Electrolux Branding in Rural India

INTRODUCTION: Electrolux came into being in 1919. This makes it a hundred year old
company. It has been doing great business since decades. The company has its headquarters in
Stockholm. It operates in various parts of the world including India. It sells various consumer
electronic goods including refrigerators. The Swedish brand has made a place of its own in the
Indian market. Its refrigerators boast of innovative technology and appealing exteriors. Many of
its models have advance intense and intelligent cooling technology. The brand’s newest offering
is its triple door refrigerators. They come with temp drawer where you can select the food item’s
temperature.
PROBLEM STATEMENT: The main problem statement in the case highlights about the
positioning/penetrating of the brand Electrolux group and establishing an organized dealer
network to capture the rural market.
SWOT ANALYSIS OF RURAL MARKETS

Strength
• Distinctive competence
• Strong financial resources
• Cost of price leader
• Strong brand name
• Innovative skills
• Skilled human resources
• Loyal customers
• Superior technological know how
Weaknesses
• No clear direction
• Weak market-share
• Weak distribution network
• Weak market silage
• Poor marketing competency
• Lack of distinct competency
• Absolute plant and facilities
• Poor track record of strategic
implementation

O Opportunities
• Growth in new market
• New product development
• Quality improvement
• Expand product line
• Vertical integration
• Emerging customer needs
• Economic advantage
• Related product diversification
• Adverse demographic change
Threats
• Entry of low cost
• Competitors
• Slow market growth
• Substitute products
• Change in technology
• Adverse legislation
• Changing buyer’s needs
• Strong customer pressure
MAJOR FACTS: The major facts in the case study are:
1. Indian Refrigerator market industry valuation Rs.2750 crores
2. Annual Capacity at 4.15 million units instead of 1.5million units
3. Changing patterns of consumer buying behavior
4. Dealers playing an important role in the selling network
5. Urban selling has declined due to the constant demand of wanting updated features.
6. Local dealer network and distribution is low.
MINOR FACTS: The minor facts in the case are:
1. The cash and carry system no more exists in the modern day business
2. Exchanging system of the old product with the new product
3. The target customers of the product must be clearly identified in the rural market.
SUGGESTIONS/ RECOMMENDATIONS: The suggestions/recommendations for
this case are:
1. Product should be easy to reach and advertising should be done through posters,
postcards, wall paintings, Mike announcement, house to house campaign etc.
2. Built in stabilizers in the refrigerator due to inefficient power supply in the village area
and electricity fluctuation
3. Storage capacity should be enough to store vegetable and fruits
4. Cost of selling dealer must be low.
5. Cost of refrigerator should be low.
6. Small and Significant market for refrigerator.
7. Type of food should be considered as rural area prefers more natural products..
QUESTIONS:
1. Could the refrigerator market be segmented on geographical base planned
by Electrolux?
Ans: As given in the case study Electrolux strategy to capture the rural market it has
amalgamated with the three companies, Kelvinator, Voltas and Allwyn. Allwyn is popular in
South Indian market, while Kelvinator is famous in North India Market. Electrolux wants to cash
in on the popularity of the respective brands. It is not possible to segment according to North or
South Indian Market, once a company's name becomes a logo, then the reason for buying for
customers for other brand depends upon price, quality, usability and features of the product. The
storage pattern of foods in North India and South India is same. Same is the case of rest of India,
so it won’t be possible to segregate the market according to the geographical base. In my point of
view, the Electrolux company can segment the product not based on the geographical variable
but on the volume based (no:of users utilising the product) and benefit /feature based
segmentation (depends on the attributes/product features of the company) by coming up
with the change of the product name.
2. What would be the marketing mix for rural market?
Ans: The ideal marketing mix for rural markets by Electrolux could be in the following manner:
First P: Product: Following things can be focused to better the product:
1. Sturdiness of the product should be considered (high durability and heavier size)
2. Designing of the product should be considered( More space should be provided, built
in stabilizers to avoid power fluctuations)
3. Utilization of the product should be considered( Natural food rather than derived
food)
4. Brand image of the product should be considered
Second P: Price: Following strategies can be focused which make the product better in the
market:
1. Discounts should be taken into consideration
2. No-frills of products should be taken into consideration (no- defective /deceptive)
3. Implementation of promotional schemes (targeting the festive season , seasonal
variations)
4. Value engineering also can be considered by giving the product at reasonable lower
price which enhances the value of the customer.
Third P: Place: Following strategies can be focused to make the product reach the consumer:
1. Satellite Distribution Method could be used by keeping the stockiest at the important
locations and can distribute the product to the consumer.
2. Hub and spokes method could be used by appointing, identifying and maintaining the
main dealers at respective important locations and can make the product to reach the
customer. (Used by coca-cola in the rural market)
 3. Syndicate distribution method could be the ideal method by tying up with another
company for making the product to reach the consumer.
Fourth P: Promote: Following strategies can be focused to make the consumer to
know/aware about the product:
• Local Language Newspapers and Magazines
• Television
• Radio
• Film
• Farm-to-Farm/House-to-House
• Audio Visual Publicity Vans
• Product Demonstration
• Jeep Campaign
3. Would 125L and 150 L be an ideal choice to launch in the rural market?
Ans: In my point of view, this would be the ideal time for the company to launch the product
because of the following aspects:
• The chances of selling of 125 l and 150 l refrigerators are high because the prices of the
refrigerators would be less. This would be a major factor.
• The second aspect would be they don’t have many items to store.
• They would prefer a small refrigerator, also the space in their homes are not very big
wherein a small refrigerator would serve their needs.
• This is one of its kinds in the segment with other players but with its features
differentiates and it has the chances of standing tall.
• Product differentiation strategy is what the theme of the product which helps to reach the
customer.

CONCLUSION: In today’s marketing world , any firm to be successful their focus must be
on customer centric, quality centric and satisfaction centric oriented ways to reach the customers
with matching their tastes and preferences. In today’s scenario, the marketing firms always need
to update and automate themselves to create a competitive edge in the business world.