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International Marketing Whirlpool
20 Mar International Marketing Whirlpool
Posted at 02:51h in Brand, Campaigns & Cases, Case Studies, International Marketing	by	Danielle Spinks-Earl
Whirlpool Corporation is the world's number two appliance company, selling $18 billion of 'white goods' each year, including washing machines, microwaves, refrigerators and stoves. It is number one in the USA, where it is headquartered.
It has a brand portfolio to cater for different price points, including the high end Maytag and KitchenAid brands as well as middle-priced Whirlpool and a number of other brands in different countries.
Underlining Whirlpool's strategy to expand internationally is the flat domestic growth in the United States of of two to three per cent each year. Whilst it currently achieves around 40 per cent revenue from overseas markets, it expects this to become the majority of revenue in future.
The international marketing strategy floundered in the 1990s. Many believed the fault lay in its execution. It has now modified things and is taking a global market segmentation approach.
It is using a three-tiered approach, segmenting consumers on the basis of traditional or aspirational, and providing products at three price points. This was established in the USA and is being extended throughput different markets.
Whirlpool's Market Research
However, Whirlpool's research shows that consumers in different countries prefer different to product features. To accommodate these differences, the company is focusing on 'product platforms'. The product platform is the preferred technological capabilities built into the appliance, which is then housed in country-specific outer shell according to the size, colour and shape most appropriate to the consumers in the market.
Using product platforms allows Whirlpool to economically deliver sets of innovations for each particular market, making it adaptable to the needs of local consumers.
Whirlpool's research has included broad economic secondary research as well as primary research. Per capita income in Brazil, for example, shows that 30% of the population earn around $220 per month, insufficient to buy a washing machine. Having said that, other research cites the washer as being the second most aspirational purchase (next to a cell phone).
Similar to Tata in India's Nano car (the $1,000 lakh car for the burgeoning Indian middle class), Whirlpool innovated to create an affordable washer for Brazilians – proudly launching "the world's most affordable washer." This was the result of a great deal of market research including focus groups and $30 million dollars of product engineering investment and a number of short-cuts that kept manufacturing costs low and still produced an acceptable standard of washed clothes. Among these design compromises included smaller capacity washers (research found lower socio-economic households did more frequent laundry), slightly damper clothes (which removed the need for an extra gear to convert from wash to spin cycle) and a product that came on four legs (so that Brazilians could clean floors beneath the unit).
In India, the washer has a sari setting and comes in different shell colours. In China, the washer is not white because this would show the dirt too easily and instead comes in light blue and grey. It also has a 'grease removal' setting for the many users of bicycle transport.
Key Learning
Whirlpool shows us the need for not only broad desk research to assess the viability of certain products and services in a new market, but the need for in-depth qualitative research also. Local know-how is essential. The motivations for purchase are not only the functional benefits that a product provides, but also the emotional benefits such as status and esteem.
Further research revealed the washer should be good looking as it was an aspirational purchase, it was a de facto status symbol. This goes some way to explaining why some of Whirlpool's refrigerators are finding their way into the lounge-rooms of many Chinese middle-class families. They are a source of pride.
We must deeply engage and understand our market and respect the differences inherent.
Danielle Spinks-Earl
daniellespinks@gmail.com
Author & Manager, My Virtual Marketing Manager. MMktg | BACS
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