ULTRA SONIC CLOTHES WASHING MACHINEMarketing Plan

Submitted By – NMP Group 8

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Table of Contents1 Executive Summary..................................................................................................................3

2 Situation Analysis......................................................................................................................4

2.1 Market Summary...............................................................................................................4

2.2 SWOT Analysis................................................................................................................... 6

2.2.1 Strengths......................................................................................................................7

2.2.2 Weaknesses................................................................................................................ 7

2.2.3 Opportunities.............................................................................................................7

2.2.4 Threats..........................................................................................................................8

2.3 Competition......................................................................................................................... 8

2.4 Technology Analysis:.......................................................................................................9

2.5 Product Offering..............................................................................................................10

2.6 Distribution/Channels.................................................................................................10

3 Marketing Strategies.............................................................................................................11

3.1 Objective.............................................................................................................................11

3.2 Targeted Segments........................................................................................................12

3.3 Positioning.........................................................................................................................12

3.4 Strategies............................................................................................................................13

3.4.1 Products.....................................................................................................................13

3.4.2 Price.............................................................................................................................13

3.4.3 Distribution..............................................................................................................13

3.4.4 Promotion.................................................................................................................13

3.5 Marketing Mix..................................................................................................................14

3.6 Marketing Research.......................................................................................................15

4 Financials................................................................................................................................... 15

5 Marketing Controls................................................................................................................16

5.1 Implementation...............................................................................................................16

5.2 Marketing Organization...............................................................................................17

6 References................................................................................................................................. 18

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1 Executive Summary

Ultramatic Ltd manufactures and sells industrial and home cleaning systems like ultrasonic

cleaners. We are among leading firms in India for manufacturing such systems. Our products

include Single tank ultrasonic cleaners, Multistage Aqueous ultrasonic cleaner, Multi stage

vapour degreaser, Oil Skimmers etc. The company is preparing to launch a new product

“Ultra sonic clothes washing machine” for industrial and home clothes cleaning solutions.

Ultrasonic cleaning is a method of cleaning that uses an ultrasonic device i.e. a sonicator to

clean. The ultrasonic device uses a special cleaning solution and high frequency sound wave

to clean the items in frequency range of 40 to 80 KHz. Ultrasonic cleaning method has

certain advantage over existing washing machines like; it reduces the need of harsh cleaning

agents, which increases the life of fabric & color. A special cleaning solution, used with the

machine is to be used at a warm temperature, somewhere between 50 to 65 degrees Celsius.

Latest technology trends in the consumer washing machine markets incline heavily on Top

and Front Loading Fully Automatic washing machines with Fuzzy Logic being the sought

after upmarket technology. The lower end of the market is dominated by Semi-Automatic

washing machines. Ultrasonic technology in Washing machines has not been marketed

heavily in the Indian market and is still to gain space in the consumer consciousness.

Our marketing priorities include emphasis on a new cost effective technology, building brand

awareness among customers, targeting specific segments in consumer and business markets,

generating sales and breaking even by the end of the second year. The company operates in

accordance to the environmental regulations. Our capabilities of technical expertise and

design and efficient assembly procedures not only contribute to cost control but also enable us

to react quickly to market trends and technological advances. For the product’s introduction,

we will use a push strategy aimed at channel members offering customers a technically

superior product for a hassle free and cost effective cleaning experience.

2 Situation Analysis

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Ultramatic Ltd was incorporated in 1999 to manufacture industrial cleaning systems like

ultrasonic cleaners & degreasers, for the industrial marketplace. We are one of the leading

firms in India manufacturing, marketing and providing after sales services for such systems.  

In the years that we have been in business, we have addressed every conceivable cleaning and

washing application, from simple oil, chip, coolant removal, complex metal parts, cleaning

moulds, hard disk drive components and photonic optical components to absolute zero-

residue results. We are now entering the highly competitive washing machine market with a

new product based on Ultrasonic technology for both household and industrial use.

2.1 Market Summary

With an estimated 590 million urban consumers by 2030 and an estimated per capita spend of

about Rs 50,000 India has a huge market potential. A McKinsey Global Institute study

forecasts that the number of middle-class households with income of 2–10 lakh will increase

from 13 million households (i.e., 5 percent of the population) in 2006 to 128 million

households (41 percent of the population) by 2025.

Based on Market Research data available to us for FY 2011 the Indian washing machine

market continues its high growth trajectory, albeit the annual growth rate has come down

from 38 percent in FY 2010 to 24 percent in FY 2011. The total market of washing machines

in FY 2011 was 4.7 million units. The market is dominated by four players – LG, Samsung,

Videocon group, and Whirlpool – with a combined share of 74.6 percent. The semi-automatic

product category continues to have a dominant market share of 65 percent in terms of

quantity, at sales of 3.05 million units in 2010-11. However, in value terms they are almost

neck-to-neck in the Rs 4900 crore industry. Fully automatic sales is estimated at Rs 2500

crore, the balance Rs 2400 crore being contributed by semi-automatic product category.

Zone-wise, the northern region of India leads with 38 percent market share, followed by

southern region 30 percent, western region 27 percent, and eastern region five percent.

Interestingly, North India has preference for semi-automatics, whereas their southern

counterparts prefer fully automatic washing machines.

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At this stage we are among few leading ultrasonic cleaner manufacturers in the country

offering industrial products and specializing in B2B marketing. Ultrasonic washing machines

are new for the Indian households and hitherto not been marketed in the B2C space.

The penetration of Washing Machines in India is very low as just about 8.8% of the

households own a washing machine. Even in urban areas the penetration is just about 27.5%

in terms of households (Source: DuPont Research, Sep 2013). However the sales trend for

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the washing machine industry is on a surge for the last few years with the product

increasingly being perceived as a utility product rather than a luxury product. (Source: TV

Veopar Journal, April 2012). According to conservative estimates, the washing machine

industry is registering an average 20% YOY growth as per a report by Research and Markets.

Thus the market size for FY 2014-15 can be estimated as:

4.7 million in 2011; CAGR of 20%; hence market in 2014: 8.13 million.

2.2 SWOT Analysis

2.2.1 Strengths

Innovative Product: Product will be differentiated on basis of high technology

combined with commitment to high quality, and customization of products and

support services.

Pricing: Our product is priced neither at a level of prestige or exclusivity nor

economies of scale. Our product for the business segment will be priced based upon

value product pricing charged earlier towards old customers.

Employee: Highly skilled technical manpower involved in product design and

engineering. Heavy investment in R&D with the R&D department consisting of only

PHDs. Dedicated marketing team for B2B sales and B2C marketing being augmented.

Long-term relationships: We have excellent relationship with our suppliers and

business customers.

Quality: Assurance and control at each process level with emphasis on TQC.

Returning Customer: High percentage of repeat sales for Business Customers.

2.2.2 Weaknesses

Brand awareness: Ultramatic has no established brand image in comparison with LG,

SAMSUNG, IFB and others for the consumer market. As of now brand awareness is

through word-of-mouth based upon our B2B relationships. Aggressive promotion will

address this issue.

Product line mostly geared towards Industrial products.

Utlrasonic washing machines will cost more than normally available Fully Automatic

washing machines.

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2.2.3 Opportunities

Technology: New Smart Technology, which will be cost effective in the long run.

After influx of Smart Technology consumers are ready to pay higher for product

innovation.

2.2.4 Threats

Increased Competition: Competitors such as Nitin Engineers are in the market with

equal competence.

Probable theft of trade secrets is difficult to control.

Poaching of R&D team by competitors.

2.3 Competition

The top four players LG, Samsung, Videocon and Whirlpool collectively account for about

75% market share. Semi-automatic washing machines capture about 75% of the overall

washing machine market share in terms of units sold. However as per 2010 data, the revenue

share of fully automatic and semi-automatic was almost same at around Rs.2500 crore.

Geographically, North India accounts for 38% market share, South – 30%, West – 27% and

East – 5%.

In terms of price, the washing machines are categorized as those priced below Rs.8000

(generally semi-automatic machines), Rs.8001-Rs.17500 (fully automatic 6.2kg load), and

above Rs 17,500 (6.5 kg or front loading).

Popular brands offering Washing Machines in India are:

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*Jan-Dec 2010-11

2.4 Technology Analysis:

Globally, the washing machine industry is witnessing key technology changes with smart-

appliances aspect gaining wide interest with the consumers. Inverter-based variable speed

drives (VSD) is also capturing the attention of potential customers.

In India, the consumer preference is evolving from perceiving washing machines as merely a

utility product to considering it as an energy-efficient, well-connected and value-added

appliance. Of late Smart Technologies have captured consumer attention in consumer

durables like Television, Mobile Phones etc. Ultrasonic technology, though in use widely in

Industrial Cleaners have not been explored for use in washing machines.

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2.5 Product Offering

We will launch two products one for the Consumer market and another for the Business

market. Product features include

Aqueous cleaning solution

Indirect heating of solvent enhances the life cycle of the solvent

Proper insulation of the tanks minimizes the heat loss & in turn saves electrical energy

Ultrasonic generator is having auto tuning circuit for optimum power during loading

One touch programming panel with coloured digital screen display for preset mode

selection

Plug and forget features

Sleek design

Front Loading and automatic drying

50% less cycle time than Fully automatic machines

Temperature control, Cycle Time control, Spin Rate control

Adjustment for fabric modes, Automatic power stabilization

Sleep mode & Emergency pause

7 Kg for Consumer market and 35 Kg for Business market

Our Product will be in direct competition with the following popular brands. The

specification of these popular brand is as follows.

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Brands Videocon Careen Plus Samsung WF0854W8N Godrej GWI 8012 SEDS Haier HW85-B1486NZPPrice 37,777 onwards 41,500 onwards 37855 onwards 37,501 onwards

Wash Capacity (Kg) 6.5 8.5 8 6Type of Machine Fully Automatic Fully Automatic Fully Automatic Fully AutomaticLoading Type Front Front Front Front

Eco Bubble Technology

LCD Digital Display Anti Rat Cover

- Diamond Drum- Auto Restart with Memory Backup

- Chrome on Door

- Ceramic Heater- Direct Drive Technology

- Time Delay

- Voltage Control- Ozone Clean Technology

- Rinse Plus

- Eco Drum Clean - Turbulator - Sports Wear

- 4 Rinse options - 5 Spin Speed Options

- Stabilizer Free Operation

- Remaining Time Display- Remaining Time Delay- Fault Diagnosis (Digital Display)

Warranty Period 2 year 1 year 1 Year 1 Year

Normal WashQuick WashDelicate WashHeavy WashHot Water Wash --Prewash (Soak)

CottonWoolRinse+SpinBleach DispenserDetergent Dispenser

Auto RestartAuto Power OffOne Touch Wash --Lint Filter --Rat Mesh --Rinse Hold --Child LockAutomatic DrainageDigital DisplayTimersJog Dial

Main Features

Cycle Options/ Programmes

Wash Programs

Other Features

Water Consumption

More Features

Salient Features

After Sales Service

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2.6 Distribution/ChannelsUltrasonic Washing machines will be selectively distributed through a network of retailers for

the consumer segment. B2B sales will be directly through our sales force.

Traditional Channel: We plan to partner with Electronic Specialty stores and Electronic

specialty chains like Croma and Reliance Digital for phase wise roll out of our product in

Metro and Tier I cities. We seek to maintain control on the retailing with positioning of

dedicated sales personnel to explain product features to customers through live demo. Retailer

sales force will be trained in house in our facility for 2 weeks about technical aspects of the

product. Technicians from the company will provide technical assistance for installation,

servicing and break down. Selection of stores based in areas with high footfalls from affluent

customers.

Online Channel: Buyers will place orders, track shipments, and handle other functions online

through our online secure systems. Our suppliers have sufficient parts and components ready

for peak production periods, and our flow of goods will ensure proper inventory levels during

the introduction phase. On the other hand, we must avoid excess inventory, because of the

threat of technological obsolescence.

3 Marketing Strategies

3.1 Objective

Phased Launch in metros, then launch in tier1 cities in 6 months, breakeven in 2 years with

gain of around 1% in market share for the Household Fully Automatic Category through unit

sales volume of 16000. We also plan to sale 2000 units for the Industrial category.

3.2 Targeted Segments

Consumer Markets: Within the consumer market, our primary target segment is high-

income group consumers in metro cities, where many of the locales have shortage of water

supply or the supply is time bound. We plan to target well educated consumers with annual

household income of around Rs 1000000 per annum and socio economic classification of A1

and A2. We need to convince Fully Automatic Washing machine users to upgrade to

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Ultrasonic technology.

Business Market: The other segment targeted will be industrial houses and commercial

establishments involved in clothing and laundry business, manufacturing or exports houses

such as Orient Craft limited. This segment will be attracted by washing machines with higher

capacity. Reliability and customer support services is a major factor for business users. Our

introductory 5 years warranty will appeal to this segment. Our main objective is to capture

repeat sales from existing relationships with this new product. These include

Large Textile manufacturers and apparel export houses which uses heavy duty

industrial washing machines.

Nonmanufacturing segments of the business-to-business market such as garment

export houses.

Residential institutions like Boarding schools / Colleges.

3.3 Positioning

Our differentiation is based on technology which is hassle free and cost effective in the

long run. For households it is an answer to all cleaning woes and better value for money

than traditional washing machine.

For B2B sales our positioning will be based on our reliability of product and service

reputation.

3.4 Strategies

3.4.1 Products

Ultrasonic washing machines are high technology products, cost effective in the long

run, sleek in design and come fully loaded with features. This product has the potential

to carve out a niche segment in an already saturated washing machine market littered

with traditional technology. It will be a trend setter for the household consumer

segment in terms of technology with the competition gradually adopting it in the long

term. Product attributes are difficult for competitors to copy in the short run, thereby

giving us competitive advantage.

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3.4.2 Price

We plan to position our product for the affluent sections of the society in the consumer

section. After price elasticity analysis of our product we have arrived at a price of Rs

45000, which is comparable to current high end Fully Automatic Washing Machines. Our

customers will pay only a small premium compared to current best-selling models,

which sell in the range of Rs 40000-420000. For our B2B sales we will apply value

pricing formulas like other Ultrasonic products and it will be Rs 150000 per unit.

3.4.3 Distribution

Our channel strategy is based on selective distribution with control over retailers in

terms of sales pitch. Our retail mix will include well-known Electronic Specialty Stores

and Electronic Chains like Reliance Digital and Croma. Online channel will be based

upon our website. We plan to give dealer commission of 10% on the consumer price. We

also plan to provide training to selected sales personnel from each store selling our

product and generous grants towards full-length colour displays of the product on all

shop floors.

3.4.4 Promotion

We will promote our product with an extensive electronic media blitz and focus on

differentiation through our superior technology and long run cost effectiveness. An

advertising agency will be selected for conducting advertisement on television during

prime time, communicating our differentiation. This will emphasize on how the

Ultrasonic technology is the future of next generation washing machines and how this

will change household management of laundry in the future. The media advertisement

will not have a celebrity brand ambassador initially and will only focus on the product

and its futuristic features. From time to time we will print full page advertisements on

national dailies. To motivate channel partners we will use trades sale promotions and

personal selling. Until enough brand awareness has been generated our

communications will encourage sales through our sales partners rather than from our

website.

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For B2B sales we will focus on trade journals or specialty publications.

3.5 Marketing Mix

Quarter 1: We will launch a sales promotion campaign and participate in major

industry trade shows to educate dealers and generate channel support for the product

launch in addition to introductory television advertisement targeted at metro cities till

the quarter end. We will pitch the product in TV talk shows, which specializes in

Electronic Lifestyle products like NDTV Gadget Guru. Our training staff will work with

retail sales personnel in our in-house facility to explain the features, benefits and

advantages.

Quarter 2: We will start an integrated print and internet campaign to generate

awareness and induce conversation. The campaign will focus on our differentiation on

technology and cost effectiveness in the long run. The campaign will be supported by

point-of-sale signage and online ads and videos.

Quarter 3: By the third quarter we would have a pan-India distribution and will roll out

an integrated national advertising campaign. We will feature celebrities using the

product in Ads on TV and radio. We will also use animated online ads featuring avatars

of these celebrities using the product.

Quarter 4: We will institute customer satisfaction surveys to garner feedback on

product and marketing activities. We will review marketing effectiveness in terms of

annual sales and benchmark retailer and distributor performance. In addition we will

announce extensions in our product line with products of different capacities and price

points.

3.6 Marketing Research

We will invest in market research on consumer reaction towards ultrasonic washing

machines for better targeting of consumer segments and gauge the level of acceptance

of our product. Surveys and Focus group interviews with first users will be conducted

across metros and Tier I cities to measure brand awareness and customer satisfaction.

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4 Financials

Ultrasonic washing machines are priced after keeping competitors in mind. Ultramatic is

neither concerned with setting high prices to signal luxury nor is it attempting to achieve

economies of scale. Instead value pricing is practiced so that customers feel comfortable

purchasing new washing machine to replace the old. The company will price 7 Kg household

consumer model at Rs 45000 and 35 Kg industrial model at Rs 150000. The cost structure

and its analysis are given below. The data infers that the break-even will be reached at the end

of 2 year and sales will capture 1% of market share in the first year itself.

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5 Marketing ControlsWe will apply Activity Based Cost Management technique to control costs and eliminate non-

value added activities. Responsibility of each costing will be assigned to individuals to infuse

accountability.

5.1 Implementation

Stringent control activities to monitor quality and customer service satisfaction (two

key performance indicators)

Monitoring customer-service communications and online product reviews to detect

any early signs of customer concern or confusion.

Controlling schedules to ensure timely implementation.

Quarterly financial measures will include return on marketing investment, return on

sales, and return on sales by channel.

Contingency plan calls to introduce short-term price promotion such as a discount to

remain competitive. Based on the outcome, revise the marketing plan as necessary

5.2 Marketing Organization

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6 References

Our report is based on a real life company based out of Noida named R.K. Transonic Engineers Private Limited. Website of the company is http://www.ultrasonicindia.com/.

TV VEOPAR JOURNAL, APRIL 2012, adi-media.com, An ADI Media Publication

Marketing Management, 14E by Kotler, Keller, Koshy and Jha

Online Resource:

http://compareindia.in.com/products/washing-machines/10

http://en.wikipedia.org/wiki/Ultrasonic_cleaning

http://www.ukwhitegoods.co.uk/help/buying-advice/washing-machine/3502-washing-machine-cost-breakdown.html

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