Allwyn moves from Capital to O&M as Electrolux-Kelvinator merge

White goods major Electrolux Kelvinator Ltd (EKL), as part of its third phase of restructuring, has integrated two of its brands Electrolux and Kelvinator under the umbrella brand - Electrolux Kelvinator.

Post this realignment, the product portfolio of EKL will stand like this. The Electrolux Kelvinator brand will span refrigerators (frost-free and direct cool) and washing machines (top loading, fully- and semi-automatic machines) and will soon be extended to other home appliance categories. The Electrolux brand will straddle top-of-the-line refrigerators, dishwashers, cooking ranges, microwave ovens and front-loading washing machines. The Allwyn brand will continue to market a range of refrigerators targeted at consumers seeking value-for-money products. The Maxclean range of washing machines will be phased out.

The brand integration is the culmination of the process kicked off last year when the company got an approval from The Delhi High Court to merge "Intron Limited" and "Electrolux India Limited" with "Electrolux Kelvinator Limited", the flagship company of AB Electrolux, Sweden. This happened on September 14, 2001. Following this, the company consolidated the washing machine manufacturing facilities at Butibori (Maharashtra). The brand integration was the next step.

Citing the reasons for integrating the two brands Electrolux and Kelvinator, Anand Bhardwaj, executive vice-president, marketing and marketing services, EKL, says, "While Kelvinator is seen as a powerful brand, it is also perceived to be old-fashioned. Getting the two together ensures that customers across the country benefit from the union of the international technology of Electrolux with the reliability of Kelvinator. Moreover, we were planning to phase out Maxclean washing machines. Since Kelvinator is not seen as a washing machine brand, it made more sense to launch washing machines under the Electrolux Kelvinator brandname."

The brand integration process also called for a relook at the advertising business of EKL, which was split between O&M and Capital Advertising till recently. While O&M had the Electrolux and Kelvinator brands, Allwyn and Maxclean were with Capital. Since a brand integration was on the cards, EKL's wanted to club the entire business with one agency. It decided to consolidate all its advertising with O&M, by moving Allwyn from Capital.

Executives at Capital point out that EKL and Capital parted ways on mutual agreement and that Capital evened out the loss by picking up additional business from LG to the tune of Rs 25 crore, comprising washing machines, refrigerators, microwave ovens and vacuum cleaners.

Strengthening EKL's position in the white goods market is the key reason for the brand integration. And the company hopes advertising will play an important role in emphasising EKL's new direction. "EKL wants to offer the discerning Indian consumer world-class products through Electrolux Kelvinator. Category leadership through exciting new products backed with a strong market presence is the gameplan for EKL," explains Ram S Ramasundar, CEO and managing director, EKL.

To that end, O&M is planning a multi-media effort - comprising print, TVC, online and below-the-line activities. To begin with, EKL has announced the brand integration through a nationwide advertising campaign in print and television. It seems the media coverage planned for Electrolux Kelvinator will be much more aggressive than for the two standalone brands Kelvinator and Allwyn. "For Allwyn, the company plans to use print in the regions where Allwyn has a strong equity. Electrolux's advertising will be in select media and the focus will be on product displays in select outlets and direct interaction with the target consumer," explains Bhardwaj. © 2002 agencyfaqs!