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Corporate Global Strategy: What Lies Ahead for Electrolux - Essay Example

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Corporate Global Strategy: What Lies Ahead for Electrolux

All of Whirlpool's products benefited from this.
If the Maytag washing machine gave up its brand name, as Electrolux did with its most popular product-vacuum cleaners-this would be devastating for the company. Brand names trigger specific acceptance or rejection of products, and when Electrolux gave up the name for its vacuum cleaners, it lost much of its customer base in the United States because the public was unaware of the variety of Electrolux products available. In India, the Kelvinator refrigerator had an equally respected brand visibility, and Electrolux tried to benefit from this when they entered the Indian market in 1995. Unfortunately, the company name in India was Electrolux Kelvinator Ltd, developed through a series of mergers and a multi-branding approach which in turn created an unclear position for Electrolux.
Until 1965, Electrolux in America was limited to the manufacturing and distribution of vacuum cleaners, and the product became so well established through its internal method of door-to-door marketing and home demonstrations that the American public identified Electrolux solely with vacuum cleaners. Although the company expanded its line to manufacture a wide variety of home appliances and products, Electrolux sold its rights to the Electrolux name, thinking it to be a positive move, but it was not, and the company recently paid $50 million to recover it. The success of the company throughout Europe kept it from going under, but in America, even with the Electrolux name restored, external problems continued in marketing.
Unfortunately, Electrolux AB's effort to regain a popular single brand name for its American products has failed because the public does not relate the Electrolux name with products sold under different, more familiar names such as Eureka (the Electrolux vacuum), Frigidaire, and Tappan. Electrolux's marketing strategy had always advocated going to the customer rather than the customer coming to them. Door-to-door sales gave way to demonstrations at trade fairs and retail shops, but the strategy did not have the desired effect. This led to replacing retail shops previously selling one brand exclusively with retail stores called "Electrolux" which carried all the company's brands. In turn, the company had internal problems with plant closings and layoffs, and, according to the case study by Mathew and Gandlur (2004), brand ratings in the United States showed Whirlpool at the top of the list with Frigidaire in ninth place and other Electrolux brands even lower.
In India, Electrolux never gained a foothold in the market, basically because the company was already far behind companies like LG and Samsung which entered the market in 1995, around the same time as Electrolux. In addition, Electrolux followed the same path in India as they had in the United States with a multi-branding approach. Electrolux had Kelvinator, Allwyn, Voltas and Maxclean brands apart from their own brands and every brand had its own ...Show more

Summary

In a business environment, a visible brand name such as "Electrolux" can easily determine success or failure in the marketplace. Some companies have established their reliability over time, and the public automatically accepts the quality the name implies, for instance, Maytag, a company owned by Whirlpool (Whirlpool, 2006)…
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Corporate Global Strategy: What Lies Ahead for Electrolux essay example
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