INTERNATIONAL BUSINESS

ASSIGNMENT-2

Submitted by: S.Mahendran (07mba059) II MBA – A

About Whirlpool India : Whirlpool, right from its inception in 1911 as first commercial manufacturer of motorized washers to the current market position of being world's number one manufacturer and marketer of major home appliances, has always set industry milestones and benchmarks. The parent company is headquartered at

Benton Harbor, Michigan, USA with a global presence in over 170 countries and manufacturing operation in 13 countries with 11 major brand names such as Whirlpool, KitchenAid, Roper, Estate, Bauknecht, Laden and Ignis. The company boasts of resources and capabilities beyond achievable feat of any other in the industry. Whirlpool initiated its international expansion in 1958 by entering Brazil. However, it emerged as truly global leader in the1980's. This encouraging trend brought the company to India in the late 1980s. It forayed into the market under a joint venture with TVS group and established the first Whirlpool manufacturing facility in Pondicherry. Soon Whirlpool acquired Kelvinator India Limited in 1995 and marked an entry into Indian refrigerator market as well. The same year also saw acquisition of major share in TVS joint venture and later in 1996, Kelvinator and TVS acquisitions were merged to create Indian home appliance leader of the future, Whirlpool India. This expanded the company's portfolio in the Indian subcontinent to washing machines, refrigerator, microwave ovens and air conditioners. Today, Whirlpool is the most recognized brand in home appliances in India and holds a market share of over 25%. The company owns three state-of-theart manufacturing facilities at Faridabad, Pondicherry and Pune. Each of these manufacturing set-ups features an infrastructure that is witness of Whirlpool's commitment to consumer interests and advanced technology. Present: Whirlpool, the pioneer in washing machine technology brings to you :

Unique 6th Sense™ technology the next generation in fuzzy logic for Optimum water, detergent and temparature levels based on wash load Stainwash : Brings together unique properties of Hotwash and 1-2 , 1-2 hand wash to completely remove all common household stains

• Complete range from Semi-Automatic to Fully Automatic front loading machines to suit the needs of the discerning homemaker 1. What product strategy would WOI adopt? And why Globalstandardisation? Local Customisation? Product strategy: WOI adopted Local customization strategy for the better reach of their products to Indian households. Local Customisation: Whirlpool studied the Indian market intensely, through quantitative and qualitative market research tools, with the help of IMRB and MBL India. The research team delved deep into the psyche of the Indian housewife, her habit, her attitude towards life, her schedule her every day concern and most importantly, her innate laundry wisdom. It was found that housewife wanted to gain direct control crucial household operations. It was found that clothes washing was a daily activity for the women , whether it was done personally by a maid or by a machine. That was a breakthrough insight used by Whirlpool for the design of all the washing machines, which adopted a “1-2, 1-2” Hand Wash Agitator system to mimic the preferred hand wash technique. The target customer defined psychographically as the turning modernist was decided upon only after the initial MR exercise was concluded. This was only the stage at which the Unique selling proposition Whitest White was thrashed out. Reasons for Local Customization: • To reach the needs of the customers • As the Indian households feel a pride in self-done washing, they tried to satisfy them with their product

• The various quality and quantity issues are dealt with and solved with new technology 2. What pricing strategy would WOI follow? What according to you could have been the appropriate strategy? Importance of Pricing: – knowing the market – elasticity – keeping an eye on rivals

Pricing Strategy: Whirlpool has implemented a customer-centric strategy that focuses on making sure our products are appropriate for the Indian consumer. Different versions of the product are priced differently, but not according to differences in their costs. Whirlpool’s bigger success has been in the fully automatic segment (Rs. 12,000- 36,000). This is smaller with sales of 177,600 units in 2000 compared to 1.2 million units sold by Videocon (in the 7,000- 12,000 price range) 3. What lessons can other white goods manufacturers learn from WOI? WHOLPOOL INDIA LIMITED Background: WHIRLPOOL INDIA Limited (WIL) is an 82.3 per cent subsidiary of Whirlpool Corporation,US, one of the leading global consumer durable Player. Whirlpool is among India’s leading home appliances companies. It manufactures and markets refrigerators, washing machines, air- conditioners and microwave ovens. Set up in 1995,Whirlpool India has 2,500 employees, network of 2,500

strong, an extensive sales and distribution network, a robust manufacturing and R&D infrastructure.WIL has made substantial investments in India so far. Major player in the home appliances market Market share WIL has a market share of 22.8 per cent in the direct cool segment, 17.5 per cent in the frost-free segment, and 14 per cent in the washer segment. Factors for success Aggressive marketing and promotion initiatives: 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 Heatkraft 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 Whirlpool Corporation is one of the world’s leading manufacturers and marketer of major home appliances, with annual sales of over US$ 12.3 billion, 68,000 employees, 50 manufacturing and technology research centres around the globe. The company manufactures its products in 13 countries and markets them in more than 170 countries under brand names such as Whirlpool, Kitchen Aid, Roper, Estate, Bauknecht, Ignis, Laden, Inglis, Brastemp and Consul. Faber through WIL’s dealer network and exclusive outlets. Taking quality initiatives: Whirlpool India initiated the Six-Sigma program in 1999 as a quality initiative to transform the organization to a globally competitive entity. The program has helped the organization to streamline its operations, improve quality and eliminate defects thereby increasing customer satisfaction and enhancing its bottom line. Apart from just sales and marketing, Whirlpool has extended the Sixsigma initiative to customer focus. Wide product portfolio:

Whirlpool has a wide product portfolio ranging from air-conditioners to microwaves. Whirlpool has just launched White magic semi-automatic washing machines, which will boost its market share. The washing machines market has been growing at around 14-16 per cent per annum. Among the washing machines, the semi-automatic segment enjoys the largest market where Whirlpool has significant presence. Leveraging the India Advantage: WIL is leveraging India in the following four areas: • WIL is incubating both technical and managerial talent in India • WIL offers shared services in India that will undertake development work for Whirlpool in Asia • WIL runs a technical centre for refrigeration in Pune, and for laundry and kitchen aid appliances at Pondicherry • WIL runs an Export Oriented Unit (EOU) in Pondicherry to manufacture Kitchen Aid products for overseas. Markets Infrastructure: Whirlpool has manufacturing facilities at three locations 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. Whirlpool’s Pune research lab develops refrigerators and air-conditioners for Asia (including China), and Australia. 40 per cent of Whirlpool’s Pune research lab’s 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. Future plans: WIL’s future plans are to grow its existing market, continue with its operational and marketing initiatives, and continue to innovate, expand its product portfolio and to start manufacturing everything in India. WIL plans to make India its biggest manufacturing base in Asia.

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