Rajeev Karwal, managing director & CEO, Electrolux Kelvinator Ltd, enjoys challenges. It was this thirst for challenge that took him to the Canary Islands, Spain, post his first break at Onida, where his efforts over a four-year period brought a dramatic turnaround at Kishinchand Chellaram Group, which posted its best performance in many years - that too in a recession-hit market. Over the next few years, Karwal went about turning around the fortunes of brands like LG and Philips, and joined Electrolux Kelvinator last year to take on his next big challenge - to put Electrolux back in the reckoning. Karwal knows while the brand enjoys great equity internationally, back home, its early hiccups have ended up putting Electrolux Kelvinator on the backfoot. However, Karwal - who was voted Marketing Person for The Year 1999 by A&M magazine - is unfazed. In this interview to Sumita Vaid Dixit of agencyfaqs!, he spells out the various initiatives the company is taking to give competition a run for their money.

Q. Before joining Electrolux, you were at Philips as senior vice-president. In effect, you were making a switchover from a well-established brand to a relative upstart. What prompted you to go for it?

A. Philips is Europe's No 1 manufacturer of consumer electronic goods and there I was handling just one division of Philips in India - the consumer electronics division. I had all the responsibilities of a CEO, except treasury, banking, corporate HR and handling corporate affairs of the legally listed entity, which is Philips India.

On its part, Electrolux is the world's No 1 choice in home appliances and when I took up this challenge I also got the additional responsibility of managing the entire affairs of the legal entity which is Electrolux Kelvinator Ltd as the CEO and managing director. So the move was from one great brand to another with additional job challenges.

Q. You have valuable experience in the consumer durables category - Philips, LG and before that Onida. Could you very briefly share with us what you have learnt from each of your previous assignments?

A. I have always believed that learning never stops even for a single moment in life. More so, at your work place. I have learnt a lot from all my employers at Onida, the Chellaram Group, Surya, LG, Philips and now, Electrolux. All these corporations are leaders in their own right in their chosen areas of operation and the one thing that is common to all of them is that they have speed and they undertake a lot of efforts to understand and establish rapport with their consumers.

Q. What is the essence of Electrolux's approach in India? What sort of equity has the brand been able to build in the country?

A. Electrolux' product portfolio in India makes it amply clear that we can only reach out to our target audience by using consumer insight and foresight. Consumer foresight is something which very few organisations are able to use in their marketing. At Electrolux we have created a product and brand promise platform that makes it incumbent on us to listen to what the consumer has to say. We also anticipate how changes in technology and society would make a certain consumer need to change as well. 'Nurturing Hopes, Nourishing Life' is not just a brand promise, but also a mantra which is being imbibed all across the organisation and in every departments.

Our promise doesn't end at creating the healthiest air with our air-conditioners or creating the healthiest food through our microwave ovens or dirt-free, detergent-free clothes through our washing machines. We have created products like India's first hands-free refrigerator, where the consumer, even with her hands full, can open the refrigerator with the help of a pedal at the bottom of the unit. Then we have the Washy Talky washing machine, which has a voice interactive system that can guide the consumer to the cleanest and the most cost-effective wash. We have a changeable panel door in the refrigerator where you can change the colour of your refrigerator at your own home, yourself, without any problem.

This is what I mean when I say our mantra is to listen to what the consumer has to say. The Electrolux brand equity in the minds of the consumer today is one of the highest in terms of differentiation and status in the home appliances segment.

Q. Electrolux in India has gone through a series of structural and operational changes and it was only recently that the unified Electrolux brand was unveiled in India. Have these, in any way, affected the way the brand is perceived today?

A. Electrolux came into India through acquisitions and thereafter, mergers. Through the above strategy Electrolux had with it the Kelvinator, Allwyn, Voltas and Maxclean brands, apart from Electrolux. Since every brand had its own set of product ranges and trade partners etc, it took sometime for the organisation to amalgamate and standardise its strategy in the marketplace. In mid-2002 all the brands were brought under one portfolio of Electrolux Kelvinator Ltd and in a few markets the Allwyn brand was allowed to continue. From January 1, 2004, all the brands were brought under the Electrolux umbrella.

Q. Did these early issues help late entrants wrest the initiative from Electrolux? With the benefit of hindsight, what could the company have done differently to get a better grip on the market in India?

A. In business, the market dynamics continues to change drastically. What is right today may not be right four years hence. As a result, there is no point in getting into the issues of the past, and with the new focus on the Electrolux brand, we are confident that we will find our entitlement in the marketplace.

Q. Even the advertising strategy of Electrolux has evolved but little over the years. Can we expect some fresh creative ideas in the communication of Electrolux?

A. Our new advertising campaign has broken with the first corporate film. It talks about the aspirations of women of various caste, creed, location, ages etc, their dreams and how Electrolux can fulfill these needs and aspirations. We have made a lot of effort in understanding women, how women use our products and what are their unfulfilled needs in all categories of products. Our new product campaign - in which we are making four new films - should be out in the next few weeks and you will see that it would be a finally honed strategy to ensure an emotional connect with our target audience, that is, the women.

Q. Electrolux's product portfolio has been limited to washing machines, refrigerators, microwave ovens, air-conditioners - in short home durables. Whereas competitors LG and Samsung have an array of IT products which give them an aura of technological edge. Do you agree?

A. LG and Samsung have done well. Yes, their product range gives them a better presence in the trade showrooms. Electrolux is entering more categories of products. The new areas we are entering into are microwaves and air-conditioners and soon you will see us getting into some new products categories. The products you will see are differentiated products and it is this differentiation which will bring more vibrancy and vitality to the Electrolux brand.

Q. How is Electrolux addressing the needs of the large mass of consumers out there in rural India? To what extent have the needs of the rural consumer reshaped your thinking at the product development stage?

A. Electrolux has made a lot of efforts to understand the rural consumer. Take our water dispenser on the door of the refrigerator. This is designed to ensure that during power cuts the consumer does not have to open the door many times, but she would still be able to drink cold water. Or take our refrigerator which has extra ice pack provided in the freezer to preserve ice for a longer periods of time. Or take the example of our new refrigerator which has legs made in such a way that a consumer can avoid buying a separate stand on which to keep the refrigerator. All these things may seem small but then no one else in the industry has thought of these little things and improvised on their products. We are also expanding our distribution reach and very soon you will hear about another great product from us which will revolutionise the Indian rural refrigerator market and will help expand its size tremendously.

Q. Promotions and discount schemes/offers is one area of marketing that Electrolux has been virtually absent from. What is the thinking in Electrolux on these? In which markets do promotions and schemes work well and why?

A. Electrolux believes in value for money, pricing upfront and uses promotions rarely during festivals and around certain events. We have done promotions during Diwali and we are doing a current combination during the wedding/cricket season with combined prices on refrigerators and televisions. We believe that if any brand uses promotions perpetually as a tool to sell its products, it cannot be an honest promotion. To put things in perspective, these are cleverly designed, all-year-round, price discounts to fool the customer.

Q. All durable advertising (like FMCGs) these days is based on claims and counter claims being No 1. What is the importance of claiming to be No 1? Which are the areas in which Electrolux can claim to have an edge over competition?

A. Electrolux Group is the worlds' No 1 choice overall in its chosen area of operation. We are also the No 1 innovators and you will see more of that in the months to come. I have nothing to comment on the claims and counter-claims of our competition.

Q. Most consumer durable marketers have leveraged cricket to promote their respective brands. Electrolux too has done the same with Electrolux Wisden International Awards. How do you wish to take the strategy forward?

A. We will not be doing the Wisden Awards this year because we are getting very clearly focused in our communication plank and cricket does not fit well in our overall marketing strategy; but as a media opportunity we will continue to use cricket. You will see a lot of Electrolux during the upcoming Pakistan/India series.

Q. With technological differences vanishing across product categories, after-sales service is emerging as a key differentiator for brands. What is Electrolux's score on that count?

A. Electrolux provides the best service as has been measured by Businessworld magazine in October 2003 across various metros. We scored the highest on this count in all the categories. We are now making our service centres on-line and our new service tool Instaedge has rolled out across the country.

The company has set a target to have 300 exclusive service centres by the end of 2004 and one Master Service Centre in each metro by 2005. The objective is to become the most customer-friendly brand by 2005.

Our new initiative involves the Internet in a major way. Through our on-line initiative the customer can register her complaint and within 24 hours the complaint would be attended to. Beside this, consumers can specify whether or not they are satisfied with the service. Electrolux will also introduce an 'application lifeline' initiative which is going to target consumers who own appliances with expired warranties. Under this, consumers will be able to buy lifeline vouchers off-the-shelf that would cost between Rs 250 and Rs 400. This would entitle them to 12 months of free service apart from other benefits.

You will see more initiatives on the service front coming from us. The first one of free service week and discounted spares before the season has just broken in the media.

Q. Now that Electrolux has got its branding right, which areas would the company focus on over the next one year?

A. While 2003 was for restructuring and rightsizing, 2004 and 2005 has been earmarked for repositioning and rebranding. The year 2005 is also for achieving a turnaround. Our single-minded focus would be to achieve leadership in the minds of women. The consumer must see Electrolux as a world-class product specially designed for her!

February 23, 2004
New Delhi
You can write to Rajeev Karwal at
rajeev.karwal@electrolux.com