As part of its strategy to position itself as a complete appliances specialist brand, Electrolux India is entering a new segment, hobs and hoods, from January 2005. A small segment currently—barely two lakh units—hobs and hoods has been witnessing a good growth of over 25%. Entering newer segments will also help Electrolux to look beyond categories like fridges and washing machines, which with their slower growth patterns, are threatening the profitability of white goods majors.
Last year, the company entered two other new categories: microwave ovens (MWOs) and airconditioners (ACs). Both categories have seen good growth. Says company vice-president (sales and marketing) Ajay Kapila, ‘‘Onam sales of both categories were very good. In October, we increased marketshare of MWOs to 10%. Of the total sales of around Rs 10 crore during Onam, ACs and MWOs accounted for 30% of sales.’’
Electrolux also has plans to get into more categories next year like dishwashers, vacuum cleaners and professional outdoor equipment categories like chain saws, lawn mowers etc.
Talking about hobs and hoods, Mr Kapila says, ‘‘The segment may be small, but has immense growth potential. Factors fuelling growth are real estate development, lifestyle changes and altering consumer demands. We will have the advantage of our credible positioning as a complete appliances specialist.’’ Electrolux expects to use a differentiated proposition in technology and design to make its presence felt in the segment. It will be launching seven models in the price range of Rs 25,000-Rs 50,000. With almost 80% of sales in the segment coming from combination sales, it will also target new apartments with special kitchen packages.
There are very few organised global players in the picture. Italian brand Faber is the largest serious player in the segment. Whirlpool is also finalising plans to get into a distribution tie-up with Faber. Other brands include Kaff and Glen, which have a very small presence through distributors.
Electrolux is also strengthening its distribution by getting a second line of retail distribution through sanitary stores and electrical stores. As part of its mainline distribution plans it will open 50 Electrolux Homes—one-point outlets offering complete solutions. It has also recently tied up with Kinetic Market & Services Ltd (KMS), which has a presence in 14 states, for direct sales of microwave ovens. To begin with, KMS will market Electrolux Microwaves in Delhi, Pune, Jaipur, Kanpur, Lucknow and Bhubaneswar and subsequently extend it across the country and other product categories. This, along with its 4,000-outlet strong retail network and exclusive brand outlets will strengthen its network considerably.
Says Mr Kapila, ‘‘Microwaves being a demonstrable product, we feel that direct marketing is the most appropriate route to reach out to our customers. It has been seen that people perceive micro-waves as a mere heating device. With the direct marketing initiative, we propose to change this by giving home demonstrations, which will ensure that customers put the product to proper usage.’’