Frigidaire - Launching the front loading washing machine - Case Analysis

(GROUP 1) HOUSE OF
HOLMES PRESENTS:
FRIGIDAIRELaunching the front loading
washing machine.
ALEX ARULRAJ: 19232561
DIPANI HANDA: 19234558
SRIVATS TIBREWALA: 19232796
RAZIULLAH TP: 19232525

TOP LOADING
WHY DID FRIIGIDAIRE BRING FRONT LOADING
WASHING MACHINES INTO THE MARKET?
FRONT LOADING
V S

To achieve competitive advantage and
product diffrentiation which was difficult to
attain in the industry.
To leverage the growing trend of
environmental sustainability.
To create a new market and use the early
mover advantage to become a market
leader.
WHY DID FRIIGIDAIRE BRING FRONT LOADING
WASHING MACHINES INTO THE MARKET?

SWOT ANALYSIS
Environmental message.
Features
4th largest producer.
Strong marketing towards
dealers.
Personal contact with
consumers.
Merchandising
STRENGTH
Complexity of Technology.
Costly to purchase and
service.
Difficult to install.
No mass media adverts.
Segmentation on
outdated data.
WEAKNESS
High energy costs.
Growing consideration
of environmental issues.
Changes from DOE.
Trend drifting from
Europe to US.
OPPORTUNITY
Loyalty towards more
familiar top loading
version.
Perception of unclean
clothes.
Direct competition.
Energy efficient top
load models
THREAT

POSITIONING
PERFORMANCE
ECONOMY
LUXURY
COMFORT

MARKETING MIX (4PS)
Design success
Better washing
Gentler on clothes.
Saves energy and
water
Flexible Installation.
2 Year warranty
Commercial and coin
operated versions.
Ultra-high-end and
low-end models in
future.
PRODUCT
Personal communicat
ion over mass media.
Watch an infomercial
to win free appliances
Free financing for six
months.
Installation allowance
Use and care video
were provided on
purchase.
Free steam iron.
Free detergent.
PROMOTION
$999 (Previous price:
$799).
Higher Profit margin
for dealers of 30%,
Only 0.8% of the
machines in market
were priced above
$700.
Discounted pricing
throughout the first
year
PRICE
Primary distribution
through dealers.
High priority given to
dealers.
Hosted an open
house and training
session.
Provided training,
floor plan and other
sales aids.
Commissions and
rewards to retail staff,
PLACE

COMPETITORS
MAYTAG
Strong Brand Character
According to ace metrics, in 1998
"The lonely repairman" campaign
became the longest running TV
Ad. The ads were funny and the
character was memorable.
WHIRLPOOL
Experiance
Whirlpool has already been
successful with its front
loading machine in Europe and
hence has experience that
could be a threat.
GENERAL ELECTRIC
Strong R&D
This strength enables the
company to rapidly innovate and
develop products that suit market
demand. It won't take much time
for GE to enter into the picture.

THE BIG QUESTION.
HOW TO DEVELOP A
MARKET THAT HAS
FAILED TO TAKE OFF
OVER 50 YEARS?

MAIN ISSUES
ADVERTISING PRICING SEGMENTATION

ISSUE NO.1
ADVERTISING
Mass media platforms were under utilised
during a time period when TV audience was
increasing at a fast pace.
Competitors were rigorously advertising with
unique campaigns (eg. Maytag's Lonely
repairman).
Absence of a solid creative campaign.
“Content is king.” - Bill Gates, 1996.
Ignorance towards the newly introduced
Internet advertising. (Internet commerce
reached $8 billion)

1990's
Which activities do you take
time from to spend time on the
computer?
0 20 40 60 80
TV
Sleeping
Chores
Books
Magazines
Outdoor
Newspaper
Exercise
Gaming
None
(Source : https://link.springer.com/chapter/10.1007/978-3-322-86793-3_1)

Most important thing your audience needs to know.
Your product may be technically complex however the
purpose can be simple.
Focus on the Result because it’s easier for people to
understand what a product is if they know its end result first.
As the product is considered complex, simplifying its message
can help advertise it better through mass media. To do so
important points to make need to be identified. Points such as:
(According to BFW, Florida based Ad agency)
Use brand advertising techniques to ensure a strong presence
on the minds of the audience.
Rypple says Explainer videos can lower support queries by
36% and can increase conversion rates by 20%. That’s pretty
amazing! (Angus, 2020)
ADVERTISE THROUGH INFOMERCIAL/EXPLAINER VIDEOS.
RECOMMENDATION 1

ISSUE NO.2
PRICING
Launching an expensive ($999) products
despite being aware of price sensitivity of the
market..
Only 0.8% of the machines in market were
priced above $700.
A country recovering from 1990-1991 recession.
(Bancroft.berkeley.edu, 2020).
Because of reduction in dollars buying power
what was earned didn't mean as much it once
did.

Poverty rate in
the United
States from
1990 to 2018
(Source : https://www.statista.com/statistics/200463/us-poverty-rate-since-1990/)

RECOMMENDATION 2
Price should be closer to the previously
decided $799 that gives a fair share to both
the dealers and Frigidaire while also being
attractive to consumers.
Shift pricing strategy from competition
oriented to consumer demand
oriented. (Harvard Business Review, 2020)
It is important to show the product is not just
energy and water efficient but cost efficient as
well.

ISSUE NO.3
SEGMENTATION
Based on historical and potentially outdated
data.
Focus on too many segments.

RECOMMENDATION 3
The company should conduct a new study to gain
current and relevant data for segmentation.
After analysing the six segments, we can say that the
company should target on the upscale suburban
families and the executive suburban families.
We came to this conclusion because they are style
conscious, brand loyal and get motivated to buy a
product by the performance and the fashion
components.
These two groups are also above average
economically. these two groups have an expected
demand of 4.75-4.76%.

PLAN OF
ACTION
PHASE 2
Consider price sensitivity
as a major factor and set a
reasonably low price
PHASE 4
Review the performance and
competitors activities and
make necessary changes.
PHASE 1
Conduct brand new study on
the market and identify
segments to target.
PHASE 3
Advertise a simplified message with a
revamped creative campaign while
continuing to focus on the personal
contact with consumers..

REFERENCES
Advertising, b. (2020). Creative Advertising for Complex Products | bfw Advertising. [online] bfw Advertising. Available at: https://www.gobfw.com/advertising/creative-advertising-
ideas-complex-products-services/ [Accessed 19 Feb. 2020].
Angus, A. (2020). Why Explainer Videos Increase Conversion Rates by 20%. [online] Unbounce. Available at: https://unbounce.com/conversion-rate-optimization/explainer-videos-
increase-conversions/ [Accessed 19 Feb. 2020].
Ace Metrix. (2020). Brand to Watch: Maytag Man Makes Appliances Manly | Ace Metrix. [online] Available at: https://www.acemetrix.com/insights/blog/brand-to-watch-maytag/
[Accessed 19 Feb. 2020].
Investopedia. (2020). How Does the Current Cost of Living Compare to 20 Years Ago?. [online] Available at: https://www.investopedia.com/ask/answers/101314/what-does-
current-cost-living-compare-20-years-ago.asp [Accessed 19 Feb. 2020].
Harvard Business Review. (2020). How to Fight a Price War. [online] Available at: https://hbr.org/2000/03/how-to-fight-a-price-war [Accessed 19 Feb. 2020].
Statista. (2020). U.S. poverty rate by year 1990-2017 | Statista. [online] Available at: https://www.statista.com/statistics/200463/us-poverty-rate-since-1990/ [Accessed 19 Feb.
2020].
Mindtools.com. (2020). Segmentation, Targeting and Positioning Model: What Is the STP Process in Marketing?. [online] Available at: https://www.mindtools.com/pages/article/stp-
model.htm [Accessed 19 Feb. 2020].
Bancroft.berkeley.edu. (2020). 1990-92 Early 1990s Recession - Timeline - Slaying the Dragon of Debt - Regional Oral History Office - University of California, Berkeley. [online]
Available at: https://bancroft.berkeley.edu/ROHO/projects/debt/1990srecession.html [Accessed 19 Feb. 2020].

Frigidaire - Launching the front loading washing machine - Case Analysis

More Related Content

What's hot (20)

Similar to Frigidaire - Launching the front loading washing machine - Case Analysis (20)

Recently uploaded (20)

Frigidaire - Launching the front loading washing machine - Case Analysis