Page 66 - Forbes India (December 2015)

My Learnings

gunjan srivastava, Bosch sieMens

German Engineering

Primed for India

How a dual brand strategy helped Bosch Siemens make
serious inroads into India’s washing machine market

osch Siemens Home There were also some specific needs factory had high drying efficiency.
Appliances (BSH) regarding wash cycles for dhotis Our next challenge was to
entered India in 2010 as a and saris, which we incorporated. decide what product segment to
B wholly-owned subsidiary On the quantitative side, through enter. When it comes to front load
of the German home appliances the use of scorecards, we studied washing machines, the market is
manufacturer BSH Hausgeräte the performance of machines. dominated by 6 kg machines. But
GmBH. Prior to that, Bosch Siemens All this became an input for the our market research showed that in
products were sold through a product we designed for India. India, a 7 kg product would be more
distributor. As part of our company’s We knew from the beginning that efficient as Indians tend to have large
dual-brand strategy, we decided to our imported products would be joint families. The average family
position Siemens as a premium brand good for the urban consumer, but if size is 4-5 members and in a 7 kg
while Bosch would be the more we wanted to tap into the top 200 drum, if you load 6 kg of clothes,
affordable one. We launched Bosch cities in India, we would need to the washing efficiency is better.
washing machines in India in 2011, make changes to our foreign models. Prior to our launch, the 6 kg
a year after setting up our offices I’ll share two examples. Voltage machines had a market share of
in the country. At that time, all our fluctuations are common in India and 85 percent while the 7 kg version
machines were imported. After some we could have sold the product with accounted for around 15 percent.
initial success, we decided by late 2011 an external stabiliser, but we realised Still, we stood by our research and
that we would manufacture washing that the consumer wouldn’t accept entered the market with a 7 kg, front
machines in India and preparations this. So we incorporated an internal load product. Since the launch in
for that began at our plant in Chennai. stabiliser (this is a modification that September 2014, the market size for
Clearly, if we were going to be a big most multinational home appliance 7 kg machines has risen to 25 percent,
player, we could not rely on imported companies have made for the Indian according to a research by Gfk
machines designed for other markets. market). Second, clothes don’t Nielsen. Everyone had a 7 kg product,
Between 2011 and 2013, we dry easily in the monsoon. That is but no one wanted to move in that
sold our imported range and also when consumers feel the need for direction. When the consumer went
learnt a fair bit about what Indian a powerful dryer. We ensured the to shop, he saw our 7 kg product and
consumers wanted. Our research was machine we built in our Chennai took to it as it was our best one.
both quantitative and qualitative. While the 7 kg machine is our
Washing machines were placed in mainstay, we also have a 6 kg product
households and customer behaviour BOSCH SIEMENS that is imported. That was done
was studied. People wanted shorter mainly to grant us entry into small-
wash cycles, faster drying, lower HAS EXPANDED town retailers who are reluctant to
power consumption and lesser ITS PRESENCE IN stock only 7 kg products as the market
use of water. In addition, a lot of is dominated by 6 kg machines.
customers told us they wanted a INDIA, CONVINCED Even as we brought in more
feature where they could add more MORE RETAILERS flexibility for the consumer, we
clothes mid-cycle. We assimilated TO STOCK ITS were careful not be priced out of
this information and worked on the market. While the competition’s
making a machine that would, to a PRODUCTS 6 kg product comes with a price
large extent, incorporate these needs. tag of Rs 26,000-27,000, our 7 kg

66 | FORBES INDIA DECEMBER 11, 2015