Marketing mix of Vacuum Cleaner

Marketing Management Library Assignment 2010-11

S.Y. B.B.A. Semester- III

Prepared By: 1. Jatin Ramani (219) 2. Bhavik Rangunwala (220) 3. Jay Rashiwala (221)

Product: VACUUM CLEANER (Electrolux) Submitted to: Mr. Jayesh Desai

Mr. Pratik Patel th

Submitted on: 26  September 2011

INTRODUCTION ABOUT VACUUM CLEANER A  Vacuum cleaner, commonly referred to as a "vacuum," is a device that uses an air pump to create a partial vacuum to suck up dust and dirt, usually from floors, and optionally from other surfaces as well. The dirt is collected by either a dust bag or a cyclone for later disposal. Vacuum cleaners, which are used in homes as well as in industry, exist in a variety of sizes and models: small battery-operated hand-held devices, domestic central vacuum cleaners, huge stationary industrial appliances that can handle several hundred liters of dust before being emptied, and self-propelled vacuum trucks for recovery of large spills or removal of contaminated soil.

Vacuum Cleaner Market Condition In early 2007, TTI Floor Care North America of Glenwillow , Ohio, became the largest vacuum manufacturer when it acquired the Hoover brand  from Whirlpool for $107 billion. By the late 1990s, vacuum manufacturers tried to boost sales with new high-tech products. In order to make filtration systems more desirable, vacuum manufacturers wanted consumers to be alerted to the damage caused by fine dusts. Eureka Forbes, for example, introduced a line of environmentally-friendly vacuums that were designed to filter out 99 percent of the dust and dirt that entered the vacuum. Philips Home Products Corp.  introduced Blue Magic, a high-tech vacuum with a turbo-compressor

that operated by fuzzy logic. Another technological highlight included new polymers, which allowed vacuum manufacturers to reduce unit costs and weight while improving quality. In 2010, there were 37 establishments operating in this industry with 5,631 employees. The industry shipped more than $1.35 billion that year, only to decrease the following year to $1.2 billion. In the middle years of the first decade of the 2000s, bagless models were touted as the best alternative for those with allergies and for general air quality. Hands-free "robotic" vacuums were also becoming more prevalent. An English company, Dyson, entered the high-end market with a claim that their vacuums used a filter less technology that never loses suction power. Presently there are many companies working in vacuum cleaner industry. Like, 

Eureka Forbes



LG



Philips



Bissell



Hoover



Whirpool



Electrolux



ROOTS Multi Clean Ltd.



Haier



Lindhaus



Kirby



Shark Clean



Dust Devil

Vacuum Cleaner market in India Vacuum Cleaners in India until recently were a rarity because of the high Prices and less awareness among the masses about their use. As the times have moved forward at a rapid pace, which creates a demand for more and more mechanized and less time consuming home appliances like vacuum cleaner. The leading Vacuum Cleaner Brands world over are targeting India as a potential Commercial market in their Marketing strategies. These include Electrolux, Whirlpool, LG, Eureka Forbes and many more. The Best Vacuum Cleaners and Accessories in India

at present can certainly be accredited to them. These companies also have their Authorized Service Centers all over the country. We can find special Discount and Best Buy Deals   on the Prices of Vacuum Cleaners. Cheap and branded Vacuum Cleaners and Accessories are available in most of the electronics shops and showrooms. Comparison can be made between the various models available in the market on basis of: 

Their Air-suction capacity that can be less than 6000 Pascal to more than 18,000 Pascal



Their chord length ranging from below 5 meters to above 6 meters



Their dust bag capacity that is less than 3 liters to above 5 liters

Price Comparison between Vacuum Cleaners is inevitable given the vast range For Sale by the top companies like Electrolux, Whirlpool, LG and Eureka Forbes; that can be as cheap as less than 2,500 Rupees to as high as above 8,000 Rupees. Additional features which one can go for are the dust level indicator, air filtration or dust-mite inactivator. Vacuum Cleaner Accessories like the Vacuum Cleaner belts and bags, cleaning tools like carpet nozzle, dusting brush, bare floor brush, crevice tool or upholstery tool, filter and scented tablets are available with the local vacuum cleaner dealers. The varieties of Vacuum Cleaners present in the market are:    

Floor Cleaners Upright Vacuum Cleaners Stick and Hand-Held Vacuum Cleaners Canister Vacuum Cleaners

A strong global brand, attractive design and innovative products provide Electrolux with the competitive edge to increase sales and capture market shares. The Electrolux brand is now positioned in the profitable premium segment throughout the world. The Electrolux Group is a Swedish appliance maker. As of 2010 the 2nd largest home appliance manufacturer  in the world after Whirlpool, its products sell under a variety of brand names including its own and are primarily major appliances and vacuum cleaners. The company also makes appliances for professional use. Forbes Magazine  says Electrolux is one of the top 5 companies   in consumer durable

goods, worldwide, and named it to its list of 130 Global High Performers in 2010. Formed from a 1918 cooperative agreement between sales company Svenska Elektron AB and kerosene lamp maker Lux AB , Electrolux grew rapidly through mergers and

acquisitions to become a world-class appliance manufacturer. Electrolux made an initial public offering on the London Stock Exchange in 1928 and another on the Stockholm Stock Exchange in 1930. In the 1960s, the company successfully marketed vacuums in the United Kingdom with the slogan "Nothing sucks like an Electrolux".  Americans often assumed that using this slogan was a brand blunder. In fact, the informal US meaning of the word sucks was already well known in the UK at the time, and the company hoped the slogan, with its possible double entendre, would gain attention. The company's current slogan is "Thinking of you".

Hans Werthén, a President and later Chairman of the Board, led the strategic core of an increasingly decentralized Electrolux—and was instrumental to its rapid growth from 1967 to 1991. Keith McLoughlin  took over as President and CEO on January 1, 2011, and became the

company's first non-Swedish chief executive.

ELECTROLUX: Present market condition In addition to presenting significant events in 2009 and the Group’s strategic ambitions, Electrolux CEO Hans Stråberg   comments on current market conditions   and

expectations for 2010. He repeats the outlook that operating income is expected to be in-line with 2009, but that economic conditions remain uncertain.

Electrolux Annual General Meeting 2010: CEO’s comments on current market

conditions: The appliance industry has been in recession since mid-2007. The market is on its way to the seventh consecutive quarter of negative growth in the US. They maintain the assessment that they issued in January that demand for appliances shows a slightly negative development compared to 2009. However, the year has started somewhat weaker than they anticipated. Their estimate is that the market declined by 10% in February compared to the same month in 2009, which means that demand was almost 15% lower than in February 2008. While the US market has declined sharply, the European market has been stable in recent years and showed a slight growth. During the fourth quarter of 2009 they saw a clear slowdown in key markets such as Germany, the UK and Spain  –  a trend that continued in the first quarter of 2010. Demand in Western Europe remains weak, while they see continued growth in Eastern Europe. As previously, they expect Electrolux operating income in 2010 to be in-line with 2009. A number of factors will have an impact on their results. First, they have reduced complexity in their European operations and are now able to

manage the operations with a lower headcount. They expect this to lead to more than 400 people leaving the company. The cost of this will be around SEK 400 million and will be taken in the first quarter. Second, costs will continue to be higher for the products they launched in Europe, even

though they are now able to reduce costs on a stepwise basis.

Third, they expect the major Electrolux launch in the US to impact negatively on income

due to substantial initial marketing costs. The positive effects will not be seen until 2009. Fourth, they anticipate that raw material costs will rise for the fourth consecutive year

and expect an increase of SEK 1 billion in 2010. They continue to make savings and raise prices, but it will be difficult to entirely offset the cost increases. However, they are gradually increasing underlying results through operational improvements and I believe they will be able to compensate for these negative items. They will see positive effects from their major restructuring program and from costsavings in purchasing, administration and production. The product launches in Europe will raise margins. A slight market growth will also improve results. But I will already at this stage announce that the first quarter will be very weak. Historically, the first quarter is the seasonally weakest quarter, accounting for only 1015% of the full year results. As a consequence of the initially weak trend of the markets in North America and Europe as well as a number of negative non-recurring items, as previously announced, they expect that operating income for the first quarter of 2010 will be somewhat negative. But I would like to repeat that their outlook for the full year remains unchanged and that they expect operating income for 2010 to be in-line with 2009, but that economic conditions remain uncertain.” Electrolux is a global leader  in home appliances and appliances for professional use, selling more than 40 million products to customers in 150 countries every year. The company focuses on innovations that are thoughtfully designed, based on extensive consumer insight, to meet the real needs of consumers and professionals. Electrolux products include refrigerators, dishwashers, washing machines, vacuum cleaners and cookers sold under esteemed brands such as Electrolux, AEG-Electrolux, Eureka and Frigidaire. In 2009, Electrolux had sales of SEK 105 billion and 57,000 employees.

Consumer Buying Behavior Consumer behavior is comparatively a new field of study which evolved just after the Second World War. The sellers’ market has disappeared and buyers’ market has come up. This led to the manufacturer’s attention from product to consumer and specially focused on the consumer behavior. The evaluation of marketing concept from more selling concept to consumer- oriented marketing has resulted in buyer behavior becoming an independent discipline . Consumer behavior is a study of how individuals make decision to spend their available resources or consumption related aspects .

The heterogeneity among people makes understanding consumer behavior a challenging task to marketers. Hence marketers felt the need to obtain an in depth knowledge of consumers buying behavior. Finally this knowledge acted as an imperative tool in the hands of marketers to forecast the future buying behavior of customers and devise four marketing strategies in order to create long term customer relationship. The reason for a business firm to come into being is the existence of a consumer who has unfulfilled needs and wants. To fulfill these consumer needs an organization is set up. In your professional capacity you may also be a part of one such business organization. But as part of the organization, have you ever wondered about who are the consumers of your products and services? Why do these consumers buy your brand and not that of the competitors? How do your consumers perceive your product fulfills their needs? After having bought your product do they feel satisfied or dissatisfied? And how are these feelings reflected in their behavior as consumers? It is important to the survival and growth of your organization that you regularly raise such questions and attempt to find answers to them. It is only through such a process of questioning and seeking that you can be sure of keeping your firm on the growth path. A thorough knowledge of your consumers and an understanding of their behavior (as consumers) are essential if you wish to continue to remain in business.

Consumer Buying Process Consumer buying behavior process is basically divided in 5 steps which are as follows,

1. Problem Recognition: The buying process begins with recognition on the part of the buyer that he has a problem or need. Market Research should try to identify what are the factors that make a buyer go for buying a vacuum cleaner. In the first step the consumer has determined that for some reason he/she is not satisfied and wants to improve his/her situation. For instance, internal triggers, such as hunger or thirst, may tell the consumer that food or drink is needed. External  factors can also trigger consumer’s needs. Marketers are particularly good at this through advertising; in-store displays and even the intentional use of scent. At this stage the decision-making process may stall if the consumer is not motivated to continue. For example, Mr. Mehta wants to buy a vacuum cleaner for his car by seeing his neighbor’s one.

2. Information Search: Next step is to identify different available alternatives and to find information about alternatives. Assuming consumers are motivated to satisfy his or her need, they will next undertake a search for information on possible solutions. The sources used to acquire this information may be as simple as remembering information from past experience (i.e., memory) or the consumer may expend considerable effort to locate information from outside sources How much effort the consumer directs toward searching depends on such factors as: the importance of satisfying the need, familiarity with available solutions, and the amount of time available to search. To appeal to consumers who are at the search stage, marketers should make efforts to ensure consumers can locate information related to their product.

Total Set

Awareness Set

Consideration Set

Choice Set

Decision

LG

LG

LG

Hoovers

Philips

Hoovers

Hoovers

Electrolux

?

Hoovers

Electrolux

Whirlpool

Electrolux

Whirlpool

Electrolux

Eureka Forbes

Philips

Philips

Bissell

Haier

Haier

Whirlpool

Dirt Devil

Haier Dirt Devil . . . .

3. Evaluate Alternatives: Having collected the information, the consumer clarifies and evaluates the alternatives. There is, unfortunately no simple and single evaluation process used by all consumers or even by one consumer in all buying situations. The most current process of evaluation is to judge the product largely on a conscious and rational basis. Various considerations form the part of judgment such as product attributes, importance, weights, brand image, utility function for each attribute, and attitude etc. After evaluation of various alternatives, he takes the decision to buy. Most importantly, marketers must determine which criteria consumers are using in their selection of possible options and how each criterion is evaluated. Returning to the television example, marketing tactics will be most effective when the marketer can tailor their efforts by knowing what benefits are most important to consumers when selecting options (e.g., picture quality, brand name, screen size, etc.) and then determine the order of importance of each benefits. To find perceived value for each bike, according to the expectancy-value method, we multiply weights by belief about each bike’s attributes. This computation leads to the following perceived values:

Attributes Vacuum Cleaner

Price (30%)

Filter/sucking

Carpet-height

power

adjustment

(20%)

(35%)

Weight (15%)

Upright vacuums

8

7

9

7

Canister vacuums

8

9

8

8

Central vacuums

7

8

7

6

Small vacuums

8

9

6

10

Stick vacuums

9

8

8

7

Upright Vacuums :

0.3(8) + 0.2(7) + 0.35 (9) + 0.15(7) = 8.0

Canister Vacuums:

0.3(8) + 0.2(9) + 0.35 (8) + 0.15(8) = 8.2

Central Vacuums:

0.3(7) + 0.2(8) + 0.35 (7) + 0.15(6) = 7.85

Small Vacuums:

0.3(8) + 0.2(9) + 0.35 (6) + 0.15(10) = 7.8

Stick Vacuums:

0.3(9) + 0.2(8) + 0.35 (8) + 0.15(7) = 8.0

The expectancy-model formulation predicts that it will favor canister vacuums, which has the highest perceived value. Mr. Mehta now perceives that canister vacuums are better than all available alternatives so he will go to buy it from any resources.

4. Purchase Decision: Evaluation behavior leads the consumer to form a ranked set of preferences. Normally a consumer buys the article, he or she likes most but there are three more important consideration for taking the buying decision: (a) attitude of other such as of wife, relatives, and friends, (b) anticipated situational factors as expected family income, expected total cost of the product and the expected benefits of the product; (c) unanticipated situational factors as looks or manner of the salesman or the way business is carried on. In many cases the solution chosen by the consumer is the same as the product whose evaluation is the highest. However, this may change when it is actually time to make the purchase. The "intended" purchase may be altered at the time of purchase for many reasons such as: the product is out-of-stock, a competitor offers an incentive at the point-of-purchase (e.g., store salesperson mentions a competitor’s offer), the customer lacks the necessary funds (e.g., credit card not working), or members of the consumer’s reference group take a negative view of the purchase (e.g., friend is critical of purchase). Marketers whose product is most desirable to the consumer must make sure that the transaction goes smoothly. For example, Internet retailers have worked hard to prevent consumers from abandoning online purchase (i.e., online shopping carts) by streamlining the checkout process. For marketers whose product is not the consumer’s selected product, last chance marketing efforts may be worth exploring, such as offering incentives to store personnel to "talk up" their product at the checkout line. In our case he may be go for purchase a vacuum cleaner system from a showroom or can also buy it from internet. He purchases it from a company show room near his home.

5. Post-Purchase Behavior: After buying and trying the product, the consumer will feel some level of satisfaction or dissatisfaction and level of satisfaction depends very much on the expectation and the product's perceived performance. If the product matches up to his expectations, the consumer is satisfied; if it exceeds, he is highly satisfied; and if it falls short of expectations, he is dissatisfied. After the purchase, the customer might experience dissonance about their purchase and be alert to inform that supports their decision. The marketer’s job therefore doesn’t end wit h the purchase. Marketers must monitor post purchase satisfaction, post purchase actions, and post purchase product uses and dispose. 

Satisfaction

Satisfaction is a function of the closeness between expectations and the product’s perceived performance. If   performance fall shorts of expectations, the consumer is disappointed; if it meets expectations, the consumer is satisfied. 

Use and Disposal

Marketers should also monitor how buyers use and dispose of the product. A key driver is product consumption rate  – the more quickly buyers consume a product, the sooner they may be back in the market to repurchase it. In our case Mr. Mehta’s wife is very satisfied with canister vacuum cleaner which is very comfortable to use and she also give reference to their peer group and to other to buy this vacuum cleaner.

Business Buying Behavior The business market includes firms that buy goods and services in order to produce products and services to sell to others. It also includes retailing and wholesaling firms that buy goods in order to act resell them at a profit. Because asp of business-tobusiness marketing applies to institutional markets and government markets, we group these together. The business marketer needs to know the following: Who are the major participants? In what decisions do they exercise influence? What is their relative degree of influence? What evaluation criteria does each decision participant use? The business marketer also needs to understand the major environmental, interpersonal, and individual influences on the buying process. Business buying behavior is the buying behavior of organizations that buy goods and services for use in the production of other products and services, for using the products in operational non-core operation like photocopier for office management or for the purpose of reselling or renting them to others at a profit.

Business Buying Units Business buying decisions are most likely to be made by a committee or group of people than wholly by an individual. In an organization purchase ‘decision making unit’ there are various center of powers which influences and finally guides the decision making. According to Webster and Wind there are six units in a Business buying unit - :

1. Users  – the individuals most likely to be the final user of the products. They are the one who initiate the buying process; in fact they are the need recognizers.

2. Influencers  – As most of the decision in an organization is made by committee or purchase department, some people acts as influencers in the group for example if for the atomization of office communication the company have to install the latest devices the user may place the need for voice recorders or some other device but the IT department will influence which one to buy as they have the responsibility to decide in broader view of overall organization technology policy. Once the IT department gives the product specification and process, the Purchase department will evaluate the sellers.

3. Decision Makers  – the decision makers are the one who took the final decision of what should be purchased and from where it should be purchased.

4. Approvers  – once the decision makers took their decision it goes to the approving authority. For example if the purchase department finalized what is purchased and from whom it purchased, the order will go to finance department for approval.

5. Buyers  – As the finance department approves the decision the purchase department can go ahead and purchase the communication device.

6. Gate-keepers  – these members control the access to persons in DMU for example secretaries manage the work flow of purchase department head so how successful a company is at selling can sometimes depend how fast the secretary process your file for perusal. The above decision making units not necessarily have to be separate units’ in fact they can very well overlap too. For example the IT department can be user and influencer while purchasing an information technology product.

Business Buying Behavior Process Business or industrial buying behavior process is basically divided in 7 steps which are as follows,

• Problem Recognition • General Need Description • Product Specification • Supplier Search • Proposal Solution • Supplier Selection

• Order Routine Specification • Performance Review

1. Problem Recognition The buying process starts with a company realizing it has a need for a product or service. A sales person can proactively identify a prospect's needs by analyzing an aspect of the company and recommending a purchase. For example, if a company's current computer software can no longer meet regulatory requirements, a salesperson could suggest new software be explored. What is needed should be clearly described so that a company can make the best decision about what product or solution will fulfill its needs. For computer software, the key features and functions such as reports needed are described. Someone recognizes that the organization has a need that can be solved by purchasing a good or service. Users often drive this stage. In the case of the electronic textbook, it could be, for example, the professor assigned to teach the online course. However, it could be the dean or chairman of the department in which the course is taught. Business marketers can stimulate problems recognition by direct mail, telemarketing and calling on prospects. In our case a company wants to purchase computers for a company itself.

2. General need description / Product specification Next, the buying center, or group of people brought together to help make the buying decision, work to put some parameters around what needs to be purchased. In other words, they describe what they believe is needed, the features it should have, how much of it is needed, where, and so on. For more technical or complex products the buyer will define the product’s technical specifications. Users and influencers come into play here. In this stage company will decide that which types of computer they want to purchase. They will make whole list for it. For ex. For whom they want to purchase computers, which kind of computers will need, which software they want to install in it etc.

3. Supplier Search The buyer now conducts a supplier search to find the best vendors. The buyer can compile a small list of qualified suppliers by reviewing trade directories, doing a computer search, or phoning other companies for recommendations. Today, more and more companies are turning to the Internet to find suppliers. For marketers, this has leveled the playing field—smaller suppliers have the same advantages as larger ones and can be listed in the same online catalogs for a nominal fee: The newer the buying task, and the more complex and costly the item, the greater the amount of time the buyer will spend searching for suppliers. The supplier's task is to get listed in major directories and build a good reputation in the marketplace. Salespeople should watch for companies in the process of searching for suppliers and make certain that their firm is considered. At this stage, the people involved in the buying process seek out information about the products they are looking for and the vendors that can supply them. Most buyers look online first to find vendors and products, then attend industry trade shows and conventions and telephone or e-mail the suppliers with whom they have relationships. The buyers might also consult trade magazines, the blogs of industry experts, and perhaps attend Webinars conducted by vendors or visit their facilities. Purchasing agents often play a key role when it comes to deciding which vendors are the most qualified. Company that purchases over the internet are stimulating electronics market places in several forms: 

Catalogue sites



Vertical markets



Pure play auction sites



Spot markets



Private exchange



Barter markets



Buying alliances



Set up direct extranet links to major suppliers



Form buying alliances



Set up company buying sites

4. Proposal Solicitation In the proposal solicitation stage of the business buying process, the buyer invites qualified suppliers to submit proposals. In response, some suppliers will send only a catalog or a salesperson. However, when the item is complex or expensive, the buyer will usually require detailed written proposals or formal presentations from each potential supplier. Business marketers must be skilled in researching, writing, and presenting proposals in response to buyer proposal solicitations. Proposals should be marketing documents, not  just technical documents. Presentations should inspire confidence and should make the marketer's company stand out from the competition. In our case company get more than 20 proposals by different companies and agents like Dell, HP and Sony etc.

5. Supplier Selection The members of the buying center now review the proposals and select a supplier or suppliers. During supplier selection, the buying center often will draw up a list of the desired supplier attributes and their relative importance. In one survey, purchasing executives listed the following attributes as most important in influencing the relationship between supplier and customer: quality products and services, on-time delivery, ethical corporate behavior, honest communication, and competitive prices. Other important factors include repair and servicing capabilities, technical aid and advice, geographic location, performance history, and reputation. The members of the buying center will rate suppliers against these attributes and identify the best suppliers. As part of the buyer selection process, buying centers must decide how many suppliers to use. There is even a trend toward single sourcing, using one supplier. With single sourcing there is only one supplier to handle and it is easier to control newsprint inventories. Using one source not only can translate into more consistent product performance, but it also allows press rooms to configure themselves for one particular kind of newsprint rather than changing presses for papers with different attributes. Many companies, however, are still reluctant to use single sourcing. They fear that they may become too dependent on the single supplier or that the single-source supplier may become too comfortable in the relationship and lose its competitive edge. Some marketers have developed programs that address these concerns.

The choice and importance of different attributes varies with the type of buying situation. Delivery reliability, price and supplier reputation are important for routine order products. For procedural-problem products, such as a computer, the three most important attributes are technical services, supplier flexibility and product reliability.

Rating Scale

Attributes

Importance Weight

Poor (1)

Price

0.30

B

Technical Services

0.20

Product Reliability

0.30

A

B

Service Reliability

0.10

C

A

Supplier Flexibility

0.10

Fair (2)

Good (3)

Excellent (4) A,C

A,C

C

B

C B B

A

A for Sony, B for HP and C for Dell.

Total Score: For Company A: 0.30(4) + 0.20 (3) + 0.30 (1) + 0.10 (2) + 0.10 (4) = 2.9 For Company B: 0.30(1) + 0.20 (4) + 0.30 (2) + 0.10 (4) + 0.10 (3) = 2.4 For Company C: 0.30(4) + 0.20 (3) + 0.30 (3) + 0.10 (1) + 0.10 (2) = 3.0

After doing analysis about attributes of different companies, the order will be given to the most suitable company. In our case, conclusion is that company C i.e. Dell is selected as a best company and an order will be provided to them.

6. Order-Routine Specification After selecting suppliers, the buyer negotiates the final order, listing the technical specifications; the quantity needed, the expected time of delivery, return policies, warranties, and so on. Many industrial buyers lease heavy equipment such as machinery and trucks. The lesser often ends up with a larger net income and the chance to sell to customers that could not afford outright purchase. The selected vendor provides the item purchased and assists with installation if it is required. In the case of computer software, implementation can include user training, conversion from old software to new software, customization of the software and preparation of user documentation. The buyer now prepares an order-routine specification. It includes the final order with the chosen supplier or suppliers and lists items such as technical specifications, quantity needed, expected time of delivery, return policies, and warranties.

7. Performance Review In this stage, the buyer reviews supplier performance. The buyer may contact users and ask them to rate their satisfaction. The performance review may lead the buyer to continue, modify, or drop the arrangement. The seller's job is to monitor the same factors used by the buyer to make sure that the seller is giving the expected satisfaction. We have described the stages that typically would occur in a new-task buying situation. The stage model provides a simple view of the business buying decision process. The actual process is usually much more complex. In the modified rebuy or straight rebuy situation, some of these stages would be compressed or bypassed. Each organization buys in its own way, and each buying situation has unique requirements. Different buying center participants may be involved at different stages of the process. Although certain buying process steps usually do occur, buyers do not always follow them in the same order, and they may add other steps. Often, buyers will repeat certain stages of the process.

Marketing Mix The basic task of marketing is the delivery of product(s) to consumers so that their needs are fulfilled and organizational objectives are also achieved. This involves several important decisions, e.g. deciding about the product or products which should be offered for sale, price of the product, markets where products may sell and the means of communication with the consumer for the sale of the product. All these decisions form part of marketing-mix. In this lesson we shall study about the concept of marketing mix, its components and the relationship among various components of marketing mix. The process of marketing or distribution of goods requires particular attention of management of business because production has no relevance unless products are sold. Marketing mix, simply stated, is the process of designing and integrating various elements of marketing in such a way as to ensure the achievement of enterprise objectives. The elements of marketing mix have been classified under four heads product, price, place and promotion . That is why marketing mix is said to be a

combination of 4 P’s. Decisions relating to the product include product   designing, packaging and labeling and varieties of the product. Decision on ‘Price’ is very important because sales depend to a large extent on product pricing. Whether uniform price will be charged or different prices will be charged for the same product in different markets are examples of decision pertaining to the price of the product. The third important element is ‘place’, which refers to decision regarding the market where products will be offered for sale. ‘Promotion’ involves  decisions bearing on the ways and means of increasing sales. Different tools or methods may be adopted for this purpose. The relative importance to be attached to the various methods is decided while concentrating on the element of ‘promotion’  in marketing mix. Lastly, the marketing manager has to take into account the impact of external factors like consumer behavior, competitors’ strategy, and Government policy on each element of marketing mix. In short, marketing mix involves decisions regarding products to the made available, the price to be charged for the same, and the incentives to be provided to the consumers in the markets where products would be made available for sale. These decisions are taken keeping in view the influence of marketing forces outside the organization.

ELECTOLUX comes with new marketing mix strategy that includes,

 Product  Price  Place 

Promise instead of Promotion.

Product Product refers to a physical product or a service or an idea which a consumer needs and for which he is ready to pay. Physical products include tangible goods like grocery items, garments etc. Services are intangible products which are offered and purchased by consumers. Services may involve also an innovative idea on any aspect of operation. When an organization introduces a product into a market they must ask themselves a number of questions. 1. Who is the product aimed at? 2. What benefit  will customers expect? 3. How does the firm plan to position the product within the market? 4. What differential advantage  will the product offer over their competitors? We must remember that Marketing is fundamentally about providing the correct bundle of benefits to the end user, hence the saying ‘ Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer’.

Dust remover

With blowing power

After sales services, warrantee

From a life cycle analysis, they can know that their greatest potential to positively impact the environment is to improve efficiency of products during use. That is why Electrolux main focus is developing and promoting the most water- and energy-efficient products. Today’s consumers want appliances that ar e safe and efficient, that do not contain hazardous materials, have low noise levels and are produced under good working conditions. We aim to meet, and exceed, these expectations. Energy-efficiency, speed, simplicity and individual solutions are some of the needs identified by Electrolux through interviews and home visits to users of household appliances. Consumer insight is at the core of all product development at Electrolux, and in 2010 a large number of households were visited worldwide.

Green range of appliances Through the green products ranges, each business sector within Electrolux is innovating and promoting a product offering that is water- and energy-efficient, with climate smart features. The products’ contribution to sales is reported annually. Electrolux raises the bar for products qualifying for the range on a yearly basis. Although locally defined to meet each market need and regulatory demands, the series is based on environmental parameters defined by the Group. These products’ contribution to sales is also reported annually. Sales of our green ranges accounted for 21% of sold units in 2009 and 30% of gross profit. In the Nordic region, the share of net sales has increased by 10% during 2009, indicating that growth in the market for efficient products continues.

Price Pricing is one of the most important elements of the marketing mix, as it is the only mix, which generates a turnover for the organization. The remaining 3p’s are the variable cost for the organization. It costs to produce and design a product; it costs to distribute a product and costs to promote it. Price must support these elements of the mix. Pricing is difficult and must reflect supply and demand  relationship. Pricing a product too high or too low could mean a loss of sales for the organization. Pricing should take into account the following factors: 1. Fixed and variable costs. 2. Competition 3. Company objectives 4. Proposed positioning strategies. 5. Target group and willingness to pay . An organization can adopt a number of pricing strategies. The pricing strategies are based much on what objectives the company has set itself to achieve.

Electrolux is a name most North American and European homeowners recognize. Since the early 1900s, this company has been providing all kinds of useful home appliances, including vacuum cleaners. In fact, the company’s founder, a man named Axel Wenner-Gren, commissioned the creation of the world’s first household vacuum cleaner, the Lux 1, in 1912. Today, vacuums carrying the Electrolux, Eureka, and Sanitaire brand names are all owned by Electrolux, giving them broad coverage in most major markets around the world. One of the most popular Electrolux vacuum cleaners is the EL5010A Aptitude Bagged Upright. Priced in the $250-$350 range, it’s within the budgets of most homeowners, and it has some interesting features. As you’ll see, however, it also has a few problems that should be taken into consideration as you evaluate its overall worth. Finally, the price for this Electrolux vacuum cleaner is good. $250-$350 is not too much to ask for a machine with these impressive features. There are less expensive uprights that also boast strong motors, wide cleaning paths, and advanced filtration systems, but this model’s brush roller speed controls and lifetime HEPA filter set it apart from most others in this price range.

Place A strong global brand, attractive design and innovative products provide Electrolux with the competitive edge to increase sales and capture market shares. The Electrolux brand is now positioned in the profitable premium segment throughout the world. A crucial decision in any marketing mix is to correctly identify the distribution channels. The question “how to reach the customer" must always be in your mind. The place is where you can expect to find your customer and consequently, where the sale is realized. Knowing this place, you have to look for a distribution channel in order to reach your customer.

Although figures vary widely from product to product, roughly a fifth of the cost of a product goes on getting it to the customer. 'Place' is concerned with various methods of transporting and storing goods, and then making them available for the customer. Getting the right product to the right place at the right time involves the distribution system. The choice of distribution method will depend on a variety of circumstances. It will be more convenient for some manufacturers to sell to wholesalers who then sell to retailers, while others will prefer to sell directly to retailers or customers. The marketing distribution channel of ELECTROLUX is as below:

ELECTROLUX (Manufacturer)

Contry Distributors

State Distributors

Customers

Retailers

Dealers

ELECTROLUX has a strong market share in selling of consumer durable items in Europe and East African Countries, North America, Latin America with Asian countries.

Promotion The promotion (Promotional Mix) is one out of four basic instruments of marketing that has the purpose to inform about other instruments of marketing mix and to contribute to sales increase on the long term. The promotional mix always serving to specific goal. These goals can be public informing, demand increasing, product differentiation, and product value increasing or sales stabilizing. Usually the promotion is targeting more than one goal. Promotion is the process of communication between the company that sells the product and the potential customer, with the purpose of influencing the attitudes and behavior. There are specific promotional tool that are supporting chosen promotional goal. The promotional mix represents a combination of different promotional tools. The basic elements of promotional mix are Advertising, Public Relationship, Personal Sales and Sales Promotion. Advertising is communication with current and potential customers and consumers, done through paid mass media. The channels of communication can be TV, radio, Internet, billboards, etc. Public Relationship (PR) is communication toward public, but is turned more to reputation and image of the company, than to its products. The PR activity can be a press conference, TV interview with company representative, press article about donation of the company to charity or about latest environmental project. Focus on PR and the Internet

Marketing is coordinated globally and across product categories to increase its impact and penetration. Concentration on the Electrolux brand enables more effective use of resources. At first hand, the focus is on cost-effective campaigns with a high degree of PR and Internet utilization. The majority of the customers who buy Electrolux products visit the Group’s websites during the purchasing process, thus making the websites one of the most important tools for convincing customers. Therefore, Electrolux develops Internet solutions that are well conceived, stimulating and innovative and that support the consumer through the purchasing process, from start to finish. In 2010, the Group rolled out completely new websites all across Europe, which will assist in strengthening the brand and increasing sales in conjunction with future product launches.

Promotional Activities in India ELECTROLUX is doing many promotional activities in India which represents that they are more consumer related, i.e. 

Participates in general and product specific international trade fairs

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Facilitates short term training courses on International Marketing

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Acts as a forum for representation of the trade related issues and acts as a liaison between the exporting community and the government, policy planners, quasi government organizations

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They are making sense in customers by, 

By communicating and changing quality perception

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By proper communication in Indian language

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By target changing perception

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By understanding cultural and social values

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By providing what customer want

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By promoting products with Indian models and actors

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By associating themselves with India

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By promoting Indian sports team

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By talking about a normal Indian

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By developing rural-specific products

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By giving Indian words for brands

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By acquiring Indian brands

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By effective media communication

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By adopting localized way of distributing

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By associating themselves with Indian celebrities

They are more focusing in maintaining personal relations with customers through different activities like sending greeting cards to their customers on different occasions like Christmas etc.

Electrolux Annual Report 2010 awarded third best in the world Electrolux Annual Report 2010 is called a “top -notch reporting appliance” and rates it third best of 1,500 international annual reports. This is the fourth year in a row Electrolux has placed among the top three best annual reports in the world. “A dialogue between the former and the new CEOs, the World of Electrolux spread, product and cost elements of strategy, exchange rate exposure and transaction effects mapped make it a top-notch reporting appliance,” writes the Report Watch team of the Electrolux Annual Report 2010. The survey is often regarded as the most comprehensive, international and authoritative survey on annual reports. This year, around 1,500 annual reports were included in the ranking. When conducting the evaluation, Report Watch takes a representative cross section of annual reports based on the relative importance of stock markets, aiming at industrial and geographic diversity. The Electrolux Annual Report 2010 is published in two sections. The first part is a comprehensive overview of the Group strategy and business model. The second part provides the full-year financial statements and other financial information, as well as the Electrolux Sustainability Report.