASING WASHING MACHINE
Sr. No. Criteria Response Nos.
1 Quality 61
2 Price 30
3 After Sales Service 22
4 Brand Loyalty 15
It is quite clear that some people prefer more than one factor while purchasing a
product, so company should pay attention on all these factors to attract the
customers. tamal
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MARKETING STRATEGY: AN OVERVIEW
arketing Strategies Are Largely Shaped By A Number Of Factors That
Include --
penetration levels of products
position or market share of the company
competitor’s strategies
changes in the consumer buying behavior
changes in consumer’s perceived needs
changes which occur in technology
A commonly used and highly successful marketing strategy is to make available
to consumers such product and service features that mark them as different from
the rest. Companies need to position their products to various segments
separately as each segment will have a different need and will require different
features to satisfy these needs.
Competition is forcing many companies to stop shouting hoarse about USPs
(Unique Selling Propositions) that only they can believe will sell, and peddle
product-benefits. As long as there were 4-5 products competing for the
consumer's attention in a category, each could spin its own intangible
differentiation around lifestyles, values, and attitudes. This approach became
impractical with entry of many more. Customers find it difficult to distinguish
between competing brands that tried to associate themselves with similar
aspirations. The simplest way to cut through the clutter is an emphasis on
product benefits. Not only does this approach bestow brands with strong tangible
benefits, it ensures a sufficient bang for promotion. Discounts will work only if the
consumer is convinced about the product. Evidently, an increasing number of
companies are realizing that 'Consumers seek product benefits and tend to
remember brands that (claim to) fulfill that promise'.
LG Electronics’ strategy includes developing non-traditional channels of selling
even while it continues to strengthen its retail sales network.
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The company has banded together small teams of people to be attached to its
branch offices to carry out brand promotions in smaller cities and towns.
Electrolux follows its multi-pronged strategy, which includes aggressive product
launches, focus on quality and increased rural reach. The company is focusing
on building a strong market for its 35-year old brand -- Kelvinator. The company
plans to offer a range of solutions for its washing machines segment. Electrolux
plans to introduce low-end top loading, twin-tub machines; a fully automatic
machine and a range of front-loading washing machines from Italy's Portrayals.
The company has launched a new model washing machine --1045 model -- that
provides four rinses as against three rinses of all other washing machines. The
fourth rinse removes the dirt and soap residues completely from the fabric.
Electrolux is organizing demonstrations/road shows at retail outlets and
apartment complexes to explain the four-rinse mechanism through a four-bucket
test.
The group has outlined a multi-brand marketing strategy aimed at customers at
the high-end, upper end and middle income and lower segments. The company
will have different marketing strategies for different customer segments. The
focus will also be on the price-sensitive rural markets. In fact, to push the
products, the dealers are trained such that they are able to explain the value-
addition to prospective customers.
At the top-end, the company's products are priced higher than the competitors.
The company is getting direct and fast and its strategy for growth this year
includes consolidation of its existing operations and entering new product
segments. Electrolux has put the Internet on the forefront of its sales strategy.
With 'Market based Management' being the guiding principle, Samsung's
strategies to achieve its 'Millennium Leap-15bn' target include:
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In its attempt to position its products as an ‘elite’ product and improve brand
visibility, companies have sponsored TV programmes on various channels.
Samsung, LG, IFB and Electrolux sponsored movies on the Star Movies network;
Samsung and IFB, for instance, sponsor the Saturday and Sunday night
premieres. LG has lately sponsored the most talked about programme on Star
Plus, Kaun Banega Crorepati?, hosted by the famous Bollywood star Amitabh
Bachchan.
CUSTOMER SERVICING:-
A business area, which assumes much importance in this sector, is that of
customer servicing. The word ‘customer’ will include both the external (i.e the
customer to whom the company sells the products) as well as the ‘internal’
customer which is nothing but the dealer – an important constituent of the value
chain.
In order to distinguish one’s offerings from that of the others, firms are trying to
add more value-added services in their product portfolio. Godrej-GE, for
example, has succeeded in etching out a name in the customer’s mind by paying
serious attention to customer services. It intends to leverage its formidable
distribution strength (6000 dealers and 6000 distributors) for the purpose. There
are two aspects to their service leverage: one, use it to help support their current
product range and two, to develop it as a business in it’s own right . The new
plans to be implemented in this regard are:
Introduction of service technician vans so that more spare parts can be carried
to
the homes of the people who register complaints .
Setting up Intelligent Care Centers to create a centralized system for
registering
consumer complaints/queries. This helps in keeping track of the all the
complaints and assigning jobs to the service personnel accordingly.
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Effect calls registration on complaints by providing a ticket number, thus making
service processing easier. It also helps to build up a database of customers for
direct marketing as the details of the customers can be used for cross selling to
them (For selling other products)
Train freelance technicians, especially in smaller towns and give them a Godrej
authorized status. Franchising the services to expand reach.Offering a Godrej-
GE customer card, which entitles the buyer to avail of special gifts on purchases
of any Godrej-GE product.
New entrant LG Electronics has decided to give a strong push to strengthening
Its service network. A string of consumer promos like free service weeks, annual
maintenance plans, loyalty programs, special offers to last year buyers and
honeymoon packages for newly wedded couples are in the pipeline.
Samsung, on the other hand, has gone hi-tech in order to please its customers.
Each Samsung service center has been made on-line to its head office in Delhi,
which in turn is linked to its headquarters in Seoul. A software keeps a
comprehensive record of all service calls attended—customer history, nature of
the complaint, time taken to respond, spare parts used etc.
Electrolux AG has developed an electronic mail handling system to channel
customer responses to the area of the group best equipped to deal with any
query.
Electrolux now has a via medium to communicate with their customers, know
which products they like, what problems they have. From now on, it will be the
customers who would drive product development.
MARKETING :-
Branding strategy for the products. Their assiduously built images over the years
convey the message of leadership to their customers. Videocon International, for
example, has brought about a change in their logo to convey the message of
precision, quality and technical edge in all company activities. In their TV ad
campaign, Videocon Industries Limited says that they were the first company in
India to introduce frost-free refrigerators and fully automatic washing machines.
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The whole range of consumer durables being produced and sold by the company
is described in the belief that consumers for these goods often overlap and they
tend to go for the same brand. The strategy clearly is to impress upon the buyers
that theirs is the best available. Lately some companies like Samsung, LG, IFB
and Electrolux have thought of sponsoring movies on the Star Movies network.
Samsung and IFB, for instance, sponsor the Saturday and Sunday night
premieres respectively. Electrolux, on the other hand, is one of the main
sponsors for a special package of Oscar awarded movies in the month of
February 1999. These moves can be a pointer to the Electrolux management’s
strategy of trying to position their products in the ‘elite’ market.
BUSINESS STRATEGY:-
Like any other consumer durable, sales of washing machines is largely
dependent on how well a company plans out their marketing strategies which
help increase visibility and build a distinct brand image. A commonly used and
highly successful marketing strategy is to make available to consumers such
product and service features that mark them as different from the rest.
LG Electronics by bringing out a high-technology “Chaos Punch” machine has
ensured that clothes do not remain tangled while being washed. Next on line is
the ‘Fabricare’ sub-brand, which takes a detour from the earlier technology
positioning and tries to address the concerns and sensibilities of a modern
woman. Its new adline says – “LG Fabricare – Because you should never hurt
the ones you love”. Fabricare ensures that not only it cleans all your clothes but
also it does it with enough ‘care’ so as not to damage them.
Samsung too has mounted the technology bandwagon and come out with a
“Boomerang Pulsator” wash system endorsed by the well-known cricketer Kapil
Dev. This helps to create awareness and builds brand equity for the products. A
classic example of a company responding to a long felt need of Indian
homemakers is Godrej-GE. Recently, it rolled out of its factory Smart-wash Super
Agitator, a 5.5kg twin-tub washing machine with an active soak facility. Now the
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need to keep clothes soaked in water before washing them in a machine will no
longer be felt.
BRANDS:-
Some consumer durable companies have thought it fit to adopt an umbrella
branding Strategy for their products. Their assiduously built images over the
years convey the message of leadership to their customers. Videocon, for e.g.,
has changed its logo to convey the message of precision, quality and technical
edge in all company activities. VIL claims to be the first company in India to
introduce frost-free refrigerators and fully automatic washing machines.
Electrolux Kelvinator is a good example of how a well-known and popular
brand suffers due to a lack of adequate marketing support. One of the early
entrants in the market, Kelvinator also had a limited portfolio of models, lower
brand visibility and had suffered at the hands of indifferent dealers.
PRICING:-
With washing machine sector operating at 34.7% capacity utilization, prices had
touched an all time low in FY99 and with new capacities coming up this year, the
trend is expected to continue.
Penetration pricing is now the name of the game. The strategy is to keep entry-
level prices lower in order to activate demand. A sharp rise in the sales of
washing machines in the first half of FY98/99 had partially been attributed to this.
Prices of semi-automatic machines fell by an average of 15% since January
1998. The biggest fall has been noticed in the cases of Godrej-GE (22%) and
Videocon (12%). In fact, Videocon has introduced a new model breaking the
earlier price barrier of Rs5,000. For the fully automatic segment, the price fall has
been in the range of 6.5% on an average. Unlike the semi-automatics, there is a
large variance in the extent of price declines of the various brands. Also, the
price difference between a semi-automatic and a fully automatic one has
narrowed down considerably.
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DISTRIBUTION:-
Samsung has introduced JIT (Just in Time) to its 2,500 dealers spread across
the country. In order to deliver within 48 hours of the expected date of delivery,
the company has put in place four regional dispatch centers, one at each
regional location of the country. The material is sent from the Central Warehouse
at Delhi to the Regional Distribution Centers (RDCs) and from thereon the right
production mix is made available to the branches as per their weekly plan. The
new system called `Logistics Innovation’, has helped slash the cycle from order
to delivery by at least two days and also reduced inventory levels of finished
goods by 25-30%. For Samsung, it is the dealer’s demand that is now tugging
the bottom-line up.
Samsung has put in place an extensive sales and service network all over India.
A network comprising of 18 branch offices, over 2,500 dealers and more than
300 service centres has been put in place to reach customers. An EDI system is
being implemented through a chit process, which gives the vendor the weekly
purchase plan and the weekly delivery schedule and takes into account a final
delivery confirmation on all the chits as per the specified format. R&D constitutes
the kernel of the company's business philosophy and by setting up an R&D
Centre at Noida, the company hopes to provide its customers with breakthrough
technology products tailored to meet their needs.
LG plans to expand its retail network to 4500 dealers by the year-end FY02. The
company is setting up a specific portal, which will have at least 20% of its dealers
online carrying out all transactions over the net. At present, the company has an
online messaging system with 75 dealers. The company has linked together
small teams of people to be attached to its branch offices to carry out brand
promotions in smaller cities and town. The number of such teams is to increase
to 45 from the existing number of 21. The company will also expand its network
of direct sales to 2,500 lady representatives under 50 team leaders (against the
present strength of 1,000 representatives under 20 team leaders). The company
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plans to step up the company's presence in canteen stores departments of the
Army and Naval canteen by doubling institutional sales through canteen stores
department to 50,000 units from 10,000 units in FY01.
Whirlpool of India has a well-entrenched distribution network comprising of 1,500
distributors and over 5,000 dealers while Godrej-GE has a network of 12,000
dealers. Electrolux has a distribution reach of over 3,500 retail outlets and plans
to increase its distribution network and foray into the rural markets.
OUTLOOK:-
Over the last five years, the market for consumer durables has grown
tremendously and an important catalyst has been the modern working woman.
As disposable income levels rise, thanks partly to the latest Pay Commission
report, aspiration levels have also spiraled upwards. Therefore, women who have
to take care of both the domestic and professional front are increasingly opting
for convenience appliances. However, the family element cannot be ruled out in
the purchase trends seen in Indian homes. A look at the purchase pattern of
consumer durables reveals this. While TVs and refrigerators are essentially for
the whole family and enjoy a relatively higher penetration level, washing
machines, microwave’s etc which is predominantly used by the woman of the
household have a lower penetration as the real disposable income is low and the
washing machine comes after TV and Refrigerator in the list of Priorities of
consumers (As found in a survey conducted by NCAER) .
The low penetration of washing machines (only 0.5% of all households in the
country) is an indication of its potential. However unlike refrigerators, washing
machines have remained largely an urban phenomenon. Buying of a washing
machine is usually due to typical urban reasons such as shortage of household
help and lack of space for drying clothes. Besides working women, other demand
drivers are an aging population, which may find it exerting to manually wash
clothes.
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STRATEGY ADOPTED BY MIRC
ELECTRONICS LTD. FOR PROMOTION
OF WASHING MACHINE
s far as Mirc Electronics is concerned it has dual task before it. The first
job is to build confidence in the heart of distributor and dealers, which had
reached into nadir as the product was withdrawn from the market in 1994 and
they (dealers) had to face difficulties at the time of after sales service from
consumer. The second task is to generate awareness regarding the product . No
doubt ‘Onida’ is a well known brand name in TELEVISION sector of consumer
durable segment, but it is not so very well known in washing machine market.
Viewing these points, the company has made strategies to overcome all the
adversaries and to establish itself as one of the premier players in Vidarbha
region. Company’s top brass have given free hand to their executives operating
in the city for product awareness creation programme, improving dealership
network, suggestion for keeping price level competitive, steps for improving
service of customer care center and recruiting product demonstrators.
Here are the strategies adopted by the company to promote washing machine in
the market of Siliguri city.
Product Positioning-
Two advertising executives Al Ries and Jack Trout popularized the word
positioning. They see positioning as a creative exercise done with a product.
Positioning is the act of designing thee company’s offering and image to occupy
a distinctive place in the target market mind.
Onida has also positioned itself keeping this point taken into consideration. The
Main focus area is growing middle class and working family in the city.
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Company and
product
Target customer Benefits Value Proposition
Mirc Electronics
Ltd. - Washing
Machine
Medium- Class
Family
Durability and
Safety
Technology,
Power and
Performance
PRICING :-
Prices are considered to be the major force that keeps the economy in
balance, and it is same in case of an organization too. Actually price is the
value that consumer place on a product and price is termed as the most
flexible component of the marketing mix. And in the era of cut throat
competition price of a commodity plays an important role in keeping its
existence in the market.
As far as Mirc Electronics Ltd. is concerned it is paying attention mainly on two
Pricing objectives. first is sales objective and second is competitive objective.
Here it follows that sales growth would be a reasonable goal of pricing. Here it
has to compete with the many more established brands, so it has tried to keep it
price very much competitive. company has dropped the price of 5.5kg (Ecowash)
by 1000 Rupees to Rs. 7900 to attract the customers.
The company has also adopted flexible price policy. Sometimes they have
reduction in prices for more no. of deliveries. If we have a close look at the price
structure of Onida washing machine, it is clear that company has adopted
odd-even Pricing too.
e.g. Rs.5590,7990,9290,9390 etc. It is nothing but an attempt to follow the form
of psychological pricing.
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72
The pricing policy taken by the company for different categories with taken into
consideration of other companies engaged in the city is as follows-
3/3.5 kg category
Company Capacity Dealer Price Customer Price
Onida 3.5 kg Rs. 4970 Rs. 5590
Videocon 3kg Rs. 4500 Rs. 4990
Whirlpool 3.5 kg Rs. 5400 Rs. 6100
5/5.5 kg category
Onida 5.5kg(Ecowash)
5.5kg(Hydrowash)
Rs.7610
Rs.8500
Rs.7990
Rs.9390
Samsung 5.5kg Rs.9850 Rs.10250
Videocon 5kg Rs.7200 Rs.7690
6KG CATEGORY
Onida 6kg Rs.8800 Rs.9290
Samsung 6kg Rs.8800 Rs.9500
LG 6kg
6kg
Rs.7700
Rs.8500
Rs.8500
Rs.9300
Whirlpool 6kg
6kg
Rs.9924.75
Rs.10571.22
Rs.10450
Rs.11150
Videocon 6kg Rs.8400 Rs.8990
6.5kg/6.8kg category
Onida 6.5kg (metal)
6.5kg (plastic)
Rs.9000
Rs.8900
Rs.9690
Rs.9390
LG 6.5kg Rs.9500 Rs.10200
Whirlpool 6.8kg (aquawash)
6.8kg (hotwash)
Rs.10829.71
Rs.11168.19
Rs.11450
Rs.11900
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73
6kg category-fully automatic
Onida 6kg Rs.15100 Rs.19990
IFB 6kg
6kg
Rs.22500
Rs.23800
Rs.23500
Rs.24800
Samsung 6kg
6kg
Rs.18350
Rs.26000
Rs.19300
Rs.27500
LG 6kg
6kg
Rs.15764
Rs.23546
Rs.16300
Rs.24300
Videocon 6kg Rs.17000 Rs.17990
From the above figure it is reflected that company has tried to keep its dealer
price very much competitive (less than that of LG, Samsung, Whirlpool etc.) But
the price policy of
Videocon is its core competency in this area and it has competitive advantage
over all other players.
As far as dealer margin is concerned Onida gives maximum margin in 5.5 kg
model. In other category it’s dealer margin is equal to or less than that of other
big players.
DISCOUNT :-
We may also take it in price administration. Now a days, all companies make
follow these steps through their dealers, yes quantity of discount may be different
and it is also different for established and a newly branded product. Through
dealers onida has made a policy to give at least Rs. 500 minimum to customer
as discount on cash payment. For its primary customer i.e. for distributors and
main dealers, the company has adopted non-cumulative quantity discount. This
strategy is made to make itself sure that the entire quantity sold will disappear
from inventory.
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DISTRIBUTION CHANNEL:-
In consumer durable in most of the cases direct selling does not takes place.
That is there are intermediaries between the companies and end consumer.
These intermediaries are no one but distributors, dealers and sub dealers. They
come under distribution channel of the company. In Siliguri city the company has
two types of distribution channel.
&
DEALERSHIP NETWOORK:-
As the dealers are the connecting link between the company and customers, so
to keep it very strong is very much important and the more no. of dealers is also
necessary to tap the large segment of customer. When company started its
selling from July 2001 since that time they are trying to increase the no. of dealer.
It has been seen that in many case the no. of dealership is directly proportional to
Sell figure.
Company Sub dealars End CustomerDistributor
Company End customerMain dealer
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75
Month-year Distributor Main Dealer Sub-Dealer
July - 2001 1 - 2
August - 2001 1 2 3
September - 2001 1 2 4
October - 2001 1 2 5
November - 2001 1 3 7
December - 2001 1 5 9
January - 2002 1 5 11
February - 2002 1 5 12
March - 2002 1 5 15
April - 2002 1 6 16
May - 2002 1 7 18
June - 2002 1 9 24
July - 2002 1 9 24
August - 2002 1 9 24
September - 2002 1 9 25
October - 2002 1 9 26
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 160
5
10
15
20
25
30
35
40
x-axis-month - year, 1=JULY2001---And so on & y-axis – No. of dealers
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76
LIVE DEMONSTRATION:-
Company has identified it as a tool for creating awareness as will as for sales
promotion activity. As in a survey conducted by (Sample size-500); the
company’s Market
research team, around 80% of the respondent didn’t know about that whether
onida washing Machine exist or not. So to generate awareness; after 2 months
of launching its product company started to do live demonstration activity of its
product in many places. The demonstration places chosen were- Societies,
Corporate offices, Dealer’s shop. As in these places, one can get large no. of
people at one place.
In societies company’s men use to go on Sunday or the day best suited to the
residents of that society. In corporate offices, the time chosen is lunch hour.
Here, the company aim is to create an image of its product in their mind and also
persuade them to buy the product.
There has been a great amount of success rate on company’s point of view as
far as awareness program is concerned. It was also a pleasant moment for sales
personnel as they got a charge of encouragement with this type of unique way of
sales promotion
activity.
*Sale figure
occurred during
the month of
Live
Demonstration
Activity
Month - Year Sale -figure
July - 2009 -
August - 2009 23
September - 2009 25
October - 2009 44
November - 2009 65*
December - 2009 70*
January - 2010 65
February - 2010 64
March - 2010 60
April - 2010 70
May - 2010 85*
June - 2010 125*
July - 2010 123
August - 2010 85
September - 2010 85
October - 2010 90
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77
Jul-0
1
Sep-0
1
Nov-0
1
Jan-
02
Mar
-02
May
-02
Jul-0
2
Sep-0
20
20
40
60
80
100
120
140
Line chart- showing sale figure occurred in different months
CUSTOMER RELATIONSHIP MANAGEMENT;-
Now a day’s customer relation management has become an integrated and
inevitable part at any organization and MIRC electronics is not untouched with it .
As their primary customers are distributors & dealers. So they are trying to make
relationship more friendly. They are doing some sort of things which are very
much part of service industry; but also applicable here . Some of the steps
initiated by the company are-
* Present them some gifts or greeting in the time of birthday of the shop owner.
* Send messages in the time of some events ,for example in Ganeshotsav or in
the time of shop anniversary day etc.
* Give them some extra time to pay the amount if they find that the case is
genuine.
* Provide some gift item meant for end customers to the distributor, free of cost,
so that it may help in enhancing sell growth.
* Recently company has launched a new schemes for them. If they sell 12
machines and achieve the target in 3 months, they will be given a tour package
of Goa.
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78
AFTER SALES SERVICE: -
It is one of the most important factors for a company engaged in home appliance
segment. As lack of service back up was one of the main reasons for
withdrawing its product from the market during 1994. so this time company is
paying more attention on this theme of strategy. Company is trying to reduce the
service time period and it has standardized the service. Some of the focused
areas are-
* If any complain is made before 12 noon, within 2 hrs the problem is solved.
* Home service facility is made available for all types of technical faults as far as
possible. Company’s or Dealer’s men go to purchaser’s home for demonstration
purpose.
* If there is a major fault or a part is to be changed there is an MIS (Management
Information System) in its branch office and an indent letter is immediately issued
to its warehouse, and it is made sure that the part should be available to the
dealer/customer care center same day.
MEDIA ADVERTISEMENT: -
Company gives its advertisement on local newspaper and in local languages too.
They give the advertisement regarding features, its dealership network, current
scehme, live demonstration going an a shop etc. But on national level, electronic
media has not been introduced to the viewers yet.
PATRONIZING OFFER TO CUSTOMER :-
Company has made an optimistic plan to encourage its customer of TV to act
as company’s influencer for other customer. There is a patronizing offer for
them in the form of cash gift. Basically this is done through the dealers of that
area who are acquainted with the old customers. They send a letter to the
customer, which consists of company’s present offer and date and place of live
demo; if it is going on specific shop’s place. Actually it is in initial stage and
company is mostly dependent on dealers for it.
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REPLACEMENT OFFER :-
Company has started a replacement offer too. They have set a criteria for this
purpose. Company’s Service Technician inspects the machine first, then
evaluate it keeping these points into consideration.
* Age of the washing machine i.e. how old is the machine.
* It’s present working condition.
* Condition of the cabinet.
The maximum rebate in this case given is Rs. 2000. The offer is applicable for all
types of washing machines - Fully-automatic, Semi-automatic and Washing
system i.e. without dryer.
0% FINANCE SCHEME: –
Mirc Electronics has taken this as a basic component for sells promotion.
Company has tied up with Bajaj Finance for financing its product washing
machine. They have this scheme for payment mode is up to 24 months.
The Detail is as follow-
Schemes
Models
10 months
(EMI)
12 months
(EMI)
18 months
(EMI)
24 months
(EMI)
Ecowash 5.5 kg
(Rs.7990)
Rs.799 cash
(9 PDC of
799)
Rs. 2663 cash
(8 PDCof 665)
Rs. 2664 cash
(12 PDC of 443)
Rs. 2996 cash
(15 PDC
of2996)
Hydroshakti 6.5
kg
Plastic(Rs. 9390)
Rs. 939 cash
(9 PDC of 939
)
Rs. 3130 cash
(8 PDCof 783)
Rs. 3126 cash
(12 PDC of 521)
Rs. 3519 cash
(15 PDC of 391)
Hydroshakti 5.5
kg
Rs. 939 cash
(9 PDC of 939
Rs. 3130 cash
(8 PDCof 783)
Rs. 3126 cash
(12 PDC of 521)
Rs. 3519cash
(15 PDC of 391)
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80
(Rs. 9390) )
Hydroshakti6.0
kg
(Rs. 9290)
Rs. 929 cash
(9 PDC of 929
)
Rs. 3100 cash
(8 PDCof 775)
Rs. 3096 cash
(12 PDC of 516)
Rs. 3519 cash
(15 PDC of 387)
Hydroshakti 6.5
kg
(Rs. 9690)
Rs. 969 cash
(9 PDC of 969
)
Rs. 3232 cash
(8 PDCof 808)
Rs. 3228 cash
(12 PDC of 538)
Rs. 3636cash
(15 PDC of 404)
PDC- Post Dated Cheque
There is no finance scheme for 3.5 kg.
CONCLUSION
VER THE YEARS MARKETING HAS GROWN FROM A SIMPLE
SALES DEPARTMENT INTO A COMPLEX GROUP ACTIVITIES. MARKET
SITUATION IS SUCH THAT WE CAN NO MORE PASS ON THE COURSE OF
INEFFICIENCY TO THE CUSTOMERS.
On the basis of analysis and data interpretation following conclusion can be
drawn-
Onida washing machine has a low product awareness level in Siliguri city.
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81
It is doing a great effort regarding promotion of the product but due to previous
experience dealers and distributors are cautious this time.
Onida as a brand and as a corporate has a good image in customers mind but
these things are not enough to be successful in other sector too as it has
established a reputed place in TV segment but it is struggling in washing
machine area.
Videocon , whirlpool, LG, Samsung have been placed well in Siliguri washing
machine market.
There is a great scope for washing machine market in the city as still it has low
penetration level and middle class is increasing who are now considering it as a
necessary household product and not as a luxurious item.
DISTRIBUTION CHANNELS IN THE INDUSTRY
The Washing Machine companies in the industry use different distribution
channels to reach the customer.
These are as follows-
1.
.
In this type of channel the company uses its sales representatives to deal with
the dealers directly. The dealers place the order through the sales
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representatives who visit them periodically, and the products are delivered
directly from the company. Some companies appoint Direct Dealers who act as
their Franchisee Outlets or their Exclusive showrooms.
*BPL uses this channel
2.
In this channel of distribution the company appoints distributors on the basis of
District/ Population /No of Dealers to be handled by one distributor. The area of
operation and its potential is also taken into consideration.
Some of the companies make the distributor totally responsible from appointing
the dealers to providing after sales service.
*Godrej uses this channel
3.
In this channel of distribution the company appoints Distributors as well as Direct
Dealers. The company appoints distributors to deal with small dealers who order
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83
small quantities. With the dealers who have good potential and sales the
company deals directly.
Daewoo and Samsung use this channel : The Korean Multinational follow
this channel where they appoint Distributors for upcountry towns and
direct dealers for big cities and major towns eg. Kolkata.
4.
In this channel the company appoints a C&F agent who acts on behalf of the
company. The C&F agent is totally responsible for appointment of Distributors
and Direct Dealers. He sells to both the Distributors and the Direct Dealers at the
same rates.
-Whirlpool uses this channel
PEST ANALYSIS
The following analysis gives an overview of the environment in which the
washing machine industry is operating. We have analyzed the Political,
Economic, Sociocultural and Technological environment for the industry.
Political Environment
Finished Product:
▪ Washing Machines below 5 kg capacity are on negative import list in order to
protect the domestic industry. Customers of below 5 Kg segment are very price
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sensitive so when foreign players enter the market, they would be offering the
same product at a competitive price which in turn would affect the domestic
players. Therefore the threat from imports in the washing machine segment is
minimal due to quantitative restrictions and high duties.
▪ Under Special Import License washing machine above 5 kg capacity can be
imported because the customers of this segment are not very price sensitive.
This has a dual advantage firstly the government can earn additional revenue
without affecting the domestic players and second that the customers get a
product with additional features which are not available in Indian washing
machines.
Import Duties on Raw Materials:
▪ Import duty on washing machine parts is also as high as 40%.The high
imposition of duty on the imported components discourages the companies to
import their parts and promotes the manufacture of the parts within India. Thus
most of the MNC also source their requirements form the Indian manufacturers
and thus enable the development of the ancillary manufacturing units in India.
▪ The custom duty on the cold rolled sheets required for the outer cabinet is 30%.
As the import is high it discourages import. Thus there is an alternate use of
plastic cabinets by the manufacturers.
Table 6.1: Import duty on Washing Machine and its parts
YEAR WASHING MACHINE WASHING MACHINE COMPONENT
2000-01 35% 35%
1999-2000 40% 40%
1998-99 40% 40%
1997-98 40% 40%
1996-97 50% 50%
1995-96 50% 50%
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1994-95 65% 65%
1993-94 85% 85%
1992-93 65% 65%
1989-90 110% 110%
From the Table 6.1 it can be seen that the import duties on washing machine and
its parts have been gradually reduced from very high levels of 110%-100% in
1989-90. This has been in line with the policy of liberalization adopted by the
Indian government.
Table6.2: Excise duty on Washing Machine and its parts
Year Washing Machine Washing machine components
1999-00 18% 18%
1998-99 18% 18%
1997-98 18% 18%
1996-97 20% 20%
1995-96 20% 20%
1994-95 20% 20%
1993-94 25% 25%
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1992-93 25% 25%
1989-90 20% 20%
From the Table 6.2 it can be seen that the excise duties have been reduced from
25% level in 1994-95 to 18% level in 1997-98 .This helps in increasing
competition in the market place as more players come in and thus results in a
price war. One implication of this is that the customers get a better product at
lower prices.
OTHER LEVIES
Sales tax on washing machines vary from one state to another. The sales tax
along with the excise duty constitutes about 20% of the sales price. Thus any
decrease in these taxes and duties will have a significant impact on the prices
and subsequently boost demand of washing machines.
The reduction in excise duties on washing machines has resulted in a price
decrease. This made washing machines affordable to the middle class
households in India. There was a decline in Rs 400-500 and Rs 800-1000 in
prices of semi-automatic and fully automatic respectively due to this change in
the excise duty from 25% ad valorem to 20% ad valorem in the 1994-95 budget.
The entire range of white goods was perceived as luxury items by the
government and high duties were levied on it. But with the increase in urban
population and the number of working women washing machines have been
recognized as a necessity and the government has reduced the duties applicable
on it.
ECONOMIC ENVIRONMENT:
I. DISPOSABLE INCOME OF THE POPULATION
With the sustained growth in the GDP of approximately 5-6% in the last few
years there has been a high rate of growth in the disposable income of the Indian
households. This has led to a favorable attitude towards consumption and credit
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87
purchases. The NCAER data reveals that the middle (annual household income
between Rs 62,000 and 86,000) and the high (annual household income higher
than Rs 86,000) income segments have grown at a compounded average growth
rate of 13% and 17% respectively between 1989-90 and 1993- 94. This
increases the demand for the washing machines.
II. AVAILABILITY OF CONSUMER FINANCE
Consumer finance has picked up substantially in India though the interest
charged on loans lies in the range of 20%-30%. Consumers are no more averse
to the concept of buying now and paying later. Consumer financing schemes
account for30% of the sales
in 1995-96 on whole India basis, while in the South it accounts for40% of the
sales. The availability of consumer credit has also increased over the last few
years and this gives a boost to the industry as the demand increases.
SOCIOCULTURAL ENVIRONMENT
I. GROWING MIDDLE CLASS
In India it is estimated that 35% population comes under middle income
group.Around 3.5 crore people are tax payee and approximately 8,00,00,000
households fall under middle or upper middle category. Ideally each house needs
a washing machine and present penetration is very low.
▪ Upper middle and high income segment of the population has been growing
faster. Since a major chunk of demand for washing machines comes from this
segment therefore the market for this sector is expected to get larger in the near
future.
▪ Within the upper middle and high income segment, the rural households are
growing at a far more impressive rate than their urban counterparts.
▪ Roughly about 137 million people belong to upper middle and high income
categories i.e. incomes over Rs. 62,000 per household and with per capita
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income of Rs 34,500 p.a. This is a fairly large size indicating that the marketing of
‘niche’ products can be the promising area.
II. LIFESTYLE CHANGES
▪ Rising participation rate of women in the income generation is another trend
that has been increasing at a fast pace in India. With more and more working
women the Indian families are on the lookout for alternate ways to do household
chores. Also the declining supply of household workers have led to the
dependency of Indian households on consumer durables like washing machine
and microwaves to do their work. ▪The increase in the spread of cable TVs to a
large majority of the urban households have had led to increased visibility of TV
advertisements to the middle class households. The TV advertisements have
had a impact on the mental makeup of women in particular in the urbanized
families in general.
TECHNOLOGICAL ENVIRONMENT
There has been a trend towards replacement of steel sheets with moulded
plastics such as ABS and PS and other materials in the fabrication of the
washing machine body. This is expected to considerably reduce the raw material
costs of the manufacturers and increase the cost competitiveness of the
manufacturers.
▪ Emergence of new technology like Digital Fuzzy Logic washing machines have
also have an impact on the mindset of the customer. At the touch of a button, the
digital microprocessor senses the wash load, temperature, ideal water level,
wash time, wash type, rinse frequency and other such processes selected for
giving a super clean wash. Some of the concepts that are coming up are:
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89
* Aero Power : A break-through concept where millions of bubbles burst on the
surface of the fabric, generating tremendous energy to wash all the dirt off.
* Triple Cascade Tornado Wash : The powerful 3-way water-flow action causes
hi-speed spinning, splashing and swirling, creating a storm of energy in the wash
tub. Which removes heavy, stubborn stains from your clothes and ensures
detergent solubility that’s three times faster.
*iDigital Intelligence: The digital microprocessor diagnoses the working
conditions and indicates corrective measures to be taken, if required.
* Unique Optical Sensor: An Optical Eye measures the extent and type of dirt,
water quality, type and solubility of detergent to compute the perfect wash.
INDUSTRY ANALYSIS USING PORTER'S FIVE FORCES MODEL
Washing Machine industry in India is of the size of 1010000 units and is
expected to grow at a CAGR of 7%. The various operating in the industry have
been analyzed using the Porter's five forces model. The five forces are as
follows:
* The Threats that a new entrant faces in the industry
* The Intensity of rivalry between the existing players.
* Pressure from the substitutes.
* The Bargaining Power of the buyers
* The Bargaining Power of the supplier
1.THREAT OF ENTRY
BARRIERS OF ENTRY
* Economies of scale :
The players like Godrej, BPL , Whirlpool, Videocon and Lg have achieved
economies of scale. BPL Sanyo has a capacity utilization of 93%. This declines
their unit cost of every function of business and enables them to keep their prices
low. This will force the entrant to come in at a large scale and risk strong
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reactions from them or come at a small scale and accept a cost and price
disadvantage.
* Product differentiation:
The companies like Godrej, BPL and Videocon, being very old players in the
Indian market enjoy high brand awareness and consumer loyalties. These brand
names are associated with trust and reliability in the Indian market. The Korean
players like LG and Samsung who engaged in heavy advertising and brand
promotion during the last year have also created a niche for them in the premium
segment. Their brand awareness has grown tremendously after the recent
Cricket World Cup Tournament, during which they advertised heavily.
These create a barrier to entry by forcing the entrant to spend heavily to
overcome existing consumer loyalties and to build a brand image.
* Capital Requirements:
Huge Capital requirements are posed in front of the new entrant in terms of
advertising, product development, production facilities, distribution channel credit,
inventories and for covering up the start-up losses.
* Access to the distribution channels:
- The Indian players like Godrej, Videocon, Voltas and Allwyn which are catering
to the mass market have a strong distribution and dealer network.. They have a
presence in the urban as well as the rural areas. Moreover these companies
have established developed ties with the channel members over the period of
time, which are hard to break.
- Whirlpool has also developed a strong network of 4000 dealers in urban and
semi urban areas in a period of few years.
- The South Korean Majors like Samsung and LG have a dealer network of more
than 1500, mainly in urban areas and plan to expand it in rural and semi urban
areas also. This poses a major threat in front of the new entrant as the existing
firms already serve the channels and the new entrant will have to persuade the
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channels to accept its product through high margins, promotional allowances,
better credit facilities and advertising support, which will reduce the profits.
* Cost disadvantage independent of scale:
- Learning or Experience curve: The old players like Godrej, BPL, Videocon are
high on the experience curve, as they know the Indian Market well. This
experience lowers their costs in production, marketing, and distribution and in
other areas of business, thus giving a cost disadvantage to the new entrant.
- Government policy: The Government policies of levying duties on the imported
washing machines and other taxes gives an advantage to the Indian Players and
in a way protect them from price competition in the market with the MNCs.
* Expected retaliation: The industry as a whole faces excess capacity and the
supply exceeds demand and so the existing competitors are expected to respond
forcefully to a new entrant. The new entrant will face competition based on the
segment to which it tries to cater.
- If the company enters in the Semi Automatic top-loading segment,
Videocon,Godrej, and Whirlpool will pose the major threat.
-If the company enters in the Fully Automatic front loading high capacity segment
(above 5 Kgs) it will have to face main competition from IFB and Electrolux.
2. INTENSITY OF RIVALRY AMONG THE EXISTING COMPETITORS.
The companies in the washing machine industry of India can be divided into four
strategic groups based on the price and the perceived quality of the products.
These groups also differ in their target segments and the strategies adopted to
cater to it.
High Price Medium Price Low Price
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High
Perceived
Quality
1.REMIUM
STRATEGY
IFB,Electrolux
2.HIGH VALUE
STRATEGY
(1)LG, Samsung
Daewoo
(2) Whirlpool, BPL
3. SUPER VALUE
STRATEGY
Moderate
Perceived
Quality
4. SUPER VALUE
STRATEGY
5. MEDIUM
VALUE
STRATEGY
Godrej , Videocon
6. GOOD VALUE
STRATEGY
Low
Perceived
Quality
7.RIP OFF
STRATEGY
8.FALSE
ECONOMY
STRATEGY
9.ECONOMY
STRATEGY
- The companies in the market witness a tough competition from the other
members of its strategic group as they fight for the same chunk of the market. As
their products do not differ much in the features, they try to differentiate their
brands through copy differentiation in advertising.
- The competition intensifies as most of the companies are using the same dealer
network to distribute their products. They lure the dealers to promote their
product by different strategies on margins, incentives and credit and payment
terms.
- The competition increases as all the companies have high Strategic stakes in
the washing machine business. A major fraction of their revenues come from this
business and so they retaliate sharply to any move of the competitor.
- The industry has high Exit Barriers for the members who have invested in the
manufacturing facilities in India in the form of specialized assets.
3. PRESSURE FROM THE SUBSTITUTES:
The washing machine has substitutes like the laundry but due to the increasing
problems with them , people are preferring to switch over to the washing
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machines for washing normal clothes and use laundries for their expensive cloths
and for dry cleaning.
4. BARGAINING POWER OF THE BUYERS:
The buyers of the industry can be discussed as the consumers who are the end
users and the distribution channel members.
A) CONSUMERS
- The bargaining power of the consumers is high due to the presence of many
competitive products in the market. - The Washing machine models available are
not much differentiated in terms of the features, and so the buyers can switch
between the different brands based on other criteria like Price, service, warranty,
promotion and financing schemes.
B) DISTRIBUTION CHANNEL MEMBERS.
The industry players use different intermediateries like dealers, distributors and
the C&F agents for the distribution of its products.
- The bargaining power of the distribution is high as the same dealer deals in the
products of different companies. This increases the bargaining power of the
dealer as he can promote one brand at the cost of another if not satisfied with
one company.
- The existing companies try to provide the channel members with a better deal
than the competitor to lure him to promote their products.
5. BARGAINING POWER OF THE SUPPLIERS:
Not very high
RECENT TRENDS
Market Share of different companies in 2001
Videocon 32%
Whirlpool 17%
LG 14%
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BPL 11%
Samsung 5%
IFB 4%
Electrplux 3%
National 2%
Others 12%
32%17%
14%
11%5%4%3%2%12%
Videocon
Whirlpool
LG
BPL
Samsung
IFB
Electrplux
National
Others
Strategic alliance for Washing machine manufacturing technologies
Indian Company Foreign Company Country
BPL Sanyo Japan
Videocon Matsushita Japan
Whirlpool Whirlpool USA
Daewoo Anchor Daewoo South Korea
LG Electronics LG South Korea
Samsung Samsung South Korea
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SWOT ANALYSIS
he overall evaluation of a company’s strength, weakness, opportunity
and threats is called SWOT analysis.
External Environmental Analysis :-
(Opportunity/ Threat)
In general, a business unit has to monitor key Macro Environment Force
(demographic, economic, technological, political-legal and socio-cultural) and
significant Micro Environment Factors (customers, competitors, distributors,
suppliers) which affect its ability to earn profit. The business unit should t rack
trends and important development to identify thee associated opportunity and
threat.
Internal Environment Analysis :-
(Strength/weaknesses)
It is one thing to discern attractive opportunity and another to have the
competencies to. Each business needs to evaluate its internal strength/weakness
analysis succeed periodically.
STRENGTH
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¨ Product depth is one of the big strengths of the company as the company has
already launched six model of w/m and introducing LILIPUT as its new member
of the family of Onida washing machine.
¨iCompany is introducing w/m in the market with different design and
technology like Onida’s model of 6.5 kg consisting of one big and three mini
pulsator called as 1+3 pulsator and 6.0 kg consisting the combination of
pulsator and agitator called as pulgitator.
¨“Onida” brand name is well known in the market in television sector .So the
company has got the job of generating product awareness only.
¨ Dealer price is also one of the strengths of the company.
WEAKNESSES
¨ Low advertisement is one of the major weaknesses of the company. Due to
low advertisement , most of the people are not familiar with the product, as a
result of which company may lose their prospective customer.
¨ Inadequate no. of service technician is a big drawback..
¨iMany a time materials required for replacement purpose could not be
delivered to service center because of shortage in the warehouse. Sometimes it
take 1 month;and it degrades the confidence level of consumer.
OPPORTUNITY
¨ BPL exit from the market is one of the biggest opportunities. It has around 11%
of market share and here after quitting the market by BPL there will be a gap
and this gap presents a chance for Onida.
¨iIncreasing no. of middle class households, for whom white goods have become
a part of lifestyle and now these things are not luxurious item.
THREAT
¨ Low pricing of the competitors is one of the big threats the company can face.
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Currently VIDEOCON, leader in washing machine segment has lowered its
price,in lower weight category (3kg) which MRP (max. retail price) is
approximately equal to the landing price of other company product.
¨iNew entrants and invent of innovative products by competitors like talking
washing machine by Electrolux may create unlikeliness for Onida’s products.
RECOMMENDATIONS
he following is the concrete list of recommendation that has been
prepared keeping in mind the quantitative and qualitative analysis work done.
All the following factors have been taken into consideration.
1. Product awareness programme should be done aggressively:-
Onida has got good brand image in the market and it has got well market
stabilization in its product like TV, so it is not an impossible task to capture the
market for washing machine, but as the people or market is familiar about the
TV, it is required to make them familiar about washing machine too and for this
purpose product awareness programme should be taken as prime function for
achieving its goal.
Steps to be taken-
Company should take the help of cable network for the purpose of
advertising as city has large number of cable TV connections.
Advertisement using print and electronic media which is one of the
important tool to capture the market.
Introducing washing competition can also help to attract the buyer in the
city, which in turn target women either housewife or working.
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Participating in different types of exhibition like loan mela or trade fair also
helps to increase awareness.
For live demonstration activity contact should be made to some big
departmental stores(super bazaar) of the city. In these places hundreds of
people come for shopping and it creates a great scope for awareness cum
promotional activity
Company should send project trainee into new areas /towns in order to
increase awareness.
Recommended places-Umred, Ramtek, Kondhali, Kalmeshwar
Whenever there is a live demonstration activity going on or if company is
participating in trade fair,these news should be advertised well in advance
for 2 to 3 consecutive days through local dailies.
● It should also emphasize on transit media. In transit media costs of
advertisement is very low and reach is very high.
2. Various types of dealer Incentive scheme should be launched:-
Now a days a substantial portion of sales and marketing expenditure of all
consumer electronics companies is allotted to dealer incentive programmes
(nearly 5% of the product cost). Accompanied by the limited technical knowledge
of an average end consumer, the role of a dealer becomes extremely critical. Not
only does he perform the standard role of channel partner as in other product
(availability, merchandizing,credit and stocking) but also plays a major role in the
consumer buying process.
Types of scheme should be operated-
● Quantity based discount-Such a scheme helps in increasing offtake of dealers
in one shot and also reduces market-operating price, as part of the scheme
generally get passed on. Slab based schemes and model special/bonus also fall
under this category.
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● Target-based scheme
●iiTrip schemes- Dealers find such promotion exciting ,as it gives them an
opportunity to take a break from their hectic schedule and also meet dealers
from other places, besides of course the attraction that the trip locale offers.
● Gift schemes- The advantage of such schemes is that these benefits are
largely retained by the dealers and it adds on to his asset /profitability.
● Surprise schemes-Many more dealers has been running a ‘retention scheme’
every month where a dealer comes to know of the benefit only at the end of the
month.
● Secondary sales linked schemes-In order to movement of stock from the
dealer’s shelf, Company should sometimes incentivize the secondary sale made
from the dealer’s shop. But tracking the secondary sales accurately becomes
logistically complicated and hence difficult to implement on a large scale.
● Advertising cost sharing-This is most popular in southern states, and a lot of
expenditure happens during season and in the New Year.
● Display contest- On the basis of models displayed dealers are either ranked
and incentive should be given to all who participate.
3. Appointing retail sales executive:-
Company should identify some big dealers and there it should appoint a retail
sales executive. It would help in promoting the product which may improve the
market share.
4. After sales service must be improved:-
● Customer care center should be made very effective. In paper there happens
to be everything in the center, but many more times especially in the job of
replacement of spare parts; service is very poor. Main problem lies in colour
combination of the cabinet. So proper attention should be paid in this regard.
● A customer protection plan on all models , where the customer is offered,
beyond the 5 year warranty, additional service protection plans of one and two
years at reasonable prices.
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● A string of consumer promos like free service weeks, annual maintenance
plans, loyalty programs, special offers to last year buyers and honeymoon
packages for newly wedded couples should be offered.
● It should make a decision to go hi-tech in order to please its customer. Its
service center should be made on-line to its headquarter.
[N.B.-This policy has already been introduced by Samsung]
5. Onida should focus its strategy by targeting small dealers too. Many more
dealers who are working in countryside may be small but they have grip over
their customer and paying attention to them can be fruitful.
6. Company should keep track on the new entrants (dealers) in the nearby area
and target them during opening phase of new showroom, so that Onida washing
machine can be integrated first in the shop.
7.iCompany should continuously gather and evaluate ideas for new product
feature, product improvement and services to meet the customer needs.
8. BPL is going to exit it self from the market; which bring an opportunity for the
company to capture BPL’s share and emerging as a big player in the market.
Simultaneously Videocon is lagging behind in the supply of their demand due to
which many of the dealers are dissatisfied*. Right now company can use the
guerilla policy and attack on this weak point by increasing supply in the market.
(Refer point no.14-ii)
9. Dealer meet should be held:-
Dealer meets and dealer conferences are held where company official and
channel partner get a chance to interact with each other and share information,
feedback and market intelligence.
10. Appointing Direct Service Links (DSL):-
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It can prove to be very successful for this particular product. In this method the
company appoints some DSLs whose job is to direct an enquiry to the DSL head.
The DSL head sees to it that the enquiry is liquidated in the sale with the help of
company and dealer’s infrastructure and the DSL is given some commission
based on the sale.For washing machine particular this is very useful, as the
people who want to buy washing machine certainly ask for reference (basically
people people wants to know if ‘this product, of this brand, of this model‘ is being
used by someone ,how is it performing). Innovatively, each and every consumer
of the company can act as a DSL for this particular product and earn some
money back.
11. Company should also present fully automatic range in lower weight category
i.e. in 3.5kg and in 5kg category.
12.iiIt must have it’s own delivery van. As it becomes itself a mode of
advertisement.
13. Suggestion based on competitive advantage selection-
i. Competitive Advantage selection
Competitive
advantage
Company
standing
*1-10
Competitor
standing
*1-10
Importance
of
improving
standing
(H-M-L)
Affordability
and speed
(H-M-L)
Competitors
ability to
improve
standing
(H-M-L)
Recommended
action
Technology 8 8 L L M Hold
Cost 7 8 M M L Monitor
Quality 8 8 L L L Monitor
Service 6 7 H H L Invest
H=high M=medium L=low
*1 for minimum and 10 for maximum
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ii. Customer’s rating of competitors on key success factor
Competitor Customerawareness
Product quality
Product availability
Technical assistance
Selling staff
Competitor A E E rrrrrrrr e E G P* F G
Competitor B E E G G G
Competitor C G E F E F
Competitor D G G G E F
E=excellent G=good F=fair P=poorCompetitor A ---- Videocon Competitor B ---- Whirlpool Competitor C ---- LG Competitor D ---- Samsung *Recommendation- Onida should attack here.
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BIBLIOGRAPHY
Marketing Management - Ramaswami Namkumari
Strategic Management,The Indian Context - R. Sriniwasan
Business Today
Business World
Pratiyogita Darpan
economic Times
Siligurikhhoj.com
Indiainfoline.com
Department of statistics, Siliguri Office.
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