Identify : Gunjan Srivastava
age: 47 years
Put up: MD & CEO, Bosch Siemens Residence Home equipment Manufacturing Pvt Ltd (India)
training: IIT (BHU), IIM-Ahmedabad
problem: BSH was a minor participant in washing machines. The corporate must differentiate itself in a chaotic market
How did they do it: Going towards the prevailing knowledge and launching 7kg, entrance load washing machines in a market dominated by 6kg machines
subsequent transfer: To launch fridges for the Indian market
Bosch Siemens Residence Home equipment (BSH) entered India in 2010 as a completely owned subsidiary of German dwelling equipment producer BSH Hausgereit GmbH. Beforehand, Bosch Siemens merchandise have been bought by means of a distributor. As a part of our firm’s dual-brand technique, we determined to place Siemens as a premium model, whereas Bosch shall be extra reasonably priced. We launched Bosch washing machines in India in 2011, a yr after we established our workplaces within the nation. At the moment, all our machines have been imported. After some preliminary success, we determined by the top of 2011 that we’d manufacture washing machines in India and preparations for that started at our plant in Chennai. Clearly, if we have been going to be an enormous participant, we could not depend on imported machines designed for different markets.
Between 2011 and 2013, we bought our imported vary and likewise realized what Indian customers need. Our analysis was each quantitative and qualitative. Washing machines have been put in within the homes and the habits of the purchasers was studied. Folks wished shorter wash cycles, quicker drying, much less energy consumption and fewer water use. As well as, many purchasers advised us they wished a characteristic the place they might add extra garments in the course of a cycle. We assimilated this info and labored on making a machine that might meet these must a big extent. There have been additionally some particular necessities concerning wash cycles for dhotis and saris, which we integrated.
On the quantitative aspect, by means of using scorecards, we studied the efficiency of the machines. All this grew to become an enter to the product we designed for India.
We knew from the start that our imported merchandise could be good for city customers, but when we need to enter the highest 200 cities in India, we now have to alter our abroad fashions. I’ll share two examples. Voltage fluctuations are frequent in India and we may have bought the product with an exterior stabilizer, however we realized that the buyer wouldn’t settle for it. That is why we included an inside stabilizer (this can be a modification that the majority multinational dwelling equipment firms have made for the Indian market). Second, garments don’t dry simply in monsoon. That is when customers understand the necessity for a strong dryer. We ensured that the machine we made at our Chennai manufacturing facility has excessive drying capability.
Our subsequent problem was to resolve which product section to enter. Speaking about entrance load washing machines, 6 kg machines dominate the market. However our market analysis has proven that in India, a 7kg product shall be extra environment friendly as Indians have massive joint households. The common household dimension is 4-5 members and in a 7 kg drum, in case you load 6 kg of garments, the washing capability is best.
Previous to our launch, 6kg machines had a market share of 85 p.c whereas the 7kg variant had a market share of round 15 p.c. However, we persevered with our analysis and entered the market with a 7kg, entrance load product. In accordance with a analysis by Gfk Nielsen, since its launch in September 2014, the market dimension of 7kg machines has grown by 25 p.c. Everybody had a product of seven kg, however nobody wished to maneuver in that path. When the buyer went to buy, he noticed our 7 kg product and took it because it was our greatest product.
Whereas 7kg machine is our mainstay, we even have 6kg product which is imported. This was primarily accomplished to provide us entry into small city retailers who’re reluctant to inventory solely 7kg merchandise because the market is dominated by 6kg machines.
At the same time as we introduced extra flexibility to the buyer, we have been cautious to not value out the market. Whereas the competitors’s 6 kg product prices Rs 26,000-27,000, our 7 kg machines price Rs 30,000. This makes it enticing for folks to stretch and improve a bit. Worth shouldn’t be a barrier.
Bosch Siemens has additionally expanded its presence in India. Whereas the marketplace for entrance load machines is within the prime 200 cities of the nation, we weren’t current in all of them initially. However with two manufacturers and a ‘Made for India’ product, we have been in a position to persuade extra retailers to inventory our merchandise.
The twin-brand technique continues to assist us in some ways. On account of our heritage in India, there are numerous components of the nation the place the Bosch model and Siemens model are sturdy. For instance, Siemens is powerful in Mumbai and the encircling area, whereas Bosch is powerful in Hyderabad and Bengaluru.
What we now have accomplished in India is to offer German engineering tailored to Indian situations and that is the promise that buyers are shopping for. We count on to turn into the second largest washer firm in India within the subsequent 18 months, an enchancment from our quantity three place now. In some markets, like components of the South, we’re already second solely to our Korean rivals LG and Samsung. (BSH doesn’t publish its income by nation.)
Going ahead, we plan to undertake the identical technique for the ‘Made for India’ vary of fridges subsequent yr as properly.
(As advised to Samar Srivastava)
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(This story has been printed within the December 11, 2015 concern of Forbes India. To view our archives, click on right here.)