Magazine article Marketing

Indesit's Price Salvo

Magazine article Marketing

Indesit's Price Salvo

Article excerpt

Next Tuesday (June 16) white goods brand Indesit will launch its first ever TV campaign, with an unashamedly price-led strategy that asks consumes "Why Pay More?"

The move has raised eyebrows across the 2.3 bn [pounds] UK white goods industry. As one rival puts it "They've never been much of a marketer - normally they just say |Here's a product, here's a price, do what you want with it.'"

But these are not normal times. The Indesit campaign, worth more than 2.5 m [pounds] in above-the-line spend alone, follows a period of unprecedented activity entirely out of keeping with the industry's slumbering image.

A price war is raging, brand shares are seesawing and most incredibly, the market leader Hotpoint has been accused of trying to squeeze out budget brands like Indesit by using its clout to "persuade" retailers to adopt a minimum pricing policy. That could lead to retailers pushing up prices of products previously beneath the set "floor" - or at its most extreme, delisting certain brands.

The first indications of the backroom battle with Hotpoint emerged in a full page ad from Indesit in the April 30 edition of the retailers' trade paper ERT. It featured a picture of a Moscow bread line and emphasised Indesit's belief in a free market.

"We know that different consumers enter the market at different price points and we believe that they should be allowed to do so," said the ad. "No-one should dictate to you, the retailer. We will support your business, not tell you how to run it."

The ad does not mention any brand by name - and leading retailers Comet and Currys were unavailable for comment - but most industry observers recognise it is aimed directly at Hotpoint.

"We have no evidence of their activity with retailers but we do suspect it," says Electrolux's deputy managing director (marketing) Nevio Polliselle.

Indesit's communications manager Adam Read confirms the fracas with Hotpoint. "They were apparently trying to push through minimum prices and that would have caused major problems for Indesit," he says. But he claims the timing of the new ads is more fortuitous than planned.

"The idea is to reinforce the message of Indesit as an affordable, reliable brand, saying you don't have to pay more," he says.

"It's not a direct snub at Hotpoint. They won't be happy about it but then we're all out there in the marketplace and we're all there to gain market share."

Hotpoint's sales director John Morrisey was unavailable for comment as Marketing went to press. But the question remains: why would a premium brand like Hotpoint be so worried about the price-led Indesit? …

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