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MARKETING PLAN FOR ULTRA SONIC CLOTHES WASHING MACHINE

Group-3

MARKETING PLAN FOR ULTRA SONIC CLOTHES WASHING MACHINE

Submitted by:

GROUP # 3

MANAGEMENT DEVELOPMENT INSTITUTE GURGAON

13 SEPTEMBER 2013

991191991111991
DATE Marketingplan/NMP26-03/MKTG/01 13th Sep 2013 PAGE Page 1 of 9

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MARKETING PLAN FOR ULTRA SONIC CLOTHES WASHING MACHINE

Table of Contents

Group-3

S. No. 1 2 Cover page Table of Contents Executive Summary Situation Analysis

Title

Page No. 1 2 3

2.1 Market Summary 2.2 Strength, Weakness, Opportunities, and Threat Analysis 2.3 Competition 2.4 Product Offerings 2.5 Distribution 3 Marketing Strategy

3.1 Objectives 3.2 Target Markets 3.3 Positioning 3.4 Strategies 3.5 Marketing Mix 3.6 Marketing Research 4 5 Financials Controls

5.1 Implementation 5.2 Marketing Organization 6 7 Conclusion References

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MARKETING PLAN FOR ULTRA SONIC CLOTHES WASHING MACHINE

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1. Executive Summary The busy schedule of people, growth of double income nuclear families, scarcity of helping hands have made the washing of clothes a tedious affair in a typical Indian household. This has warranted a need for convenient, minimal human intervention and effective cleaning solutions for clothes in the form of washing machines. Hence, the washing machine has become a necessity rather than a luxury item. Off late with the depletion of ground water table at various locations coupled with increase in population density at various locations has lead to water scarcity or supply of poor quality water. Encashing on these aspects, Ultramatics Limited proposes to launch a new washing machine using ultrasound as the agitating media instead of the mechanical washers available in market. The technology intends to reduce water, electricity and detergent consumption during a wash cycle. The intangible benefits will be environmental friendly and fabric friendly. The current players are offering washing machines based on conventional technology and hence, Ultramatic Ltd will be the first to launch this cleaning solution giving it the first mover advantage by offering an innovative product ULTRACLEAN WASHING MACHINE. The product will be targeted to the high net worth income group, double income nuclear families, hospitals, hotels and professional laundries. A comprehensive marketing plan has been prepared. The company plans to go for a extensive marketing campaign which shall educate the consumers about the new technology and the benefits arising from it alongwith thrusting on creation of brand awareness amongst the consumers. 2. Situation Analysis Ultramatic Ltd. is an emerging company in the washing machine market. It was founded about a year ago by the ex-Head of R&D department of IFB-a leading washing machine manufacturer. The lack of spare time in many households, especially where both husband and wife are working, and scarcity of helping hands (servants/ maids) has lead to demand for automated washing solutions for clothes. The demand is aided with the rise with increasing disposable incomes. Since the advent of washing machine in the market, in the 1990s, the market has grown substantially. In 2006, the washing machine had percolated to households constituting 5% of the Indian population. The percolation is expected to grow by leaps and bounds and is projected to cover households constituting 41% of the

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MARKETING PLAN FOR ULTRA SONIC CLOTHES WASHING MACHINE

Group-3

Indian population by 2025. The market is in growth phase, however, the growth trajectory is ebbing of late. 2.1. Market Summary There are mainly 4 major manufacturers like LG, IFB, Whirlpool, Samsung controlling the major chunk of the market. LG is the market leader with 27% market share, Whirlpool comes next with 17% market share and Samung is third with 14% market share. The products offered by these manufacturers are basically classified as fully automatic washing machine and semi automatic machine with top load and front loading options. Also, the existing products in market primarily use water as the washing agent. The opportunity in tapping this growing market is huge as we see that the no of washing machines sold has risen from 27.55 lac units to 47.28 lac units from 2008-09 to 2009-10. On account of the great deal of competition in the conventional systems, Ultramatics contemplates to enter the market with a new innovative product (incremental)- Ultrasonic Washing Machine - to create a niche in the market for itself. In various areas of the country there is dearth of clean water supply. Ground water tables have gone down in various parts of the country over the years. The cost of making available clean human usage suitable water supply is spiraling. Accordingly, consumers are looking for solutions to minimize the water usage. Herein, stems the requirement of a washing machine that would be cleaning with ultrasonic waves instead of water and detergents. Ultramatics possesses the CEOs extensive knowledge obtained in the R&D of the product and is confident about the success of the product. This knowledge is also backed by Ultramatics success in electronic hi-fi home entertainment system. The market of Ultramatic Ltd consists of business users as well as home users. The machine has various advantages like cleaning with one third of water used in conventional system, cleaning with mild detergents, lesser mechanical action is less leading to less wear and tear of the clothes. The benefits of the machine make it ideal for targeting the high net worth individuals, double income group and the business clientele like hospitals and hotels on the basis of demography. Further, the geographic areas with water shortage and bad water quality shall also be targeted. The briefs of the targeted segment, their needs and corresponding benefits are tabulated below.

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MARKETING PLAN FOR ULTRA SONIC CLOTHES WASHING MACHINE

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Targeted Segment High Net Worth Income

Customer Need Better cleaning solution for delicate clothes

Corresponding Feature/Benefit No mechanical impact makes it ideal for delicate clothes High end internet enabled control panel and automatic sensors for various purposes enable washing with zero effort

Double income group

Trouble free washing in all conditions Minimal Human Intervention Saving on time

Professional laundry services (Business market) Areas having hard water

Single cleaning solution for variety of clothes

High range of ultrasound transponder with fabric detection allows all type of fabric

Better cleaning even in hard water

Magnetic hydrodynamic resonance for water softening gives better washing even in hard water

Areas having shortage of Low water consumption water Hotels and Resorts (Business Market) Suitable for variety of fiber and trouble free operation

consumes one third water as compared to traditional washing machine High range of ultrasound transponder with fabric detection allows all type of fabric

Hospitals

Low operating cost with disinfectant features

Low power and water consumption and ultrasound functioning as disinfectant

2.2. Strength, Weakness, Opportunities, and Threat Analysis: Ultramatic Ltd has several powerful strengths such as pioneer in sonic waves HI-Fi Audio systems and has many renowned brands in its product line. Major weakness is first time introduction of washing machine having ultrasonic transponder in Indian market. The major opportunity is rising disposable
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MARKETING PLAN FOR ULTRA SONIC CLOTHES WASHING MACHINE

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income of urban households and their demand for economical yet high end cleaning solution. We face the threat of existing trusted washing machines and their low pricing. Strengths of Ultramatic washing machine are: 1. Innovative product- Ultra sonic washing machine offers wash without subjecting them to powerful mechanic impacts characteristic for the traditional washing machines which is undesirable for most of the fabrics. It is a great product offering that combines the technology of ultrasonic treatment of the textiles, the magnetic treatment of the water and the latest disinfectant technology 2. Green Product- One third water consumption as compared to traditional washing machines and better cleaning even with aqueous cleaning solution makes it an ideal in its category. 3. High frequency range from 30 to 400 khz makes it suitable for all kinds of clothes such as silk to drapes, cotton to wool etc. 4. Low operating cost on account of less harsh detergent, longevity of fabrics, low power and water consumption. 5. Established dealer network of home entertainment products Weaknesses: Ultramatic is first time entering into home care durables with launch of Ultrasonic washing machine. It has three main weaknesses 1. Lack of brand awareness - Ultramatic has no established brand or image in washing machine segment, whereas Samsung, LG, IFB and others have strong brand recognition. The issue can be addressed with aggressive promotion. 2. Unsafe for pets: Ultrasound which is inaudible to human ears is having spectrum of range audible to pets such as dogs. Ultrasound creates discomfort to these pets. Ultrasound protective fiber shielding will address this issue. 3. Low awareness: The customers are unaware of the benefits of new technology. A customer awareness campaign needs to be coupled with the promotional campaign. Opportunities: Ultramatic can take advantage of three major opportunities 1. Increasing demand for trouble free high end cleaning solution- With the rise of nuclear family with both spouse working, there is a huge demand for full range of automatic washing machine having ability to handle all kinds of fabrics. 2. Erratic water supply - Traditional washing machine requires lot of water and hard water

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MARKETING PLAN FOR ULTRA SONIC CLOTHES WASHING MACHINE

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3. High TDS( Total Dissolved Salts) and impurities in water: the impurities in the water will have lesser impact on the ultrasonic machines which normally are detrimental in the conventional systems decreasing the effectiveness of the detergents.. Threats: The main threats at the introduction of the Ultrasonic washing machine are: 1. Increased competition- More companies are offering devices with some but not all of the features and benefits provided by the Ultrasonic Washing machine. Therefore, Ultrasonics marketing communications must stress out clear differentiation and value added pricing. 2. Already established dealer and service network of the estabilished players. 2.3. Competition: Ultramatic Ltd faces competition from existing established leading brands of the market. As cited earlier LG has the highest market share and commands a good image in the consumers perception. It offers products in wide price range starting from as low as Rs. 9000 to as high as Rs112000. Samsung provides washing machines in Rs. 10000 to Rs. 30000 range and also commands a good brand loyalty amongst consumers. The other players are IFB, Godrej, Videocon, Panasonic, and Electrolux. 2.4. Product Offerings Automatic fabric type detection and accordingly ultrasound frequency and water temperature adjustment. Magnetic hydrodynamic resonance for water softening. Silver Technology is its disinfectant capacity without the need to boil the clothes at high temperatures Internet connected feature enable information flow and control on move. 100 % dry feature with 5 star rating heating coil. LED display and child lock 100% stainless steel drum and weatherproof stainless steel body. Advanced safety features.

2.5. Distribution The company plans to initiate sales of the product through its current dealer network who offer home entertainment services along with appliances. In the introductory phase the product will be launched in the metros wherein the High Income and Double income group are prevalent. The emphasis will be affluent area markets. Subsequently the company shall enter into strategic
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MARKETING PLAN FOR ULTRA SONIC CLOTHES WASHING MACHINE

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partnership with large stores of Future Group, Tata Croma and Reliance Living and other such stores in the Tier-I and Tier-II cities. 3. Marketing Strategy 3.1. Objectives: First Year: 2% share Second Year: Break even 3.2. Target markets: The product provides an effective clothes cleaning solution with minimal human intervention, low mechanical action and low water consumption. These features coupled with other features make the product ideal for users of delicate fabrics, busy people and households having water supply issues. Accordingly the target segment will be high income group (users of delicate fabrics), double income households (lack of time) and geographical areas having water scarcity or quality issue. The company shall also target the Hotels, small and medium hospitals and the professional laundry in B2B. 3.3. Positioning: The product shall be positioned as a fabric friendly, green, on the go (internet enabled) washing machine. 3.4. Strategies Product: The product shall be launched in 3 variants based on the washing load ability. The smallest one shall be for 4 kg followed by machines for 6.5 kgs and heavy duty machines for B2B consumers. Pricing: The product is priced based on the typical price of comparable products in the market with premium added for the consumers benefit accrued from savings in water and electricity and a premium for the intangible benefit of longevity of clothes. Distribution: Distribution of the products will be initially through the companys home entertainment distributors who also offer home appliances followed by strategic partnerships in the Tier-I and tier-II companies. Marketing Communications: The communication shall involve both generation of customer awareness towards the new technology as well as the benefits of the product towards lowered operating cost and improved longevity of the fabrics. The spots shall be booked on Television shows having highest TRPs like Star Plus Diya aur Batti, Zee TV Kabool Hai as they are also

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MARKETING PLAN FOR ULTRA SONIC CLOTHES WASHING MACHINE

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watched by ladies of the house which will be the main initiators and influencers in procurement of the product. 3.5. Marketing Mix January: Trade Shows, promotion campaign, educating dealers, internet buzz, product reviews, opinion leaders and influential bloggers February: Integrated print/radio/Internet/TV campaign March: Customer sales promotion activities such as contest to win for consumers and such things April: Sales contest i.e. prizes for sales person and retailers selling maximum number of machines in a given period. May: New advertising campaign June: Summer bonanza 3.6. Marketing Research: An initial market survey shall be conducted in the high end market segment regarding the expectations of the consumers. The marketing research will mainly target the affluent ladies at the high end malls. Also the research shall focus on the working ladies. 4. Financials: Since the product shall have a low operating cost accruing a benefit to the customer, hence, it will be priced higher than the typical comparable conventional front loading washing machine with complete drying facility in the market. This shall also help in paying off the high R&D expenditure. The 6.5 kg machine shall be priced at Rs. 51,999 with the 4 kg machine being priced at Rs. 45,999. The retailer margin shall be 12% and distributor margin will be 8%. The transportation and handling cost has been taken at 3%. The product shall have a warranty of 5 years. 5. Controls: The marketing activities will be carried out with proper control. 5.1. Implementation: Close monitoring of quality and customer service satisfaction shall be done. Feedback forms shall be obtained from the buyers as well as prospective buyers (those who enquire about the machine) about the dealers service, explanation rendered and the perception of the benefits. 5.2. Marketing organization: A group of 7 persons will overview the total marketing activities. 6.
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