Durables marketers dump technology, talk consumer needs
Arvind Uppal spoke with ET on host of issues facing the consumer durables industry and how he plans to make Whirlpool a household brand of choice.
By Bhanu Pande & Shailesh Dobhal, TNN |
NEW DELHI: A serious employee churn greeted Arvind Uppal when he took over as the managing director of Rs 1,376-crore Whirlpool of India. Not to be deterred, this former Nestle honcho carried the long standing tradition of FMCG marketer, and lead the charge in Whirlpool with impressive results.
Two years down the line, he can take heart at the fact that Whirlpool is back in the reckoning. Under his leadership, it recorded a jump of 19% in gross sales last year on the back of series of launches.
Having attained leadership in the direct cool segment in refrigerators, Whirlpool is now aiming to dominate the frost-free segment with the launch of Mastermind frost-free refrigerator. Uppal spoke with ET on host of issues facing the consumer durables industry and how he plans to make Whirlpool a household brand of choice.
How has consumer durables industry evolved over the years and what are the key drivers today?
Consumer durables and home appliances industry rode a wave of hype in the mid-1990s as consumerism caught on. Over the years, there was nothing revolutionary happening in consumer durables industry. It’s been more of an evolution than revolution.
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There was a shift in the sense the industry became all about comfort without any radical technology changes. It no longer remains a fashion statement it used to be. Today, the industry players are simply keeping pace with the consumer needs. And technology is leading the charge elsewhere. What are the challenges facing consumer durables marketers?
We have to strike a balance between market growth and hype. Today, consumer gets back to a brand on the basis of how well his practical needs are being met, so a brand marketer has to understand his consumer well. It’s all about picking up insights and creating products around them. Evolution in India is important since it is an emerging market. The industry will have to differentiate between and hype because after a point it’s got to do with affordability.
The market is clearly dominated by Koreans. Where does that leave Whirlpool?
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We would not let rivals to dictate to our brand strategy. A lot of players have followed a manufacturing driven strategy in the past. Rapid leadership doesn’t guarantee sustainability in a fast changing market. So those who have invested heavily to take that position, are now uncomfortable today. After all, it is not a manufacturing-led strategy that drives demand, but consumer-driven strategy. Though we see ourselves as mass marketers catering to all segments, we are not in the business of telling consumer what to buy. We will be consumer-driven though for tactical reasons, we’ll do whatever it takes to compete with the rivals. The name of the game in durables marketing is no longer technology, but consumer needs.
With product parity a reality in consumer durables, what could be possible options for differentiation and how does Whirlpool address that issue?
Whirlpool drives differentiation by better focus on consumer insight based innovation and very high focus on quality and performance parameters. We have always believed that understanding our customer, who is a modern home-maker, and innovating our products to cater to her unmet needs and desires will result in leadership.
Our enhanced product portfolio across categories, innovative marketing coupled with faster response to the market will be the key drivers in attaining our targeted market share. We expect Whirlpool to notch up a 27% market share in the refrigerator category, 20% in the washing machine category and 10% in the air conditioner category in the country this year.
With the organised retail fast evolving and specialised retail formats gaining currency, what impact will it have on consumer durables market?
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At an absolute level, the emergence of organised retail may not be good news for manufacturing industry as the balance of power will shift to the retailers. Nevertheless, specialist retail format will always have a better fit for consumer durables. However, we do not see the current distribution model changing drastically overnight, largely because of the wide distribution and geographies. We already have in place a separate team that deals with the modern retail channel.
Whirlpool has always communicated upfront, with the housewives and not with chief wage earner. Now with men in households increasingly playing a dual role, does the company need to tinker with their communication strategy?
We have in fact, made no shift in our marketing communication as we have always focussed on the homemaker and we continue to re-emphasise our focus. While in the Indian context the term 'homemaker' is largely associated with the female, we speak to the homemaker (independent of gender) and address the need of the homemaker.
Consumer durables still don’t find a focused place in the scheme of finance companies. Has this proved to be drag on the growth of the industry?
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It is true that personal finance hasn’t worked in a big way for consumer durables industry. This is because finance companies were making enough money elsewhere hence duarbles industry didn’t hold any interest for them, but we see them coming back.
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