As the mercury soars, there is heated activity around the refrigerator business. All players are gearing up for this season with new offers, product launches and advertising campaigns.
LGEIL, which recorded a growth of 25.7 per cent in refrigerator business in March 2004-March 2005, is looking at a target of Rs 1,490 crore this financial year, said Anil Arora, VP-Marketing. "Between January and July we plan to achieve Rs 975 crore," he said. Samsung India is also optimistic about the business this year. Ravinder Zutshi, Director, Sales, said, "We are expecting over 50 per cent volume growth in refrigerator sales this year."
On the new marketing initiatives, Arora said, "We are planning to come out with lucrative exchange offers, which will enable customers to upgrade their old refrigerators with zero per cent finance scheme and nil processing fee." Meanwhile, Whirlpool is planning to launch new products across segments i.e. Direct Cool and Frost Free. "We are launching an entirely new range of refrigerators this summer in different colours and features. This initiative will be further strengthened by an advertising campaign featuring our new brand ambassadors, Kajol and Ajay Devgan," said Arvind Mediratta, VP, Marketing. In fact, LGEIL is also planning to launch aesthetically upgraded version of Direct Cool and Frost Free. According to ORG-GSK report (February 05) (Value-wise) LG has got 37 per cent market share in Frost Free and 26.4 per cent Direct Cool; Samsung has 16.2 per cent market share in Frost Free and 9.6 per cent in Direct Cool. Whirlpool is closely fighting with LG with a 20.5 per cent market share in Frost Free and 24.7 per cent share in Direct Cool. Electrolux has 9.2 per cent market share in Direct Cool and 7 per cent in Frost Free.
Interestingly, most marketers believe that the high-end segment is where the actual growth is. Arora said, "Although 80 per cent contribution comes from direct cool segment and 20 per cent from frost free, there is a considerable shift that is taking place from direct cool to frost free." Zutshi agrees with Arora saying, "The industry expectation this year, as was proven last year, is that the frost free segment will show higher growth."
The 'heated' competition will also see the white goods majors fighting for space on the tube. There are campaigns lined up from LG, Electrolux, Whirlpool and Samsung, and all in April! While LG's campaign will be focused on the 'health' platform, Electrolux will release a campaign on the 'hot and cold' offer, which is a combination promotion wherein consumers can buy a refrigerator and microwave. On the growth path, Anil Hiranandani, Head-Refrigerators, Electrolux, said, "We are planning to increase by 30 per cent over last year. We expect this quarter would be more efficient that last quarter." The promotional activity would also be focused on the high-end segment and the theme of the campaign will revolve around making life easy for women, he added.
Does this indicate that marketers are losing interest on the Direct Cool segment? "Certainly not," said Mediratta, adding, "Considering that Direct Cool segment constitutes almost 80 per cent of the market and is not a segment that can be ignored."
Voltas, with a negligible market share in the refrigerator segment, incidentally has no plans to boost this segment. K D Virmani, General Manager, Voltas said, "There is no promotional campaign to boost the refrigerator business. We believe that it is an already cluttered market and we are not getting into the refrigerator business in a big way." Last year, the company sold 75 to 80,000 units.