Another crack at the market

STRATEGY: Whirlpool relies on traditional recipes to stage a gradual comeback into the consumer durables market.

Picking up the pieces, and rising again, has never been an easy task. But Whirlpool has been doing just that. In a market virtually taken over by the Korean chaebols, this reduced-to-the-periphery player is striking back, and succeeding somewhat.

And the numbers back the story. After posting a net loss of Rs 34 crore in 2004, Whirlpool is back in the black. It has managed an operating profit of Rs 14 crore this year, to the surprise of many market observers.

So what did it do right? "Steps were taken to expand our footprint," says Anup Jain, general manager, brand and marketing, Whirlpool India.

This included inroads into the hinterland on one end, and increasing points of presence within the city on the other. Today, its products are sold through 7,500 retail outlets in over 150 cities and towns in India, and eight exclusive showrooms.

The other ingredients in its turnaround recipe are fairly predictable "" focus on innovation, sharp reduction in inventory and efficient management of payables.

Net sales of the company are up over 26 per cent to about Rs 1,300 crore, and with a few new launches in the pipeline, the company expects to increase its market share as well.

Jain claims that Whirlpool has a 25 per cent share in the refrigerators market, which incidentally contributes more than 60 per cent to Whirlpool's sales, and 16 per cent in washing machines. The overall washing machines and refrigerators market is pegged close to Rs 4,800 crore.

The company is also getting aggressive on marketing and plans to hike spends 20 per cent to Rs 43 crore this year.

While competitors LG and Samsung have been associated with cricket to enhance their expanding base, Whirlpool has stuck with its homemaker theme with the "Whirlpool mom" and the popular cine duo "" Ajay Devgan and Kajol.

"Our endeavour has always been to understand and cater to the needs of our core target audience, which is the modern Indian homemaker," says Jain.

How long Whirlpool can be "at it" will decide where the company will ultimately be positioned. As a market analyst puts it, "Whirlpool has revived well, but will need to continue doing so for a period of time to regain its old brand equity." There are still miles to go!