LAHORE

SCHOOL OF
ECONOMIC
S

MBA for Professionals II Section A

Branding & Promotion Management

Project (Report 2)

Submitted by:
Ahmed Shoaib Zaidi
15E00023
Brand Name: Grundig

Introduction
Grundig is a German company which was established in 1945 and
accomplished its fame with state of the art radios, televisions, electronics
and home appliances. The company expanded itself to the manufacturing
of large electrical goods used domestically such as refrigerators and
washing machines because of which it became Europe’s only electronic
company with full range of products in 2013. Today the company’s head
office is located in Nuremberg and has a workforce of more than 140
employees. The company has its presence in 65 countries throughout the
world with almost 1600 employees. Grundig was at its peak in 1979 as it
had 30 factories around the world and 38,000 workers but now the
employees are just a tenth of that number. Grundig became the victim of
falling German economy after Second World War as well as cheap Asian
rivals. In Pakistan Grundig radios were first introduced by Syed Bhai’s
group in 1953. Syed Bhai’s group was initially a trading company and had
the distribution of domestic appliances from Westinghouse, Grundig USA.
The import and sale of Grundig radios was done by Syed Bhai’s group in
Pakistan. The company imported tube type Grundig radios and captured
Pakistani market as it was the only source of entertainment and
information available at that time. But after the invention of transistors the
company started importing transistor based radios from japan as these
radios were cheap as compared to the European products and had better
reception as well sound quality compared to the competitors. Sayed Bhai’s
group office is located at Ferozepur road and is now famous for the KWH
meters that are used by Wapda for energy metering of houses and
commercial buildings. Grundig now manufacture home appliances like
refrigerators, washing machines, dishwashers, cooking range and
integrated. And also design kitchen styles by the name of k!tchn by
Grundig.
History
Grundig is one of the globally leading providers of electronic products
with its specialty at the areas of entertainment, electronics, small electrical
appliances and major home appliances with a history of more than 70
years. The company started its business in 1945 and gained an early fame
through its high-quality radios. In 1946 after the Second World War
Germany was in ruins and economy was falling apart but Max Grundig
introduced a radio Heinzelmann without tubes that were not a radio
officially. In 1947 after the success of Heinzelmann a new production site
was established. In 1948 the economy was stabilizing and there was a
greater demand for radios so the company introduced Weltklang a
complete radio with four tubes and six circuits to ensure greater reception
quality. In 1949 150,000th radio was produced and the company was
growing as an office building and 3 story production plant was established.
A portable radio was introduced into the market which became popular
within a year by the name of Grundig boy. By mid-50’s Grundig was the
largest manufacturer of radios in Europe with factories in Nuremberg,
Frankfurt and Karlsruhe. In 1952 the first European television developed
for the German television channel was introduced together with the first
tape portable tape recorder. The television available in the market at that
time were much expensive but due to Grundig television receiver 210 the
Grundig television was affordable. In 1960’s the company introduced color
television and also the music players for cars. In the 70’s the company
started to show some economic problems but Grundig GmbH became a
shareholding company, Grundig AG. From this time the Philips electronics
company began to gradually accumulate shares in Grundig. Company faced
big competition in Asian continent as cheap rivals were introduced with
better technologies. They were comparable in quality of Grundig products
but were cheap enough for the consumers to buy them.

Syed Bhai’s group which was initially a trading company was

responsible for the import and sales of Grundig radios in 1953. But after
1960’s when Syed Bhai’s group started their own manufacturing of KWH
meters the focus on brands imported from Europe was becoming low. It
was also because after cheap rivals like Sony and Samsung introduced their
products into the Pakistani market the demand for high prices European
products fell down.
Brands Golden Era
Grundig established its facilities in the Nuremberg in the 1970s.
Started by opening a manufacturing unit that produces color tele vision and
a factory was setup for the production of plastic. Then in 1973, the Central
Customer Service Department was opened in "Goodingg City" in the
Nuremberg Sales Office of Langwas district. Nuremberg. A new video
recorder factory started production in 1978. On 1 April 1972, Grundig-
Werke GmbH was converted into a public company - Grundig
Aktiengesellschaft. Grundig was able to secure two major order from their
corporate clients that year. In 1972, Grundig supplied 9000 color television
and monochrome for international displays in Munich. Almost 150
operating centers with television information system were setup at
Deutsche Luttenans. Another Hi-Fi super color television sets were
introduced and it was the first German television that was portable. It was
also one of the most successful products of Grundig.

Two major orders have been received from Grundig corporate clients
in the following years. In 1972, as a government supplier for the Olympic
Games in Munich, Grundig set up 9,000 monochrome and color television
for informational displays. In 1974, Gunde equipped 140 operating centers
of Deutsche Luttenans with the television information system. In the
consumer electronics market, the introduction of the new product, the Hi-
Fi system, "super-color" television sets, with the introduction of fully
transmitted Chassis, the first German portable color television (which was
among the most successful products) For the first time, Kate Deck is
included. The first Grundig Car Radio with the first step players, and the
first German-color television projector, with the first-minute display of the
cast recorders.
Sales for the first time in the financial year 1974-75 passed 2 billion
marks, and in 1981-79 the Grand products sold more than 2.7 billion dams.
According to Grundig, in 1979 "an equity link was established with Dutch
Philips Group. This was the golden era for Grundig radios.

Brand Recall and still remembered brand image?

Person who used the brand: Mr. Zeeshan Siddiqui
Contact No: 0304-5595161
Details:
Grundig was a famous brand in 1960’s for its tube type radios.
Electronics was the field of interest for Mr. Zeeshan because of which he
completed his diploma in electronics and used to work on the trouble
shooting of these radios. According to him Grundig radios were a tube type
radio in which the cathode and anode tubes were the basic element to
produce electrons. And because of this effect the starting time was almost
45 secs. The broad casting was short and there was only a single channel
named as radio Pakistan. On this Radio channel Actor Rangila used to do a
show. Before the invention of television, radio was considered to be the
only entertainment. People used to sit together in a group of 10 to 15 people
to listen to the transmission and it was followed in both rural and urban
areas.
Apparently the radio had two knobs, one for the volume control and
the other one for tuning the radio frequency. A single speaker, antenna and
two knob were placed in a wooden box known as radio. The radio works on
a normal domestic voltage before the invention of transistor based radios
and were available for sale at Hall road Lahore.

Interviews from users, owners and others, (Interviewees details

and contact)
Interviewee: Mr. Moiz Ahmed Khan
Designation: Director Sales & Marketing Syed Bhai’s group
Contact No: +92 -42 - 3759 8193
Location: 200, Ichra, Ferozepur Rd, Lahore 54000, Pakistan
Mr. Moiz Ahmed Khan is the director sales and marketing in Syed
Bhai’s group. His responsibilities include marketing, sales (domestic &
international), and business development and customer relations in the
metering division. He was very cooperative and wanted to help as much as
he can for providing information about Grundig radios. According to him
these radios were sold throughout Pakistan by Syed Bhai’s group in 1950’s
and the company was responsible for importing the product in Pakistan. At
that time Syed Bhai’s group was a trading company and was selling two to
three brands of domestic appliances. To keep abreast with the technology
the company started importing transistor based radios from japan which
were much cheaper as compared to the European product. But as we are
talking about the things that were 30 to 40 years back and the directors that
worked at that time are no longer associated with us so it becomes very
difficult to give every detail related to Grundig radio.

Failure causes
“Grundig prided itself on its German craftsmanship and the quality of its
televisions, but it was quality that came at a price”. After 1980 new players
came into the electronic market and the completion became fiercer as
people became more and more reluctant to pay over the extra features in a
TV set. Grundig maintained its high prices and failed to keep pace with
fickle consumers. After years of losses and a breakdown in rescue talk with
the investor’s the company files bankruptcy.
Cheap rivals
After the 2nd World War Max Grundig setup a radio repair and testing
business but the business grew and the company started manufacturing
radios including the first portable radio in 1949 named Grundig Boy. At
that time Company expanded itself to become the biggest radio
manufacturer in Europe. The company was also the supplier of first TV sets
to German consumers and one of the first company to build color
television. At that time Grundig grew itself to become the Germany’s best
known company. At its peak the company had 30 factories around the
world and 38000 employees were working with Grundig. But after it fell
victim to rivals like Sony and Samsung the strength of the employees was
cut to one tenth. In the beginning Sony and Samsung provided low quality
and cheap products but Grundig on the other hand was selling high quality
with high price. Gradually the quality of Sony and Samsung was improved
and the prices were almost the same. This good quality with cheap prices
caused the consumers to shift themselves towards the competitors of
Grundig. And as a result Grundig lost major share of market.
Cordless phones
Grundig after 1980’s started losing the market share because of the cheap
rivals and had to cut thousands of jobs because the company was making a
loss. After negotiating with different companies in 1984 Dutch electronics
firm Philips took the control of the company’s business. But Philips was
unsuccessful in turning the tables for the company and left the company in
control of banks. In 2000 Anton Kathrein bought companies major share
but no other investors were ready to invest in the company. Grundig
continued its manufacturing of radios and televisions but it also tried to
move into new areas such as investing a large amount of money on cordless
phones. Another loss added to already fragile economic condition of the
company.
Breaking-up
The losses had reached 150m euros in 2001 and were increasing day by day.
Experts suggested that company should find a niche for itself in the
electronics market but should do it quickly. Grundig was considered as a
middle price brand and according to Jochen Wiesinger a spokesman for
industry association “People either cheap Goods or top range TV sets and
Radios. In the current economic climate the trend is for people to be more
concerned about price than they are about brand.
Grundig radios were first introduced in Pakistan by Syed Bhai’s group
which was initially a trading company located at Ferozepur road. But after
the decline in demand of expensive radios and arrival of the cheap and
transistor based products into the market Syed Bhai’s group started
manufacturing KWH meters and the focus on import of European products
was getting low due to less demand. And the companies focus was shifted to
the import of transistor based radios form japan.
Old advertisements

http://nativepakistan.com/wp-content/uploads/2015/09/Old-
Newspapers-Ads-Pakistan-Grundig-Radio-Ad-by-Syed-Bhais-Ltd-1960-
Vintage-Pakistan-Newspapers-Ads.jpg
https://www.google.com.pk/url?
sa=i&rct=j&q=&esrc=s&source=imgres&cd=&cad=rja&uact=8&ved=0ahU
KEwi067yEkLPWAhVJsY8KHZA_Dd0QjRwIBw&url=http%3A%2F
%2Fwww.brandsynario.com%2Fa-collection-of-vintage-pakistani-print-ads
%2F&psig=AFQjCNHPsJ2Ghf-Dy_vrjb3kgXCQNNxo-
g&ust=1505974956694164

Product packaging snaps

http://www.radiocorner.de/candies/satellit3/500/images/200903202017
37_img_6252_1.jpg

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Bibliography

1. http://www.referenceforbusiness.com/history2/79/Grundig-AG.html

2. http://news.bbc.co.uk/2/hi/business/2945815.stm

3. http://news.bbc.co.uk/2/hi/business/2949617.stm

4. https://southafrica.grundig.com/company/grundig-history/
5. https://www.thetimes.co.uk/article/grundig-failure-adds-to-german-
decline-l89bf2mx6pm

6. http://www.independent.co.uk/news/business/news/a-victim-of-
germanys-economic-ills-grundig-radios-the-receivers-115180.html

7. https://www.theguardian.com/business/2003/apr/15/germany.inter
nationalnews1

8. http://www.grundig.co.uk/about-grundig/history

9. http://www.grundig.co.uk/about-grundig