chapter iv marketing strategies of manufacturers...
TRANSCRIPT
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CHAPTER IV
MARKETING STRATEGIES OF MANUFACTURERS
Manufacturers must think of the best practices to generate revenue, increase
efficiencies, reduce cost, gain competitive advantage and ensure regulatory
compliances. For this they should understand the trends and developments in their
market and then design their strategies accordingly. They should receive the latest
intelligence on the changing market conditions enabling them to make better
informed business decision and develop cost effective strategies and tactics.
To reduce costs and improve quality and responsiveness firms have made
manufacturing and marketing management a cornerstone of their corporate strategy.
Historically corporate strategy objectives were governed exclusively by marketing.
But today the focus has shifted to induce manufacturing, supply chain management
and purchasing in the strategic direction of the firm. However, all of these functional
entities are ultimately focused on the definitive goal of the business – “maximization
of its economic efficiency, which is possible in this competitive world only through
the creation of a satisfied customer base. Even though manufacturers change their
strategic focus, without overlooking the main goal of business one question of
interest that usually arises relates to the types of marketing strategies companies use
to succeed in a rapidly changing environment”.
Kitchen appliances industry is a growing high technology industrial market
characterized by high levels of regulatory dividend and technology uncertainty. The
manufacturers of these industries are behaving quite differently and experienced
varying levels of success in the market. The efficiency of the strategies which they
are pursuing in the market is the sole determinant of their gain or loss from the
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market. Their strategies represent tradeoffs between the risks of resource
commitment and competitive preemption. The marketing Strategies of these
manufacturing firms play a vital role in making available the right type of product of
the right quality, size and shape at the right time and at the right place, thereby build
a satisfied customer base and support.
This part of the study is designed to identify the commonality as well as the
discord among the manufacturers in their competitive marketing strategies, along
with the characteristics of their relation with distributers and consumers. To isolate
the specific characteristics unique to these companies that many others wish to
emulate, the study is focused on most prominent manufacturers in kitchen appliances
industry. Depending on the strategy the company uses, there can be large differences
in the manufacturing programs pursued and the nature of the manufacturer customer
relationship. Taking into consideration the above facts, an in depth analysis is made
on various aspects of marketing strategies pursued by manufacturers of Kitchen
appliances.
The data used in this part of analysis are collected using a structured
interview schedule. The survey instrument is similar in format to the interview
schedules used in preview strategic studies. The study has selected twelve leading
manufacturers of kitchen appliances in Kerala based on the personal judgment of the
researcher. Minimum four manufacturers in each product segments are selected and
the individuals completing the survey most commonly hold the title of Chief
Executive Officers or a position equivalent to that level. The main product segments
represented in the survey included mixer grinder, grinder, refrigerator, gas stove and
pressure cooker.
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The survey is mainly based closed end questions to the respondents, some of
which were of dichotomous nature. For measuring the factors which the
manufacturers considered in designing their strategies, the respondents are asked to
rank them in the order of their preference.
4.1 Market Location
The first aspect that the manufacturer has to take into consideration while
developing the marketing strategies is the location of Markets. The products can be
marketed at the state level or national level. Table T4.1 shows the market location of
the manufacturers of Kitchen Appliances.
Table T4.1 Market Location
The TableT4.1 reveals that all the twelve manufacturers selected for the
study have their business operations at the national level. Since they operate at the
national level, the marketing strategy might be more dynamic than those who operate
at a regional level. Marketing at the national level enables the manufacturers to
create a wide customer base; large scale economics of production etc. which shall
give them synergy in their operations and their production become more cost
effective. Such cost efficiency itself is a key for them to widen their market share. By
sharing a portion of such benefits in cost with the consumers in the form of reduced
prices of products, the manufacturers can add more number of people to their
customer base.
Location No. of Respondents Percent
State Level - -
National level 12 100
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4.2 Product Mix
The Manufacturer has to decide the product mix that they are going to
manufacture and distribute among the consumers. Different types of Kitchen
Appliances can be manufactured and marketed by the manufacturers using the same
facility at their disposal. Table T4.2 exhibits the product mix of the manufacturers of
kitchen appliances.
Table T4.2 Product Mix
Product Mix Brands No Percent
Mixer Grinder only Sumeet 1 8.33
Grinder only Laxmi 1 8.33
Refrigerator only Godrej, L.G, Samsung, Whirlpool 4 33.33
Pressure Cooker only Hawkins 1 8.33
Mixer Grinder & Grinder Maharaja 1 8.33
Gas Stove & Pressure Cooker Prestige & Pigeon 2 16.66
Gas Stove, Pressure Cooker & Grinder Butterfly 1 8.33
Gas Stove, Mixer Grinder & Grinder Inalsa 1 8.33
Total 12 100 Source: Survey Data
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Figure F 4.1 Product Mix
From the analysis it is revealed that a sizable number of the manufacturers of
Kitchen appliances do not confine their manufacturing activities to a particular
product alone, but they are maintaining a good product portfolio. The pattern
emerging from this analysis also shows that manufacturers of refrigerators are
focusing on the production of refrigerator alone without making any diversification
to other selected product segments of kitchen appliances industry.
4.3 Pricing
Pricing is one of the most important activities involved in marketing. Various
factors like marketing objectives, marketing mix, costs, organizational
considerations, nature of market and demand, competition etc. are to be considered
while setting the prices. Table T4.3 display the various factors considered by the
manufacturers while setting the prices.
Mixer Grinder only9%
Grinder only8%
Refrigerator only34%
Pressure Cooker only
8%
Mixer Grinder & Grinder
8%
Gas Stove & Pressure Cooker
17%
Gas Stove, Pressure
Cooker & Grinder8%
Gas Stove, Mixer Grinder & Grinder
8%
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Table T4.3 Factors in Fixing Price
Choice Mean Rank
Marketing Objectives 3.00 4
Marketing Mix Strategy 2.50 5
Costs 6.00 1
Organizational considerations 2.00 6
Nature of Market and Demand 4.50 2
Competitions 3.50 3
Source: Survey Data
Cost proved to be the most important factor considered by the manufacturers
when they go for designing their pricing strategies. Nature of market and demand
took the next important factor followed by competitions in the market and the
marketing objectives of the firm. Marketing mix strategy and organizational
considerations were given least importance by the manufacturers in their strategy
formulation process. From these results it can be deduce that like any other product,
the manufacturers of kitchen appliances also prefer to recover the cost in full from
the prices of their products in order to survive and grow in the market. Even in such
occasions they cannot negate the supply – demand conditions in the market.
4.3.1 Department involved in Price Fixation Process
Responsibility of setting up of prices of a product is to be entrusted with a
particular department. But different departments can be there which have direct or
indirect involvement in fixation of price. Marketing department, pricing department
or divisional or product line managers can be the main decision supporting centers
among them.
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Table T4.4 Fixation of Price- Department Responsible
Department No. of Respondents Percent
Marketing Department 8 66.67
Pricing Department 10 83.33
Product Line Managers 3 25
Source: Survey Data
Figure F4.2
Fixation of Price- Department Responsible
Analysis of Table T4.4 shows that 83.33 percent of the manufacturers
surveyed have their own pricing department which has the ultimate responsibility in
fixing the prices of their products. 66.67 per cent of them are making consultation
with their marketing team before finalizing their product prices. Only 25 percent of
the manufacturers are seeking the advice of product line managers with regard to
their pricing decision. So, marketing department of the firms in kitchen appliances
industry has a prominent role in the determination of the product prices. This is due
0
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20
30
40
50
60
70
80
90
Marketing Department
Pricing Department Product Line Managers
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to the fact that the marketing department can supply market intelligence to the firm
about the demand conditions, competitor prices, consumer needs etc. which is vital
for formulation of prices of products in a competition oriented market.
4.3.2 General Factors in the Determination of Price
While determining the price the manufacturer has to take into consideration
numerous aspects like historical or past prices, price elasticity and sensitivity,
demand analysis, competitor’s price, competitor’s reaction, economic condition and
societal considerations. A price which is fixed without considering the above factors
will not be the right price and therefore the manufacturer has to give due weight age
to the various factors while setting the price. Table T4.5 exhibits the various factors
that the manufacturer has to consider in setting the price.
Table T4.5 Analysis before Setting the Price
Type of Analysis No. of Respondents Percent
Past prices 12 100
Price Elasticity and Sensitivity 6 50
Demand Conditions 12 100
Awareness of Competitors Price 12 100
Competitors reactions to own price moves 12 100
Economic conditions 12 100
Societal factors 12 100 Source: Survey Data All the manufacturers selected for the study give due consideration to the past
prices of their products and the demand conditions in the market before finalizing
their pricing decision. They also take into account the competitor price and assess the
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possible competitor reactions to their price moves. They also make societal
considerations and analyze the impact of economic conditions in the market on the
prices of their product. But only one half of them are keen on the analysis of Price
elasticity and sensitivity. So from the analysis it is right to say that kitchen appliances
manufacturers are making rational and scientific approach in finding the correct price
for their product.
4.3.3 Pricing Method
Pricing is the process of deciding what a manufacturer will receive in
exchange for its products. A rational pricing method has to be selected by the
manufacturer in order that the financial goals of the organization are achieved, fit the
realities of the market place and support the positioning of the product in consistence
with the other variables in the marketing mix. Table T4.6 exhibits the pricing method
adopted by the manufacturers of kitchen appliances under study.
Table T4.6 Pricing Method
Method No. of Respondents Percent
Cost plus pricing 8 66.67
Break even pricing - -
Target return pricing 1 8.33
Perceived value pricing - -
Value pricing 1 8.33
Going rate pricing 2 16.67
Total 12 100 Source: Survey Data
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Figure F4.3 Pricing Method
It is clear from the analysis in Table T4.6 that 66.67 percent of the
manufacturers surveyed have adopted cost plus pricing method and 16.67 percent has
adopted the going rate pricing method. One manufacturer each of the kitchen
appliances industry are following the methods of pricing like target return pricing
and value pricing methods. None of the manufacturers has followed break even
pricing method. This is because majority of the manufacturers are already established
companies who mainly wants to recover their cost in full and to earn a reasonable
profit portion also. Only those manufacturers like Inalsa who concentrates on a
specific segment of the market is following going rate pricing method.
4.3.4 Price Adaptation Strategy
Manufacturers usually adopt a pricing structure that suits the variations in
geographical demand and costs, market segment requirements, purchase timing,
frequency of delivery, guarantees, service contracts and other factors. Price
adaptation strategy enables the manufacturer to generate demands for the product as
67%
0%
8%0%
8%
17%
Cost plus pricing Break even pricing Target return pricing
Perceived value pricing Value pricing Going rate pricing
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well as to retain the demand thus created. Because of the severe competition existing
in the marketing arena of kitchen appliances, the manufacturer has to adopt the right
strategy relating to price adaptation. Table T4.7 depicts the price adaptation strategy
of the manufacturers.
Table T4.7
Factors adopted for Price Adaptation Strategy
Choice Mean Rank
Geographical Demand 5.00 2
Geographical Costs 2.00 5
Market segment requirements 3.00 4
Purchase Timing 4.00 3
Frequency of Delivery 6.00 1
Service Contracts 1.00 6 Source: Survey Data
Figure F4.4 Factors adopted for Price Adaptation Strategy
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From the analysis of the mean scores obtained by various factors which are
considered by manufacturers of kitchen appliances and the corresponding ranks
obtained by them, it is revealed that the Frequency of Delivery is the most important
factor taken into account by them in deciding their price adaptation strategies.
Geographical Demand and Purchase Timing are also seriously looked in to before
making a decision finally in this regard. Manufacturers are least bothered about the
Service Contracts, Geographical costs and Market Segment requirement in
formulation of their price adaptation strategies.
4.3.5 Discriminatory Pricing Strategy
Manufacturers of kitchen appliances adopt discriminatory pricing in several
forms like customer segment, product form, image, location and time pricing. Table
T4.8 depicts the Discriminatory Pricing method employed by the manufacturers:
Table T4.8 Discriminatory Pricing
Forms No. of Respondents Percent
Customer Segment 6 50
Product form Pricing - -
Image Pricing - -
Location Pricing 3 25
Time Pricing 3 25
Total 12 100 Source: Survey Data
The analysis shows that all the manufactures practice discriminatory pricing.
50 percent of them adopt it in the form of customer segment pricing and 25 percent
each follow it as location pricing and time pricing. None of the manufacturers under
study adopt product form pricing and image pricing.
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0
20
40
60
4.3.6 Product Mix Pricing
The different products produced by the manufacturers of kitchen appliances
comprise of a part of a product mix. Therefore the manufacturer has to indulge in
different product mix pricing situations like product line pricing, optional feature
pricing, captive product pricing, two part pricing, by-product pricing and product
bundling pricing. Table T4.9 portrays the method of product mix pricing followed by
manufacturers of kitchen appliances.
Table T4.9 Product Mix Pricing
Pricing Situations No. of Respondents Percent Product line pricing 7 58.34 Optional feature pricing 2 16.66 Captive product pricing - - Two-part pricing - - By-product pricing - - Product bundling pricing 3 25 Total 12 100
Source: Survey Data
Figure F4.5 Product Mix Pricing
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The above analysis brings into focus the scenario existing in the product mix
pricing adopted by kitchen appliance manufacturers. 58.34 percent of the
manufacturers resort to Product line pricing, 25 percent adopts Product bundling
pricing and 16.66 percent follows Optional feature pricing.
4.3.7 Situations Leading to Price Cut
Many situations lead the manufacturers of kitchen appliances to cut its prices.
The different situations identified are, excess plant capacity, declining market share,
drive to dominate the market and economic recession. Table T4.10 displays the
various situations that necessitate price cuts by the manufacturers:
Table T4.10 Situations Leading to Price Cut
Situations No. of Respondents Percent Festival season 12 100 Excess plant capacity 2 16.67 Declining market share 6 50 Drive to dominate the market 6 50 Economic recession 3 25
Source: Survey Data
Figure F4.6 Situations Leading to Price Cut
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40
60
80
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Festival season
Excess plant capacity
Declining market share
Drive to dominate the market
Economic recession
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In Kerala, during Onam and Ramzan festivals, all the manufacturers selected
for the study are following the practice of price offers to their customers. In those
days manufacturers are producing on large scale and cut the prices of their products
in order to capitalize the situations. 50 percent of the manufacturers resort to the
practice of price cut due to the declining market share. Another 50 percent are doing
this practice in order to dominate the market. During recession days 25 percent of the
manufacturers went for a price cut.
4.3.8 Discounts & Allowances
All the manufacturers selected for the study offer different types of discounts
and allowances to their customers at different situations. The different types of
discounts and allowances that can be offered are cash discount, quantity discount,
seasonal discount, trade in allowances and promotional allowances. Table T4.11
shows the different types of discounts and allowances offered by the manufacturers
of kitchen appliances.
Table T4.11 Types of Discounts & Allowances
Types of Discounts No. of Respondents Percent
Cash Discount 12 100
Quantity Discount Nil Nil
Seasonal Discount 12 100
Trade in Allowances Nil Nil
Promotional Allowances 12 100 Source: Survey Data
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Figure F4.7 Types of Discounts & Allowances
It is clear from the above analysis that all the manufacturers selected for
the study offer incentives to customers in the form of cash discounts, seasonal
discount and promotional allowances. But none of them allows any quantity
discounts or trade in allowances to their customers even if they either individually or
in group made bulk purchases of the products of the companies.
4.3.9 Promotional Pricing Techniques
Promotional pricing techniques are invariably used by the manufacturers of
kitchen appliances to stimulate demand. Promotional pricing techniques include loss
leader pricing, special event pricing, cash rebates, low interest financing, longer
payment terms and extended warranties and service contracts. Table 4.12 exhibits the
different promotional pricing techniques resorted to by the manufacturers of kitchen
appliances.
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Table T4.12 Promotional Pricing Techniques
Techniques followed No. of Respondents Percent
Loss Leader Pricing Nil Nil
Special Event Pricing 12 100
Cash Rebates 12 100
Low interest Financing Nil Nil
Longer Payment Terms Nil Nil
Extended warranties and contracts 12 100
Source: Survey Data
The analysis shows that the manufacturers under study adopt promotional
pricing techniques like special event pricing, cash rebates, extended warranties and
service contracts to stimulate early purchase. But none of them follow loss leader
pricing, low interest financing and longer payment terms. Here it is important to note
that all the manufacturers under study follow universal techniques uniformly in
Promotional Pricing.
4.4 Channel Levels Selected
For the distribution of kitchen appliances, the manufacturers have to adopt
the appropriate distribution channel. The different channels of distribution that can
be adopted are 0 level, 1 level, 2 level, 3 level and any other channel. Table T4.13
shows the various channels chosen by the manufacturers for the distribution of
kitchen appliances.
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Table T4.13 Channel Levels Selected
Channel Level No. of Respondents Percent
1 Level Nil - 2 Level 7 58 3 Level 5 42 Others Nil - Total 12 100
Source: Survey Data
The analysis reveals that majority of the manufacturers in kitchen appliances
industry is using 2 level channel for marketing their products. Seven out of the
twelve manufacturers selected for the study resort to such practice in the distribution
of their products. The remaining five manufacturers depend on 3 level channel and
none of them uses 1 level channel in their distribution activities. The two level
channels are preferred by the manufacturers as they can concentrate on the
production activity to the maximum extent without worrying much about its
marketing and distribution. They can be relieved from the risks of channel conflicts
as well.
4.4.1 Selection of Channel – Source
The selection of channel members is an important activity in the distribution
process. Channel members can be selected from various sources like News paper
advertisements, Agencies and others.
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50%
25%
16%
9%
Advertisement Agencies Referrals Competitor Channels
Table 4.14 Selection of Channel
Sources of Selection No. of Respondents Percent
Advertisement 6 50
Agencies 3 25
Referrals 2 16.67
Competitor Channels 1 8.83
Total 12 100
Source: Survey Data
Figure F 4.8 Selection of a Channel
Table T4.14 reports the source through which the manufacturers select the
channel members. The analysis shows that 50 percent of the manufacturers identify
their channel members through advertisements, 25 percent through agencies, 16.67
percent by referrals and 8.33 percent by competitor channels. Thus most of the
manufacturers in kitchen appliances mainly depend on advertisements or entrust
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agencies for the selection of channel partners because they are considered as the most
cost effective method.
4.4.2 Training of Channel Members
Since kitchen appliances belong to a special category of product requiring
technical skill to operate the equipment, special training shall be provided to the
distributors so that they can pass on the information to the consumers. Two types of
training can be provided namely, internal training and external training. Table T4.15
exhibits the method of training adopted by manufacturers.
Table T4.15 Training of Channel Members
Training No. of Respondents Percent
Internal 12 100
External - -
Total 12 100
Source: Survey Data
All the twelve manufacturers selected for the study impart internal training to
the channel members. This is due to the fact that manufacturers are aware of the
technical aspects and unique features associated with their products, which help them
a lot to explain about its merits and utilities compared to the competitor’s products.
This would be a crucial factor in bringing success to their area of operation.
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4.4.3 Evaluation of Channel Members
The performance of the channel members shall be evaluated for the purpose
of taking corrective steps in case of non performance or weak performance. This can
be assessed with the help of sales quota attainment, customer delivery time, average
inventory level, treatment of lost and damaged goods and co-operation in promotion
and training programs. Table T 4.16 discloses the methods adopted by manufacturers
for the evaluation of channel members.
Table T 4.16 Evaluation of Channel Members
Evaluation Criterion
Based on Product Mix of Manufacturers
Total Gas Stove& Pressure Cooker
Mixer Grinder, Grinder, Gas stove Pressure Cooker
Fridge and Mixer Grinder
No. % No. % No. % No. %
All 1 25 1 33.3 2 40 4 33.3 All except Average Inventory Level 3 75 2 66.7 2 40 7 58.3
All except Average Inventory Level & Treatment of lost & damaged Goods
- - - - 1 20 1 8.4
Total 4 100 3 100 5 100 12 100
Source: Survey Data
58.3 percent of the manufacturers under study consider all the factors except
Average Inventory Level as the vital yardstick for the evaluation of the performance
efficiency of channel members. While 33.3 percent of the manufacturers take into
account all the factors, 8.4 percent do not consider the Treatment of lost and
damaged goods by the channel members. This shows that with a single factor, the
performance of channel members cannot be evaluated. A multi dimensional approach
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is to be followed by the manufacturing firms for the evaluation of the performance of
channel members. This is because a channel member good in one area may be poor
in other areas.
4.4.4 Mechanism for Managing Channel Conflict
When engaging in the distribution of products through different channels,
channel conflicts will definitely arise. It will not be possible to eliminate channel
conflicts. Therefore, all steps must be taken to manage the channel conflicts in an
amicable manner. Different mechanisms can be adopted for managing channel
conflicts. They are super ordinate goals, exchange of persons, co-optation,
diplomacy, mediations and arbitration. Table T4.17 describes the mechanism
adopted by manufacturers of kitchen appliances for managing channel conflicts:
Table T 4.17
Mechanism for Managing Channel Conflicts
Choice Mean Rank
Super ordinate goals 3 6
Exchange of persons 6 3
Co-optation 4 5
Diplomacy 7 2
Mediations 8 1
Arbitrations 5 4
Source: Survey Data
Mediation proved to be the most important technique used for managing
channel conflicts by the manufacturers. It has been ranked first in manufacturer
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opinion as to the strategy for managing the channel disagreement. Diplomacy
receives the second preference followed by exchange of persons and arbitrations.
Super ordinate goals are preferred by the manufacturers as the last step in their
channel issues. They prefer to solve their channel conflict at the initial stage itself
through mediations and diplomatic actions rather than taking it to arbitration for
settlement, which is considered unfavorable both to the manufacturing firm as well
as to the channel member.
4.5 Types of Retailers
The types of retailers through which the manufacturers decide to make their
product available to the final consumer depend upon the target policy of each and
every manufacturer. Different types and classes of consumers will have diverse
purchase habits. Table T4.18 shows the types of retailers preferred by the
manufacturers of kitchen appliances.
Table T4.18 Types of Retailers
Types of Retailers No. of Respondents Percent
Specialty Stores 6 50.0
Super market 3 25.0
Specialty Stores &Super market 3 25.0
Convenience Stores - -
Discount Stores - -
Off Price Retailer - -
Total 12 100.0
Source: Survey Data
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Figure F4.9 Types of Retailers
50 percent of the manufacturers prefer to have specialty stores in the selection
of the type of stores retailers. 25 percent of the manufacturers prefer Super markets
and the rest 25 percent prefer both. None of the manufacturers prefers convenience
stores, discount stores and off price leaders, since they are not popular in Indian
markets. Since kitchen appliances are utility products meant for specific use and have
some complimentary/supplementary relationship among them, the manufacturer’s
want a specific centre for promoting them. This could be the reason for many
manufacturers preferring specialty stores for promoting their products.
4.5.1 Retailing System
Since there are numerous established retailing systems, it will be an important
decision of the manufacturer to decide the type of retailing system which he has to
follow. The choice of the manufacturer will be based on the target market segment of
the product. Table T4.19 displays the different marketing systems which are chosen
by the manufacturers of kitchen appliances to market their product.
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Specialty Stores
Super market
Specialty Stores &Super market
Convenience Stores
Discount Stores
Off Price Retailer
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Table T4.19
Retailing System
Types No. of Respondents Percent
Direct Marketing Nil -
Automatic Vending Nil -
Store Less Retailing Nil -
Franchising 12 100
Corporate Chain Process 12 100
Voluntary Chain Nil -
Source: Survey Data
All the twelve manufacturers prefer to adopt Franchising and Corporate chain
stores as a system of retailing for kitchen appliances. None of the manufacturers
under study uses direct marketing, automatic vending, and store less retailer or
voluntary chain as their type of retailing system.
4.5.2 Retailer Marketing Decisions
Since marketing is a dynamic activity, the manufacturers have to give
flexibility to the retailers to take some decisions. The areas in which the retailers can
give free hand in decision making are a crucial decision to be taken by the
manufacturers (based on their marketing policy). Table T4.20 displays the different
areas in which the retailers can take marketing decisions and the areas which are not
advisable for them to use their discretion.
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Table T4.20 Retailer Marketing Decisions
Areas of Decision No. of Respondents Percent
Target Marketing 12 100
Product assortment &procurement 12 100
Service and Store Atmosphere 12 100
Price Decision Nil -
Promotion Decision 12 100 Source: Survey Data
All the manufacturers allow the retailers to take marketing decisions in
different areas like target marketing, product assortment and procurement, service
and store atmosphere, price and promotion decision. In the competitive environment
of the business, in order to grow and withstand the competition like any other firms,
the manufacturers of kitchen appliances also prefer to have a flexible distribution
system where the dealers are allowed full freedom to take decisions on many aspects
regarding the marketing of their products. Even in pricing decision, the base price is
fixed by the manufacturers and the dealers are allowed to sell the products within
their margins.
4.6 Functions Performed by Wholesalers.
Generally the manufacturers seek the support of wholesalers because they are
more efficient in performing certain functions which are necessary for marketing the
product. By delegating certain functions of marketing to the wholesalers,
manufacturers can concentrate in their area of production. Table 4.21 depicts the
picture of various functions normally performed by the wholesalers.
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Table T 4.21 Functions Performed by Wholesalers
Functions No. of Respondents Percent
Selling & Promotion 5 100
Buying & Assortment Building 5 100
Bulk Breaking Nil -
Warehousing 5 100
Transportation 5 100
Financing 5 100
Risk Bearing 5 100
Market Information 5 100
Management Services & Counseling 5 100 Source: Survey Data
From the study, it is identified that out of 12 manufacturers selected only five
have been using 3 level channel (i.e. a wholesaler included in the system) All of the
manufacturers allow the wholesalers to perform certain functions like buying and
assorting, bulk breaking, warehousing, Transportation, Financing, Risk bearing,
Market information, Management services which are helpful in the promotion of
sales including transporting and warehousing. So it can be concluded that the normal
functions of the wholesalers are also allowed by the manufacturers of kitchen
appliances under study.
4.6.1 Wholesaler Marketing Decisions
Due to recent changes in technology, systems and buying habits of
consumers, wholesalers have had to develop appropriate strategic responses. The
manufacturers have to decide the areas in which flexibility can be allowed. Table T
4.22 reveals the areas in which the manufacturers allow the wholesalers to act upon.
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Table T4.22 Wholesaler Marketing Decisions
Areas of Decision No. of Respondents Percent
Target Market 5 100
Product Assortment& Service 5 100
Price Decision 5 100
Promotion Decision 5 100
Source: Survey Data
All the manufacturers allow the wholesalers to take decisions related to target
market, product assortment and service, price and promotion decision to face the
challenges of new channel needs. Here also the wholesalers are allowed to dictate the
prices of the products subject to certain conditions in accordance with the changes in
the environment they operate. In other words, they are allowed to determine the
market operating price.
4.7 Market Logistics
Market logistics decisions have a direct impact on the entire activities of a
business establishment. Until and unless the products are distributed, none of the
other activities can be effectively performed. Four vital decisions are to be made in
relation to market logistics. They are order processing decision, warehousing
decision, inventory decision and transportation decision. Table T4.23 depicts the
market logistic decisions taken by the manufacturers of kitchen appliances.
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Table T4.23
Market Logistics
Decisions No. of Respondents Percent
Order Processing 12 100
Warehousing 12 100
Transportation 12 100
Inventory 12 100 Source: Survey Data
All the manufacturers of kitchen appliances under study are keen on logistics
decisions in order processing, warehousing, transportation and inventory and they
accept the universal principles of Market Logistics. Hence, there exists a smooth
flow of manufacturing and other allied activities that are performed by the
manufacturers concerned.
4.8 Product Levels
Products coming under the category of kitchen appliances are of a different
category as compared to other domestic utensils used in a household unit. The
expectations of the customers about the product are a vital factor that influences the
buying decisions. There are five different product levels in the kitchen appliances;
they are core product, basic product, augmented product, expected product and
potential product. Table T4.24 shows the product level that is chosen by the
manufacturers of kitchen appliances.
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Table T4.24 Product Levels
Levels of Product
No. of
Respondents Percent
Core product -
Basic product -
Augmented product 12 100
Expected product -
Potential product -
Total 12 100 Source: Survey Data
It is clear from the analysis that the entire manufacturers under study finally
dispatch augmented products with added features like warranty, after sales service,
free delivery, credit facility and installation of the appliance at the premises of the
customer. The kitchen appliances are of a special category which requires expert
handling and operation and the household units which use the equipments do not
possess the required skill or technical know how to operate the appliance. Moreover,
the manufacturer has to keep the sold products in its original form and use at least up
to a particular period of time for which he has to extend warranty and after sales
service. So, in kitchen appliances industry, it is very rare to see an established brand
only in its core product form, rather than seeing almost all the brands in its
augmented form.
4.8.1 Product Mix Decision
The product mix comprises of several product lines which a manufacturer
offers for sale. Each product line comprises of several sub lines. Marketing of
kitchen appliances is an area where the product mix is a common feature. A product
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mix has four dimensions. They are width, length, depth and consistency. Table T4.25
displays the dimensions of the product mix of the manufacturers of kitchen
appliances:
Table T4.25 Product Mix Decision
Dimensions No. of Respondents Percent
Width–number of product lines 7 58.33
Length-total number of items in the mix 8 66.67
Depth- number of variance offered 10 83.33
Consistency –close relations between product lines 12 100
Source: Survey Data
The kitchen appliances produced by most of the manufacturers under study
have the entire dimensions of the product mix. Out of the 12 manufacturers selected
for the study, 7 give importance to the Width (number of product lines) of the
product mix, 8 focus on Length (total number of items in the mix), 10 offer more
number of variables of products (Depth) and all the 12 make Consistency – close
relations between product lines. The refrigerator manufacturers lag behind mainly in
‘width and length’ dimensions of the product mix.
4.8.2 Modernization of Product Line
The product line is to be modernized regularly with the object of updating the
products to cope with the advancement in technology, to neutralize competition and
to attain more market share. The product line modernization is highly essential in the
case of kitchen appliances because customers have up to date information about the
various products with latest technology available in the market and prefer to buy only
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those products which give maximum utility at the minimum disposal of effort and
cost. Table T4.26 shows whether the manufacturers resort to modernization of their
product line or not.
Table T4.26 Modernization of Product Line
Opinion No. of Respondents Percent
Modernized 12 100
Not modernized - -
Source: Survey Data
The entire manufacturers selected for the study constantly resort to the
modernization of their product lines. The withstanding of the imperfect form of
competition existing in the kitchen appliances industry is possible by the firms
mostly through product differentiation and hence they try to incorporate all novel
features in their products powered by modern technology in accordance with changes
in the competitive product.
4.8.3 Product Line Featuring
The products belonging to a particular product line may have high priced as
well as low priced ones. This is done for the purpose of attracting the customers to
the market place and indirectly motivating them to shift their demand to the high
priced product. The manufacturer’s response as to the product line featuring adopted
by them is given in T4.27
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Table T 4.27
Product Line Featuring
Opinion No. of Respondents Percent
Product Featuring 12 100.0
No Product Featuring - - Source: Survey Data
The analysis shows that all the manufacturers adopt product featuring as a
regular policy. So, every product segment in kitchen appliance industry under study
has a good range of products in price and its feature terms which are mainly used by
the firms as a tool for expanding their market share either by attracting the customers
from different geographic segments or by stimulating the existing ones to shift their
demands from economy segments to premium segments.
4.9 Brand Strategy
All the manufacturers of the kitchen appliances use brands for identification
as well as for gaining market share. The following are the different brand strategies
that can be adopted for multiple products which include single brand, umbrella
brand, multiple brand categories and family of name. Table T4.28 shows the brand
strategy adopted by the different manufactures selected for the study.
Table T4.28 Brand Strategy
Brand Strategies No. of Respondents Percent
Single Brand 1 8
Umbrella Brand 3 25
Multi Brand Categories 5 42
Family of Names 3 25
Total 12 100 Source: Survey Data
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Figure F4.10 Brand Strategy
Multi brand strategy is the most widely used brand strategy in kitchen
appliances industry. About 42 percent of the manufacturers surveyed are using this
strategy. Umbrella brand and family of names are also favored by twenty five
percent each of the manufacturers. Single brand strategy is relatively unpopular
among the manufacturers.
4.10 Brand Equity When a product is marketed under a brand name, various advantages accrue
to the product compared with those that would accrue if the same product did not
have the brand name. Brand equity is an important factor which increases the
financial value of a brand. Brand equity can be measured at the firm level, at the
product level and at the consumer level. Table T4.29 shows the different ways
adopted by manufacturers to measure brand equity.
0
5
10
15
20
25
30
35
40
45
Single Brand Umbrella Brand
Multi Brand Categories
Family of Names
Single Brand
Umbrella Brand
Multi Brand Categories
Family of Names
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Table T4.29 Brand Equity
Level of Brand Equity No. of Respondents Percent
Firm Level 4 33.33
Product Level 3 25
Consumer Level 5 41.77
Total 12 100
Source: Survey Data
Majority of the manufacturers would like to have a brand equity which the
customer values and regards as a friend. 41.77 percent of the manufacturers have
such an opinion in this regard. One third of the manufacturers wish to measure its
brand value at the firm level.
4.11 Packaging Functions
Packaging is one of the most important tools of marketing. Proper packaging
creates convenience value for the consumer and promotional value for the producer.
Packages hold the contents together and protect goods as they move through the
distribution channels. Table T 4.30 exhibits the choice of factors by the
manufacturers of kitchen appliances in the use of packaging:
Table 4.30 Packaging Functions
Choice Mean Rank
Containing of the Product 5 4
Protecting the Product 7 2
Promoting the Product 6 3
Facilitating storage, use & convenience 8 1
Source: Survey Data
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With regard to the packaging aspects of marketing, utmost concern given by
the manufacturers of kitchen appliances is the storage, use and convenience of the
product. This factor gained the first priority by the manufacturers followed by
protection of the product and promotion of the product. Containing of the product
was the least important factor in packaging function for them. Since the kitchen
appliances are larger in size and consisting of electronic components in it which
could be easily damaged at the time of its handling. So its packaging is mainly done
for use and convenience and also for protecting the product from such abnormal
damage. Its packaging has nothing to do with the promotion of the product since the
people are attracted not by the packing of the product, but by the quality of the
product contained in it.
4.12 Labeling
Labeling is done for the purpose of correct identification of the product or
brand and the label may describe various things about the product. Table 4.31 shows
the labeling policy adopted by manufacturers of kitchen appliances:
Table T4.31 Labeling
Opinion No. of Respondents Percent
Labeling 12 100.0
Not Labeling - - Source: Survey Data
All the twelve manufacturers under study practice labelling of their products
to take advantage of the creative aspects involved in labelling.
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4.13 Promotion Mix
Promotion mix consists of advertising, sales promotion, public relation,
personal selling and direct marketing. Communication enables the manufacturer to
impart all the information relating to the product in the proper manner. Table 4.32
shows the communication mix adopted by the manufacturers.
Table T4.32 Promotion Mix
Promotion Strategies No. of Respondents Percent
Advertising 12 100
Sales Promotion 12 100
Public Relation & Publicity 12 100
Personal Selling Nil Nil
Direct Marketing Nil Nil Source: Survey Data
To reap the maximum benefit out of the implementation of marketing
program, all the prominent ingredients of the marketing communication mix are
applied simultaneously by all the manufacturers under study. However, personal
selling and direct marketing are not found as part of the promotion mix. Since almost
all brands have already created a name in the different segments and have a good
channel of distribution, the manufacturer need not go for these two types of
promotion strategies that are mainly adopted by the firms under unorganized sector.
4.14 Budget for Advertisement
Every firm has to take a decision on the amount that is going to be spent for
advertisement. Since advertisement is one of the major aspects in boosting sales, the
manufacturer has to set apart a considerable portion of their funds to be spent on
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advertisement. The amount spent on advertisement can be small, moderate, or huge.
Table T4.33 shows the extent of amount spent on advertisement by the
manufacturers of kitchen appliances.
Table T4.33
Budget for Advertisement
Budget No. of Respondents Percent
Low - -
Moderate 7 58.33
Huge 5 41.67
Total 12 100 Source: Survey Data
Figure F4.11 Budget for Advertisement
Among the manufacturers of kitchen appliances under study, 58.33 percent
spent moderate amount and the remaining 41.67 percent spent huge amount for
advertisement of their products. None of the manufacturers report that their
01234567
Low Moderate Huge
T4.40
Low Moderate Huge
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advertisement budget is low. Competitive situations prevailing in kitchen appliances
industry like any other segment of home appliances market compel the companies to
spend more for advertisement in order to make the customers aware of the relevant
aspects of their products than the amount spent by rivals to persuade the customers to
buy their products.
4.14.1 Factors in Setting Advertisement Budget
For planning the advertisement activities for each product a separate
advertising budget is to be established. Since the purpose of advertisement is to
increase demand for the product, the manufacturer has to consider various factors in
setting the advertisement budget. The various factors include stage in the product life
cycle, market share and consumer base, competitions, target audience and product
substitutability. Table T4.34 displays the factors which are taken into consideration
by the manufacturers of kitchen appliances in setting advertisement budget.
Table T4.34 Factors in Setting Advertisement Budget
Factors No. of Respondents Percent
Stage in product life cycle Nil -
Market share and consumer base 12 100
Competitions 12 100
Target audience 12 100
Product Substitutability 12 100 Source: Survey Data
All the manufacturers consider almost all the factors in setting advertisement
budget except the stage in the product life cycle. This is because all the
manufacturers under study are already in the market with established brands and
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most of them have been in Kerala market for the last 10 to 15 years. They have been
in the growing or saturation stage and the advertisement is a regular promotional
activity for them. Every year they have to earmark relatively large portion of their
budget for advertisement without considering the stage in product life cycle, which is
a factor usually used by the new entrants into the market while designing their
advertising budget.
4.14.2 Factors in Selection of Advertising Media
The selection of the right media to deliver the appropriate message to the
target audience is an important activity to be performed by the manufacturer. The
different factors that are to be considered usually in media selection are desired
reach, number of respondents, target group and impact, selecting specific media
vehicles, choosing media type, media timing and geographical media location. Table
T4.35 exhibits the various factors that are considered by the manufacturers of kitchen
appliances in the order of their preference in advertising media selection.
Table T4.35 Factors in Selection of Advertising Media
Choice Mean Rank
Target group and impact 3.5 4
Choosing media type 5.5 1
Media timing 2 5
Geographical media allocation 4.75 2
Selecting specific media vehicles 4 3 Source: Survey Data
Choosing media type is the most important factor considered in the selection
of advertising media. Since choosing the media type has the highest mean we give it
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the rank one followed by geographical media allocation, selecting specific media
vehicles, desired reach number of audience and impact and then media timing.
4.15 Tools of Marketing Public Relations
A successful marketing of public relations is the direct outcome of choosing
the apt technology and its effective use. Table T4.36 lists out the manufacturer’s
response as to their preference in choosing the tools for marketing their public
relations
Table T 4.36 Tools of Marketing Public Relations
Choice Mean Rank Publications 3.25 4 Events 4.5 1 News 4 2 Speeches 2 5 Public Service Activities 3.67 3
Source: Survey Data
In the ranking of Tools of Marketing Public Relations of manufacturers,
Events has the highest mean score in the weighted average test and so it has been
ranked first position followed by News, Public Service Activities, Publications and
Speeches in the second, third, fourth and fifth positions respectively. Thus, this
analysis shows that Events are considered to be the most important tool of marketing
public relations.
4.16 Basis for Market Segmentation
Since the market consists of buyers who differ in one or more ways, it
becomes necessary that a firm shall segment the consumer market in a suitable
manner. The major variables that can be used in consumer market segmentation are
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Geographic, Demographic, Psychographic and Behavioral segmentation. The
marketer may also adopt a combination of the different variables. Table T4.37
outlines the major variables that are used by the manufacturers of kitchen appliances
in market segmentation.
Table T4.37 Basis for Market Segmentation
Variables No. of Respondents Percent
Geographic - -
Demographic - -
Psychographic - -
Behavioral - -
Combination of All 12 100
Total 12 100 Source: Survey Data
The analysis reveals that all the manufacturers selected for the study have
adopted a holistic approach in their market segmentation process. They have taken
into consideration all the variables relevant for segmenting the market together and
they have designed their product which can fulfill the needs of the consumers
irrespective of the environment in which they include. This is because the wants,
resources, location, buying attitudes and buying practices of the consumers differ as
regards the purchase decision related to kitchen appliances and by including all these
differentials they have designed their products.
4.16.1 Patterns of Market Segmentation
There are different ways by which market segments can be built up. The three
different patterns that may emerge are Homogenous preferences, Diffused
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Preferences and Clustered preferences. Table T4.38 reveals the patterns of market
segmentation adopted by the manufacturers of kitchen appliances.
Table T4.38 Patterns of Market Segmentation
Patterns No. of Respondents Percent
Homogenous Preferences Nil -
Diffused Preferences 12 100
Clustered Preferences Nil - Source: Survey Data
All the manufacturers selected for the study, follow Diffused preferences as
patterns of market segmentation because the consumer preferences are scattered and
the consumers vary greatly in their preferences.
4.16.2 Evaluation of Market Segment Evaluating the market segment is an activity which involves the consideration
of three factors like Segment size and growth, segment structural attractiveness,
company objective and resources. Table T4.39 exhibits the ranking given by
manufacturers for the factors of evaluating market segment.
Table 4.39 Evaluation of Market Segment
Choice Mean Rank
Segment size and Growth 1.14 3
Segment Structural Attractiveness 3.00 1
Company Objective and Resources 1.83 2
Source: Survey Data
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In the ranking of the factors considered by the manufacturers of kitchen
appliances for the evaluation of their market segment, segment structural
attractiveness received highest rank with mean score of 3. Company objectives and
resources take the second position in this regard followed by segment size and
growth. Thus, this analysis shows segment structural attractiveness as the most
important factor in the evaluation of market segment. A segment in a kitchen
appliances market might have desirable size and growth still not be attractive from a
profitability point of view. So the manufacturers in this industry appraise the impact
on long run profitability of the industry in terms of competitors, potential entrants,
substitute producers, buyers and suppliers.
4.17 Product Positioning Strategies
Product positioning refers to the way by which the product is defined by the
consumers taking into consideration the important attributes attached to the particular
product. The different positioning strategies that can be adopted by the
manufacturers are product attributes, product benefits, usage occasions, positioning
against a competitor, positioning away from competitor and product classes. Table
T4.40 shows the ranking of various positioning strategies followed by the
manufacturers of kitchen appliances.
Table T4.40 Product Positioning Strategies
Choice Mean Rank Product Attributes 3.25 3 Product Benefits 5.58 1 Usage Occasions 4.33 2 Class of users against Competitors 3 4 Away from Competitors 2.25 6 Product Classes 2.75 5
Source: Survey Data
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In the ranking of Product Positioning Strategies of Manufacturers of Kitchen
appliances, Product Benefits has the highest mean in the weighted average test and
so it has been rank one followed by Usage occasions, Product attributes, Class of
users against Competitors, Product Classes and Away from Competitors in second,
third, fourth, fifth and sixth positions respectively. So, this analysis shows that
adding additional benefits and utilities to their products is the main strategy pursued
by manufacturers of kitchen appliances for marketing public relations and making an
image or identity of their products in the minds of consumers.
4.18 Factors Influencing Buying Behavior of Consumers
Several factors influence the buying behavior of consumers. The various
factors are Cultural, Social, Personal and Psychological. A three point scales is used
for measuring the opinion of the selected manufacturers of kitchen appliances in this
regard and the results are reported in Table T4.41
Table T4.41 Factors Influencing Buying Behavior of Consumers
Factors Mean Score Rank
Cultural 1.75 4
Social 2.25 2
Personal 2.67 1
Psychological 2 3
Source: Survey Data
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0
0.5
1
1.5
2
2.5
3
Cultural Social Personal Psychological
Figure F 4.12
Factors Influencing Buying Behavior of Consumers
Among the various factors influencing the buying behavior of their
consumers, the manufacturers of kitchen appliances believe that the personal factors
are the most prominent one. Personal factors were ranked first with the highest mean
score of 2.67 in the group. Social factors are in second position in terms of influence
on buying behavior according to manufacturers followed by psychological and
cultural factors with third and fourth ranks respectively.
4.18.1 Cultural Factors Influencing Buying Behavior
Cultural factors influencing the buying behavior of consumers of kitchen
appliances include Culture, Sub culture and Social Class. Table T4.42 displays the
ranking of various cultural factors makes such influence.
Table T4.42 Cultural Factors Influencing Buying Behavior
Factors Mean Score Rank
Culture 1.75 4
Sub Culture 2.25 2
Social Class 2.67 1
Source: Survey Data
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Among the various cultural factors influencing the buying behavior of
consumers of kitchen appliances identified, basic culture of the consumer is the most
important factor which has highest influence on consumers in this regard. Social
class in which the consumer belongs to is also a significant factor and ranked second
by the manufacturers. Manufacturers have given least importance to sub culture in
determining the buying behavior of consumers.
4.18.2 Social Factors Influencing Buying Behavior
Social factors like reference groups, family, roles and statuses influence the
consumer’s behavior. Table T4.43 reports the ranks obtained by various social
factors in its influence on the buying behavior of the consumers of kitchen appliances
and compiled from the responses of the manufacturing firms.
Table T4.43 Social Factors Influencing Buying Behavior
Factors Mean Score Rank
Reference Group 1.83 2
Family 2.75 1
Roles and Status 1.17 3
Source: Compiled from Survey Data
From the analysis it is proved that the family is the most significant social
factor influencing the buying behavior of consumers in kitchen appliances industry.
This social factor is ranked first in the manufacturer survey followed by reference
group and role and status of the consumers which are ranked second and third
respectively. Kitchen appliances are domestic products which are mainly used by the
spouses of consumers and so definitely have their own voice in the selection of the
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brands which might be the reason for the family to become the most important
determinant of the buying behavior of kitchen appliances industry.
4.18.3 Personal Factors Influencing Buying Behavior
The personal factors that influence a buyer’s decision include the buyer’s age
and stage in the life cycle, occupation and economic circumstances, life style and
Personality. Table T4.44 reveals the influence of various personal factors in buying
decision.
Table T4.44 Personal Factors Influencing Buying Behavior
Factors Mean Score Rank
Age and Stage in Life Cycle 2.91 2
Occupation and Economic Circumstances 3.5 1
Life Style 2.41 3
Personality and Education 1.25 4
Source: Survey Data
Occupation and economic circumstances of the buyer is the major personal
factor affecting the buying behavior of consumers of kitchen appliances. In the
survey administered among manufacturers this factor is ranked first followed by age,
lifestyle and personality, which were ranked second, third and fourth respectively. To
own and use a kitchen appliance, an economic element is always involved; and for
many of the households in India, these appliances are luxury than anything else and
so the economic circumstances of the consumers is perceived to be the most
important personal factor by the manufacturers in designing their marketing
strategies.
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4.18.4 Psychological Factors Influencing the Buying Behavior
Four major psychological factors influence the buying decision. They are:
motivation, perception, learning and belief and attitudes. Table T4.45 gives the
ranking of various psychological factors which influence the buying behavior by the
manufacturers of kitchen appliances.
Table T4.45 Psychological Factors Influencing Buying Behavior
Factors Mean Score Rank
Motivation 1.33 4
Perception 3.75 1
Learning 2.00 3
Beliefs and Attitudes 2.8 2
Source: Survey Data
It is traced out from the analysis that perception of the consumer towards
various brands products is the most significant psychological factor influencing the
buying behavior of consumers. The manufacturers surveyed in this study have given
top most priority of this factor. Beliefs and attitudes of persons are also highly
influential psychological factors in the buying behavior and is ranked second.
Learning and motivation has medium influence as a psychological factor and are
ranked in the third and fourth position respectively.
4.19 Post Purchase Behavior
The post purchase behavior of the consumers shall be ascertained for
determining the level of satisfaction or dissatisfaction of the consumers. The post
purchase satisfaction, post purchase action and post purchase product use and
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disposal of the consumers are to be monitored. Table T4.46 reveals the monitoring of
post purchase behavior of the manufacturers in kitchen appliance industry.
Table T4.46 Post Purchase Behavior
Opinion Number Percent
Monitoring Post Purchase Behavior 10
83.33
Not Monitoring Post Purchase Behavior 2 16.67
Source: Survey Data
Most of the manufacturers surveyed are keen in monitoring post purchase
behavior of their consumers. This practice they followed on the basis of the principle
that retaining customer base is more important than attracting new ones in the present
competitive scenario.
4.20 Tools for Tracking and Measuring Customer Satisfaction
Since customer satisfaction is highly important in post purchase behavior it
has to be measured by using various standard tools and techniques. The measuring of
customer satisfaction is an important activity to be performed by a marketer. For
tracking and measuring customer satisfaction, different tools can be applied. They
are Complaints & Suggestion System, Customer Satisfaction Survey, Ghost
Shopping and Lost Customer Analysis. Table T4.47 displays the different tools that
are applied by the manufacturers of kitchen appliances for tracking and measuring
customer satisfaction.
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Table T4.47 Tools for Tracking and Measuring Customer Satisfaction
Tools No. of Respondents Percent
Complaints & Suggestion System 12 100
Customer Satisfaction Survey 8 66.67
Ghost Shopping Nil -
Lost Customer Analysis 12 100 Source: Survey Data
Most of the manufacturers use the tools like complaint and suggestion
systems, customer satisfaction surveys, lost customer analysis etc. for tracking and
measuring customer satisfaction. Among these complaints and suggestion system is
the most widely used by manufacturers of kitchen appliances for measuring the post
purchase satisfaction of their buyers. None of the manufacturers under study uses
ghost shopping as a tool for tracking and measuring customer satisfaction.
4.21 Level of Investment in Customer Relation Building
Loyal customers are an important asset to any organization. For developing
greater customer loyalty the organization has to spend more. There are four different
levels of investment in customer relationship building. They are Basic Marketing,
Reactive Marketing, Accountable Marketing and Pro Active Marketing.
Table T4.48 Level of Investment in Customer Relation Building
Factors Mean Rank
Basic Marketing 2.58 3
Reactive Marketing 3.42 1
Accountable Marketing 1 4
Pro-Active Marketing 3 2 Source: Survey Data
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Reactive marketing proves to be the most preferred one among the
manufacturers of kitchen appliances in Kerala. This level of investment in customer
building was ranked first by manufacturer’s survey followed by pro-active marketing
and base marketing. Re active marketing is by far an easier approach and brings
economy in money, effort and time. This could be the reason why manufacturers of
kitchen appliances prefer this.
4.22 Competitive Intelligence System
Collecting competitive information is an important process in designing the
various strategies of manufacturers. Every company should design its competitive
intelligence system in such a way as to make it cost effective. Each and every
personnel of the company must be given an incentive to spot competitive information
and pass it on to the relevant parties in the company. So an effective competitive
intelligence system is required to gather competitive information. Table T4.49
depicts the picture whether or not a competitive intelligence system is implemented
by the manufacturers of kitchen appliances under study.
Table T4.49 Competitive Intelligence system
Opinion
No. of Respondents Percent
Maintain Competitive Intelligence System 12 100
Not Maintain Competitive Intelligence System Nil -
Source: Survey Data
All the manufacturers of kitchen appliances under study have a competitive
intelligence system to get valid information from competitors. During the present
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competitive situation of kitchen appliances market of Kerala, each and every
manufacturer has to get the information about the competitor product, the strategy of
competitors and design counter strategy against them and have to modify their
products in accordance with the changes in the industry. For this purpose, they
maintain a highly integrated competitive intelligence system.
4.23 Type of Competitive Strategy
Competitive strategy comprises of the various moves adopted by
manufacturers to attract the customers, withstand competitive pressure and
strengthen the firm’s market position. There are four competitive strategies in which
the manufacturers may be positioned. They are market leader, market challenger,
market follower and market nicher. Table T4.50 exhibits the competitive strategy in
which the manufacturers are placed.
Table T4.50 Type of Competitive Strategy
Market Position No. of Respondents Percent
Market Leader 3 25
Market Challenger 6 50
Market Follower 2 17
Market Nicher 1 8
Total 12 100
Source: Survey Data
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25%
50%
17%
8%
Market Leader Market Challenger Market Follower Market Nicher
Fig F 4.13 Type of Competitive Strategy
Many of the manufacturers follow the strategy of market challenger and are
found to be more reactive to their competitor strategies. Only three pursue the
strategy of market leader and two are in the shoes of market follower and one is
market nicher. So, most of the manufacturers in kitchen appliances industry want to
become a market challenger by making a product advantage, offering better value to
the market place and by adopting new technology in production for getting more
economy in their production activities.
This part of the analysis of the study finds commonality in many aspects of
the marketing strategies pursued by manufacturers in the kitchen appliances market
of Kerala. All the manufacturers operate at the national level and while designing
their pricing policies they give a lot of consideration to the cost and also the supply
demand conditions of the market where they operate. Multi brand strategies and
customer level creation of brand equity are preferable to many of them. Some of the
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leading manufacturers, especially in refrigerator segment, concentrate fully on that
product segment alone without wanting to become more diversifying in their
operations to other selected segments of the industry. They are more reactive than
pro active because of the changing conditions of the industry.