Marketing Microwave Ovens to a New Market Segment

1. Marketing Microwave Ovens to a New Market Segment Group 3

2. Group-3 Member Yao Ju M99Y0206 Ninh M997Z211 Nancy M997Z228 James M99Z0216 Melva M997Z227 Allison M99Y0105

3. Outline • Market Research • I. Define the Target market • II. Target market analysis • SWOT ANALYSIS • MARKETING STRATEGY

4. MARKET RESEARCH I. Define the Target market II. Target market analysis

5. I.Define the Target market • India microwave oven market • Competitors’ situation • Segmenting Indian market • Define the target customers

6. I.Define the Target market Indian microwave oven market The penetration level of microwave oven remains shockingly minuscule, under 1%, mainly in big cities (70%) Competitiveness: There are many companies producing microwave ovens in India.

7. I.Define the Target market Competitors LG Electrolux Godrej Haier Panasonic IFB Inalsa Kenstar Samsung Sanyo Sharp Videocon Whirlpool (http://www.indiahousing.com/microwave-ovens-india.html_

8. I.Define the Target market Competitors’ situation Their Target market: Large Urban area Product’s problem:irrelevant size The priceof the Microwave Ovens can range from less than 7000 Rupees to more than 21000 Rupees depending upon the desired features → competitiveness of other competitors in terms of price pattern is very strong.

9. I.Define the Target market Segmenting Indian market based on the Administration area, Indian market can be divided in to: Urban market: occupy 30% of population, high and middle income generally, penetration of competitors has existed Rural market: 70% of population, lower income, gap market of microwave oven has been existed

10. I.Define the Target market 1. Indian Population: estimated population of 1.2 billion India is the world's second most populous country. In 2001, about 285 million Indians lived in urban areas while more than 70% of India's population resided in rural areas. 2. Indian Population growth rate: 1.38% per annum; there are 22.01 births per 1,000 people per year. → From this (1&2), we can see the scale and growth level of market is quite big

11. I.Define the Target market Concept of rural sector The "rural sector" means the area which meets the following conditions: A population of less than 5,000 Density of population less than 400 per sq km andmore than "25 per cent of the male working population" is engaged in agricultural pursuits.

12. I.Define the Target market From conducting research: “We know it’s an alien concept for the rural consumers, but we want to do our homework now to reap the benefits years later” → With the goal is market share leading for long - term, our target market is rural habitants.

13. II. Target market analysis Demography Occupy more than 70% of India's population. The national human sex ratio: 944 females per 1,000 males

14. II. Target market analysis Literacy rate: 64.8% (53.7% for females and 75.3% for males).

15. II.Target market analysis Language: The Constitution of India has recognized 22 different languages that are prevalent in the country, out of which, Hindi is the official language and is spoken in most of the urban cities of India. Religious: As per the 2001 census, over 800 million Indians (80.5%) were Hindu. Indian religions form one of the most defining aspects of Indian culture. Major dhármic religions which were founded in India include Hinduism, Buddhism and Jainism.

16. II.Target market analysis • Traditional Indian family values are highly respected, and multi-generational patriarchal joint families have been the norm, although nuclear families are becoming common in urban areas.

17. II. Target market analysis Indian cuisine Indian cuisine is characterized by a wide variety of regional styles and sophisticated use of herbs and spices. The staple foods in the region are rice (especially in the south and the east) and wheat (predominantly in the north). Spices, such as black pepper which are now consumed world wide, are originally native to the Indian subcontinent.

18. II.Target market analysis • Chili pepper, which was introduced by the Portuguese, is also widely used in Indian cuisine. • People do not use chopstick or knife and fork to eat, they eat by their hands.

19. II. Target market analysisPerception of target market about microwave oven Different perceptions of Indian citizens about Microwave oven from the conducting research Microwave oven is only suitable for Western food, not relevant with Indian food. “We know microwave oven can help us to prepare the meal, but we need know how to use it”

20. II. Target market analysisPerception of target market about microwave oven • “The food doesn’t taste the same when cooked in a microwave” • “The food doesn’t taste the same when cooked in a microwave” • Microwave oven is more and more important today. The middle – income consumer comes looking for novelty, value and competitive pricing.

21. II. Target market analysisPerception of target market about microwave oven Many people are still unclear about how to utilize the microwave, or some of them just use it as a food reheating product. The size of the microwave oven is too small & irrelevant with the money have to pay.

22. II. Target market analysis • The wrong understanding about microwave oven makes the India microwave market much calmer than it should be. • In fact, microwave oven has more other benefits which the Indian consumers haven’t discovered yet.

23. II. Target market analysis Benefits of using microwave oven Microwave oven: Saves time Easy to heat food Easy to clean Does not need to keep a watch Retains nutrients and vitamins in the food Safe for user Saves power much more than Oven toaster and Grill → Direct marketing – oriented an approach to create right awareness about the benefit of microwave oven is very important

24. SWOT ANALYSIS

25. Strength • Define target market based on the conducted research • Have resource and ability in producing microwave oven • Have experience in microwave oven manufacture in USA, Asia and Europe • Do marketing research carefully and gain experience from competitor’s failure

26. Weakness • The presence of company in Indian market is limited at this time • The products appear the introduction stage in Indian market must be experimental and improved after that. • White appliances have less experience in Indian Market • The company could have minus benefit in the first stage • It’s difficult to change target customers’ perception about microwave oven

27. Opportunity • Big market with potential demand in long – term • Big gap market with few competitors • Get big benefit in long – run • It’s not too difficult to set up and develop the image in rural market because of earliest penetration • Very strong policies of Indian government to develop rural areas (finance, house, road, electricity, water system)

28. Threats • Limitation of Indian customers’ perception about microwave oven • Low income of target market may make the profit increase slowly • Appearance of potential competitors when the products begin to be accepted in the target market

29. MARKETING STRATEGY • MARKETING – MIX (4Ps) • PRODUCT • PRICE • PLACE • PROMOTION

30. Sales and benefits PRODUCT’S LIFE CYCLE Decline Stage Maturity Stage Introduction Stage Growth Stage Sale Benefit 0 t1 t2 t3 t (time)

31. PRODUCT Product Design • Name: Microwave oven • Appearance: eye – catching • Size: Large size to meet the needs of a large family • Colors: various colors, avoid the colors which are considered unlucky by the Indian. • Package: well – protect the products, good looking • Usage: User – friendly • Good and clear instruction (at least in Hindi and English)

32. PRODUCT Product policy • Credit: apply installment payment policy • Good After- sales • Good Guarantee

33. PRICE • Apply cost driven – competitive strategy, follow the target long – term profit. • Acceptable price with rural consumers

34. PLACE • Chose reliable deliverers, base on wholesaler and mainly on retailers to supply customers with product conveniently • Pull marketing mix: stimulate the demand of target customers by promotion, and they will have request to buy products • deliver products mainly by land • Good inventory system organization • Ensure delivering product quickly, timely, exactly.

35. PROMOTION • Advertisement: In introduction stage, advertisement focus on introduce the function and the benefits of microwave oven • Consider TV and radio the main media because internet has not been very popular yet. • Organize some big event related to product that may attracted many consumers and leave a good impression →Take advantage of WOM kind (Words Of Mouth)

36. PROMOTION • Attach cookery accessories with products (the accessories made from relevant material with microwave oven) • Promotion programs specially head towards the housewives • Sales is always parallel with consulting

37. In long - term • There will be some adjustments for 4Ps for each stage of Product life cycle.

38. Sales and benefits PRODUCT’S LIFE CYCLE Decline Stage Maturity Stage Introduction Stage Growth Stage Sale Benefit 0 t1 t2 t3 t (time)

39. Introduction Stage • P1: Producing a good product follow the perfect design; launching the products to the market with limited number to fathom the attitude of target customers; special pay attention to their response and focus on completing all dimension of product. • P2: No high price all the time, acceptable price with rural customers • P3: Create tightly distribution system with selective channels • P4: Change Indian perception about microwave oven through announcement advertisement and some promotion programs.

40. Growth Stage • P1: Producing with larger quantity because at this time, microwave oven is accepted by target customers; there maybe some adjustments in product so that it can meet customers’ need more and more. • P2: Price should be keep constant • P3: Enlarge distribution system, always pay attention to quality of the service • P4: Continue advertising following the direction of attracting more and more customers.

41. Maturity Stage • P1: There should be some improvements in product to make it new and more attractive in customers’ eyes • P2: Price should be keep constant to make profit, or may be decreased a little bit to stimulate the demand • P3: Maintain current distribution system but always discover new other market segment, pay attention to quality of the service. • P4: Continue advertising, there should be something new in the performance, give presents with product, …

42. Decline Stage Specially pay attention to P3 !!! • P3: Never forget to check distribution situation which reflects the status of product’s existence in the market • P4: apply reminding advertisement and some others promotion forms.