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Godrej’s Appliance Division is aware of the competition but is confident in its knowledge of the Indian consumer. The company has also added zing to its products and marketing.
The Godrej factory at Shirwal, Maharashtra
Kiwi Green, Melon Red, Icy Blue … If the colours of its appliances were to indicate the mood at the company, they would say Godrej is upbeat. Going hand in hand with that sentiment is the awareness that it faces a challenge - the usual one most other brands with a hoary heritage face – that of contemporarising its image.
Godrej had been relatively quiet when it came to speaking to the media and also refrained from buffeting the media with its ads. However, both situations are changing at Godrej’s Appliance Division. The company is all set to accelerate business, considering it has been able to hold its own against global giants who have a presence in India. “Who knows the Indian consumers as well as we do? We make products that contain technology relevant to them, which will touch their heart and soul,” says George Menezes, Chief Operating Officer, Appliance Division. He adds, “We’re being different on a scale where the majors cannot compete with us,” he says.
At its offices in Mumbai and Shirwal (near Pune), an exhibition room proudly shows off several colourful refrigerators and washing machines made there. The innovation and customisation to Indian tastes goes deeper than colour. The EON range of frost-free refrigerators has won an award for the best design for its ‘Seven Wonders’ – the ‘Cool Shower Technology’ that allows the cooling to evenly pervade the fridge through holes in the shelves even when it’s loaded, a hook in the freezer/chiller which one can hang milk or other stuff brought in a polythene bag – and the washing machines with their Dynamic Aqua-Power Control Technology have been designed to monitor power and water supply and wash accordingly.
The Appliance Division also makes microwave ovens and DVD players. It’s all set to launch a pilot project for colour televisions in mid-2008 (a category that will help it instantly scale up the size of the domestic appliances business), and add capacity to respond faster to demand in the peak season. “Our challenge is to change the 60-year-old mindset,” Hussain A. Plumber, General Manager (Quality), Appliance Division, Godrej, tells a group of mediapersons from Chennai visiting the factory.
Godrej, unlike many other rivals, is not operating in all the categories but plans to launch more high-end models now. It is investing Rs 100 crore in a new line to make 2.5 lakh more refrigerators at the Shirwal plant to increase its total refrigerator capacity to 18.5 lakh units per annum.
As of now, this plant can make six lakh refrigerators and its Mohali facility, 10 lakh units. For the appliance division, refrigerators contribute 55 per cent of the topline sales, which, this year, Godrej expects will be Rs 1,400 crore. The company has a 20 per cent market share in this segment, compared to LG and Samsung which have 24 and 23 per cent. In air-conditioners, the company aims to increase market share to 10 per cent from 7 per cent. In washing machines, its share is 8 per cent and in microwave ovens, seven per cent.
Says Ramesh Chembath, General Manager (Marketing), Appliance Division: “In the last two years, we have been focusing on offering relevant technology and being more visible in the media. We have invested Rs 30 million in market research. Five per cent of our turnover is spent on R & D and seven per cent of it on promotion.”
Godrej recently set up a new R & D centre which employs over a 100 people at its Vikhroli township in Mumbai. “We have plans for every month till the year 2011. Every six months, there will be something new, at least a variant if not a product itself,” says Chembath. This multigenerational product planning has seen Godrej launch 104 products in the last one year. Every category the company is present in saw the introduction of new technology, says Chembath.
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