Chotukool Case Study Solutions

Topics: Marketing, Refrigerator, Ardeshir Godrej Pages: 12 (2868 words) Published: October 16, 2012
Marketing Case Study (2)
Godrej ChotuKool: A Cooling Solution for Mass Markets

Q.1. Assess the business scenario for ChotuKool? What are the critical success factors for this product to succeed?

ChotuKool falls in to the business of refrigeration, to understand the business better let us understand the overall refrigeration business But before that lets looks at the consumer durable market, the consumer durable market consists of products from watches to fans. With the help of the below mentioned data we can understand the penetration and reach of a consumer durable like refrigerator in comparison to a product like Television Set, car, bike or Grinder. This will help us in having a deeper knowledge of the placement of a retrigger in the minds of the consumer in comparison to other consumer durables.

With the analysis of the below shown chart we understand that refrigerators have been able to penetrate only 46% of the urban market on the other hand it has barely scratched the rural market by just reaching a meager 8%. Overall most of the consumer durable shown below have a decent reach in the rural markets except for car and refrigerators, this helps us understand that there is an untapped market available in the rural areas for this specific consumer durable

Ownership of consumer durables (% of household)
Pressure cooker
Wrist watch
Ceiling fan
Colour TV

FY 2008 – 09| Rs/cr|
AC&R industry market size| 14,200 (US$ 3.0 B)|
Airconditioning systems| 11,000|
Commercial refrigeration| 2,000|
AC&R servicing| 1,200|

* Approximately 69 per cent population resides in rural India, yet only 35% sales is contributed by rural markets. However, this sales contribution is expected to increase to 45% in near future. * Rural Consumer durables markets is growing by 30 per cent currently, expected to grow by 45 per cent in FY12

80 lacs Refrigerators sold last year and the market has grown by 12-15% (2010) Commercial Refrigeration Sector
• Growth during last 5 years: -10%
• Expected growth during medium term (3-5 years): 10-12%

Looking at these figures we can see that the Domestic Refrigerator market in India is one of the fastest growing segments of the consumer durable industry and is witnessing significant growth on account of rising per capita income and improved social indicators. The market is estimated to be worth INR 97.69 bn in 2010. Over 80% of the population of India does not use refrigerators. Refrigerators have been manufactured in India since 1950s. Till the 1980s, players like Godrej, Kelvinator, Allwyn and Voltas controlled almost 90% of the market. Earlier, the white goods sector was categorized as a luxury goods industry and was subject to oppressive taxation and licensing. The situation changed after liberalization of the economy in the early 1990s. The Government removed all restrictions, and now there is no restriction on foreign investment, and licenses are no longer required. Post-liberalization, a number of foreign companies entered the market and many domestic players also diversified into refrigerators. BPL and Videocon who already had a presence in the consumer electronics market, leveraged their strengths to enter the durables sector. In India, refrigerators have the highest aspirational value of all consumer durables, with the exception of televisions. This accounts for the high growth rate of the refrigerator market which has been growing at a rate of about 15% per year, while the consumer durables industry as a whole has grown at almost 8%.

The size of the refrigerator market is estimated to be 3.5- 4 million units approximately, valued at Rs. 50 bn. The domestic penetration rate of refrigerators is about 9%. The penetration is considerably higher in urban areas,...
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