Marketing Microwave Ovens to a New Market Segment Case study # 4 Marketing Microwave Ovens to a New Market Segment

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Outline Overview SWOT analysis Strategies Conclusion Situation Market value White Appliances - Introduction SWOT analysis Strategies Target Market Strategy 4P’s in marketing Short-term and long-term strategies Conclusion

OVERVIEW Situation Market value White Appliances - Introduction

Situation Before the liberalization of the Indian economy, only a few companies like Kelvinator, Godrej, Allwyn, and Voltas were the major players in the consumer durables market, accounting for no less than 90% of the market. Then, after the liberalization, foreign players like LG, Sony, Samsung, Whirlpool, Daewoo, and Aiwa came into the picture. Today, these players control the major share of the consumer durables market.

Situation Today, these players control the major share of the consumer durables market. Consumer durables market is expected to grow at 10-15% in 2007-2008. It is growing very fast because of rise in living standards, easy access to consumer finance, and wide range of choice, as many foreign players were entering in the market with the increase in income levels, easy availability of finance, increase in consumer awareness, and introduction of new models, the demand for consumer durables has increased significantly. Products like washing machines, air conditioners, microwave ovens, color televisions (C-TV) were no longer considered luxury items.

Growth 2007 - 2008

MARKET VALUE The Indian consumer electronics market grew by 7.6% in 2006 to reach a value of$3.8 billion. The compound annual growth rate of the market in the period 2002-2006 was 11.1%.

Table of India Consumer Electronics Market Value

White Appliances - Introduction We are White Appliances - an international company that manufactures and markets appliances globally. The company has a line of microwave ovens. We market several high-end models in India which are manufactured in US.

White Appliances - Introduction We believe that through technology innovation today, we will find the solutions we need to address the challenges of tomorrow. From technology comes opportunity for businesses to grow. It’s our aim to develop innovative technologies and efficient processes that create new markets, enrich people’s lives and continue to make White Appliances a trusted brand.

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STRENGTHS High technology Product is simple to use Microwave oven is a convenient and efficient way to cook Use for a longtime

WEAKNESSES High cost expand for production The presence in the Indian market is limited at this time

WEAKNESSES (Cont’d) High cost for maintaining the microwave(for user) Not common in use in India (strange tools)

OPPORTUNITES Microwave companies seeks a lot of opportunities that utilize their strengths of innovation changing customer’s demands and flavors has helped Microwave companies launch it product at a mass scale. Today most customers are looking for new and updated product is that provide maximum benefits at the same time. 1 1

OPPORTUNITES So Microwave companies see an opportunity of its product’s being accepted at a considerable pace. The second opportunity Microwave companies is the huge population of the targeted country so the consumer base requiring such appliance is going to be large. 1 1

OPPORTUNITES Moreover the countries economic condition and the industrial atmosphere is quite healthy which also enhances the opportunity for the company. Changing customer needs / tastes Huge population (1.3billion) Economic condition and good industrial atmosphere. 1 1

THREATS Microwave companies has threat from its competitors. More and more companies entering into the microwave oven field is increasing the competition level. Microware companies is facing such competition which has added in its threat. 1 1

THREATS Moreover one more threat Microwave companies is facing is the Socio Cultural Trends in the society. 1. Competitor 2. Socio Cultural Trends 1 1

Competitors White Appliances competes directly with several international companies like Samsung, Whirlpool and LG Electronics India Microwave brands available in India LG                                 Godreg Samsung                        IFB Whirlpool                       Onida Sanyo                            Haier Electrolux                       Videocon

Strategies Target Market Strategy 4P’s in marketing Short term & Long term strategy

Target Market Strategy Microwave companies utilizes the latest high end technology to attract the customers. The women in the age group 22-45 who are looking for latest updated technology in kitchen appliances constitutes the main market target. 1 1

Target Market Strategy To reach them feature are added that are catching to these group of people. Although women are the main target group, Sony does not underestimate men either in their importance as they can also influence the housewives decisions and can also have interest in cooking. 1 1

Product Tailoring product to suit with Indian market Ease of use Size match with large Indian vessels Special cooking function for Indian food Ease of use The whole family can use it After sales service and call centers Saving energy product

Product Stylish design Using nutrition technology to retain vitamins and food’s vital nutrients Offer several models to fit with each Indian family (compact, medium capacity, large capacity) Health wave system for health benefits

Price Wide range of price High-end (premium) Medium price for middle income consumer Low price for rural consumer Manufacture product in India and reduce import content to cut cost

Place Focus on the top 16 Indian cities to promote through new retailing activities. Urban Market Electronic specialty store, Malls and Department Stores Give a brand shelf space Rural Market Direct selling

Promotion Discount at festival time Product placement Advertising in cuisine books, magazines and TV programs Organizing Indian food cooking classes by using our product Offering Indian menu recipe books to customer Installment Sale Trade show booth to spread brand awareness

Short term & Long term strategy Short term strategy Penetrate rural market Maintain urban market

Short term & Long term strategy (cont’d) Continue to launch Microwave Oven with new features Introduce new innovation products

Conclusion The change in consumer habits create new opportunities Pricing policy is one of the important factors The development of technology is the key to success for the market seems difficult Style, size and product enhancements designed to suit each market segment

Conclusion The change in consumer habits create new opportunities The new recipes has changed somewhat the habit of using microwave Indians. “To change the way you look, just change the way you cook” was a recent tagline by one of the companies What really drives the growth of this product will be a change in eating habits

Conclusion Pricing policy is one of the important factors There is some difference of opinion on the righ price for the ovens. Microwave companies face a chicken-and-egg question on price and sales.

Conclusion Pricing policy is one of the important factors (cont’d) Prices will not come down easily until volumes go up, while volumes depend on prices The price of the microwave is different. Each company has a different pricing policy. Additionally, the support function is also one of the factors which decide the price

Conclusion The development of technology is the key to success for the market seems difficult Though the concept of microwave ovens is western, the fact Is that microwave technology to day has advanced to a level wherein even complex cooking like Indian cooking is very much possible.

Conclusion The development of technology is the key to success for the market seems difficult (cont’d) Microwave is now described as a multi-function device rather than a warming device (a substitute to the Oven Toaster and Grill).

Conclusion Style, size and product enhancements designed to suit each market segment

Q & A