The Hindu Business Line : Hot war for cold comfort

A chilled glass of water, a large mug of beer, a tall glass of refreshing lemonade, a nice bowl of cold salad and a big helping of a frozen dessert. Summer dreams are made of these. But ever imagined what would happen to those dreams if not for a big, vertical, rectangular box called the refrigerator? Well, actually there's no need to, what with not one or two but seven national and international players fighting it out to attract consumers to their products this summer. In fact, with rising temperatures and disposable incomes, both the companies and the consumers are assured of some good times.

Girish V. Rao, LG Electronics India's Vice-President (Sales and Marketing), said, "Pioneering adoption of the Bureau of Energy Efficiency's (BEE) norms, LG has become the only player to have launched the five-star rated models."

In 2007, the focus areas would be the high-end frost free and large capacity direct cool (over 230 litres) refrigerators. LG will also aggressively market its new range of Green Ion Door-Cooling Refrigerators that emphasise health-related features and technologies." It is hoping to achieve a 25 per cent growth in its refrigerator's business this year.

Samsung also has extensive plans up its sleeve. "The company has launched nine new refrigerator models, both frost-free and direct-cool. In fact, we have identified refrigerators and air-conditioners as the growth engines for our home appliances business this year," said R. Zutshi, Deputy Managing Director, Samsung India Electronics Pvt Ltd.

Samsung, which is the market leader in the over-350 litre frost-free refrigerator segment, is seeking to consolidate its position by launching three new, advanced, feature-rich models in 375 litres, 400 litres and 704 litres in the Indian market. The company currently has a range of 42 frost-free models priced between Rs13,000 and Rs 1.5 lakh. "We are expecting the frost-free refrigerators to contribute 45 per cent by volume to our total refrigerator sales this year," said Pradeep Tognatta, Director (Sales), Samsung India.

In the direct cool refrigerator segment, the company has extended the category by introducing two new models of 180 litres and 195 litres. With the launch of these new models, Samsung now has 15 direct cool models priced between Rs 8,700 and Rs10,900.

"In addition to strengthening our refrigerator product offering, we are also looking at expanding our refrigerator channel by 25 per cent this year," said Tognatta. "We are targeting a market share of 18 per cent in the refrigerator segment this year from 15.8 per cent last year," he added.

Meanwhile, Whirlpool launched its new refrigerator, Mastermind, in seven finishes in 220 litres, 250 litres and 280 litres, with prices ranging between Rs 11,500 and Rs 20,000. The USP is its 6th Sense tower-cooling feature that does away with the thermostat and automatically adjusts the level of cooling.

Shantanu Das Gupta, Vice-President (Marketing), Whirlpool of India, said, "Our new launch in the category is being targeted at consumers with requirements of not very big capacities. Besides, it will also have features like Swarovski crystal-studded handles and `Magic Rails' on either side to provide storage to commonly used items like bottles, cutlery and menu cards." "We already hold the numero uno position in the direct cool segment and the second position in the frost-free category. We now expect to capture 27 per cent of the domestic refrigerator market this year, up from the previous year's 25 per cent," he added.

But all is not rosy for the players, as Suresh Khanna, General Secretary, Consumer Electronics and TV Manufacturers Association (CETMA) points out. Despite all the action in the sector, the industry has grown only in the single digits. Khanna said, "While refrigerators were the first durables to be introduced into the Indian household and have immense utility for providing convenience to housewives as well as saving food wastage, it is surprising that the penetration level is below 20 per cent, with the market growing only at a marginal rate." "One of the reasons could be the industry's inability to put across the utility value to the consumers, particularly in small towns. The other is, of course, the non-availability of power," he added.

Despite early introduction into the Indian market, refrigerators account only for Rs 4,000 crore or 16 per cent of the total consumer durables market of Rs 20,000-25,000 crore in the country. While last year (2006-07), the industry reported sales of around four million units, sales for 2007-08 are expected to touch 4.2 million units, given that the industry is growing at 7-8 per cent.

However, the industry is leaving no stone unturned. The companies are substantiating their plans and claims of capturing substantial chunks of the market with in-depth and innovative marketing and promotional activities. Whirlpool, for one, will use the charisma of its brand ambassadors and Bollywood star couple Ajay Devgan and Kajol to the hilt, starting with the new television campaign that is already on air. Besides, the company also plans a host of below-the-line activities. It has earmarked Rs 70 crore for 2007-08, and considering that it derives almost 70-80 per cent of its turnover from refrigerator and washing machine sales, a major portion of the ad spend would be on the segment.

Rao of LG said, "In terms of marketing and promotions, LG will run a 360-degree media plan centred on our product USP and featuring brand ambassador Abhishek Bachchan. This has also helped the company to make a gradual shift towards brand preference amongst the younger audience as well. More thematic advertising has been sought."

But what will be interesting is the reaction of the consumers to these innovative marketing initiatives converting to actual sales. Though attractive campaigns and Bollywood stars can pull the crowds to the retail points, factors like product performance, delivery process, after-sales services and consumer schemes are what will actually make the `goat eat the grass.' If one were to go by those standards, according to CETMA, Whirlpool leads the race in terms of product usage and performance, LG pilots the after-sales services, while Godrej and BPL are the best both at consumer schemes and promotions and delivery processes. Nonetheless, the other interesting factor would be the consumer satisfaction index, where according to CETMA, both LG and Samsung lead from the front with 52 and 51 points respectively, closely followed by BPL, Godrej, Whirlpool and Videocon at 50 points.

But all said and done, it is the consumer that knows best. So, let the war begin, the consumers will decide who will win!

More Stories on : Air-conditioners & Refrigerators | Market Shares

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Hot war for cold comfort