Case for Analysis Marching Towards Market Essay Example for Free

Case for Analysis evidenceing Towards Market Essay innovation twirl Corporation is a Fortune 500 confederation and a global manufacturer and vendor of major(ip)(ip) inhabitation thingamajigs, with annual sales of approximately $20 billion. birl entered the Indian trade in the late 80s, and had entrenched itself as a formidable fraud in the Indian home appliances commercialisedise by the mid 1990s, with a comprehensive increase portfolio covering washing machines, refrigerator, microwave ovens and air conditioners. Today, birl is one of the most recognized soft touch in home appliances in India and holds a commercialize serving of over 20%. While swirl is an acknowledged player in m some(prenominal) of the piddle purifier securities industry places across the world for the gone several years now, Whirlpool entered the growing pissing purifier market in India in 2008. Given its focus on attaining market leadership with Customer loyalty, Whirlpool aspires to be the market leader in the wet purifier market by 2012. This chemise presents the situation of the water purifier market in India, and poses ch aloneenges that Whirlpool will brace to overcome to earn its vision of becoming the market leaders. deglutition irrigate A perspectiveEven as world bodies and governments across the continents ar st tempogizing to manage the branch humanity in a holistically sustainable manner, availability of safe alcoholism is a major playing field of concern for all. As high as 884 Mn people in the world do not suck up access to safe water. This is roughlyone in eight of the worlds population. 1.4 million children die each year from diarrhoea ca recitationd by unclean water and poor sanitation one child every(prenominal) 20 seconds. Approximately 80% of diseases in India ar caused by water borne micro organisms.This is true in rural as well as urban India. However, aw areness of health risks linked to unsafe water The use of water can b e broadly divided in to two major categories, videlicet for Consumption ( drink, cooking etc) and Sanitation. This case focuses on water used for drinking purposes.A brief on pee Treatment methodsThrough start human history, different methods of treating water before consumption have been devised. Up until about 100 years ago, it was al rooms found that water flowing from natural springs was safe for drinking in its natural state, but in the 21 century even spring water is prime(prenominal) scientifically tested before it is recommended or bottled for drinking. Each of the above methods carries with them of import dis profits either from a restroom point of view or from health and hygiene perspective. This calls for more sophisticated methods of ameliorate water, to suit with the evolving lifestyles in the societies.Current State-of-the-Art Water Purification TechnologiesToday, the more sophisticated and commercially available water purifying technologies are, Manual sati ate Purifier (Drip Type) Ultra Violet (UV) elaboration drive away Osmosis (RO) purificationThe latter two are generally referred to as Electronic Water Purifier technologies (EWP) by exception, the first one is referred to as Non EWP.The above tether are given in the purchase order of chronological evolution, with RO engineering being the latest in the Water Purification technology. The manual film purifiers do not run on electricity, which is a scarce mental imagery in many parts of rural India, and also have probatoryly lower be in comparison to the EWPs. Interestingly , these manual fill purifiers which primarily use chlorine or UF technology are at par in performance with UV in terms of microbial protection. UV has been the oldest technology in the patience. It typically involves preliminary stages of filtration, followed by treating the filtered water by UV rays to deactivate the microbial organisms. In the RO technology, even the smallest of microbial organisms are f iltered using the reverse osmosis technology.RO technology especially s shopping malls over UV when the Total Dissolved Solids (TDS) count in the source water is high . One disadvantage of RO systems is the wastage of significant quantum of water during its processing. Needless to say, the costs of the products nether these different technologies increase from manual fill purifiers to UV purification systems to RO purification. The typical toll mental image of manual fill purifier products is Rs. 1500 to Rs. 3500, while the UV products range in bell between Rs. 4000 to Rs. 9000. The RO products are priced on the higher side starting from Rs. 8000 to Rs. 20000. Many products available in the market today in India use a combination of technologies but for the products in the lower end technologies (manual fill purifiers).Water Purifier Market in IndiaThe delivery of purified water in the Indian markets follow two conduits, to wit, water purified in purification plants delivered to residences and other consumption locations (e.g. restaurants) in cans and installation of water purification instruments at the smudge of usage. While the formerOne of the oldest methods of treating water, and one still used constantly in Third macrocosm and often in developing nations or areas that have seen recent natural disasters, is boiling to kill microbes (but this causes dismission of taste and may leave in dirt). Other methods of water treatment include filtering and distilling, use of chemic agents such as Iodine or Silver or Potassium Permanganate into the water supply, or the use of candle filters. methodology predominantly uses multiple technologies mentioned above, provides economies of scale and eliminates initial costs of investing in equipments, the costs involved in distribution of the treated water counters these economies of scale. The latter provides for visibility and ease of use, which are significant perceived benefits in comparison to the former. While both the delivery mechanisms exist, the latter is fast catching up. This case focuses on the latter, which is typically referred to as the Water Purifier effort.This industry is broadly divided in to two categories namely Electronic Water Purifiers (EWP) comprising of products using UV or/and RO technologies and Non Electronic Water Purifiers (Non EWP) comprising of products that use the manual fill purifiers. Frost and Sullivan report of primary research in 2009, estimates the total market size of the Water Purifier industry in India to be 2000 Cr of which 63% is from product sales and 37% is after sales revenue. despite the size of this industry, the Water Purifier industry in India has a low penetration (2% Urban and 0.5% All India) as per IRS 2007 and is growing at a strong rate (others use traditional water treatment methods uniform boiling and filtering, or use of chemical additives like Chlorine, Potassium permanganate etc). As per AC Nielson 2006 study( and internal estim ates), the industry is expected to touch approx 2.3 mn units by the end of 2009. Expected growth rate of 15% and a CAGR (04-09) 21%.The average ASV of the industry is Rs 6700. With a size of approx 1.7mn (units), the EWP market is divided into 2 sub- incisions RO (30% sal) UV (70%). The RO segment is the premium end of the category and has an ASV of Rs 12000 while UV has an ASV of Rs. 7000 .RO UV growths , CAGRs(04-09) are (15% ,16%) and (10% ,10%) respectively. The Non-EWP segment operates at a sub 2K ASV (Rs 1900). This segment is witnessing an explosive growth with the entrance major players like HUL etc . The Annual growth rate was witnessed at 25% while CAGR(04-09) at 77%. It is important to note that the technology sold in a given local market is also dependent mammothly on the characteristics of the source drinking water in the given demography. For example, a region like Delhi with high TDS calls for RO technology, while regions like cochin with low TDS would depend on p roducts with UV technology. Also, one of the detriments to EWP products is the availability of continuous flow of source water and availability of power, both of which advantages are addressed the products dependent on Manual Fill Purifier technology.While the major ingredient of the market in the water purifier equipment line in India is still in the unorganized sector, mark products are catching up and their market share is improving. The major branded players in the market are constantan Forbes (AquaGuard, AquaSure brands), Kent, Philips, HUL (Pureit), Ion Exchange (Zero B) Ushabrita and Whirlpool (Purafresh). As per Frost and Sullivan report 2009 , Market share by player and by technology- Approx Shares ( for 2008) constantan Forbes RO(20%) , UV(35%) , Drip Type(33%) Kent RO(25%) , UV(0%) , Drip Type(0%) ZeroB RO(15%) , UV(0%) , Drip Type(0%) HUL RO(0%) , UV(0%) , Drip Type(42%) OTH RO(40%) , UV(65%) , Drip Type(25%) The Non-EWP segment was primarily predominate by local pl ayers until recently, when HUL entered the category with its drip type purifier under the brand Pureit at a discontinue through price of Rs 1800 and took the market by storm.The other key players in this segment are Ushabrita Eureka Forbes. The channel for this segment has traditionally been the Direct to Home (DTH) route, with this route still accounting for a wallop 65% of the product sales in this category. The ratio of Eureka Forbes DTH sales is higher at 75%. On the trade side(contribution bal 35%), the DAP channel (Domestic Appliances Products) accounts for the macroscopicr proportion of the share with 65% while the unchanging Trade accounts for the remaining 35%. The DAP Channel mainly consists of small appliance sellerswho sell products like constrict , blenders , mixers , gas burners etc. These retailers primarily sell products which lie within the price range of Rs 500-Rs 5000. They are typically not in the prime locations in the market place and their shopfloor size is on an avg10X10ft.The products are displayed broadly in a packed form. The products are sold very close to the MRP and the discounts offered are in the range of only 5-10% HUL has made an entry through a fantastic channel. It has opened up a large number of Water synthetic rubber Zones / Product Experience Centres and is pushing the volumes from there while catering to curb to home benefit as well While HUL is establishing itself in the entry level segment through consistent advertising and promotions , the more established players in UV RO like Eureka Kent too are active in the media space and are seen promoting their products through several media elements. Recently, HUL was seen rolling out a Rs 1 Crore challenge offer and heavily promoting the homogeneous. At the same time Eureka Forbes was also seen throwing a currency Back Guarantee offer on its products.Eureka Forbes operates with a strong sales service extort of 6000 people on the company rolls along with an equ ally large group of tercet party franchises. The company has been under pressure to expand its volumes since the avg the productivity of its sales squad has come down over years. Lately, they have been seen heavily focussing on retail through their Aquasure brand while the Aquaguard brand is operating in the DTH section. Kent has its own sales service set up in Northern India while it depends on third party franchises for its operation in the rest of the country. It has branch offices in 6 cities (AP , Karnataka, Kerala , Mumbai , Gujarat , West Bengal). In order to counter HULs explosive growth, Kent recently rolled out a NON-EWP (UF based) purifier at a price of Rs 2500 under the sub-brandKent Gold.This product is being primarily marketed through the retail channel. HUL has set up its Safe water zones with external KSPs ( constitute service providers) while continuing to have its internal sales team supervising the operations . In Delhi for example , it has 27 such zones with a sales team of 750 sales men, 17 Territory sales executives (TSE) , 3 business growth executives (BDE) , 1 area head.(AH) and 2 service officers . The TSEs, BDEs AH are on company rolls. The following table summarizes the typical product price points in the various(a) segments. Price range (In Rs) Unorganized 1500-2500 4000-6000 8000-12000 Organized 2000 3500 6000-9000 8000-20000 Whirlpool Not Applicable Not Applicable 12500-20500 share Non EWP Ultra Violet (UV) Reverse Osmosis (RO)Whirlpools entry in the Water Purifier Market in IndiaWhirlpool has been present in the Water category in all the key regions of the world including US, Canada, NAR, Europe, Brazil, Mexico Asia in several value added segments like water heaters, bottled water dispensers, water softeners , Refrigerator filters etc. Whirlpool entered the Water Purifier Market in India in the early 2008 to tap in to the growing Water Purifier Market, focused on the RO segment to start with, with the launch of the Puraf resh range of purifiers. Currently, Whirlpool Water Purifier products are available across all markets in the country. Whirlpool has garnered a Market Share of 5% in the RO segment in the past 1 years. The Water purifier category is a perfect brand fit for Whirlpool.It is a home appliance used by the home maker to provide safe and pure drinking water to her family, thereof building a strong case of placing trust in the brand. This category will lend a lot of credibility to the Whirlpool brand. Whirlpools conference strategy also revolves around reinforcing this element of Trust. Equipped with Whirlpools patented 6th Sense technology, the raw Purafresh water purifier is the first Reverse Osmosis system on the market that not only purifies but also protects the virtuousness and freshness of the water with its prestigious gold seal certification (from GOLD Seal of Water Quality Association, USA WQA). Purafresh is available in three models Purafresh Platinum, Purafresh Elite and P urafresh Deluxe.Trigger Questions for AnalysisGiven the situation described above, suggest a comprehensive Go-To-Market plan following a systematic methodology for Whirlpool to achieve its overall target of achieving market leadership in the Water Purifier Market (in the organized sector) by 2012, and its interim goal of achieving market leadership in the RO segment, ensuring its premium brand image, and its practicable philosophies (given in the annexure for ready reference). A) Understanding and presentation by a Systematic methodology. B)Inputs Should reflect comprehensive understanding of the company and competitive environment.1) Analyze company development , history, Growths. 2) Identify Strengths , weaknesses , 3) Analysis of external environment (Porter 5 forces , SWOT etc) C) Outputs Understating should result in output 1) outline on all 4 Ps 2) Channel Strategy ( Spl Focus) a) Evaluation of SWOT b) Key market insights c) Business Level Strategy d) Recommendations (inclu ding articulation of hypothesis) e) innovative approach especially in the communication/promotion strategyPhase IIBuild a detailed business plan arising out of the above strategic plan, and project the profitability of this business over time, including investments that may be required for new products and their market entries, while achieving this objective. Recommendation evaluated by 1) Strategy 2) Product choice 2) Financials ( volumes, Margins , costs , etc) 3) Process of carrying into action strategy 4) Innovative approach/ideas. In the first phase, the second phase question and related references should not be circulatedWhirlpools high end Purafresh platinum model, is Indias first and Only Direct Flow RO with no entrepot tank enabling immediate consumption of freshly purified water with 72 litres per hour capacity (Normal RO products have 8-10 litres per hour capacity). It has an advanced 5-stage purification process and also boasts of a firstofitskind electronic embrasure with a Filter change indicator, which alerts the consumer on the impoverishment to change the filter and thus ensures continual purity protection of the water. Other diagnostics functions like no water on tap indication, self change mode indication, and water extraction indication makes it the most advanced and best in class product available in the Indian market today. Whirlpool entered the Indian market mainly leveraging their carriage in the durable retail channel and has the highest share (30%) of all Water Purifier sales in this channel. Whirlpool has also entered the DAP Channel and are currently having a 10% share in that channel.The Surging to ask ChallengeGiven its focus on attaining market leadership through Customer loyalty, Whirlpool aspires to be the market leader in the water purifier market by 2012, with an interim goal of attaining market leadership in the RO segment by 2010, while at the same time maintaining its brand position. This, no doubt, is a challengin g aspiration for Whirlpool, given the well entrenched players in the market like Eureka Forbes, aggressive players like HUL who is focused on tapping the market at the Bottom of the Pyramid and a large unorganized market who would significantly benefit from the growth fuelled by these players. However, Whirlpool has to its advantage of its strong brand position in the hearts and minds of the home makers, and a strong, well established channel in the sportsmanlike goods market. The challenge for Whirlpool is to leverage its strengths, and perhaps work out completely innovative market strategies if it has to achieve its intent of becoming amarket leader in the Water Purifier Market in general, and that in the RO segment.Annexure A brief about WhirlpoolWhirlpool, right from its inception in 1911 as first commercial manufacturer of motorized washers to the current market position of being worlds number one manufacturer and vendor of major home appliances, has always set industry mile stones and benchmarks. The parent company is headquartered at Benton Harbor, Michigan, USA with a global presence in over 170 countries and manufacturing operation in 13 countries with 11 major brand names such as Whirlpool, KitchenAid, Roper, Estate, Bauknecht, Laden and Ignis. The company boasts of resources and capabilities beyond achievable feat of any other in the industry. Whirlpool initiated its international expansion in 1958 by entering Brazil. However, it emerged as sincerely global leader in the1980s. This encouraging trend brought the company to India in the late 1980s. It forayed into the market under a joint venture with TVS group and established the first Whirlpool manufacturing facility in Pondicherry. soon Whirlpool acquired Kelvinator India Limited in 1995 and marked an entry into Indian refrigerator market as well. The same year also saw acquisition of major share in TVS joint venture and later on in 1996, Kelvinator and TVS acquisitions were merged to create In dian home appliance leader of the future, Whirlpool India. This expanded the companys portfolio in the Indian subcontinent to washing machines, refrigerator, microwave ovens and air conditioners. Today, Whirlpool is the most recognized brand in home appliances in India and holds a market share of over 20%. The company owns three state-of-the-art manufacturing facilities at Faridabad, Pondicherry and Pune. Each of these manufacturing set-ups features an infrastructure that is witness of Whirlpools commitment to consumer interests and advancedtechnology.In the year ending in March 09, the annual turnover of the company for its Indian enterprise was Rs.1,719 Crores. The companys brand and image speaks of its commitment to the housewife from every aspect of its functioning. It has derived its functioning principles out of an undaunted partnership with the homemakers and thus a slogan of You and whirlpool, the worlds best homemaker dots its promotional campaigns. The products are enginee red to suit the requirements of smart, confident and in-control homemaker who knows what she wants. The product range is designed in a way that it employs unique technology and offers consumer relevant solutions.Whirlpool Corporation Vision and MissionWhirlpools pervasive vision, all Home, everywhere, with pride, passion and performance, rests on the pillars of innovation, operational excellence, node-centric approach and diversified talent. These are embedded within our business goals, strategy, processes and work culture. Be it our products that are the result of innovation and operational excellence to meet every need of our consumers or the people behind these products that come from a wide spectrum of backgrounds, everything we do features a distinct Whirlpool way.Core CompetenciesInnovation Unique and compelling solutions valued by our customers and aligned to our brands create competitive advantage and differentiated shareholder value. Operational Excellence (OPEX) A metho dology for solving problems continuous improvement of products processes through pursuit, acquisition, and utilization of knowledge using critical thought and planned experimentation helps us achieve operational excellence. Customer Excellence Excelling the customer expectation from the company, its brands,products and services are a three-step process. The three steps are Know a customer, Be a customer, Serve a customer. Knowing a customer helps us know who our customers are, how to treat them, how we add value, and what the drivers of brand loyalty are.This information is gathered from the customers data base history. This way we are better able to customize products for them and recommend the right product to solve problems. Being a customer is important to share customer knowledge and insights, drive actions based on customer insights, be passionate about our brands and customer loyalty and provide a positive voice for our brands. We show empathy for customers and research to resolve their problems by creating consistent customer touch-points, with our endeavour always being to provide unique solutions for the customer .Whirlpool Corporations Transformation AgendaWhirlpool is transforming into a completely customer-centred company where the customer lies in the core of every of our functions. This focus has arrived as direct consequence of our coreIDEATEup of five elements readiness of customer excellence. It allows us to build Customer Loyalty. The transformation is madeThe elements of the transformation hold the promise of making Whirlpool a growing company and thereby increasing value for our shareholders. The fiveelements are the foundation garment for describing our strategy internally and guide the development of our plans and initiatives. Whirlpool has swiftly moved from being a humankind Class Manufacturer to a World Class Marketer using the brand-building framework. We are dedicated to creating unique branded solutions that build customer loy alty and achieve brand excellence.