Godrej Chotukool – Group 2

1. Is Chotukool an innovation? Briefly argue

There are several reasons Chotukool doesn’t fall into the category of innovation, the
reasons are as follows:

 The main intent of introducing Chotukool is for the rural markets. In rural areas
groceries are purchased everyday and no bulk purchases are made.
 It is evident from their lifestyle that there is no need of an product that cater to their
needs. Space constraints, immediate consumption, earthen pot to cool water,
budget are important area points to consider that are very much into their life/living.
 Market feedback was that it was still not affordable to many rural residents.
 Pricing of Chotukool was just 50 percent of the lowest cost refrigerator, unlike other
classic disruptive innovations.
 Prospective low-cost versions in the category of traditional refrigerator, posed the
threat of potential substitutes.

2. Does Chotukool make a business case for Godrej

Yes, it does make a business case as Godrej started with from the start instead of modifying
their existing cooling systems. Also, it challenges the everyday living convenience of people
living in rural areas. As they purchase every day, no bulk purchases, budget constraints etc.

 The success factors that can bring a success to Godrej is by making the product
affordable. Why? As it is considered an aspirational product.
 Make the product suitable to small time kirana stores as it is them the rural people
are dependent on for their needs.
 Evolving to community-based segmentation.
 Main threats and challenges would be, the affordability factor.
Threat of potential substitution. Changing demands, contradictory performance,
requirements , differing environmental conditions at the end user.

3.Discuss critical success factors for Chotukool to succeed

Following are the important factors for the success of Chotukool

 As the product was developed keeping BOP customer in mind pricing had to be very
critical launching two models at Rs. 3000 and Rs. 3500 which was at 50%of the cost
of the existing lowest priced refrigerator.
 A BOP customer’s house is generally small and space is of essence. Designing a
refrigerator that hold such small area is a crucial factor for success.
 As mentioned in case being Portable and light not helps the distribution setup but it
also address the need of cooler for small and confectionery retailers.
  As it runs on battery it can be operated in areas where there is irregular power
supply and voltage fluctuations most of the BOP customers are setup in these
conditions

4. What could be key threats and/or challenges for Godrej Chotukool?

Marketing to BOP is not an easy task. It poses several challenges as mentioned below.

 Chotukool project faces the challenge of very thinly spread market, as mentioned in
the case India has close to 6.5 lac villages and designing efficient distribution
network to these widely spread areas is a challenge.
 low earning power of the consumers creates a challenge for product development
without compromising on effectiveness and serviceability this challenge becomes
further hard when BOP customers is targeted.
 limited awareness of users, as the target group is very widely spread creating
awareness among the consumers becomes a challenge.
 vast cultural diversity, refrigerator is used to store food and vegetables and India
being a very diversified county and change in culture and culinary practices adds to
it.

5. Discuss a business plan for Chotukool

Value proposition: Lowest priced refrigerator that occupies less space and is portable &
light, it consumes less electricity and thus reducing monthly expenses.

As we have discussed above Chotukool faces multiple problems. Many of these problems
can be solved through strategic collaborations.

 Help of SHG and NGO: Chotukool is a product that is developed for BOP customers.
The geographical spread of BOP customers makes distribution challenging. Similar to
HUL’s “project shakti” developing a self-sustained distribution channel in association
with SHGs an NGOs in very vital for success of Chotukool.

 Developing trust factor: This is an extension of aforementioned suggestion for

association with SHGs and NGOs. The BOP customers associate trust with locally well
known NGOs and SHGs therefore associating with these local entities is very vital in
gaining trust for the brand.

 Target Urban market: Penetration of refrigerators in urban market is less than 20%
which means that urban market also has immense potential for low priced
refrigerators. This market comes with an added advantage of well established
distribution network and credit services.

 Tie-up with ecommerce: Though e commerce was at its nascent stages during the
given time period nevertheless it can be an efficient distribution network for urban
customers.