India's Refrigerator market estimated at Rs. 2750 Cr. is catered mainly by 10 brands. The annual capacity is estimated at around 4.15 million units is running head of demand of 1.5 millions.
As there is a demand and a surplus supply, all the manufacturers are trying out for new strategies in the market.
Times have changed and also the buying behaviour of the customer. Earlier it was cash and carry system. Now dealers play an important role in selling; now the systems is exchange for old “bring your old refrigerator and take a new one with many gifts”.
A new company by name Electrolux has entered the market which has acquired Allwyn, Kelvinator and Voltas brand. Researchers have revealed that urban and city sales are declining and hence all manufacturers are trying to concentrate on rural markets. Electrolux strategy is customisation of market, with special attention to the Northern and Southern India markets, while Godrej the main player thinks that dealer network in rural market for sales and service will be beneficial and is trying to give more emphasis on dealer network, whereas Whirlpool has adopted the strategy of increasing the dealer network by 30%.
The market shares of the major players are as follows:
• Godrej 30%
• Videocon 13%
• Kelvinator 12%
• Allwyn 10%
• Voltas 5%
• Whirlpool 27%
• Daewoo 1%
• L.G 1%
• Others 1%
Questions
1. Could the refrigerator market be segmented on geographical base planned by Electrolux?
2. What would be the marketing mix for rural market?
3. Would 125 L and 150 L models be an ideal choice to launch in rural market?
Possible Solutions
Answer 1. The main justification for Electrolux strategy would be Electrolux is amalgamation of 3 companies, Kelvinator, Voltas and Allwyn. Allwyn is popular in South Indian market, while Kelvinator is famous in North India Market. Electrolux wants to cash in on the popularity of the respective brands.
It is not possible to segment according to North or South Indian Market, once a company's name becomes a logo, then the reason for buying for customers for other brand depends upon price, quality, usability and features of the product. The storage pattern of foods in North India and South India is same. Same is the case of rest of India, so it won’t be possible to segregate the market according to the geographical base.
Answer 2. The rural market is small but significant as far as refrigerator is concerned. Moreover, the cost of selling of dealer in the rural market should also be justified. The type of food the rural people consume should also be taken into account; they prefer to have more of natural foods and less of derived food products like Ice-creams, butter, cheese etc. The cost of the refrigerator should be less attractive to buy. The size and material should be so adjusted that the cost price would be reasonable. The capacity of the refrigerator should be 100 l - 300 l. Much more space has to be given for storing vegetables. Other important factor to be taken into consideration is the Power supply which is not so good in rural areas. To avoid the voltage fluctuations in built stabilisers will be the selling features in the rural areas.
Answer 3. The chances of selling of 125 l and 150 l refrigerators are high because the prices of the refrigerators would be less. This would be a major factor. The second aspect would be they don’t have many items to store. They would prefer a small refrigerator, also the space in their homes are not very big wherein a small refrigerator would serve their needs.
As there is a demand and a surplus supply, all the manufacturers are trying out for new strategies in the market.
Times have changed and also the buying behaviour of the customer. Earlier it was cash and carry system. Now dealers play an important role in selling; now the systems is exchange for old “bring your old refrigerator and take a new one with many gifts”.
A new company by name Electrolux has entered the market which has acquired Allwyn, Kelvinator and Voltas brand. Researchers have revealed that urban and city sales are declining and hence all manufacturers are trying to concentrate on rural markets. Electrolux strategy is customisation of market, with special attention to the Northern and Southern India markets, while Godrej the main player thinks that dealer network in rural market for sales and service will be beneficial and is trying to give more emphasis on dealer network, whereas Whirlpool has adopted the strategy of increasing the dealer network by 30%.
The market shares of the major players are as follows:
• Godrej 30%
• Videocon 13%
• Kelvinator 12%
• Allwyn 10%
• Voltas 5%
• Whirlpool 27%
• Daewoo 1%
• L.G 1%
• Others 1%
Questions
1. Could the refrigerator market be segmented on geographical base planned by Electrolux?
2. What would be the marketing mix for rural market?
3. Would 125 L and 150 L models be an ideal choice to launch in rural market?
Possible Solutions
Answer 1. The main justification for Electrolux strategy would be Electrolux is amalgamation of 3 companies, Kelvinator, Voltas and Allwyn. Allwyn is popular in South Indian market, while Kelvinator is famous in North India Market. Electrolux wants to cash in on the popularity of the respective brands.
It is not possible to segment according to North or South Indian Market, once a company's name becomes a logo, then the reason for buying for customers for other brand depends upon price, quality, usability and features of the product. The storage pattern of foods in North India and South India is same. Same is the case of rest of India, so it won’t be possible to segregate the market according to the geographical base.
Answer 2. The rural market is small but significant as far as refrigerator is concerned. Moreover, the cost of selling of dealer in the rural market should also be justified. The type of food the rural people consume should also be taken into account; they prefer to have more of natural foods and less of derived food products like Ice-creams, butter, cheese etc. The cost of the refrigerator should be less attractive to buy. The size and material should be so adjusted that the cost price would be reasonable. The capacity of the refrigerator should be 100 l - 300 l. Much more space has to be given for storing vegetables. Other important factor to be taken into consideration is the Power supply which is not so good in rural areas. To avoid the voltage fluctuations in built stabilisers will be the selling features in the rural areas.
Answer 3. The chances of selling of 125 l and 150 l refrigerators are high because the prices of the refrigerators would be less. This would be a major factor. The second aspect would be they don’t have many items to store. They would prefer a small refrigerator, also the space in their homes are not very big wherein a small refrigerator would serve their needs.
