Microwave Marketing

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CASE 1 4 Marketing Microwave Ovens to a New
Market Segment
You are the Vice President of International Marketing for White Appliances, an international company that manufactures and markets appliances globally. The company has a line of microwave ovens— some manufactured in the United States and some in Asia—which are exported to the U.S. market and Europe. Your company markets several high-end models in India that are manufactured in the United States. Your presence in the Indian market is limited at this time. White Appliances has traditionally sold to the high-income segment of the Indian market. However, India is in the midst of a consumer boom for everything from soda pop to scooters to kitchen appliances. Demand for microwave ovens jumped 27 percent in two years amid surging demand for kitchen conveniences. Sales have been spurred by declining import tariffs and rising salaries, as well as the influx of companies reaching to all ends of the market. India has about 17 million households—or 90 million people that belong to the country’s middle class, earning between $4,500 and $22,000 annually. Another 287 million are “aspirers,” those that hope to join the middle class. Their household income is between $2,000 and $4,500. In 2010, these two groups combined number 561 million. Furthermore, significant numbers of Indians in America are repatriating to their homeland and taking their American spending habits and expectations back home with them. After preliminary analysis, you and your team have come to the conclusion that in addition to the market for high-end models, a market for microwave ovens at all price levels exists. Several international companies like Samsung, Whirlpool, and LG Electronics India are entering the market with the idea that demand can be expanded with the right product at the right price. There are, however, several challenges in the Indian market, not the least of which is the consumer’s knowledge about microwaves and the manner in which they are perceived as appliances. In conducting research on the market, your research team put together a summary of comments from consumers and facts about the market that should give you a feel for the market and the kinds of challenges that will have to be dealt with if the market is to grow and if White Appliances is to have a profitable market share. • Five top consumer durable companies are in the race to sell the oven, but to sell the product, they must first sell the idea. The players do not agree on the size of the market or what the oven will do for the Indian family. • It may be a convenient and efficient way to cook, but microwave ovens were invented with European food in mind. “Only when Indian eating habits change can the microwave ovens market grow in a big way,” says one market leader in appliances. • Some companies disagree with the previous statement. Their contention is that all Indian dishes can be prepared in a microwave; people only need to know how to use one. Consumer comments were mixed. • One housewife commented, “The microwave oven was the first purchase after my wedding. I bought it only because I liked it and I had the money. But I must say its performance surprised me.” • “Men no longer have an excuse for not helping in cooking. My husband, who never before entered the kitchen, now uses the microwave oven to cook routinely.” • “Somebody gifted it to me but food doesn’t taste the same when cooked in a microwave whatever the company people may claim.” • “Microwave ovens will be very useful and they are fast becoming as essential as a fridge.” • “Ovens are of great use to bachelors. They can make curries every day or sambhar every day. If you heat in a regular oven sambhar or dal for the second or third time it will have a burnt smell. The microwave oven will not get you any such problem. It will be heated and at the same time as fresh as if it was made now.” • “Some people say that using a microwave oven is lazy and getting away from...
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