Some dishwasher brands were priced as much as Rs 30,000 to Rs 35,000 when BSH came in with a range going up to over Rs 40,000. And then, it labelled one as the most technologically advanced dishwasher, and launched it at Rs 82,000.
Says Dedekind, “It may not sell as many units as a Rs 28,000 dishwasher. But it's selling, and retailers are happy to display it. There is also this ‘anchoring effect'.
When there are three dishwashers priced at Rs 33,000, Rs 23,000 and Rs 27,000, the Rs 33,000 dishwasher comes across as ridiculously expensive. When you see a Rs 80,000 dishwasher next to it, things are different.”
Says B. A. Srinivasa, Director, Vivek Ltd, which runs retail chains Vivek's and Jainsons, “I wouldn't call what they have launched in washing machines premium. Even upper middle class consumers are opting for it. In fact, towards the end of Diwali, we ran out of Bosch washing machines.”
“In dishwashers, only the elite are buying into the category as a whole. Or someone with a problem with the domestic help or someone aspiring for a higher lifestyle. But overall, the market for premium products is definitely growing,” adds Srinivasa.
On the brand recall, he notes, “The consumer is aware of Bosch in India thanks to the automotive legacy - at one point it enjoyed 100 per cent market share in that space.”
Siemens is, at the moment, the larger of the two brands in India, given its age. They both play in the same categories (except built-in appliances), and at the same price points.
So in terms of brand personality, BSH wants to keep them different. Consumers, including Indians, view the two differently, says Hantscher.
“Siemens is a forward-looking brand; future-oriented. For example, in washing machines, we have an innovation by which customers can choose whether they want to save water and energy, or they want a fast wash,” explains the CEO.
Bosch, on the other hand, has been crafted to focus on ‘substance and quality'. The differentiation is by product, (product) design and the communication. Adds Hantscher, “Indian consumers trust Bosch for sturdiness and peace of mind, and are possibly more value-minded.”
With multiple global recognitions under its belt for the same, and technology which it claims allows BSH to position itself as an eco-friendly innovator, it's almost surprising that the brands' product advertising doesn't dwell on it. Bosch, the more recent launch, is talking about its scientists' passion for their machines.
“The conscious consumer is not yet that visible in the sales figures from what we understand,” reflects Dedekind. His take is that when asked about energy-efficiency standards (besides Government-mandated labels), people simply don't know.
When value-conscious Indian consumers are communicated the value accruing to them, they are willing to pay a premium, Hantscher acknowledges.
Being the leader
BSH's target is to become the leader in premium home appliances in India. However, there is no figure its spokespersons are willing to put on the premium slice of the €2 billion market.
“We believe we are very well positioned for this opportunity. No one has established a premium reputation. Everyone is trying to get there, but no one has positioned themselves to do that,” states Hantscher.