WASHING Afroz Alam

8/12/2019 WASHING Afroz Alam

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The On Slaught of MNCs in Indian White Goods Industry Scenario

INDUSTRY PROFILE (WASHING MACHINES)

Overall Market Scenar! "!r Wa#$n% Mac$ne# n In&a

Ten years ago, a washing machine was considered an essential item only

on the conspicuous consumers shopping list for status symbols, even if

this object of desire resided in the bathroom . Today, they have become so

much part of the urbanites list of necessary household appliances that she

couldnt wash her dirty linen in public even if she had a mind to.

The range of brands and types of washing machines have proliferated,

rendering a careful survey of the market necessary. The salesman is likely

to bombard you with the jargon that has proliferated in direct proportion to

the kinds of machines on display; he will declaim on the respective merits

of fuzzy logic air powder washing. agitators and pulsators and eco valves.

The Washing achine market in !ndia is divided into three segments "

#ully $utomatic Washing achines %$W&, 'emi"$utomatic Washing

achines %'W& and anual echanical !mpeller washing machine. The

organized sector is made up of #ully $utomatic washing machines and

'emi $utomatic washing machines.

Washing achine is a new entrant in the consumer industry. The

penetration level of all types of washing machine in the !ndian (ousehold

level is very low " only ).*+. ver the past few years washing machine

sale have e-perienced high growth rates. #rancis anoi studies estimate

that washing machine sector from /001 to )222 will e-perience growth rateof )3+ p.a. 4arge middle class and increasing disposable incomes in the

hands of consumers, offer big opportunities.

5ven at conservative growth rate of )2+ p.a. it is forcasted that the total

washing machine industry will touch the figure of $ppro-. ) illion units by

the year6 )222. With the $utomatic Washing achine at 63 illion

%'ource " #rancis anoi&.


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$t 7resent 'W constitute roughly *2+ of the total market with rest with

$W. (owever, according to the industry estimates the fully automatic will

register higher growth rates of nearly 63+ and 82+ for semi automatic as

there e-ists a huge replacement market.

!n the $W market there is a further segmentation " Top 4oading and

#rom 4oading. !n #ront 4oading !#9 is a leader with market share of

appro-. 82+ by the virtue of monopolistic position in the front loading

segmentation.

ther major players in $W category are Whirlpool, :ideocon, 974,

odrej " 5, :oltas, nida, 'amsung, 4, odi (oover, $llwyn, and

'iemens %


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WASHING MACHINE INDUSTRY

APRIL ' * MARCH '+

TECHNOLOGY SEGMENTATION

UNITS (MILLIONS) CONTRI,UTION

#ront 4oad #ully $uto.. 2.23 3.*+Top 4oad #ully $uto 2./8 /6.1+Twin Tub 'emi $uto 2.* *0.3+Total 2.11 /22+

FULLY AUTOMATIC WASHING MACHINE INDUSTRYAPRIL ' * MARCH '+

,RANDWISE SEGMENTATION

,RAND UNITS (MILLIONS) CONTRI,UTION

!#9 32,222 )*.*1+974 63,222 )3.22+W(!=474 81,322 )/.80+:!>5?< 8/,222 /*.))+:4T$' /),222 @.@*+>=5A 8322 /.06+TT$4 /,12,222 /22.22+

TWIN SEMI * AUTOMATIC WASHING MACHINE INDUSTRYAPRIL ' * MARCH '+

,RANDWISE SEGMENTATION

,RAND UNITS (MILLIONS) CONTRI,UTION:!>5?< ),0*,222 6).68+974 /,3),222 )/.*/+W(!=474 /,)1,222 /1.)0+$ 63322 @.32+>=5A 8/,322 6.32+T(5=' 6@,222 @.3*+TT$4 *2,2222 /22.22+


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A,OUT THE PLAYERS IN THE MAR-ET

This is among the fastest growing segments in the white goods business,translating into big opportunities for manufacturers. !ncreasing disposable

incomes and the associated convenience have knocked washing machines

off the lu-ury list and helped the segment register faster growth. ver the

past decade, washing machine sales have increased ninety "nine fold.

#rom /2,222 units in /01@, the current market size is /2 lakh machines

valued at =s. *32 crore. $nd the market is growing at 82 per cent annually.

:idecon was the first to launch its washing machine in the late eighties.9ut it is only in the past four years that the market has grown fast enough

to generate volumes.

The two prominent divisions are the fully automatic and the twin"tub semi"

automatic segments. The latter constitutes a major chunk of the market,

accounting for 1 per cent of total sales. 9ut while the mass"marketed

twin"tub is growing at 82 per cent, the fully"automatic machine is ahead at

63 per cent.

9anglore"based 974 has added two more automatic models in the 6.3kg

size %they had one in this size earlier& to its stable of five machines. it

plans to introduce two more semi"automatic washing machines. nida is

augmenting its four"model range. !t test marketed its @kg #uzzy 4ogic %with

automatic control mechanisms& last year and will make a formal launch this

month. it also plans to upgrade its e-isting 6.3kg semi"automatic and the 3

kg fully"automatic washing machines.

#uzzy 4ogic, a feature studded model, is patronized by all the companies.

With its automatic settings for water levels, it is said to offer the latest

technology. 9ut the largest washing machine of them all is the /2kg, fully

automatic machine from odi (oover, priced at =s. *2,222. $9 5lectrolu-

of 'weden, which has taken over aharaja !nternational, is also e-tending

its e-isting range of washing machines. $s multinationals gear up to

occupy the premium segment, washing machine, which currently have a


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penetration level of a paltry 8 per cent, should see some turbulent

competition could understand a difference such as between denim and

silk. 9ut they would not have been able to make the finer distinction

between silk and satin, which the new machines are eBuipped to do.

Washing machines with fuzzy logic also automatically adjust the water

level and decide the wash programmes, with a Cone touch slart. These

machines are priced in the range of =s. 82,222 and more.

'lightly less e-pensive machines offer the option of deciding the wash

programmes. 'ome machines like 974s $9' 32 # offer 3/ wash

programes. ?hick that the machine of your choice has the hot wash optionbecause this is most effective in washing very stubborn dirt. The other

important component the drier. 'ome machines give a choice of deciding

on @ drying times, ranging from 82 minutes to 8 hours. The less endowed

machines spin"dry for about half an hour and dry the clothes.


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WHIRLPOOL

Marketn% Strate%e# "!r .W$r/!!l0 n In&a

$merican white goods measured, Whirlpool is performing strongly ) years

after it entered the !ndian arket for refrigerators and washing machines.

Whirlpool of !ndia, 3@ + owned by Whirlpool corporation, 9enton (arbour,

michigan %E'&, has seldom stayed out of the news ever since it first

entered !ndia in /006 by acBuiring a majority stake in elvinator of !ndia

by outbidding 5lectrolu-, the 'wedish white goods major.

The comapnys washing machines business has also shown strong volume

growth with sales of /.@* lakh in /00@ as against /.// lakh in /003.

The impact on the bottom line has been less marked so far. ! recorded a

net loss of =s. 32 crore on sales of =s 321.*/ crore for the nine"month

period ended 8/ >ecember, /00@. !t lost =s 86 crore on sales of =s. 683

crore for the /3 month period ended 'eptember /003, though the two sets

of data cannot be compared because Whirlpool Washing achines%WW& and 5-po achinery 4imited, two subsidiaries, were merged with

the parent company in $pril /00@.

The washing machine business has undergone a two"step restructuring. !t

started life as a joint venture with the T:' group and was known as T:'"

Whirlpool. Whirlpool subseBuently bought out T:'s stake before finally

merging it with the parent company. !n /00@,which was its last year as an

independent company, WW registered a net profit of =s 3) lakh on sales

of =s 0@ crore.

The company also spent =' @.* core on introducing the whirlpool brand

name into the !ndian market. 9y Aune /00@, the integration of the sales

and distribution teams was complete. Whirlpool had also managed to

increase the number of outlets for its products. $t the end of /003, there

were 8,822 dealers selling elvinator refrigerators and /,222 selling

Whirlpool Washing achines. 9y end /00@, this had increased to 6,322


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and 8,222 respectively, a crucial achievement in a country where the

Whirlpool brand"name was practically unknown.

There is considerable disagreement about the market share figures,

especially the ones relating to washing machines. Whirlpool claims a

market share in e-cess of )2 percent of a total market of over * lakh units

costing less than =s. 3,222. $ccording to company sources, it is engaged

in a close tussle for the number one position with :ideocon. Which has

market share of 82 percent, and 974. which has )3 percent. These

numbers differ from those provided by :ideocon. FWith a market share of

3) percent, :ideocon out"sells all its competitors put together.

= data for Aanuary /00* give Whirlpool %including machines sold under

the T:' brand name% /3 percent and 974 )2 percent of the market. These

data, however, relate to market share figures for all washing machines not

just those priced above =s. 3,222.


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ELECTROLU1

Marketn% Strate%2 "!r Electr!l34 n In&a

$9 5lectrolu- is a 'wedish multinational and $ #ortune 322 company with

a turnover of nearly /* billions E'>. World"Wide it owns brands like

#rigidaire., Ganussi, Westinghouse, 5lectrolu-, $5 etc. and in !ndia it

owns elvinator brand. 5lectrolu- in 5urope is the market leaders in

washing machine and is ranked as the ealer. The branches are also well eBuipped withmanpower and infrastructure to handle the after sales service functions.

We are going to further strengthen our dealer network from the base of

832 e-isting dealers to nearly @22 dealers by the year end.

'ome figures on the Washing machine !ndustry are enclosed herewith.


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SAMSUNG

Sa5#3n% In&a Electr!nc# Lt& (SIEL)6 a subsidiary of the 'outh oreanmultinational giant 'amsung 5lectronics 4td. plans to invest around =s

)@2 crore in !ndia by the year )222. The investment would be made for

setting up four separate units for manufacturing a wide range of electronics

and home appliances products at reater


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the !ndian consumer. $ccording to a pre"launch survey conducted by the

company in mid /003, 'amsung had a low unaided awareness level of just

one percent while the aided awareness level was a slightly more

respectable )3 per cent. !n contrast globally 'amsung enjoyed 12 percent

united awareness and *2 per cent positive opinion in the last Buarter of

/00@. 5ven in the emerging markets, the company had an aided

awareness level of 02 per cent and positive opinion level of 12 per cent.

'etting aside an annual budget of H).6 million, which later ballooned to H6

million, for developing a corporate image and improving corporate image

and improving brand awareness. 'amsung first launched into a two monthlong corporate identity campaign. (igh lighting its achievements 'amsung

is the worlds largest manufacturer of colour monitors has a /* per cent

share of the ?T: market and spends H /.) billion on =I>"'amsung

#le-ed its global muscles.

Then in phase two of the campaign, 'amsung began carpet"bombing the

consumer with a barrage of product specific advertising, with a special

thrust on 'amsungs technological e-cellence. 5njoying pride of place in

the campaign was the companys flagship product the )0"inch, Worldbest

television. The idea here was that the prestige and brand value associated

with the )0"inch ?T: would have a rub"off effect on their other products.

The pay off was certianly Buick. While still awaiting the final results.

'amsung scored an unaided awareness level of *3 per cent and a positive

opinion of @3 per cent in the survey conducted at the end of /00@.

While the campaigns helped spread the 'amsung word across the

country, credit for the companys smooth take off goes to its differentiation

and focus strategy. >ifferentiation strategy, because each one of their

proudcts is contemporary offering uniBue conveniences and foucssed,

because the company decided to consolidate their presence in one region

before moving on to another.


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!ts products are priced above the !ndian brands and below 'ony. 'amsung

is trying to give the !ndian counsumer is Cvalue for money and providing

more and superior features at given price. 'amsungs real advantage

however, come without a city cult board and lies in the strength of its after"

sales"service.

?ompany plans to open a number of e-clusive 'amsung show rooms at its

head office and all branch offices where the products are displayed and

but not retailed.'amsung is the only company in the country to have

developed top"Buality 77 e-clusively for service in addition to marketing

77. The company aims to sell /32"/12 million ?T:s %against 12.22 unitsin /003"0@&. To toggle interest, it will introduce a range of colour

televisions. With just 8/ per cent of the market buying the brand so far

there is a lot of switching 'amsung can look forward to.


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LG

$fter two aborted tries at the countrys consumer electronics market " firstin /008 with the >elhi"based 9estavision and therefore with the ?.. 9irla

group " the re"christened H*8 billion 4 5lectronics %formerly 4ucky

oldstar&, is going it along this times. !n Aanuary this year, it set up its /22

per cent subsidiary, 4 electronics !ndia 7vt. 4td. with a serious view to

breaking through at last.

(owever, setting up a subsidiary not be the final solution to the jin-. #or, !f

it was F!ncompatibility in management orientationJ with its !ndian partners

that did it in on the first two occasions, this time around the altered market

comple-ion could well prove to be 4s nemesis. >uring the companys

two"year status, from the time the 9estavision tie"up fell through and the

oldstar barnd went out, the hue of the !ndian consumer electronics

market has changed drastically.

$ slew of other


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plant at reater i-on utilities and

5-ports 4td, a subsidiary of the Western group, for its /6"inch, )2"inch and

)/"inch ?T:s. !ts )0"inch ?T: as well as the entire range of refrigerators

and washing machines will be imported for the time being.

>ifferentiation for 4 will come in through our innovative and break

through product technology, which is proprietary . Colden eye one of thethere television models launched, encompasses a light sensitive natural

algorithm eye and an advanced circuit which adjusts colour, sharpness,

brightness, contrast, tint and white balance, according to the ambient light

conditions in the room. 5ntire pricing policy will hinge on honest pricing

with no hiden costs to factor for the promotional e-penses. 4 is going for

is value for money pricing and not necessarily mass pricing . !t is e-pected

that once 4s pricing initiative unfurls, the consumer will see through the

promotional gimmicks others are indulging in.

4 will pass on more margins to the dealers. the pricing rationale is simple

not to put the brand on an artificial life support system; rather; attempt to

build it upfront through with dealers and consumers. $t a time when the

trade, lured in by the trade in promotion bait, is reportedly saddled with

stocks of competing brands that in their misplaced enthusiasm in have

virtually flooded the ?hannels 4s strategy of spreading wide fast tominimize stock pressure on the trade may well be sensible 4 will

enhance our dealers working capital through clear and honest pricing and

by minimizing stock pressures on them. This alone will ensure trade push

in the long.

With a new identity, an all new hope in the !ndian market and a seemingly

sound marketing strategy, it remains to be seen how many consumers


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finally smile with the new 4 logo, shake hands and repeat with itL F!ts nice

to meet youJ.


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MAR-ETING STRATEGY

!t is the gameplan to achieve success when the decision what product tomake has been taken. !t comprises of target markets, positioning, price,

distribution, service, promotion, research and development. The main

thrust is developing marketing mi- %6 7s&

W$at # a Pr!&3ct 7

We define product as follows :

$ product is anything that can be offered to a market for attention,

acBuisition, use or consumption that migth satisfy a want or need.

7roduct variety L

Mulaity

>esign

#eatures

9rand name

7ackaging

'izes

'ervices

Warranties

=eturns

W$at # Prce 7

what the customer is willing to pay.


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PERSPECTI8E OF PRICING STRATEGIES

I9 Prcn% Strate%e# "!r Ne: Pr!&3ct#

A9 Sk55n% Prcn%

Definition : 'etting a relatively high price during the initial stage of a

products life.

Objectives:

%/& To serve customers who are not price conscious while the market is at

the upper end of the demand curve and competition has not yet

entered.

%)& To recover a significant portion of promotional and =I> cost through a

high margin.

,9 Penetrat!n Prcn%

Definition: 'etting a relativily low price during the initial stage of a

products life.

Objective:

To discourage competition from entering the market by Buickly taking a

large market share and gaining a cost advantage by realizing economies

of scale.

II9 Prcn% Strate%e# "!r E#ta;l#$e& Pr!&3ct#

A < Mantann% t$e Prce

Objectives :

%/& To maintain the position in the market place %i.e. market share&

%)& To enhance the public image.

, < Re&3cn% Prce


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Objectives :

/. To act defensively and cut price to meet the competition

). To act offensively and attempt to beat the competition

8. To respond to as customer need created by a change in the

environment

C < Increa#n% t$e Prce

Objectives :

/& To maintain profitability during an inflationary period.

)& To take advantage of product differences, real or percieved

8& To segment low price elasticity served market.

D#tr;3t!n 7

PERSPECTI8ES OF DISTRI,UTION STRATEGIES

I9 C$annel*Str3ct3re Strate%2

Definition : Esing perspectives of intermediaries in the flow of good from

manufactures to customers. >istribution may be either direct %from

manufacturer to retailer, or from manufacturer to customer& or indirect

%involving the use of one or middlemen, such as wholesalers andKor

agents, to reach the customers&.

Objectives : To reach the optimal number of customers in a timely

manner, at the lowest possible cost, while maintaining the desired degree

of control.


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II9 D#tr;3t!n*Sc!/e Strate%2

Definition : 5stablishing the scope of distribution " i.e. the target

customers. ?hoices are e-clusive distribution %one retailer is granted sole

rights is serving a given area&, intensive distribution means a product is

made available at all possible retail outlets&, and selective distribution

%many, but not all, retail outlets in a given area distribute a product&.

Objective : To serve the chosen markets at a minimal cost while

maintaining desired products image.

Pr!5!t!n 7

PERSPECTI8ES OF PROMOTION STRATEGIES

The marketing communications mi- %also called the promotion mi-&

consists of five major toolsL

Advertising : $ny paid form of personal presentation and promotion of

ideas, goods or services by an identified sponsor.

Direct Marketing : Ese of mail, telephone, and other nonpersonal

contact tools to communicate with or solicit a response from specific

customers and prospects.

Sales Promotion :'hort"term incentives to encourage trail or purchase

of a product or service.

Public Relations and Publicity : $ variety of programs designed to

promote and or protect a companys image or its individual products.

Personal Selling : #ace"to"#ace interaction with one or more

prospective purchasers for the purpose of making sales.


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I9 Pr!5!t!n*E4/en&t3re Strate%2

Definition :>etermination of the amount that a company may spend on its

total promotional effort, which includes advertising, personal selling, and

sales promotion.

Objective: To allocate enough finds to each promotional task, so that

each is utilized to its fullest potential.

II9 Pr!5!t!nal*M4 Strate%2

Definition : >etermination of a judicious mi- of different types ofpromotion.

Objective : To adeBuately blend the three types of promotion to

complement each other for a balanced promotional perspectives.


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ANALYSIS (Wa#$n% Mac$ne#)

=9 Avala;lt2 !" ,ran

?ompany 7ercentage of =etailers

Whirlpool 1)+

5lectrolu- 16+

>aewoo @2+

'amsung *1+

!#9 9osch 0)+

>9 Ratn% !n t$e "!ll!:n% "act!r#

%/" ost important ; 3"least important&

Prce

Percenta%e !" Retaler# Ratn%

1+ /

6+ )

3)+ 8

/)+ 6

)6+ 3

,ran& Na5e

3)+ /

8)+ )

@+ 8

/2+ 6

2+ 3

D3ra;lt2



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@)+ /

8)+ )

)+ 8

2+ 6

2+ 3

Feat3re#


31+ /

82+ )

)+ 8

)+ 6

)+ 3

A//earance?L!!k#


/2+ /

/6+ )

62+ 8

))+ 6

/6+ 3

Sc$e5e#


@+ /


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1+ )

/6+ )

6)+ 6

82+ 3

@3alt2


36 /

81+ )

)+ 86+ 6

)+ 3

9 Rankn% !" ,ran& !n a"ter*#ale#*#ervce

%/L9est; 3"worst&

C!5/an2 Percenta%e !"

Retaler#

Ratn%

Whirlpool 61+ /

!#9"9osch 6)+ )

5lectrolu- @)+ )

'amsung @2+ )

>aewoo 62+ 8

B Rankn% !" ;ran !n /r!5!t!n #c$e5e#

7romotion 'chemes were not ranked.

9 Rankn% !" ;ran !n 5erc$ann% #3//!rt

%/"best ; 3"worst&

C!5/an2 Percenta%e !"

Retaler#

Ratn%


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Whirlpool @2+ )

!#9"9osch @1+ 6

5lectrolu- *2+ )

'amsung @2+ 6

>aewoo 62+ 8

9 T!tal #ale# (a//r!45atel2)< (an3ar2 )

arket 'haresL

Whirlpool L 6)+

!#9"9osch L 3/+

+9 Retaler# /erce/t!n a;!3t lea&er#$/

/. @2+ L !#9"9osch %7roduct, Technology&

). 8)+ L Whirlpool %argin, 7roduct, $dvertising&

8. 1+ L thers


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CONCLUSION

The total market share of


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/.


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CHAPTER PLAN

=9 Marketn% Re#earc$ Pr!ce##

>9 T$e!retcal Fra5e:!rk

9 In&3#tr2 Pr!"le# an& MNC Strate%e#

B9 @3e#t!nnare#

9 Anal2##

9 C!ncl3#!n#

+9 Re"erence#


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REFERENCES

/. 7hilip otler; arketing management analysis, implementation and

control, 5ight 5dition %7rentice (all&.

). 'ubhas. ?.Aain; arketing 7lanning and 'trategy. %'outh"Western

publishing company&.

8. F'amsumg 7lans 9ig !nvestments in !ndiaJ, (industan Times; #eb ),

/001.

6. F!ts a 'ony $gainJ, 9rand Wagon; The #inancial 5-press, >ec )*,

/00*.

3. F$kai, 9ombards the arket with !nnovative 'chemesJ, !ndian e-press;

#eb /3,/001.

@. Faking the =ight 'witch, 'amsungJ, 9rand Wagon, The financial

e-press; Aan )6,/00*.

*. FThe arketers uide to 5ntry 9arriersJ, 9usiness Today, #eb *")/,

/001.

1. 'mall 'creen >rama,J 9rand 5Buity, 5conomic times I !ndia, $ugust

/8,/00*.

0. ?onsumer >urable !ndustry report 7(> house.

/2.aking an !mpact %Whirlpool&, 9usiness !ndia, ay 3, /00*

//.Fnward (o.N %4&J, The 'trategist, 9usiness standard; arch )6,

/001.

/). F5ddies in the 'treamJ, $ I , Auly 8/, /00@.

RESEARCH METHODOLOGY


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Pr!ect Ttle < 'trategies and 7olicies of ultinational ?onsumer >urable

?ompanies L $ n $nalytical 'tudy

O;ectve istribution

?hanging market share

Met$!&!l!%2 esign " >escriptive

/& >ata 'ources

a& 7rimary L

'ample unit L =etailers

'ample 'ize L 32

ode of 'ampling L ?onvenience

'ample e-tent L elhi

!nstrument used L Muestionnaires

b& 'econdary L

9usiness magazines

). $nalysis L Tabulation of data.


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FINDINGS/CONCLUSIONS


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ANALYSIS


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ANNEXURES


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REFERENCE

Documents

WASHING Afroz Alam