Whirlpool Prez: We have a consolidated brand portfolio

Having seen off the tough times in India, consumer durable major Whirlpool is on a comeback trail. Michael Todman, president Whirlpool International, who oversees the non-US business of the $18-billion company straddling Europe, Latin America and Asia, talk about the global appliance industry and Whirlpool’s strategy. Excerpts:

Whirlpool operates through a number of brands globally, some of them even in the same product category. Given that multi-branding adds to costs, does it make sense to have a broad brand portfolio?

I feel we already have a consolidated brand portfolio. In Europe, we basically have two brands in addition to some heritage brands. In India it’s only one brand — Whirlpool. Even in other markets where we have more than one brand they are catering to particular segments and there is a clear strategy. What’s important is that the different brands should be serving their purpose for the product categories they are engaged into.

At times we need to evaluate whether a particular brand can be stretched from one end of the market to the other end. In a particular market at different points of time views change and, yes, we have considered a second brand in India in the past but have continued with a single-brand strategy. Today, we think our global brand Whirlpool is doing pretty good across product categories and consumer segments. The Whirlpool brand can easily be expanded into other products. But what we need to consider, and our Indian team would decide on it, is whether it is time to look for more brands within a product category.

It is believed that Whirlpool acquired US appliance maker Maytag largely to prevent it to from being snapped by China’s Haier...

We wouldn’t have paid $2.7 billion just for that. After all, we are answerable to our shareholders. Maytag brand has a rich history in the US. The main reason why we acquired Maytag was because it brought us very strong US brands in particular categories. In fact, in some of the categories we may not have been able to reach the consumer to the same extent through our own brands, which we can now do with the portfolio of brands under Maytag.

Two years ago the global CEO of Whirlpool speaking to ET described the Indian appliance market as ‘crowded’. Today there are 4-5 additional brands competing...

The most important way to tackle this is to look at brand relevance. As long as your brand is able to ensure that, the consumer would understand the difference between your product and others. If we can do that we can grow faster than the market.

Some electronics brands have stretched themselves to enter appliance business in India. But Whirlpool is only into appliances. Does it count as an inherent disadvantage?

I would rather see that as an advantage. We can specialise on a particular product category and give more value to the consumer by focusing on the business. Ultimately it is the consumer who matters and if your product and brand strategy is right than they would understand.

Even after its global expansion, Whirlpool is over-depended on the US market. Like AB Electrolux, Whirlpool has been facing tough times in India and China, the two most populous and fast growing economies....

A part of the reason for the US still being a significant revenue contributor to our global sales is Maytag. When we acquired the company it added to our total US business and so skewed the total, as it is primarily a US brand. In addition, it is to be kept in mind that in the US we operate in many other product categories which we don’t in other markets, including India. This also tends to generate more revenues from the US market. Having said that, the other regions are growing faster and so our international business would be stronger going forward.

The relatively smaller business of India and China has a lot to do with the market growth over time. We entered more than a decade ago in both the markets and we expected a particular growth in these regions, which didn’t exactly happen but now we are focusing on both the opportunities. There have been few setbacks in these two markets and we have made some changes to correct them. Today our strategy is working and we have already regained the top position in direct cool refrigerators in India and we would continue to gain market shares in other product categories. In fact, in India we are already making profits on an operating basis. Today, even though India contributes a small part of the global turnover, it is one of our key markets and we are investing in our operations here.

Durable purchases are said to be a good indicator of the economy. How would you view the current economic scenario around the world going by the outlook for appliance sales?

If we look at the US market there is some demand slowdown as the economy has been seeing some kind of a downturn. However, going forward we see that changing. There are some signs of improvement and we think by the second half we would see some of it picking up. But when we see outside of the US, it’s really growing very fast, Latin America and Brazil in particular.


In Latin America we are seeing 15-20% growth. Similarly in India and China we are seeing double digit growth and the economies are looking very robust. Europe is showing growth of 2-3% which is much lower than the emerging markets but is encouraging. So overall it seems to be a good picture.