Monday, 8 September 2014

Electrolux increases its brand portfolio for global share

Electrolux, based in Sweden, is buying General Electric's home appliance business, at a price of £2 billion. GE's division markets refrigerators, air conditioners, water heaters and cookers under two main brands, GE and Hotpoint, throughout North America. Electrolux's brands, shown above left, include Frigidaire, Westinghouse, Electrolux, Eureka and Zanussi (graphic from Electrolux's pdf presentation on the deal).

In particular, GE has forged connections with North American construction firms to sell home appliances for new houses. GE has wanted to exit the consumer appliance business for some time so it can concentrate on its B2B marketing, including industrial power products, aviation products and other expensive products sold to businesses, governments and health-care providers. 

Marketing to the construction industry is a marketing channel opportunity that Electrolux would like to exploit as the economy continues to improve. The deal also gives Electrolux more strength in North America, to complement its strength in the European region.

As discussed in Chapter 6 of my Essential Guide to Marketing Planning, products are often marketed with a company brand and a product line brand--as GE does with its GE Profile Series and GE Monogram appliances. In contrast, Electrolux traditionally uses an individual brand for each product line. Whether Electrolux will append its company name to the GE brands is not yet known. I can imagine a change that would create brands like "GE Monogram by Electrolux" but these decisions won't be made for some time.

The combination of Electrolux and GE appliances gives Electrolux a slim lead over Whirlpool in market share. It also adds to Electrolux's pricing complexity, given the number of brands and lines within each brand.