Godrej refrigerator

PROJECT REPORT ON

GODREJ REFRIGERATOR

SUBMITTED TO: SUBMITTED BY:

DR. T. GHOSHAL SUMANT KUMAR

CENTRAL UNIVERSITY OF JHARKHAND CUJ/I/2012/MBA/34

6th semester

CONTENTS

S.no TOPIC PAGE No.

1. Introduction

2. Market analysis

3. Key Growth Drivers

4. Segmentation

5. Positioning

6. Strategic Branding

7. Product Market Analysis

8. Marketing Strategy

ABOUT THE INDUSTRY:

A Refrigerator is an appliance or compartment that is artificially kept cool and used to

store food and drink.

Due to competitiveness global players like LG, Samsung, Whirlpool, Haier etc. are

present in Indian market whereas some domestic players such as Videocon and Godrej

are giving them a tough competition. Refrigerator segment stands to be one of the

fastest growing commodity in the white goods segment Market. Huge potential exists

owing to the constant increase in demand Indian Refrigerator Market.

The consumer electronics and home appliances market is worth Rs 70,000crore

(around $15 billion)- Following are the Sales revenue targets of major players in this

sector:-

Samsung $10 Billion by 2013, LG- $10 Billion, Whirpool- $2Bbillion, Videocon- $ 5

Billion by 2015- With a $10-12 million (Rs 45-55crore) investment on a manufacturing

line (excluding cost of land), acompany can churn out 15,000 refrigerators, or 9,000

washingmachines, or 1 million mobile phones in a month. Typically any capacity

addition takes 12 months to become operational & every dollar invested on an asset,

acompany can earn a little over $3 insales

In 2012-13 more than 7.5 Million units Sold , which accounts at around Rs 11,200

crores. 46 % of urban households And 8 % of rural households in India own a

refrigerator.

The presence of different manufacturer domestically and internationally, the

competition is increasing day by day in order to give the best of the best to the

customers to sustain in this cut throat competitive market.

About the Company

Godrej Group is an Indian conglomerate . It operates in diverse sectors such as real

estate, consumer products, industrial engineering, appliances, furniture, security and

agricultural products. Godrej Group is one of the largest conglomerates based in

Mumbai , India , involved in various industries that include appliances, precision

equipment, machine tools, furniture, healthcare, interior solutions, office equipment,

food-processing, security, materials handling and industrial storage solutions. Over the

years it has diversified into various industries including: security, materials handling

and industrial storage solutions, construction, information technology, furniture, health

care, interior solutions, office equipment, appliances, precision equipment, machine

tools and food-processing.

MARKET ANALYSIS

COMPETITION

The major competitor in the refrigerator industry of Godrej are LG, Whirpool, Samsung

and Videocon. These four manufacturer comands around 80% of the market share and

currently LG is leading the industry with highest market share. Hitachi makes some of the

most advanced refrigerators but all above 300 Ltr. Their older models within this segment

have currently being discontinued. So only these companies are giving a tough competition

to Godrej.

If we were to go by what our dealers on the ground say, most of them suggested that LG

is the best buy in this segment. Now some of we will why not Whirlpool or Godrej as they

are more value for money but this might not be the case.

The model of Whirlpool is the cheapest brand. Though it has some added features, we

didn't quite like the fact that it runs on normal compressor, has a 3 star rating and isn't that

energy efficient.Godrej also runs on a normal compressor. It consumes maximum number

of electricity units out of all the models.If people are one of those who doesn't mind

compromising on the energy efficiency and star rating, then settling for Samsung won't be

a bad idea. It is bigger in capacity, lighter on pocket and has an added advantage of a digital

invertor compressor. LG has the most energy efficient model of all. It has four star rating,

consumes lesser energy, is sound on capacity and storage space. Its compressor is also

something that sets it apart and adds to its energy efficiency. One thing that truly sets this

brand apart from others is the after sales and customer service that has been reported as

highly satisfactory by many so far. While you will have to spend a little more but in the

end it is totally worth it.

Home appliances experts opine that out of all the brands LG and Samsung sell the most.

LG currently holds almost 30% of the total refrigerator sale share in India.

So we could clearly state that Godrej is having a tough competion from their competitors

and it is very difficult to survive in this dynamic environment of technology where the

rapid change is making the industry much more competitive.

Below is a quick tabular comparative analysis of some top refrigerator variants of different

brands and their features.

CUSTOMER ANALYSIS

The first and foremost reason why the company operates is to earn profit and the way they

can earn profit is through customers. Their ultimate aim at the end of the day is to either

create or gain customers and keep them until they are profitable to the company.

To do that the companies try to produce the products or offerings that people want and

value them at prices that are more attractive than the competiton.

Godrej mainly operates in the Lower segment of Socio- economic classification of the

customers which includes the skilled working class and lower middle class.

In the recent years Godrej has come up with different variants in the Direct cool

refrigerators and Forst free referigerator for the Upper middle class and upper class section

people.

SWOT ANALYSIS

Strengths:-

Good Quality

Enhanced Features (Micro-oven, Control Panel, radio mp3 player etc.).

After sales Service & reverse logistics framework.

Focus on a Specific region (Consolidating positioning).

Weakness:-

Contract channel Involvement.

Limited Line Offering

High Operating Cost (Initial Start-up).

Product Variety is less.

Brand Positioning. Opportunity.

Opportunities:-

Improved Technology and Widening Product portfolio

E-commerce (Direct Sales & Support Service).

Manufacturing & Operations at large scale.

Redesign, Improved Brand & Quality Image.

Threats:-

Highly Competitive Industry Dynamics (LG , Godrej, Samsung etc )

Economics Instability.

Stagnant Market Demand.

High End products & Services

Financial Support & Instances of false claims eroding value & Customer trust.

KEY GROWTH DRIVERS

Consumer spending on refrigerator is increasing

Change in demographics and lifestyle

Shift towards higher value products

Different strategy for rural market with more focus on volume generation.

Share of sales from modern retail channels will grow as FDI in retail licks in.

Industry will continue to remain price competitive.

Newer technologies will also lower per-unit cost.

SEGMENTATION

Demographic

Demographic segmentation is market segmentation according to age, race, religion,

gender, family size, ethnicity, income, and education. Demographics can be segmented

into several markets to help an organization target its consumers more accurately. With

this type of segmentation, an organization can categorize the needs of consumers.

Godrej segments the market on the basis of

Occupation

Income

Family size

Gender

Psychographic

Psychographic segmentation, which is sometimes called Lifestyle. This is measured by

studying the activities, interests, and opinions (AIOs) of customers. It considers how

people spend their leisure, and which external influences they are most responsive to and

influenced by. Psychographic is highly important to segmentation, because it identifies the

personal activities and targeted lifestyle the target subject endures, or the image they are

attempting to project. Mass Media has a predominant influence and effect on

Psychographic segmentation. Lifestyle products may pertain to high involvement products

and purchase decisions, to speciality or luxury products and purchase decisions.

Godrej segments the market on the basis of :-

Social class

Lifestyle

Behavioural

Behavioural segmentation divides consumers into groups according to their knowledge of,

attitude towards, usage rate, response, loyalty status, and readiness stage to a product.

There is an extra connectivity with all other market related sources.


Purchase occasion

User status

Attitude towards the product or service

Geographic

Marketers can segment according to geographic criteria - nations, states, regions, countries,

cities, neighbourhoods, or postal codes. The geo-cluster approach combines demographic

data with geographic data to create a more accurate or specific profile.


Rural

Semi Urban

Urban

POSITIONING

Perceptual Mapping is a qualitative method for measuring consumer or organisational

perceptions It tells us what people think about a product! Its great for giving a

diagrammatic overview of opinions on a product or service or organisation. It can simplify

market and organisational positions.

High Price

Low Price

Energy efficient Brand

GODREJ

Whirlpool

LG

Samsung

STRATEGIC BRANDING

The company uses the company name itself as a brand for all the products across diverse

categories which leverages the brand name and is called Umbrella Branding. There are

huge cost advantages since the investment is made only in a single brand name. The

customers feel comfortable buying a new product with a familiar brand name.

Some major Strategy of branding by Godrej are:-

Revitalizes Master Brand strategy and identity for greater synergies across business

and brand portfolio

Creates new Marketing and Branding strategy geared to supporting the groups

revenue growth target of 25-30% annually

Outlines a new portfolio management strategy to maximize the value of the Godrej

brand and associated businesses

Adi Godrej said The Indian consumer now has a more demanding and youthful

mind-set. At Godrej we have always been at the helm of changing and redefining

the marketplace and this will now be reflected in a marketing and branding strategy

that accelerates profitable growth.

Jamshyd Godrej said Consumer insight has always been an important part of our

decision-making. We now want to make our proprietary consumer research the core

of our business strategy and create a unique consumer experience associated with

Godrej.

The revitalized corporate identity is a result of a detailed analysis of our vast

product, service and business portfolio. Using the Godrej brand as a unifier of our

businesses and people made sense because it is our most valuable asset, it cannot

be replicated and it spans all our businesses said Tanya Dubash, Executive Director

and President, Marketing.

Godrej is an Umbrella branding, so they have got a greater advantage because good

promotion of one product will carry forward to other product also which create more

brand loyalty to its entire product amongst the people. Since Godrej product diversification in FMCG and also in real estate apart from electronic goods it enjoys

growth in all the fields because of its expansion of businesses.

Godrej has been differentiated with its competitor in the terms of

Product Differentiation:- Through its variants in product (Create your kitchen into a

dance floor)

Service differentiation:- Through Godrej Smart Care.

Image differentiation:- Ideas that make life brighter

PRODUCT MARKET ANALYSIS

The product market analysis is basically done on four

factors that are

1. Existing product Existing Market

Here the Godrej is working over the direct cool

refrigerators and to grow with this segment it has to

go with the market penetration strategy in the

existing market. They must try to sell more number

of refrigerators.

2. Existing Product New Market

In this segment Godrej has products like frost free which is yet to far from the rural

market or not so popular in the semi urban market so Godrej must for market

development in those markets

3. New Product Existing market

They still dont have some products which the rivalry is having and they are snatching

away the market share on the basis of those products only. So Godrej must try to

manufacture refrigerators like 4 door refrigerators etc. to tap into the market with new

product.

4. New Product New Market

The Godrej has a lots of opportunity to grow with the new technologies but till now

Godrej has not some of the products that the competitor is having so if the company

thinks of the market diversification then they can have a major share in the market

through innovation and proper marketing activity

PORTERS FIVE FORCE ANALYSIS

Threats of new entrants:

There is huge scope of new developments innovations and strategies that is the reason why

Godrej which once used to be market leader is now no. 4 in refrigerator sector. L.G. has

gained the customers and is the winner in terms of technology and newness

Threats of substitute product or services:

In this technology driven market there is a threat to a company from the substitutes. Like

the fan market is decreasing day by day due to ACs so the company can have threat from

substitutes of refrigerators. And people in small towns and rural areas do not consider it as

a necessary product and are unaware of its utility value. Non-availability of power.

Bargaining power of customers:

The buyer have a choice between the different variants and manufacturers so bargaining

power of the customers are increasing day by day.

Bargaining power of supplier:

Suppliers have not got many choices between the manufacturers as many of the

competitors have their own showrooms of retail stores. Godrej has industrial tie ups and

online purchase has not left any option to the supplier so that they can have high bargaining

power.

Intensity of competitive rivalry:

Competition is very high in these type of industry as the players have to be technologically

sharp and updated to perform in the market. Its the cut throat competition that the rivalry

is giving because there is no share of all in this market. All are fighting for the consumers.

MARKETING STRATEGY

Godrej tries to deliver excellent products and services that customers cant forget and they

believe this will make them hunger for more and they will come back. The value pillars

mentioned above has forged a stronger connect with the 500 million Indians whose lives are

touched by Godrej group of companies every day. To market the master brand Godrej took

the initiatives like Khelo Jito Jiyo- an exclusive TV game show where contestants

comprising 3 family pairs contend to be the one worthy pair who can win a home and

everything in it,; Godrej Power play- a consumer connect initiative which allows its

consumers to participate in the very reputed cricket league called IPL (Indian premier league)

by making their teams and win prizes while creating a lifestyle of their own using the products

in the process. And finally Go jiyo- an online 3 dimensional world. Godrej is well aware

that they have a strong and unique association in consumers mind. People prefer their

products because they are convinced of the advantages over other brands. The PODs is

created due to functionality of their products and services which delivers good performance.

Further Brand Godrej is difficult to attack; their marketing strategy is defensible hence

competitive POPs are established due to eliminated disadvantages.

4 Ps of marketing mix:

PRODUCTS:

Direct cool Frost Free

Edge digi Eon

Edge ZX Chotukool

Edge pro

Edge

Pentacool V5

Axis

Neo

Cold Gold deluxe

GDC 110 S

Frost free refrigerators, as the name implies, do not require any kind of manual defrosting.

A small element is placed inside the unit that actually melts accumulating ice. This is done

without interfering with the natural cooling cycle that is required to continuously refrigerate

food.

A direct cool model produces the necessary chill through natural convection. Its not as

effective at keeping cold foods

fresh as the frost free version. This

is because the technology of the

frost free refrigerator helps to

maintain a more consistent

temperature, especially in the

humidity controlled fresh food

bins. Frost free refrigerators also

tend to scorch food with freezer

burn less often, as the build-up of

ice is not as apparent, even on

individual items.

In 2009 Godrej designed

completely different type of refrigerator for their rural consumer who also need a cheap way

to store foods, they named it Chotukool and this was priced at about half of an entry level

refrigerator. It became a portable cooling solution that solve urgent food problem in rural

India and created a new product category and serve a new customer segment. Instead of

traditional compressors, chotukool maintains a cool temperature by installing small cooler

which functions like a laptop battery conditioning fan. Its special cap make the cold air settles

down within the container to reduce heat loss and power consumption. It is extremely

portable, with forty five litres volume within a plastic body weighing less than ten pounds.

PRICE:

Godrej has used penetration strategy to enter and sustain in the market. Penetration

pricing is a pricing strategy where the price of a product is initially set low to rapidly reach a

wide fraction of the market and initiate word of mouth. The strategy works on the expectation

that customers will switch to the new brand because of the lower price. Penetration pricing is

most commonly associated with marketing objectives of enlarging market share and

exploiting economies of scale or experience.

Godrej has targeted the rural and semi

urban population of India because they see

a huge potential in these market and to

establish themselves in the market they

priced their product very low.

They offer refrigerators below 10,000 to

15000 with variants. They have more than

10 variants of refrigerator available for

their consumers. Godrej found that only

15% of the Indian market that purchased

refrigerators, the remaining 85% didnt

because for them refrigerator is relatively

expensive. Even if they can buy one, they

wont be able to pay electricity bills.

Especially for the people who live in slum

areas, a refrigerator is too big for the

house. As a result, it brought out problem

of food spoilage in rural India.

And this also help them in differentiating the brand from other competitors.

They also offer a wide range of products for the upper segment of market to establish

themselves among the urban population of the country ranging upto 28,000.

PLACE: Godrej uses hub and spoke model for distribution. They even have strong ERP system and are present across India through 50 exclusive showrooms in 18 cities and

through 800 dealer outlets.

Godrej Ghar

An innovative idea to answer the problems of a distribution network in rural India. A Godrej

Ghar is a multipurpose, multirole unit which will help Godrej reach the rural consumers,

connect with them, sell their products & gain market share in the process. They are allocated

to each village with a population more than 10,000 people and the location is chosen in such

a way that it is accessible to all parts of the village and the connectivity and awareness to the

place is good.

PROMOTION:

This includes all of the tools available to the marketer for marketing communication.

Promotions are done in four ways Advertising, Public relations, Personal selling and sales

promotion. Godrej has a unique way of advertising their product. For example their DVDs

advertisement is considered has funny

advertising amongst the people. They advertise

their FMCG and home appliances product

through outlets, through big banners in

important cities, through television and internet

advertisement and they have their own

company websites through which people can

get to know about all the products of Godrej and

also about their companies.

Recently Godrej products are advertised on a huge basis over television. And they are trying

to position themselves as a complete home appliance company.

Marketing Strategies that Godrej adopt:-

Online Advertising: Social Media Marketing

Current Rage.PR & Advertorials: To increase

visibility and brand image

Strategic Tie Ups: With Real Estate Developers,

IPL, Sporting Events

Outdoor Advertising: Events Hosting, Banners at

selective locations for some time

Television & Print Ads- Conventional Media

Marketing Strategies are used

TV/Radio/Print Ads:Creates an Engagement Model around Objectives & Resources Address

Specific Customer Needs

BLOG or be BLOGGED: Added blogging to the marketing mix, make people talk about you,

and believes PEOPLE trust PEOPLE.

They have emerged as a complete home solutions with all the products available in the brand

and markets under GODREJ INTERIO.

Documents

Godrej refrigerator