Plying in the domestic end

The German brand, Bosch has been serving the global household market for a long time. Dirk C. Dedekind, Head of Marketing India, Bosch Home Appliances, talks us through how appliances have evolved in India and highlighting the market scenario of domestic appliances.

Aadeetya Sriram (AS): How would you define the scenario of the consumer durables sector in India currently?

Dirk C. Dedekind (DD): For the past couple of decades, the consumer durable industry in India was driven primarily by Indian consumer durable brands. However over a period several international brands and particularly Asian companies penetrated the price sensitive mass market and established themselves as leaders in almost all consumer product categories. Over the past few years almost all Japanese brands have launched their products in India. Though most of these companies entered the consumer durable market with premium products and related price points, the same was diluted over a period to sustain through the price battle with competitors. Today customers are ready to pay a slightly higher premium to procure energy efficient (Star rated product), understanding that he or she will be able to recover these costs in the long run by saving on other operational and maintenance costs.

AS: What changes have you come across over the past couple of years?

DD: Over a decade ago consumer durable retailing was at a fairly nascent stage; however it has evolved to a whole new level over the years. The momentum of operations has gone up substantially, with customers becoming more aware about brands and their USP’s, various product categories, and thus given the choice to opt for the best in class products. However, since the penetration level of each MDA product is still very low at 6-8% considering the size of the population, there is a huge growth potential in the long run. Consumer expectations are now driven by better value proposition, customer service, superior quality and energy efficiency. In the recent past the consumer durable market has become extremely cluttered with several brands trying to find their way to the target segment / market, sub markets and sub segments. This has led to a complex scenario that requires a clearly defined communication strategy to reach out to the right target audience.

The growth of the consumer durable industry over the past decade has been driven primarily by the demand in the various metros and the mini metros. However in the recent past and over the next few years the consumer durables sector is expected to witness larger growth volumes as companies will spread their wings to other Tier 2 and Tier 3 markets and rural areas. This shift in focus is already being witnessed as most market players are expanding distribution network and opening more direct dealers, exclusive outlets in the smaller towns to the growing demand in these locations.

AS: What has been Bosch’s retailing strategy in India?

DD: We do not want to compete with a wide array of features, but intend to create a space which is driven by true value propositions for our customers.  We will co-exist equally among all key retailers irrespective of the fact whether it is a traditional independent retailer or large format retailer, the important thing being that the partner should understand the brand positioning and be able to fulfill the brand promise by selling with it complete set of values.

We want to maintain a direct touch with customers by taking continuous response on the quality of sales effort at sales point and service thereafter. Our biggest strength is the emphasis on direct after sales service, which we do not out source to third party / franchisees.

As a part of the Group’s retail expansion strategy, Bosch’s set of home appliances will be made available PAN-India, however in two phases. The initial product range for India will be distributed through leading multi-brand retailers in Tamil Nadu, Karnataka, Andhra Pradesh and Delhi-NCR. The second phase will see the products being made available across India.

AS: Take us through your range of home appliances?

DD: We have recently introduced our new range of Bosch home appliances which include washing machines, dishwashers, refrigerators and dryers to the existing product portfolio of BSH Home Appliances Pvt. Ltd. We will definitely look at launching other products under the Bosch Brand in the future.

Bosch offers a wide range of energy efficient and water saving appliances. In relation, all Bosch products combine efficiency, quietness, and quality, complimented with unrivalled ease of use for a hassle free lifestyle.

Bosch Home Appliances represent premium quality and their consumer credibility stems from their advanced technology and outstanding longevity. These attributes enable them to meet the highest performance expectations. Bosch Home Appliances put their products through rigorous endurance and efficiency tests before launching them in the market.

AS: Do you have your manufacturing units in the country? If so, how many and where? 

DD: BSH Bosch and Siemens Home Appliances (BSH) Group through its subsidiary BSH Home Appliances Pvt. Ltd has acquired 42 acres of land at Sipcot Industrial Park in Pillaipakkam. The company will be setting up a state-of-the-art manufacturing facility at an investment of approximately Rs 480 crore, to produce washing machines, dishwashers, refrigerators and dryers. The manufacturing facility is expected to provide employment to 1,000 locals directly and generate another 1,000 jobs indirectly.

AS: How wide is Bosch’s distribution network in India? How much sales are generated annually in unit terms?

DD: We are present in 800 + outlets as on Oct-2011 by year end we will touch 1000 + outlet, next year we plan to be present in 1500 + outlets PAN India. The width and depth of our distribution is quite good, and we also have kept a very nice balance between traditional retailers and large format retailers, keeping the premium positioning of the brand in the MDA segment. (Sales no’s cannot give) We are growing very fast in the product categories where we have launched the product.

AS: How do you view the Tier I & Tier II cities in the country? Is there potential out there for your brand?

DD: In Tier-1 and Tier-2 cities, the potential for growth is immense specifically because the base is low. In the past couple of years the exposure through media, cinema etc has exposed them to a lifestyle which is almost in line to their counterpart in metro / large cities. There is a great potential in these cities, however we will first create infrastructure and then move to these towns, to ensure that we fulfill the long term brand promise.

AS: Have you tied up with any major home appliances retailers off-late?

DD: We have tied up will almost all major retailers in top 40 cities of India, other than east region (Bihar, Jharkhand, Orissa, West Bengal and 4 Eastern states). We have received a very pleasant response from all parts of the country where we have launched Bosch products.

AS: What marketing strategies have you adopted and how you invest in implementing it? How has this Diwali/festive period been for you?

DD: We launched an aggressive media campaign to market our products through various print, outdoor and BTL campaigns, and received excellent response from customers.  

We received an exceptionally good response for our products during the festive period of Diwali. We are delighted to have launched our products at the right time and were successful in catering to the right target audience. The festive season has indeed been auspicious for most consumer durable companies, considering the slump in demand witnessed over past couple of quarters.

Our marketing campaigns till date have been very well accepted, and have generated a lot of buzz in key markets where we launched the products. In relation, the demand for our products outstripped the forecasted numbers. Our marketing campaigns were further re-enforced at local regional and levels through local sales promotion and gave a further boost to the demand.

AS: What plans are there in place for the future? How much growth are you expecting this year?

DD: We have long term plans in India, creating a premium position for BSH brands and providing the best possible products in terms of quality, reliability, energy efficiency and usage with a unique experience to Indian market.