Institute of Management Technology, Nagpur December 2013

PROJECT REPORT Submitted by Bhavesh Mehta (2013151 / SEC-C) On MARKETING MIX OF WHIRLPOOL INDIA

Submitted to

Prof. Milind Fadnavis

1|Page

TABLE OF CONTENTS
CHAPTER 1: WHIRLPOOLS OVERVIEW...................................................................3 1.1 Whirlpool Vision & Mission..........................................................................................3 CHAPTER 2: INDUSTRIES OVERVIEW......................................................................4 CHAPTER 3: WHIRLPOOLS MARKETING MIX.......................................................5 3.1 Whirlpool Product..........................................................................................................6 3.2 Whirlpool Price...............................................................................................................9 3.3 Whirlpool Promotion.....................................................................................................10 3.4 Whirlpool Price Place ...................................................................................................13 CHAPTER 4: WHIRLPOOLS SWOT ANALYSIS...................................................15 REFERENCES ....................................................................................................................17

2|Page

CHAPTER 1: WHIRLPOOLS OVERVIEW

Whirlpool Corporation is a global manufacturer and marketer of major home appliances, with annual sales of more than $19 billion, 68,000 employees in 2011 and 66 manufacturing and technology research centres around the world. The company manufactures in 13 countries and markets products in approximately 170countries under 11 major brand names such as Whirlpool, Maytag Kitchen Aid, Roper, Estate, Jenn-Air Amana, Brastemp, Consul, Bauknecht, Laden and Ignis. Whirlpool Corporation entered India in the late 80s and today has grown to become one of the leading manufacturers and marketers of major home appliances in India. Whirlpool Corporation entered into a joint venture agreement with TVS group to produce automatic washers at a plant set up in Pondicherry. A modest beginning was made to establish the Whirlpool brand in India. In 1995 Whirlpool Corporation acquired Kelvinator of India L i m i t e d a n d e n t e r e d i n t o t h e R e f r i g e r a t o r m a r k e t i n I n d i a . I n l a t e 1 9 9 5 m a j o r i t y ownership was gained in the TVS joint venture and the two entities were merged to form Whirlpool of India Limited in 1996.Whirlpool has the distinction of having ISO certification for all its facilities in India. The refrigerator facility is located at Faridabad and manufactures a complete range of direct cool refrigerators. Whirlpools commitment to the Indian operation has resulted in the setting up of a state-of-the-art facility for the manufacture of no frost refrigerators at Ranjangaon near Pune. This facility has set the standards as one of the worlds front runners in environmentally sensitive eco-friendly manufacturing units. The washer facility is located at Pondicherry and manufactures both fully automatic and semi-automatic washers. Constant feedback is taken from the consumers resulting in products being continuously upgrade in features and in styling. Products manufactured in the above facilities match Whirlpools global standards and are e x p o r t e d t o o v e r 7 0 c o u n t r i e s a c r o s s t h e g l o b e . W h i r l p o o l o f I n d i a i s t o d a y I n d i a s largest exporter of home appliance and has been approved as an Export House.

1.1 WHIRLPOOL VISION & MISSION The pervasive vision, Every Home, everywhere, with pride, passion goals, strategy, processes and work culture and performance, rests on the pillars of innovation, operational excellence, customer-centric approach and diversified talent. These are embedded within Whirlpool s business goals, strategy, processes and work culture. Be it Whirlpools products that are the result of innovation and operational excellence to meet every need of Whirlpools consumers or the people behind these products that come from a wide spectrum of backgrounds, everything the company do features a distinct Whirlpool way.
3|Page

CHAPTER 2: INDUSTRIES OVERVIEW

Liberalization allowed many foreign players the opportunity to enter India offering high growth supported by a huge consumer class. Currently, the two Korean companies, LG and Samsung are leading the Indian consumer durable industry with LG holding the major market share across all categories. Colour televisions, Washing Machines, Refrigerators, Air Conditioners and Microwave ovens forms the large part of the Indian consumer durables market. The entire consumer durable industry can be classified as follows.

Consumer Durebles

White Goods

Kitchen Appliances/Brown Goods

Consumer

Electronics

Indias Economy is expected to grow by around 8% in the next decade making it one of the fastest growing major economies in the world. The Indian consumer durables industry has witnessed a considerable change in the past couple of years. Changing lifestyle, higher disposable income coupled with greater affordability and a surge in advertising has been instrumental in bringing about a sea change in the consumer behaviour pattern. Apart from steady income gains, consumer financing and hire-purchase schemes have become a major driver in the consumer durables industry. In the case of more expensive consumer goods, such as refrigerators, washing machines, colour televisions and personal computers, retailers are joining forces with banks and finance companies to market their goods more aggressively. In addition, change in policy, such as the WTO FTA in 2005 resulted in zero customs duty on imports of all telecom equipment, thereby improving the pricing and affordability of imported goods. Studies have found that the penetration level of various appliances in India is fairly low. Refrigerator use is about 18 per cent of the total population, washing machine 6 per cent, air-conditioner less than 2 per cent and microwave ovens about 1 per cent, which translates into a great potential to tap new consumers. Light Electrical Industry, particularly the large home appliances sector attracted a number of leading MNCs to either start joint ventures or start their fully owned subsidiaries in India. The Indian consumer durables segment can broadly be segregated into consumer electronics (TVs, VCD players and Audio systems etc.) and consumer appliances (also known as white goods) like Refrigerators, Washing Machines, Air Conditioners, Microwave Ovens and Vacuum Cleaners.
4|Page

CHAPTER 3: WHIRLPOOLS MARKETING MIX

Marketing Mix is a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market. The 4Ps is one way of defining the marketing mix all the elements of the marketing mix influence each other. They make up the business plan for a company and handled right, can give it great success. But handled wrong and the business could take years to recover. The marketing mix needs a lot of understanding, market research and consultation with several people, from users to trade to manufacturing and several others.

5|Page

3.1 WHIRLPOOL PRODUCT Product is the most basic marketing mix tool. It is the tangible offer to the market. A product can be anything that satisfies a need or wants in exchange for some form of payment (where the payment sometimes be benefits other than money). When developing a product you should consider quality, design, features, packaging, customer service and any subsequent after-sales service. In India Whirlpool has an impressive portfolio of home appliances. Whirlpool of India imports, manufactures and markets home convenience products such as refrigerators, washing machines, air-conditioners, microwave ovens, dryers, dishwashers, UPS and water purifiers. The refrigerators, washing machines, air-conditioners and microwave ovens all put together constitutes 93% of the total revenues of the company. The company has recently entered into the new high growth segments of UPS, water purifiers, kitchen tops and dryers which are expected to witness high growth going forward.

6|Page

WHIRLPOOLS PRODUCT MIX

Whirlpool's Product MIX

Refrigerators

Washing Machine

Microwave

UPS

Direct Cool Frost Control FRost Free Fusion 4 Premier Professional 410 liter

Semi Automatic Fully Automatic White Magic 800

Solo Grill Convection Magic cock Jetchef

Sin Wave HUPS Sin Wave Platinum Silver Series Elanta Hups Gold Series

Whirlpool product mixes is not that much diversified as its competitors. They have only diversified his businesses in only electronic goods that are home appliances, accessories, Built-inn and UPS. But they have many varieties in their products which is more than its competitors. In home appliance they create more and new innovative idea and add more value to its product which attracts more modern age people who loves new changes. In India, refrigerators and other home appliances were long known before the 1990s, but Whirlpools product stand out for innovative approaches to specific Indian contexts, and for a focus on customer relevant technology. One of its earliest product-innovations specifically addressed the sizeable segment of customers who bought smaller sized refrigerator. Whirlpool realized that a customer who bought a small capacity refrigerator would probably require greater flexibility and options in storage. Therefore, it introduced the flexigerator, a refrigerator with adjustable and drop-down shelves that gave unprecedented space options to customers. Again, Whirlpool realizes that Indians have a propensity to store much longer amounts of water than most other cultures. Therefore, Whirlpool introduced shelves that could take 1.5 Litre bottles, on specially strengthened doors. Subsequently, Whirlpool introduced its Ice Magic refrigerators which made ice faster than other brands. In washer products, Whirlpool was again the first to come out with a Combimatic- a single tub semiautomatic washing machine that did away with the hassle of shifting clothes from one tub to another. Whirlpool has a wide product portfolio ranging from air-conditioners to microwaves.

7|Page

Whirlpools future products will be designed as an environmental friendly product in accordance to customer expectations. Consumer insight is key to Whirlpool innovation. The starting point of any winning product innovation is invariably the consumers expressed, or latent, need for a particular feature or solution to one of lifes daily challenges, big or small. Sometimes ethnologists need to enter the arena well before the designers, to have a better understanding of consumers lifestyles and the social conditions of the markets in which Whirlpool products will compete. For Whirlpool, the four main areas of opportunity for inspiring innovation are Connectivity, i.e. the appliances interaction with smart grids; Energy and Water Efficiency through integrated systems such as Green kitchen; Food quality maximization through perfect preservation and cooking; and serving the new needs of constantly evolving lifestyles. On this last point, the kitchen, for instance, is no longer the place where one simply stores and prepares food. It has become a focal spot for socializing and where most of the emotional part of domestic life is expressed. In terms of products being actually launched on the market, in 2011 and 2012, this translates in the further development of the 6th sense concept with new, enhanced features; the continuous improvement of the user interface with a smart-phone-like user experience both in terms of connectivity and emotional impact; the introduction of new, emotional elements, such as light to guide the user through the different usage stages, and award-winning design to thrill consumers and arouse their desire for a beautiful object. BEYOND SINGLE APPLIANCE EFFICIENCY Whirlpool also developed the innovative Green Kitchen Project2, an integrated eco-kitchen that saves water and reduces energy consumption by 70%. The projects concept is that appliances are not considered as separate functions, but as part of an integrated system able to transform waste in actual resources. For a typical family of four this could result in yearly savings of over 38000. ECO-DESIGN Sustainability is an integral part of the development of any new product. Since 1998 Whirlpool has applied the principles of eco-design in the development of appliances that can be easily disassembled at the end of their lifecycle, and be transformed into new objects. According to eco-design principles, products are developed taking into account the impact on the environment throughout their entire lifecycle. The raw materials employed in their manufacturing are carefully selected, water and energy consumption, recyclability and ease of disassembly are also important factors that are considered. Currently, more than 80 percent of the materials used in Whirlpool Corporation-produced products can be recycled. In some cases it goes even further, such as that of two innovative products, a washing machine and a dryer that are both 95% recyclable thanks to the use of entirely re-usable materials
8|Page

3.2 WHIRLPOOL PRICE Price is the marketing-mix element that produces revenue, the other produce costs price is also one of the most flexible elements; it can be changed quickly unlike features and channel commitments. At the same time, price competition is the number one problem faced by the companies. Yet many companies do not handled pricing well. The common mistakes are these: Pricing is too cost oriented, Price is not revised often to capitalize on market changes, Prices is set independent of the rest of the marketing mix rather than as an intrinsic element of market-positioning strategy and Price is not varied enough for different product items, market segment and purchase occasion. There are a number of considerations in relation to price including price setting, discounting, credit and cash purchases as well as credit collection. Price concerns the amount of money that customers must pay in order to purchase your products. Of all the aspects of the marketing mix, price is the one, which creates sales revenue - all the others are costs. The price of an item is clearly an important determinant of the value of sales made. In theory, price is really determined by the discovery of what customers perceive is the value of the item on sale. Researching consumers' opinions about pricing is important as it indicates how they value what they are looking for as well as what they want to pay. An organisation's pricing policy will vary according to time and circumstances. Crudely speaking, the value of water in the Lake District will be considerably different from the value of water in the desert. There are many ways to price a product, they are Premium pricing, penetration pricing, Economy pricing, Price skimming, Psychological Pricing, Product Pricing, Optional product pricing, captive product pricing, Product bundling price, Geographical pricing and value pricing but Whirlpool philosophy had all been to deliver value for money to its customers despite being priced economically, Whirlpool maintained his product quality, so that is the reason many of the people do not consider about the price when they go for brand Whirlpool. Whirlpool has been concentrating on becoming a brand for the mass market and hence has introduced its products in all price categories. In order to increase their profit, they try to reduce their cost. Some of their actions are they closed several plants and streamlined organization in several group. Knowing the market well, structuring the elasticity and keeping an eye on competitors by whirlpool has implemented a customer-centric strategy that focuses on making sure their products are appropriate for the Indian consumers. Different versions of their products are priced differently, but not according to differences in their costs. Whirlpools bigger success has been in the full in the fully automatic segment.

9|Page

MARGIN Improving margins is one of the top strategic priorities for Whirlpool. It can be realized through the implementation of price increases to reflect the products premium qualities versus the competition; and a solid management of the cost structure. Quality: the constant enhancement of product quality evidenced by a falling Service Incident Rate - is also helping Whirlpool making substantial savings on the cost of quality, thus improving margins and breaking away from the competition. The objective for Whirlpool is to reach 8% profit margin.

3.3 WHIRLPOOL PROMOTION Promotion refers to the act of communicating the benefits and value of your product to consumers. It then involves persuading general consumers to become customers of your business using methods such as advertising, direct marketing, personal selling and sales promotion. It will provide information that will assist them in making a decision to purchase a product or service. The razzmatazz, pace and creativity of some promotional activities are almost alien to normal business activities. The cost associated with promotion or advertising goods and services often represents a sizeable proportion of the overall cost of producing an item. However, successful promotion increases sales so that advertising and other costs are spread over a larger output. Though increased promotional activity is often a sign of a response to a problem such as competitive activity, it enables an organisation to develop and build up a succession of messages and can be extremely cost-effective. The main objective of advertising and promoting your products is to attract the attention of customers and subsequently persuade them to purchase form your business. One of the benefits of advertising is that it gives you the opportunity to communicate a message to a large audience at one time reducing the cost per contact. However, advertising can also be performed at a smaller and more specialized scale to target a specific market.

Whirlpools promotion strategy has introduced unique values in the home appliance market. As recently as the early 1990s, most consumer durables were promoted just as desirable accessories, and the purchase decision crystallized through the male breadwinner in the Indian family. Whirlpools promotions broke new ground with reference to each of these longstanding premises in the Indian consumer market. Whirlpool created its marketing position around the tagline, you and whirlpool based upon this premises, whirlpools promotions encouraged and helped women to consciously identify themselves as the real homemakers in the family. This strategy also took whirlpool to the core of every home, as envisaged in the mind-set of customers, thereby enabling instant connection with the brand. In the process of establishing such an emotional connects with the customer. Whirlpools strategy of reaching out to its customers in unique ways was followed even in media. It
10 | P a g e

changed the media trend for consumer durables advertising in India, which hitherto was heavily skewed towards print. Whirlpool was the first home appliances brand to orient its promotions towards television advertising. When the company entered India in 1995, Whirlpool as a brand was unknown in India. By 1997 the Indian market had all the global consumer electronics companies such as Sony, Panasonic, Samsung, Philips as well as local brands such as Videocon, BPL and Onida.

One of the key factors of promotion Whirlpool as a brand was a partnership with advertising agencies that knew the market well. Draftfcb Ulka was lead agency which was responsible overall corporate branding and premium products. This partnership ultimately led to the building of Indias top consumer durable brand, with an estimated turnover of US$1.43bn.in 2004, whereas in 1997 was only US$27.5m. Whirlpool India Ltd. has changed its strategy from being a premium-player to a mass-player. Whirlpool has been concentrating on becoming a brand for the mass-market and hence has introduced its products in all price categories. Whirlpool recently announced an alliance with the Italian appliances company Faber Heat Kraft to introduce its range of cooking appliances in the Indian market. The products consisting of hobs, chimneys and cooking ranges will be distributed and sold by Faber through WILs dealer network and exclusive outlets.

11 | P a g e

Whirlpool spends six to seven times less in promotion and advertising than the competitors like LG. They have been spending the money smartly. Instead of giving ads every day, they are skewing their ads towards weekends when the customers go to shops and make enquiries. Their ads are frequently coming on days such as Dussehra, Karva Chowth, Dhanteras, etc. Also, they have done some smart negotiations with the major dailies and magazines by taking a twelve-month contract and blocking the primary positions like front page or back page. So they deal with competitors with greater muscle power in terms of money through smart buying and smarter planning. Regarding ads the brand ambassadors are Ajay Devgan (Intense Emotional Hero ) and Kajol ( Beautiful and Vivacious ).

In the process of establishing such an emotional connects with the customer, whirlpools promotions have also generated memorable campaigns. Foremost among these is the whirlpool, whirlpool audio refrain. Which is the hallmark of all audio-visual communications as Ice, ice baby for refrigerators, and mummy ka magic chalega kya? For washing machines which have become part of the colloquial market-speak in the country.

12 | P a g e

3.4 WHIRLPOOL PLACE Place is in regards to distribution, location and methods of getting the product to the customer. This includes the location of your business, shop front, distributors, logistics and the potential use of the internet to sell products directly to consumers. Place is concerned with various methods of transporting and storing goods, and then making them available for the customer. Getting the right product to the right place at the right time involves the distribution system. The choice of distribution method will depend on a variety of circumstances. It will be more convenient for some manufacturers to sell to wholesalers who then sell to retailers, while others will prefer to sell directly to retailers or customers. Whirlpool aims at globalization to obtain more market share in home appliance industry by expanding globally. In Asia, where considerable perceived profit is locate. Asia is a promising market with great potentiality, where the population is huge while the labour is cheap compared with Europe and North America. Whirlpool put more efforts on its major markets(Europe, north America) to ensure its market position and profit, meanwhile, the investment in new market to support the globalization strategy should be undertaken cautiously and strategically according to the economy and resource condition and related cultural issues. Asia, Europe, Latin America and North America are the most profitable market for where whirlpool is operating. Whirlpool India is also one of the largest exporters of home appliances from India. Godrej have three world class factories manufacturing a wide range of Refrigerators and washing machines. Their appliances are exported all over the globe from Australia & New Zealand in the East right up to Central America and the Caribbean islands in the west. Apart from world class factories, whirlpool has also set up its global Product Development Canters in the India where hundreds of engineers and technicians are working round the clock, developing product designs for the entire whirlpool world. Whirlpool has manufacturing facilities at three location in India to manufacture refrigerators and washing machines. Whirlpool has set up a Regional Technology Centre (RTC) at Ranjangaon, Pune, India, which mainly focuses on India as a major manufacturing centre for the Asia-Pacific Region. Whirlpools Pune research lab develops refrigerators and airconditioners for Asia (including China), and Australia. 40 per cent of Whirlpools Pune research labs resources are devoted to its core research on global projects. Whirlpool also has set up design centres at Pondicherry to meet the global business needs of the fabric care and small appliance divisions. Whirlpool is exporting refrigerators and washing machines to South Asia, Asia-Pacific, Latin America and West Asia and is the largest exporter of home appliances from India. The manufacturing unit at Pondicherry exports small kitchen appliances under the Kitchen Aid brand to the US market. Products under the brand include coffee making machines, coffee grinders and portable ovens.
13 | P a g e

Whirlpool India initiated the Six-Sigma program in 1999 as a quality initiative to transform the organisation to a globally competitive entity. The program has helped the organisation to streamline its operations, improve quality and eliminate defects there by increasing customer satisfaction and enhancing its bottom line. Apart from just sales and marketing, Whirlpool has extended the Six-sigma initiative to customer focus. The company divides the Indian market into 5 Zones, i.e. North, East, West, South and Central. The company has got 18 sales branch offices in India which have in turn got 1 CFA each. The co. markets its products through CFAs who further provide the goods to the Direct Dealers. The Direct Dealers can also source the products directly from the company. Another Alternative Channel is selling through Sub-Dealers who in turn source their products from either the Distributors or the Direct Dealers.

WHIRLPOOL DISTRIBUTION NETWORK

Manufacturing Units

Distributors

CFA 18 each for each sales branch

Sub-Dealers

Institutions

Direct Dealers

Consumers

60% of the sales at Whirlpool is done through Distributors while the rest 40% is undertaken by the direct dealers. Distributors are being preferred as they increase the companys reach into rural markets as well reduce the risk exposure of the company by providing credit worthiness in the shape of Distributors. Direct Dealers are also important as there are some stores where each of these companies has to be present so as to have a superior business
14 | P a g e

relationship with the customer. The distributor margin is around 3.25% while the dealer margin is around 1.25%.

CHAPTER 4: SWOT ANALYSIS OF WHIRLPOOL

STRENGTHS a.)Strong R&D backbone b.)Strong Brand Image c.)Increasing cash flow from operations d.)Growth in revenue from Latin America e.)Aggressive marketing campaigns

WEAKNESS a.)Low Margins b.)Declining Private label sales to Sears

WHIRLPOOL SWOT

OPPORTUNITY a.)Growing Asian markets b.)Growth in housing c.)Expansion of organized retail beyond metros d.)Overall low penetration levels in the country

THREATS a.)Influx of new multinational brands b.)High marketing & Infrastructure Investment by competitors c.)Inflation of material costs d.)Regulations on energy and Sustainability e.)Import risk due to currency fluctuations SWOT

STRENGTHS

15 | P a g e

 Whirlpool enjoys a strong brand equity around the world with considerable market share in consumer home appliances. Core competencies of Whirlpool are high innovation, operational excellence, customer support, after sales service and high product durability. Its washing machine and refrigerator have reputation in the global market due to the high compressor quality. Whirlpool has 70 manufacturing and research facilities across the world and it is manufacturer of IKEA brand. Whirlpool products have won best products award in several categories and also for best product design features. Whirlpool is a 100 year old company and it is in the fortune 500 list.

WEAKNESS Whirlpool washing machines had problem with mother board and it should be replaced often. Whirlpool has to reduce its appliances prices due to heavy competition from other players like Haier, Godrej, Samsung, etc. Big retailers like Future Bazaar, Reliance are trying to push the private labels with low costs Whirlpool lags in promotions, advertisements & product communications to its audience Whirlpool has its major presence only on refrigerators and washing machines

OPPORTUNITIES Whirlpool Green Kitchen will new opportunities in the market. Whirlpool has integrated its online shopping through mobile with its new wap enabled site. Whirlpools increasing assets can make the company invest in diversified product categories like LCD and music systems. . It can enter into emerging markets like Asia & Africa with low cost products through higher economies of scale.
16 | P a g e

 It can open its own company outlets to have more reach and technically qualified sales professionals. Whirlpool operates under various brands like Maytag, KitchenAid, Jenn-Air, Amana etc.

THREATS Whirlpool faces intense competition in the market as there many players in the market. The increasing costs of raw materials and fuel prices have affected the entire total supply chain. The global economic crisis have affected the global sales. The Waste Electrical and Electronic Equipment (WEEE) Directive of European Union (EU) has issued special norms for the companies to reduce, recycle & reuse the electronic wastes.

BIBLIOGRAPHY
REFERENCE

1. Francis Kanoi Dealer Database for Refrigerators 2004. 2. http://www.indiastat.com 3. http://www.whirlpool.com 4. Strategic Marketing-Farrell Heartline 2008 5. http://www.ndtv.com
17 | P a g e

6. Wikipedia 7. Marketing Management, Philip Kotler, 12th Edition

18 | P a g e