The Hindu Business Line : In from the cold?

Kajol dominates the conference hall, beaming down from all the posters put up there. Whirlpool has just launched a range of products to "make life more easier for the Indian homemaker" - there are refrigerators with a handy unrefrigerated section for onions and potatoes, washing machines in colours other than white and blue, but more importantly, with a hot wash function even in its top-loading models. And it's features like these that the company is betting on to garner brand equity with consumers, for it's their stated requirements that are getting translated into innovation, which the company prides itself on.

"Innovation is at the core of what we did in the last 9-12 months," says Arvind Uppal, the company's Managing Director, emphasising that the company is a specialised home appliances company and not a consumer electronics company that puts computers on a washing machine. Announcing that it's on a `blitzkrieg growth path' after a rough patch which saw it losing market share and making losses, Whirlpool has also geared up for a Rs 44-crore multimedia ad campaign that includes actor couple Kajol and Ajay Devgan to lend it some star appeal. Shantanu Das Gupta, the company's Vice-President (Marketing), says on-ground marketing activity was also innovative, involving partnerships with leading publications to involve consumers and heighten local connect.

Despite the Rs 46-crore loss it made the previous fiscal, it gained market share in the refrigerator and washing machines segment and grew more than those categories did (at 6 per cent and 8 per cent respectively), says Uppal. This was the only company to gain market share both in the frost-free (at 20 per cent) and direct-cool (at 24.5 per cent) segments of refrigerators, he says, and intends to notch up a market share of 26 per cent in 2006. For washing machines, its target is 16 per cent (from around 14 per cent) and in microwave ovens, it plans to get a double-digit market share of 10 per cent. For April 2005-March 2006, it made a profit before interest, depreciation and tax of Rs 14.57 crore on turnover of Rs 1,274 crore.

With a new tagline, `Your Magic in Homemaking,' Whirlpool has lined up an array of new models and "innovative" marketing activities that it hopes will constitute a faster response to market demands. In refrigerators, it has launched the Fusion Frost Control range, a via media between a direct cool and a frost-free model in price and technology. It has also launched a new range of washing machines, WhiteMagic Splash, and the premium JetChef microwave oven.

Arvind Uppal, Managing Director, Whirlpool of India

Says Uppal of the renewed thrust that the company has been undertaking in the last one year: "Our consumers were unable to see the quality that goes inside the product; there was a little frustration on our part. We had to find a different way to counter others' strategy - we decided to focus on features that the Indian homemaker values." Whirlpool had earlier blamed the lack of transparent pricing and cut-throat competition in the home appliances market for Whirlpool of India's current problems. In an interview to Business Line last August, Uppal said the company could not compete with rivals who triggered a price war as it did not compromise on quality by using cheaper components.

Observers are disinclined to accept this explanation. Says Francis Xavier, Managing Director of the Chennai-based market research firm Francis Kanoi, "Whirlpool tends to blame the Koreans for its woes, without acknowledging the host of mistakes it made in responding to the threat from the Koreans." He explains that when LG and Samsung went on the offensive, Whirlpool abandoned the values that had helped it become a leader and tried to fight on the pricing front. In the process, it fared poorly on product quality, product development and brand building efforts. "The entire appliances business is cut-throat and profits are hard to come by for everyone," says Xavier.

LG leads the refrigerator market overall with a value market share of nearly 30 per cent for April 2005-March 2006, and Samsung comes third at 15.3 per cent, following Whirlpool. In washing machines, however, LG and Samsung are in the first and second slots, at 33 per cent and 16 per cent respectively. In microwave ovens, LG, Samsung and Kenstar are the top three players (39 per cent, 23 per cent and 8 per cent).

Is Whirlpool losing out because it charges a premium? "It's a marginal premium, not as big as people think it is," says Uppal, adding that "the brand is far ahead of the game and is always the first to come out with new features." "The brand is very much in consumers' consideration set," says Das Gupta.

Throughout the press conference and the chat with BrandLine, there's the constant mention of features - the light in the refrigerator which is not tucked away at the rear but at the top, so that it can beam down and illuminate the entire compartment, a cubicle for cosmetics so that lipsticks don't melt, a lemon-and-coriander box, a chocobin, water-saving features in the washing machine, the microwave oven's adaptability to Indian cooking - "they are not products designed by men," says Uppal.

Whirlpool also says it is going to launch more products this year but refuses to divulge more details. Its international portfolio includes dishwashers and kitchen ranges, dryers, air purifiers and water treatment systems. It introduced air-conditioners last year but the focus is on its refrigerators, washing machines and microwave ovens. Borrowing from its practice abroad, the company has also opened a couple of experience centres in Delhi in the past year. Consumers can actually walk in with a load of clothes to test the washing machine, for instance. The company plans to open more in other cities by and by. The company aims to sell 1.5 million units across the three categories in 2006. There's already been an acceleration in sales in January-March 2006, they say. Cost-cutting and expanding distribution is an ongoing effort - the brand is now distributed across 7,500 outlets in over 150 cities and towns.

Says B. A. Srinivasa, Director of Chennai-based retail store Vivek's, "It is an innovating brand but aspirations are different from affordability, and in India, everything boils down to price. In refrigerators, if the cooling is fine, customers compromise on everything else. Whirlpool's positioning has always been `elite', maybe it should think of tackling the lower-middle class market with a sub-brand."

Says Francis Kanoi's Xavier, "It would appear that after almost three years of turmoil, Whirlpool is finally getting to do what it should have done earlier. It is a strong brand and likely to recover at least some of the lost ground. But it will be a tough and long haul."

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