DAWLANCE: 'Dawlance to commence service marketing soon' - Analysis of Financial Statements

"Success lies in consistently assessing what consumers need and delivering it to them," according to Dawlance general manager marketing, Hasan Jameel. In a recent interview with BR, Jameel revealed that the company would soon commence service marketing, an under explored area for local companies thus far.
Selling home electronics can be a lot more challenging than marketing fast-moving consumer goods, asserts Jameel. He explains that the purchase decision for home electronics involves "high involvement from the buyer and is usually a critical decision". Jameel highlights that "the average life span of these products is 6 to 7 years", explaining the need to develop a strong relationship with customers during this period to ensure repeat purchases and a loyal customer base.
Service marketing is a relatively new phenomenon for Pakistan, which has so far been limited to performance guarantees or limited-time warranties. In developed markets, electronics manufacturers often sell services such as maintenance, repair and replacement besides marketing their products.
While Jameel chose to remain secretive about the nature of service marketing that Dawlance intends to commence, he does reveal the process behind this endeavor. "You can only succeed if you do your homework right from day one, which means that product development starts with consumer insights," says Jameel.
DISCOVERING WHAT PEOPLE WANT
"In most local companies, the marketing function is merged within the sales department and remains a stale activity," says Jameel, lamenting the lack of customer-oriented research in Pakistan.
Flaunting his company's strong marketing focus, he explains that this function is responsible for four core functions:
1. Consumer research
2. Product development
3. Brand communication
4. Service marketing
Those local companies that are engaged in marketing research often rely on ready-made software and research methodologies imported from multinational corporations. However, Dawlance has developed its own consumer surveys to track "brand equity, perception, top of mind recall as well as to gather customer insights".
Jameel explains that these surveys are conducted in multiple cities on a monthly basis, and are 360-degree in terms of respondents as they include all internal and external stakeholders, including customers.
He contends that regularly checking the pulse of their target market has enabled Dawlance to maintain a customer-oriented production strategy.
"Marketing research and communication with the customer has to commence from the day you set out trying to develop any new product," he says explaining that the company's focus remains on exploring unfulfilled wants and then delivering products that meet such requirements. "Making the product first and then going for marketing and communication; that's the wrong approach," remarks the marketing whiz.
H-ZONE TECHNOLOGY
"Our key differentiation right now is the health zone or H-zone series," says Hasan Jameel. He elaborates that customer insights highlighted the need for health conscious home appliances in the local market. "Research conducted about four years back showed that although health-related issues are not on the top of people's minds, there is a strong hidden need for healthy solutions in home appliances," explains Hasan Jameel.
To meet these needs, the company has developed various products with health benefits. The first of these were H-zone refrigerators that were launched in April 2010. "The product has a light in it which ensures that the food kept in the refrigerator is preserved for almost twice the time it lasts in a normal refrigerator," he contends.
Similarly, the company has introduced microwave ovens with calorie counters, air conditioners that ionize and remove pollutants from the atmosphere, and washing machines that disinfect clothing.
The general manager-marketing also reveals that energy efficiency is also an emerging market requirement and that coming products will reduce electricity consumption by 30 percent or more to meet this demand. He adds that electricity and other utilities are essentials for the people and they cannot stop their use despite rising rates, yet consumers are becoming more energy conscious due to rising utility prices.
FENDING OFF COMPETITION
"Pakistan is one of the very few countries where 95 percent of the appliance market is dominated by local players," asserts Jameel. He believes that the reason behind the clear lead taken by local brands lies in product differentiation and meeting local needs.
"We are offering microwave ovens that can prepare Pakistani dishes and cook rotis," highlights the marketing head honcho. He adds that by maintaining communication links with current and prospective buyers, the company has consistently introduced aesthetic and performance-oriented features that meet local needs and tastes.
From its product portfolio, Dawlance is currently manufacturing refrigerators, freezers and washing machines locally, while microwave ovens are predominantly imported from China and Korea.
Yet Jameel contends that Dawlance does not compete with Chinese brands that have flooded local markets over the past decade. "It comes down to the grading of the products that you are selling," he says, adding, "There have been many Chinese manufactured products that we turned down because at the end of the day, any partner has to meet our quality standards because the products carry the Dawlance logo."
INROADS ABROAD
Dawlance exports home appliances to eleven countries including Sri Lanka, Bangladesh, Saudi Arabia as well as some central Asian and African countries. Competition in these markets is strong and the company's lead marketer accedes that there are still many lessons to be learned from these markets.
While the company is itself concentrating on developing strong research on these markets, Jameel laments the lack of government support for the country's industrial output as a whole. "Brands are ambassadors for a country," he says adding that, "People know Korea for brands like LG and Samsung."
"On aesthetic and quality grounds, we are way ahead of India which dominates the south Asian region," asserts the GM marketing. He believes that if Pakistani brands can get systemic support in the form of export rebates and relaxations on import duties, "Local brands can go miles in international markets."
But the marketer asserts his company has so far opted to concentrate on its own performance and has not lobbied government for special considerations. "Most foreign companies have the advantage of having factories in multiple countries which helps them lower freight costs," says Jameel, adding that Dawlance aims to build its business to a comparable footing before approaching the government for policy measures.
RESEARCH PAYS OFF
In July 2010, results of a survey conducted in fifty cities and four hundred villages of the country were announced. The study was carried out by an international research agency and a local activation agency. It ranked Dawlance as the seventh most leading brand of the country.
According to the same survey, the brand was placed:
-- 6th among youth
-- 8th among females
-- 7th among males
Subsequently, AC Nielsen carried out another comprehensive study which ranked Dawlance as the best brand in the home appliances sector and the second highest ranking brand of the country from a pool of 3500 brands. Incidentally, the highest ranking brand according to that survey was Nokia, which lends some credence to the level of excellence achieved by this local company.
While Hasan Jameel appears proud over these accolades, he maintains that the company's drive remains customer focused. Asked to sum up the formula for success in the industry, he sums up "Keep up research to know what the market will need in the coming years."
COURTESY: Economics and Finance Department, Institute of Business Administration, Karachi, prepared this analytical report for Business Recorder.
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