Magazine article Marketing

News Analysis: Imports Threaten Domestic Bliss

Magazine article Marketing

News Analysis: Imports Threaten Domestic Bliss

Article excerpt

White-goods manufacturers are facing stiff competition from non-European, cut-price rivals. Joanna Bowery reports.

You can go to the supermarket for a pint of milk these days and come back with a fridge to put it in. What's more, the appliance may cost less than the week's groceries.

This fall in prices in the white-goods market has been fuelled by an influx of cheap kitchen appliances from brands such as Beko and Teba from Turkey, and Haier from China.

Low production costs have enabled Haier to sell at a discount, while Teba and Beko benefit from cheaper transport, allowing them to keep prices down. This has forced traditional white-goods manufacturers in Europe to focus on differentiation.

The European manufacturers claim that it is not price alone that convinces consumers to buy a brand, but also innovative design. Their approach is to ensure that consumers buying a fridge, for example, no longer see it as a choice between white boxes, but consider other factors, too, such as how often it has to be defrosted and what it will look like in the kitchen.

Desirable designs

As a result, European manufacturers are investing in dynamic design to make their goods appear more exciting. Most recently, Electrolux announced the launch of a range of see-through domestic appliances under its Insight brand (Marketing, 27 July).

Eye-catching design cannot work in isolation, however. 'Manufacturing designer white goods is a great way of getting people to look at them and take an interest, but they won't buy them in preference to a cheaper version unless they are also technologically innovative,' says Nick Lund, account director at The Design Group.

Graham White, Hoover Candy's UK chief executive, agrees. 'Consumers are unlikely to pay for high design without top-notch functionality,' he says.

'We aim to build things into the brand so that shop staff will have something to talk about when consumers are attracted to an appliance.'

Functionality and convenience are an important factor. Indesit offers a washing machine with a dedicated setting for trainers, for example, while the Insight range features a cooker with a transparent panel on top, enabling consumers to look down into the oven, rather than having to bend down to see inside.

The Insight range was devised following in-depth consumer research, hence its name, and it is an area of work in which the main white-goods brands are investing heavily.

Reflecting reality

Research carried out by Indesit, which also owns Creda and Hotpoint, resulted in a programme to reposition its brands. 'It revealed that although Hotpoint is a hugely trusted brand, we needed to look at differentiation and communication,' says Neil Tunstall, Indesit's marketing director. …

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