Marketing Microwave Ovens to a New Market Segment Essay

Executive Summary purity Appliances is an international company that specializes in manufacturing and commercialiseing appliances glob aloney. The company is healthful kn sustain for their line of atomises. Whereas approximately of their products are construct in the U.S and while most of the appliances are exported to the U.S and the European market, White Appliances also markets several mellow-end models in India where they face some issues in trying to penetrate the market. Moreover, the make for vaporize ovens has gradually increased in the past couple of years. Subsequently White Appliances had to come to a conclusion that in auxiliary to the market of their high-end models, they mustiness introduce new microwave ovens at all toll levels in order to target the total amount of ho single-valued functionholds in India. By evaluating the problems such as the culture differences between the west and the east or whether it is the consumers limited knowledge towards the hou sehold appliance, we determined the different strategies and alternatives to tackle such issues.Statement of the hassleThe case study focuses on the challenges of the Indian kitchen appliancesmarket for microwaves. Before the liberalization of the Indian economy, only a few local companies were the major players in the kitchen appliances market. But, later opening the market for foreign competitors also global players care e.g. Samsung or LG push into the market. The kitchen appliances market seems to be very promising as extensive step-up in the next years is predicted. Nevertheless this emerging market in India focuses several challenges. At first the Indian market for microwaves is very different from the Ameri arsehole market where the market share holding companies are very advantageful.There are several cultural specifies to consider. The Indian food for example differs a carry on from the American. While Indian food has a high significance for the heap, is pretty compl ex and time consuming to cook the Americans emphasize an easy and simple commission of prep. Indians prefer cooking with fresh ingredients, a great variety of spices and herbs and ready their own list of cooking techniques and equipments that are needed for the recipe. Contrary, the Americans prefer their food cook or direct or else than steamed cooked over dry heat. But, there are non only crosscultural differences concerning the food, there are also differences between the geographic areas of India itself as the Indian cuisine varies between the Southern and Northern part of the country.3 foster, there are significant variations in the cultural characteristics. Indian people mostly live in queen-size families with close alliances. In contrast, in the American rules of order live a part of single people. As very individualistic culture, the families ties were not that tight as in India. One of the big(a)gest challenges, that need to be faced, is the missing knowledge of the consumers. Mostly Indian people do not know how to use the microwave properly. Most of the (potential) consumers do not expect that all of the Indian dishes can even be prepared in the microwave, not only heated up. So they miss the big advantages like timesaving at cooking, that nobody has to keep an eye on the food constantly while all vitamins and nutrients retain in the food and promotemore the simplification of cleaning afterwards.Another problem that goes hand in hand with the missing knowledge of the consumers is the price banter of the microwaves. Forthe traditional poor Indian middle class, the very expensive first introduced microwave models were unattractive. Additionally the models were not adequate for the Indian market as the big Indian vessels did not fit in. Even though most manufacturers reacted by designing the microwaves according to the special Indian needs and a price cut, the gross sales volume did not increase notably. This leads to the chicken egg que stion for the company- the prices go forth not come down easily until volumes up, while volume depends on prices.Additionally, the kitchen appliances market is nowadays predominated by some brands what makes it more complicate for new companies to get more market share. On the other hand, there still is a lot of potential to penetrate this relatively new market. especially the recent development like rising living standards and wages and also the fact that household uses like washing machines are no luxury good any more, eases a market doorway and increase of market share. Better access to consumer awareness and the big advantages that microwave cooking could bring to consumers also strengthens the possibilities of a White Appliances.4Situation AnalysisTo be successful in entering the Indian kitchen application market White Appliances need to identify controllable and uncontrollable elements of the markets. This can best be shown in a Strengths-Weaknesses-Opportunities-and-Threat s-Analysis (SWOT).StrengthWeaknessesMicrowaves are easy to use andHigh price for the customersunderstandable for almost everybodyMicrowaves arent common in IndiaConvenient and efficient way of The presence of microwaves atcookingIndian markets is rather weakTime SavingLongtime use of appliancesChicken-egg problem (price vs.High technology- ideally for thevolume)technically affine Indian peopleWide product ordinate from high-end tobasic models with different categoriesOpportunitiesThreatsNew, diverse target meetings in IndiaTrends in society (Healthavailable (men in the kitchen ingeneral, bachelors, students, youngin food industry, doubts ofwomen etc.)consciousness, slow feat trendmicrowave radiation)New form of lifestyles and risingDifferent cultural background than inliving standardsHigh interest in innovations andIndian society versus individualistictechnology of Indian people could beother markets (e.g. collectivisticAmericans)used stronger by White AppliancesDifferent eating habits (Western vs.Indian food, fresh vs. pleasantsales in the futureProposed bright future for microwavefood, different eating habits)Only little market sagacity byConsumers knowledge intimately the usecompetitorsof microwaves is little, difficult toProposed increase of retail storesconvince themEnvironment of competition tightensas the market is promising5Objectives and GoalsTo make the market entry in the Indian market successfully, it is great to set objectives and intermediate objectives. A goal is to find a suitable strategy to enter the market with longterm success. White appliance would like to establish itself on the market and to prevail against the major competitor. They want to increase their market share to profit from the proposed market development. Its important that they communicate their services and predict on the market. The people need getting to know quickly and effectively the microwaves from the White appliance. To increase the awareness and the sale of m icrowave oven and especially of the microwaves from white appliance it is necessary to bring forward the knowledge of microwave cooking in India. People need to know how to use a microwave with all its functions. White appliance should have special product offerings to make the secureing of a microwave more attractive. They have to offer different price ranges of the product and it can be useful to corporate with experienced partner for distri aloneion.Strategy and EvaluationsFor entering a new market, a lot of decisions have to be made and a consistent strategy has to be implemented. In the following, a recommended strategy for the White Appliances Company go forth be introduced by focusing on product, price, distribution and intercourse, the trade core elementsof all products.(1) ProductIn response to entering a new market and being confronted with new cultural and hearty behavior and habits, the adaption of the product to the Indian culture and cuisine is essential. To meet the exact needs of the new market, the investment in Research & Development as well as in product innovation is a significant first step in developing a successful and sustainable marketing strategy. Especially value added features like user-friendly one-touch program buttons, an energy saver mode or a microwave size that suits to Indian families and cooking habits need to be reconsidered in the product innovation process. Therefore every microwave model for the Indian market comes with high volume space, as this is essential to the Indian family sizes. establish on this, different microwave models exit be implemented, which inhabit their special functions and features fitted to different target groups. The product range of White Appliances should include at the root system devil different models, one basic model in a lower price range to yield a high market penetration and punt a 6 simpleness model, for a target group, searching for a more comfortable way of cooking with micr owaves.The basic model aims to reach the advancing lower-middle class, which can be seen as the most prosperous target group. The microwave comes with a basic interface to set power and time. A manual guide willing be provided to inform the customer how to make the best out of the different setting options. This microwave type will be make in Asia, whereas low production and import costs can be reached, to establish a low product price. The comfort model comes with different program-buttons in addition, which eases handling and leads to a more comfortable cooking experience. This model targets the status-oriented middle-class, which aims to have a functional but comfortable cooking experience. The comfort model will be produced in the U.S., as the target group will be more qualityconscious too. If these two microwave types are established successfully in the market, a high-price combimodel will be launched in a long-term strategy.It can already be seen, that crew-oven (convectio n and microwave) gain more and more importance, especially in a high-middle class, but as the production is way more costly, it is connected with a higher risk as ROI has to be gained through high product prices. As higher the consumers investment, as more factors will be considered, whereas already be brand awareness in the market would be supportive, what speaks as well for a product launch in a second phase. Regardless of whether the customer decides to buy a basic, comfort, or premium microwave model, the introduction of an sensitive after-sales-service could be helpful in creating an USP (unique selling proposition) for White Appliances and to stand out from their competitors in the market. The implementation of a service-hotline, a customer-care website providing information according to the handling of the product and answering frequently asked questions as well as video-tutorials via YouTube, the offering of a repair service or warranties are just some examples that could be considered in creating an excellent customer service. (2)PriceThe two respectively three different models will be established within their own price segment. The basic model will be sold in a cheap price range round about Rs. 5000. The cheap price has to be absorbed by a high volume. This is a risky step as a high sales rate is premise, but it is the only way to solve the chicken-egg-problem of low prices can only be reached through high volume. Further it gains a high penetration in the market and can raise brand awareness fast. The comfort model will be sold for round about Rs. 10.000. This establishes our brand, as a microwave seller for affordable models, but quality and more 7functional features will speak for the higher price.Besides, the offering of a coupled two years warrantee could increase the consumers attraction to this model. The premium model, which will be launched in the second phase, will be rolled-out to the market with a price of Rs. 15.000. To cut costs of pr oduction, a long-term goal could be to promote the basic microwave innovation in local manufacturing and only to continue importing the premium models. To support sales, a combination package with microwave glass-bowls and cooking equipment could be offered, in an each similar price range, which will be especially interesting to microwave starters. It can be assumed that a high percentage of the main target group buys a microwave forthe first time.(3) DistributionThe distribution will be best and easiest implemented through existing kitchen equipment retailers. This gives the opportunities to sell the own product in combination with special kitchen promotion packages and fits to the existing consumer purchase habits.(4) intercourseThe chat strategy can be divided up into two parts. The first part aims to raise knowledge about microwaves and its functionality in general, whereas the second part pushes brand and product awareness of the White Appliance company. Consumers buy produc ts not because of the product itself, but of its potential to solve an existing need. As Indian people are mainly new to the product microwave and its functions, most consumers wont be aware about the need to possess a microwave in their daily life. Therefore one part of the communication strategy aims to raise general product awareness via social media and TVshow cooperation.For TV-show cooperation, existing, successful cooking shows could be used to present microwaves and their functionality for daily cooking. Of course the TV-studio would be fit with microwaves from White Appliance, but in the communication the product usefulness is primer. In parts of social media marketing, a Facebook fan-page is imaginable, where microwave recipes and tips will be promoted. The social media site, shall be named more focused on its purpose and should not be included in the companys fan-page. Rather a powered by addition should make up the connection to the company. This naming makes sure, that it is findable for those, who want to know more about microwaves and its usefulness, further the site-name is promising for its purpose.8Besides an increased awareness about microwave and its functionality in general, the popularity of the own brand has to be pushed. This can be done sustainably via the following communication channelsTV-CommercialPromotion tour (microwave party in style of Tupperware parties, food tasting on the street, in supermarkets etc.)Point-of-Sale specials as e.g. free microwave cook books, when buying an ovenOffer special services to the lymph gland (video-tutorials on YouTube FAQ on website hotline)As well the communication via an own App would be reasonable, but as the development of an app is pretty costly, a launch is recommended in the second phase, when the investment can be defrayed by the gained sales.As every strategy has its advantages and disadvantages, those will be presented in the following, to show the strengths of the strategy, but as well where weaknesses have to be eyed.(1) ProductTo enter the market with a basic model to reach the promising low-middle class target group seems pretty prosperous. Further he more comfort-oriented middle-class will be reached with a second model, so that the market entering strategy is based on a brought target group and the brand awareness will be raised by a penetration strategy. The risk of that strategy lies therein, that competitors might plan the same and the market will be overflowed by pricy microwaves.(2) PriceAs the production for the basic model takes place in the region, this leads to low production and logistic costs. In combination with a high volume, themarket can be entered with a low price to reach the low-middle class. Although this sounds pretty promising, the strategy is not without any risk, as the success is depending on the sales volume, which has to be very high.(3) DistributionThe distribution via existing retailers leads to lower investments and the company d oesnt need to care about the legal environment. Further an already existing and proofed distribution system is used. Nevertheless the distribution via retailers means a certain loss of control, as 9those retailers have their own demands. The offer of a trade discount to all retail partners for the first year could be helpful to diminish this risk and to create an initial demand.(4) CommunicationThe communication strategy does not only focus on the product itself but rather on the general benefit of the usage of the product, which is the start of a sustainable product communication where the brand communication can be build on. But the penetration of the different channels as introduced means a big investment to the company.Recommendations and ContingenciesFor a sustainable and successful market approach, the whole strategy must be implemented in once, because all parts product, price, distribution, and communication depend on each other. Further it is important, that sufficient at tention will be given to every single part of the strategy. When it was sensible, an implementation in two phases short-term and long-term is suggested, to decrease risk and base higher investments on the by then hopefully already existing success and high sales.The marketing strategy needs to be implemented carefully, avoiding to offend the socialcultural behavior and habits of the Indian community. Therefore the strategy has to be controlled and reconsidered all time while implementing, to detect further weaknesses and optimization potential. Only by paying attention to market behavior and key figures, the success of the running strategy can be proofed and in case adjusted.