How does a consumer goods company whose products start at Rs 1.5 lakh, and which doesn’t believe in mass media advertising, connect with the Indian consumer? Well, cricket and Bollywood are out; so the next best thing is to associate with a sport that is patronised by “the royalty, socialites, bureaucrats and the uber rich”. That’s exactly the route Germany’s Miele, the world’s largest family-owned home appliance company, is following in India.
The company, which reported sales of ¤2.95 billion in the 2010-11 financial year ending June 30, 2011, heralded the start of the Fall 2011 Polo season in Delhi recently, marking the third year of its association with Polo in India. “Advertising in newspapers and television is not ideal for Miele as it lacks cost effectiveness and has a high spillover,” says Dhananjay Chaturvedi, managing director, Miele India. Magazines that are luxury and lifestyle driven are also the right fit for Miele, he adds.
For Miele, India is an important strategic market. By 2014, Miele targets sales of Rs 100 crore in the country. The company is hopeful that the rapidly changing outlook of Indian customers and increasing business opportunities will lead to a boom in the luxury market. Miele’s accent on India is understandable. The Miele board of management views the current 2011-12 business year with guarded optimism, according to a company statement posted on its corporate website. “At the moment, the debt crisis is shaking several euro zone countries, exacerbated by the fear of a downturn in the US economy, not only in the financial markets, but also among consumers,” said Markus Miele, one of the two managing directors and co-proprietors, in the statement.
According to the company’s estimates, the overall size of the home appliance market in India is Rs 12,000 crore. Of course, the luxury segment of the market is a small proportion of that, says the company. “The Miele customer aspires to a unique kitchen lounge experience. They have a preference for fine living and a flair for style. They are well-travelled and are traditionally wealthy,” adds Chaturvedi.
Miele opened its first outlet in New Delhi in October 2009 and currently has a presence in Mumbai, Ahmedabad, Pune, Bangalore, Hyderabad, Kochi and Ludhiana. Chaturvedi says that the marketing for Miele is purely experience-driven. Miele’s flagship store, The Miele Experience Centre in New Delhi, for instance, is a state-of-the-art facility where guests are entertained on invitation “so that they can be given personalised attention”. “A live kitchen within the Miele experience centre with all the appliances is an ideal place to showcase the products before they are purchased,” he says.
Chaturvedi says the company’s pedigree will help it curve out a sizeable market in India. For the records, its product portfolio includes wine conditioners, coffee machines, refrigerators, steam ovens, combination sets, hoods, hobs, dishwashers, washing machines, tumble dryers, rotary ironer, warming drawers and vacuum cleaners. The prices start from Rs 1.5 lakh and go all the way up to Rs 20 lakh.