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What you will hopefully never see from us is an ad that screams, ‘Buy me, I'm on discount',” says Dirk Dedekind, Head of Marketing for BSH Home Appliances.
The response came forth in a conversation on the company's marketing activities in India, for its two brands – Siemens that has a 15-year presence in the market, and Bosch, which followed in September this year.
Quick to add to that is Marc Hantscher, Managing Director and CEO: “We do advertising campaigns in print, on television, online, below the line … we are doing everything one would do, but considering our size, we will never be able to outshout our major competitors. We need to get through to customers and achieve that through very targeted marketing.”While the positioning at the mass premium end is clear, the €9 billion BSH is clearly not the only offering in the market in the categories it has a play in – built-in kitchens with Siemens; washing machines, refrigerators and dishwashers with Siemens and Bosch. Another category BSH has a global presence in – small kitchen appliances – has not been launched in India. Yet. There are big plans for India, explained in part by the manufacturing unit expected to be operational near Chennai sometime in 2013. Campaigns currently on air also reveal the retail presence of Bosch and Siemens, ever since BSH took over from the Siemens distributor RBS Home Appliances, is expanding.
Dual Premium
In every market where BSH has a ‘good' presence, both the brands are available. In China, the company's most successful market in Asia, it sells Bosch, Siemens and Gaggenau, a niche luxury brand. India is believed to have potential for Siemens and Bosch. But how differentiated are they? And with respect to the market, where are they positioned?
“We don't do very cheap, entry-level products. We are not good at competing there because we have rules about quality and engineering and design that don't allow us to make very cheap products,” admits Hantscher.
Washing machines, the company's bestseller in India on both Bosch and Siemens labels, are priced between Rs 22,000 and Rs 70,000. In comparison, Hantscher notes that the IFB pricing starts between Rs 15,000 and Rs 16,000, and the market goes up to Rs 60,000. But, above Rs 40,000, one hardly finds any model in most outlets.
“Starting at Rs 22,000, we believe we cover 60 to 70 per cent of this product category in terms of price points,” says the CEO.
He explains the pricing: “We only make fully automatic, front-loading machines. We don't make top-loading machines or semi-automatic top loaders, for environmental reasons. In our view, they take up about three times more water than a front-loader. And, the washing result is inferior.”
Cooling products (refrigerators included) are the largest selling globally. In India, admittedly, the refrigerator range starts at Rs 35,000 and doesn't allow BSH to compete against the major players.
“Yes, the fridge market is the largest in India within home appliances. We are looking at it, but there is no clear intention yet,” says Hantscher. He estimates the Indian home appliances market (including air-conditioners) to be over €2 billion.
India's ‘anchored'
The premium end of the market has been explored across categories. BSH is now discovering Indians are also buying dishwashers priced at Rs 82,000 under Bosch.
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