Having catapulted itself to the No. 1 slot, the company is now talking of widening its lead.

By Jaya Basu

It's a warm Saturday, and Ram S. Ramasundar, sporting a newly-grown beard, is tirelessly posing for a photo shoot for this magazine. Despite the harsh afternoon sun, Ramasundar isn't complaining. That's easily explained.

For, unlike in the past, the group CEO of Electrolux's India operations is no longer on the defensive. The Swedish giant's three brands in India (Electrolux, Kelvinator, and Allwyn) that until recently took the blame for its huge losses, are finally showing results. Electrolux Kelvinator-the flagship subsidiary-is firmly on a turnaround path while Electrolux India has broken even.

By the end of 2001, the group as an entity would have broken even, though the washing machine maker, Intron, would still be making losses. Says Ramasundar: ''Having a sensible portfolio of multiple brands is a good strategy from a long-term point of view, as each brand has its own personality, values, and promises.''

The Three-Brand Strategy

If there's an air of 'I-told-you-so' to Ramasundar's quote, it's not without reason. Sales have soared from a bare 60,000 units in 1996 to 6.6 lakh units (between January and October, 2000), making Electrolux the biggest refrigerator company in India. Moreover, as the white goods market goes through a churning, the Swedish company's repertoire of refrigerators will enable it to put its eggs in more than one basket. Though not everyone thinks so. Says Shyam Motwani, Senior General Manager, Godrej: ''I don't think they have been able to make a dent in the market with their multi-brand strategy.''

In a market that grew by a bare 2 per cent (January-October, 2000), demand will have to be created from among the first-time buyers, and by getting those who already own no-frills boxes to upgrade to loaded, expensive versions. Ergo, in terms of positioning, Electrolux-more global in terms of technology and design-is pitted at the top end. Kelvinator-the firm's bread-n-butter brand, with 22 per cent marketshare-is slotted as the 'cooling specialist' and covers a range of price points.

Allwyn-acquired by Electrolux in April, 1999, and now manufactured by Electrolux India-has been virtually reinvented. The initial distribution and marketing problems that led to the brand's downfall have been sorted out. Allwyn's no-frills perception puts it in the middle and low-end as a food-care brand. Godrej, which until recently was the leader in the direct-cool segment, has been losing marketshare. According to org, Godrej had a quarter of the market until last year, but in October 2000, the figure had dropped to 14.7 per cent. The brand that has inflicted the most damage: Allwyn. Says Anand Bharadwaj, Executive Veep (Marketing), Electrolux Kelvinator: ''Historically, Allwyn has had a strong brand equity, but it was not pushed in the market in the right manner. We have corrected that.''

In line with the group's policy worldwide, Electrolux has been positioned as the flagship brand for homecare products. Kelvinator is being promoted as the core brand for refrigerators, simply because it accounts for seven out of every 10 refrigerators Electrolux sells. In fact, Kelvinator has been the fuel of its meteoric growth. Agrees Ajay Kapila, Veep (Sales & Marketing), LG Electronics: ''A few years ago, Kelvinator was struggling. But last year, it hammered its way to the top.''

Consolidating The Gains

Having made it to the top, Electrolux wants to stay there. A slew of new launches under each of the three brands is planned over the next year. Six new revamped models of Allwyn are slated to hit the market by January 2001. That will be followed by a new range of 315-litre Kelvinator refrigerators in February 2001, and 165-lt and 210-lt models by March 2001. In addition, a new range of frost-free refrigerators will be launched. Currently, Kelvinator has a very limited presence in the frost-free segment, which accounts for 15 per cent of the market. Apart from price, the relative stability of demand in the segment is a big attraction for Electrolux.

To reinforce the multi-brand strategy, the company is ramping up its production volumes. Already, it has the capacity to churn out 1 million units a year, and the plan is to add another 1 lakh units. But the timing would depend on how much the market recovers next year (Electrolux is looking at a 10-11 per cent market growth). As a prelude, it wants to equip its three plants with the flexibility to manufacture all the three brands. Currently, only the Warora (near Nagpur) and Nandalur (Andhra Pradesh) units make Allwyn, whereas Kelvinator is manufactured at the Shahjahanpur (Uttar Pradesh) plant. The Electrolux range comes out of the Warora plant.

Given the refrigerator market's modest growth, it is clear that Electrolux will need to strengthen its other products like washing machines, vacuum- cleaners, cooking ranges, and air-conditioners. The only hitch could be that, as far as Indian consumers are concerned, Electrolux (in fact, Kelvinator and Allwyn, too) is seen as a refrigerator brand. Whether it can extend the brandname to other products where competitors are well-entrenched, is a moot question. But armed with a huge marketing push (a Rs 70-crore budget for 2001-02), Electrolux is hopeful of correcting the perception. Says S.N. Tripathi, Executive Director (Unitary Business Group), Voltas: ''Transnationals have deep pockets and can afford to lose money as part of a long-term strategy.''

But having just turned profitable, Electrolux is not willing to slip back into the red-even if that fetches higher marketshare. As far as Ramasundar is concerned, he's fighting a battle where he'll take no hits.

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