TURKISH WHITE GOOD INDUSTRY Duygu Kıran Özlem Kuzey

TURKISH WHITE GOOD INDUSTRY

Duygu KıranDuygu KıranÖzlem KuzeyÖzlem Kuzey

OUTLINE•General overview of the White Good Industry

Definition History and Growth of White Good Industry in the World History and Growth of White Good Industry ın Turkey

•Turkish White Good Industry

Structure of White Good Industry Conduct of White Good Industry Performance of White Good Industry The Role of Government Policy The Problems of Turkish White Good Industry Suggestions Conclusions

White good is a large machine that accomplishessome routine housekeeping task which includes cooking,food preservation or cleaning whether in a household,İnstitutional,commercial or industrial settings.

1874: William Blackstone invented thethe first washing machine which was made from wooden and worked by human force.1893: In Chicago World fair first motor-driven dishwasher was introduced.1908: The first electric dish washer and electirc oven were producedç1914: First electric refrigerator was produced1930: first deep freze entered the market.1937: First automatic washing machine was produced.1958: First no-frost, automatic freze refrigerator and deep freze entered the market.1977: Electronic and touchscreen washing machine and refrigerator were produced

The Evaluation Of White Goods industry;The Evaluation Of White Goods industry;

1955:First white good firm is established. 1959:First washing machine

1960:First refrigerator 1963:First oven

After 24 Jan. 1980:developing white good industry.1990: Turning point of the industry.

Hıstory and Growth of White Good Industry in TurkeyHıstory and Growth of White Good Industry in Turkey

•The structure of White Good IndustryThe structure of White Good Industry

Names,Numbers Market Shares of Firms Products and Product Differentiation

PRODUCTIVE PRODUCTIVE

FIRMFIRM BRANDBRAND IMPORTER IMPORTER

FIRMFIRM BRANDBRAND

ArçelikArçelik Arçelik, Beko, Arçelik, Beko,

AltusAltus ElektroluxElektrolux Elektrolux,AEGElektrolux,AEG

ProfiloProfilo Profilo, Bosh, Profilo, Bosh,

SiemensSiemens GepaGepa GeneralEle ctricGeneralEle ctric

ArdemArdem Arçelik, Aygaz, Arçelik, Aygaz, Beko, Beko, DemirdökümDemirdöküm

FrimakFrimakFTC FrigidaireFTC Frigidaire

MerloniMerloni Ariston, Philco, Ariston, Philco, IndesitIndesit

UnimeksUnimeks White White WestinghouseWestinghouse

TebaTeba TebaTeba SingerSinger Goldstar-CandyGoldstar-Candy

AuerAuer Auer, CalipsoAuer, Calipso ErlerErler MoulinexMoulinex

Türk Türk DemirdökümDemirdöküm

DemirdökümDemirdöküm MakMak Sanyo-CosmosSanyo-Cosmos

VestelVestel VestelVestel VestelVestel KelvinatorKelvinator

RaksRaks HitachiHitachi

2005 2004 2003 2002Dom. SalesM. Share Dom. Sales M. Share Dom. Sales M. Share Dom. Sales M. Share

ARÇELİK 3.772.687 54,60% 3.356.460 54,41% 1.973.567 54,77% 1.867.241 57,63%BSH 1.727.735 25,00% 1.494.979 24,23% 885.220 24,57% 853.183 26,33%VESTEL 1.163.844 16,84% 911.795 14,78% 360.876 10,02% 213.565 6,59%İNDESİT 245.997 3,56% 371.249 6,02% 338.247 9,39% 283.101 8,74%TEBA 34.696 0,56% 45.381 1,26% 22.800 0,70%

Total 6.910.262 100,00% 6.169.179 100,00% 3.603.291 100% 3.239.891 100,00%

*December 2005 value

**Dom. Sales: Domestic sales

***M. Share: Market shares

****Source: BESD

•Products and Product Products and Product DifferentiationDifferentiation

Main white good products:

RefrigeratorDishwasherWaching machineOven

• Products and Product Differentiation

Refrigerator: no-frost, double door,table top refrigerators,single door,side by side,nostalgia models

Washing machines:capacity of laundry between 3 and 10 kilograms

Dishwasher:normal, combi and narrow

Ovens :double parts and single cavity(narrow, fan heating, electric with fun,multifunctional).

•Conduct of White Good IndustryConduct of White Good Industry

Business Objectives Pricing Policy Branding and Marketing Research and Development

•Business ObjectivesBusiness Objectives

Mission : Economical apropriate, innovative and competitive products.Vision : Generating strategies and making profits.

• Pricing PolicyPricing Policy

•Big export capacity with exporting the %60 of productions.•All brands in the world produces in Turkey.•Foreign firms import the white goods from Turkey.

•Branding And MarketingBranding And Marketing

An example of the marketing study in the white good industry:Vestel Marketing has a structure that emerge 7 parts: sales, marketing, services and operation, finance, information and risk control, information technologies and human resources. In the part of service and operation, Vestel marketing realized that products distributes rapidly and actively.

Vestel marketing uses three different distribution channels:Main distribution channel which is a dealer group consists of stores and showrooms.Second distribution channel is wholesalers.Third channel consists of big retailers like Carrefour, Metro, Praktiker, Tansaş and Maxi.

•Branding And MarketingBranding And Marketing

• Research And DevelopmentResearch And Development

An example for R&D study in white good industry is;Arçelik R&D, which works at global standards for technology and product development, focuses on products that:•Are environment-friendly (recover, recycle, reuse and low energy, water and detergent consumption), •Ensure comfort and customer satisfaction (smart, quiet, practical), •Are affordable and comply with the standards of the future.[1]

[1] www.arcelik.com.tr

•Research And DevelopmentResearch And Development

Another example for R&D study is Vestel R&D study; Vestel invested in five points (England, USA, Hongkong, Manisa, İzmir) in the world for R&D projects. It’s aim is pursuing the growth in the world closely.[1]

[1] www.vestel.com.tr

THE PERFORMANCE OF WHITE THE PERFORMANCE OF WHITE GOOD INDUSTRYGOOD INDUSTRY

•Profitability And GrowthProfitability And Growth Production Production Export Export ImportImportDomestic SalesDomestic Sales

•Quality Of Productions Quality Of Productions •Technological ProgressTechnological Progress

Profitability And GrowthProfitability And Growth Production of White GoodsProduction of White Goods

PRODUCTION (1000)

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005* REFRIGERATOR 1.637 1.638 1.850 1.875 2.139 2.446 2.483 3.318 4.286 5.308 4.242

AUTO. WASH. MA 828 993 1.454 1.375 1.219 1.343 1.030 1.654 2.459 3.963 3.084 DISHWASHER 236 255 447 318 325 351 223 346 399 657 556

OVEN 589 735 921 907 866 1.048 1.096 1.341 1.574 1.715 1.177

TOTAL 3.290 3.621 4.672 4.475 4.549 5.188 4.832 6.659 8.718 11.643 9.059

CHANGE 100 110 142 136 138 158 147 202 265 354 *September 2005 values ** Source: TURKBESD

Profitability And GrowthProfitability And Growth Export of White GoodsExport of White Goods

EXPORT (1000 )

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005* REFRIGERATOR 802 693 785 818 1.046 1.089 1.530 2.247 3.034 3.361 3.062 AUTO. WASH. MA 41 53 87 121 180 273 444 989 1.550 2.236 1.798

DISHWASHER 2 7 110 91 88 83 66 149 239 288 255

OVEN 141 217 292 355 450 557 792 997 1.189 1.326 763

TOTAL 986 970 1.274 1.385 1.764 2.002 2.832 4.382 6.012 7.211 5.878

CHANGE 100 98 129 140 179 203 287 444 610 731 *September 2005 values

** Source: TURKBESD

Profitability And GrowthProfitability And Growth

Import of White GoodsImport of White Goods

IMPORT (1000)

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005* REFRIGERATOR 39 77 200 303 278 223 91 51 41 44 36

AUTO. WASH. MA 6 114 164 253 208 295 169 159 191 187 89 DISHWASHER 3 61 118 198 188 224 101 98 102 177 140

OVEN 0 8 10 32 38 57 28 29 26 32 36

TOTAL 48 260 492 786 712 799 389 337 360 440 301

CHANGE 100 542 1025 1638 1483 1665 810 702 750 917 * September 2005 values

** Source: TURK BESD


The Comparison of Export And Import of White The Comparison of Export And Import of White GoodsGoods

THE COMPARISON OF EXPORT AND IMPORT (x1000 )

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 EXPORT 986 970 1.274 1.385 1.764 2.002 2.832 4.382 6.012 7.211 5.878

IMPORT 48 260 492 786 712 799 389 337 360 440 301

Import/Export 5% 27% 39% 57% 40% 40% 14% 8% 6% 6% * September 2005 values



Domestic Sales of White GoodsDomestic Sales of White Goods DOMESTIC SALES (1000 )

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005* REFRIGERATOR 834 969 1.231 1.407 1.258 1.468 1.018 1.088 1.362 2.004 1.632

AUTO. WASH. MA 786 1.067 1.464 1.494 1.222 1.417 795 824 1.076 1.917 1.394 DISHWASHER 241 319 427 478 406 503 265 282 261 526 472

OVEN 445 519 608 587 474 536 337 339 378 599 472

TOTAL 2.306 2.874 3.730 3.966 3.360 3.924 2.415 2.533 3.077 5.046 3.970

CHANGE 100 125 162 172 146 170 105 110 133 219 * September 2005 values


Quality of White GoodsQuality of White Goods

Quality of products is important in Quality of products is important in White good industry because it White good industry because it effectseffects

BrandBrand Consumer SatisfactionConsumer Satisfaction CompetitionCompetition Market Share Market Share

Technological ProgressTechnological Progress

In general, the cheap In general, the cheap technologies which are improved in technologies which are improved in aero-automotive sectors are adopted aero-automotive sectors are adopted to white goods. That kind of to white goods. That kind of technological improvement activities technological improvement activities are used to develop the products for are used to develop the products for competition and to reduce the costs.competition and to reduce the costs.

THE ROLE OF GOVERNMENT THE ROLE OF GOVERNMENT POLICIESPOLICIES

Government incentive application Government incentive application should be raised for developing white should be raised for developing white goods industry. Because;goods industry. Because;

In white goods industry, the %80-90 of In white goods industry, the %80-90 of the ancillary industry firms are small the ancillary industry firms are small and medium scale firms (KOBİ), and medium scale firms (KOBİ), investments seem impossible without investments seem impossible without government incentives for KOBİ.government incentives for KOBİ.

THE PROBLEMS OF TURKISH THE PROBLEMS OF TURKISH WHITE GOOD INDUSTRY AND WHITE GOOD INDUSTRY AND

SUGGESTIONSSUGGESTIONS Problems:Problems: Like every industry, Turkish White Like every industry, Turkish White

Good Industry meets some obstacles and has Good Industry meets some obstacles and has some problems; some problems;

White goods are appraised like luxury White goods are appraised like luxury consumption goods and the tax rates are high consumption goods and the tax rates are high about %25 which causes decrease in sales.about %25 which causes decrease in sales.

In the white good industry, the sales of raw In the white good industry, the sales of raw materials with high price is a serious problem materials with high price is a serious problem for the development of industry.for the development of industry.

Satisfaction level of television and refrigerator Satisfaction level of television and refrigerator approaches to %100. The demand for approaches to %100. The demand for refrigerator as a white good can increase only refrigerator as a white good can increase only if high-tech products are produced.if high-tech products are produced.


SUGGESTIONSSUGGESTIONS

In the white good industry, the most In the white good industry, the most important negative factor is the important negative factor is the general situation of economics and general situation of economics and change in income distribution. The change in income distribution. The decrease in purchasing power of decrease in purchasing power of customers causes the deceleration of customers causes the deceleration of the growth rate of domestic market.the growth rate of domestic market.


SUGGESTIONSSUGGESTIONS Suggestions:Suggestions: Some suggestions which can Some suggestions which can

help to overcome the problems of industry help to overcome the problems of industry are;are;

High tax must be removed for High tax must be removed for consumption goods. For this reason, consumption goods. For this reason, consumption goods and basic necessity consumption goods and basic necessity must be separated.must be separated.

All producers have recognized the All producers have recognized the importance of export for the development importance of export for the development of the white good industry. Firms must find of the white good industry. Firms must find new foreign markets to provide the new foreign markets to provide the continuity of increasing export.continuity of increasing export.

Sellers must be adapted to changing the Sellers must be adapted to changing the marketing structure. marketing structure.


SUGGESTIONSSUGGESTIONS Personnel and the employees must be Personnel and the employees must be

trained to fulfill the quality product and trained to fulfill the quality product and efficiency by the implementation of efficiency by the implementation of professional education project. professional education project.

The producers and ancillary industry must The producers and ancillary industry must concentrate on standards and quality concentrate on standards and quality control.control.

For stable growth, firms must prepare a For stable growth, firms must prepare a production and sales plan which includes production and sales plan which includes energy savings, simple usage, after-sale energy savings, simple usage, after-sale service and convenient price factors in service and convenient price factors in production and sales stages.production and sales stages.

CONCLUSIONCONCLUSION Turkish White Good Industry firms compete Turkish White Good Industry firms compete

with global markets by producing high-with global markets by producing high-quality products. They follow the quality products. They follow the technological, design and quality technological, design and quality improvements and join in world fair improvements and join in world fair organizations in order to give the new organizations in order to give the new products publicity.products publicity.

In long term future plans, the growth rate of In long term future plans, the growth rate of white good market is expected about %7 per white good market is expected about %7 per year. With this foresight, after ten years, with year. With this foresight, after ten years, with 15 million production capacity and 6 billion 15 million production capacity and 6 billion Euro endorsement, Turkish White Good Euro endorsement, Turkish White Good Industry will have the %25- %30 of market Industry will have the %25- %30 of market shares in Europe market. With the same shares in Europe market. With the same foresight, the employment rate is expected foresight, the employment rate is expected to be about 200 thousands. to be about 200 thousands.

Documents

TURKISH WHITE GOOD INDUSTRY Duygu Kıran Özlem Kuzey