white appliances marketing micorwave ovens to a new market segment

White Appliances

Marketing Micorwave Ovens to a New Market Segment

Victor Marbun (victor) M987Z259Li Merlin (Merlin)

M987Z246

Thidarat Prasitpornphakdee (Nok) M987Z245

Huynh Than Phong (phong) M987Z242

江孟唐 (Johnson)M98C0242

Nguyen Thi Thanh Nhan (Nhan)M987Z232

Group Members

Overview

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.

Overview

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 are entering in the market.

Situation AnalysisInternal Situation Analysis

White Appliances is an international company that manufactures and markets appliances globally. We has a line of microwave ovens-some manufactured in the U.S. and some in Asia.

Situation AnalysisInternal Situation Analysis

For pandering to the India market, we can cut down own production costs by offshoring in Asia. And featuring ENERGY STAR products that use less energy, save money and help to protect the environment.

Situation AnalysisInternal Situation Analysis (con’t)

The Microwave Ovens available in the market are of following types:1.Compact Microwaves 2. Countertop Microwaves 3.Convection Microwaves 4.Over the Range Microwaves (OTR microwaves) 5.Convection and Grill.

Situation AnalysisInternal Situation Analysis (con’t)

Create the designed product for the customers through extensive promotion in order to capture the potential market and try to convince customers to shift to our products.We have to add more value and add more features rather than increasing the price.

Situation AnalysisCustomer Situation AnalysisIndian cuisine can be divided into two parts: North Indian Cuisine

Wheat is considered a staple part of North Indian meal. Usually a North Indian mealconsists of Roti/Paratha/Naan (Indian breads) and sabji (gravy made with vegetables).However, on special occasions or when there is company, a four-course meal is served.First Course: Appetizers and drinks.Second Course: Salads, Any Indian bread and sabji.Third Course: Spiced rice (pilaf or pulav).Fourth Course: Dessert or sweets (or lassi).

Situation AnalysisCustomer Situation Analysis

South Indian CuisineRice is considered a staple part of South Indian meal. Usually a South Indian meal consists of rice and sambar (curry).Here again, on special occasions or when there is company a four-course meal is served:First Course: Appetizers and drinks.Second Course: Mixed rice and vegetables cooked with spices.Third Course: Plain rice, sambar, rasam and yogurt with pickles (appalam, added for crisper taste).Fourth Course: Sweets and paan.

Situation AnalysisCustomer Situation Analysis (con’t)

Geographical Segmentation: Urban and suburban regions of India.

Demographic Segmentation: We are targeting people with a stable income of over Rs. 3000.


Behavioral Segmentation: Micron 1200 will be most useful for heavy users whereas the Micron 1000 for light users.


Life-stage Segmentation:

Our Micron 1000 model is targeted to single young people and newly married young couples.

Micron 1100 is targeted towards Full Nest 1 (youngest child under 6) and 2 (youngest child six or over)

While Micron 1200 is for Full Nest 3 (older married couple with dependent children) and Empty Nest (older married couple with no children living at home).

Situation AnalysisExternal Situation Analysis

The major competitors are, in order: Samsung India has emerged the leader in the 240,000-unit

microwave oven market with a 33.6 percent share over October-March 2003.

LG was trailing Samsung with 31.3-percent market share. Videocon International's brand Kenstar occupied the

number 3 position with a 10.6 percent share of the market while National Panasonic's brand is placed next with 6.1 percent share.

Japanese major Sharp and Whirlpool are in a neck-and-neck race with a 4.2 and 4.3 percent share of the microwave oven market, respectively, while BPL Appliances & Utilities Ltd is placed at the lowest with 1.6 percent market share

Situation AnalysisExternal Situation Analysis (con’t)

The Indian Consumer Electronics market generated total revenues of $3.8 billion in 2006, this representing a compound annual growth rate (CAGR) of 11.1% for the period spanning 2002-2006.Video equipment sales proved the most lucrative for the Indian Consumer Electronics market in 2006, generating total revenues of $3 billion, equivalent to 80.8% of the market's overall value.

The performance of the market is forecast to accelerate, with an anticipated CAGR of 5.4% for the 2006-2011 period expected to drive the market to a value of $4.9 billion by the end of 2011.


With an estimated population of 1.2 billion, India is the world's second most populous country. India's GDP is US$1.237 trillion, which makes it the twelfth-largest economy in the world or fourth largest by purchasing power adjusted exchange rates. India's nominal per capita income US$1,068 is ranked 128th in the world.

SWOT Analysis

A. Strengths1. High technology2. Product is simple to use3. Use for a longtimeB. Weakness 1. High cost expand for production2. High cost for maintaining the microwave(for

user)3. Not common in use in India (strange tools)

SWOT Analysis (con’t)

C. Opportunities

1. Changing cutomer needs / tastes

2. Huge population (1.3 billion)

3. Economic condition and industry atmosphere is good

D. Threats

1. Competitor

2. Sociocultural Trends

Analysis the SWOT Matrix

Strengths 1. high technology 2. use for long time 3. high class image/lux

image 4. easy to use

Weakness : 1. high cost expend for

production 2. high cost for

maintaining the microwave

3. difficult change the culture of cooking

4. not common or a little bit complex to use

Opportunities : 1. huge population

(1.3 billion)means more wide market

2. economic and political environment is good in India

SO - with huge population in

India, the company can markets their product to wide people

- simple to use, so user will aesy to use and simple

WO - high cost in

production will make impact in quality and R&D for long term investment

Threats 1. Competitor 2. Sociocultural

Trends (culture)

ST - Competitor still small, and easy to identificate - With technology we can make product cheaper but in tolerate price because of the low buying power - Change the habit will impact the sales, when they think the micro wave is worthed they will buy that for next

Advantages

Microwave ovens rapidly cook foods, heat liquids and defrost frozen foods.

Some foods are better cooked in a microwave oven as they retain more flavour, texture and goodness. (eg. plain fish, soft fruit, peas, fat free cakes).

Microwaves are safe and economical on electricity with savings up to 50%.

No oven preheating is required and the kitchen stays cooler.

Cooking is cleaner with less odours. Washing up is reduced.

A microwave oven can be used with a conventional oven to speed up the cooking such things as bread.

Major Problems with Microwave ovens.

1. Food cooks very quickly and is liable to be overcooked.

2. Hot and cold spots can occur producing food that is unevenly cooked.

3. Microwaves cannot brown food as no heat is applied from the outside.

4. The outer edges of the food get hot while the centre remains cool.

5. Metal pans, plates, utensils etc. will permanently damage the microwave generator.

6. Cooking small quantities of food can damage the microwave generator.

Major Problems with Microwave ovens.

7. Never turn on an empty oven as it will damage the microwave generator.

8. Waste food left on the inside of the oven cavity absorbs energy.

9. Salt added at the beginning of cooking toughens food especially meat.

10. Not all foods can be cooked in a microwave.

11. The size of the oven cavity limits the quantity and size of the food to be cooked.

Comparison

Conventional MicrowaveLayer-by-layer, outside to inside

Spoils the kitchen wall with sprinkling of oil

Separate utensils for cooking & serving Same utensils can be used to cook & serve

Cooking through Oil

More usage of Oil/Ghee

More time consuming & tiring Less time consuming & enjoyable

Less Oily food

Cooking through Water molecules

Even cooking, inside to outside

Non- messy , more neat & clean kitchen walls

Nutritional Value of the food is lost due to longer cooking

Nutritional Value of the food is preserved

Marketing Mix

Product :Design product for suiting with India foodStylish of productConvenient and efficient to cookCan replace demand for a bigger refrigerator

Price:Flexible price: (Rs 7.000; Rs 18.000); (Rs 12.500; 15.000) and ( Rs 17.900 for an oven with grill functions)

Marketing Mix

Place: Top seven cities ( 70% of market with Delhi and Mumbai)Expanding to explore in nonurban market, semi- urban.

Promotion: Changing awareness about benefits of Oven ( not only reheating but also cook

well) by direct marketing: Organizing cookery classes : with famous chef Recipe contests, in-house demos Giving away accessories such as glass bowls, aprons and gloves as freebies and

hosting co – promotions

Marketing Strategy

1. Product and design innovation to make the microwave suited to India cooking

2. Local manufacturing facility to promote innovation

3. Continuing to import high-end models

4. Reducing import content to cut cost

5. Boosting volumes

6. Bringing down prices

Questions

What is the most challenging factor for a Microwave Oven company to enter India Market?

Answer

The most challenging factor for a microwave oven company to enter India market is the perception of Indians about microwave oven. Generally they think that microwave ovens are only used to cook Western-styled dishes and that they are not sutitable to prepare Indian complicated recipes. Hence, cracking the mindset that microwaves are not suited to Indian food holds the key to future growth.

Questions

What kinds of Benefit that assure Indian market to choose microwave to cook ?

Answer

white appliances marketing micorwave ovens to a new market segment

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