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Electrolux, a Swedish multinational appliance manufacturer, has consistently demonstrated a remarkable journey of global success through its innovative products and strategic marketing campaigns. With a history dating back to 1919, Electrolux has become a household name synonymous with high-quality home appliances across the world.
Since its inception, Electrolux has evolved from a single vacuum cleaner manufacturing company into a global powerhouse in the appliance industry. With a diversified product portfolio including kitchen appliances, laundry equipment, and vacuum cleaners, Electrolux's revenue and market share have consistently grown.
In its Q2 Interim Report for 2023, the company highlights its focus on being “well positioned to create value” through a range of strategic decisions. The highlight of these strategies is primarily group-wide cost reduction and a key focus on core brands and categories while increasing efficiency.
This global leader in household appliances values the importance of sustainable production and consumption which is evident in its “better company, better solutions, better living" mantra. At the same time, Electrolux maintains a strategic focus on changing consumer demographics, evolving market demands and the significance of environment-friendly products. This is evident from the group’s commitment to improving the environmental performance of their products while aiming for circular solutions through resource efficiency.
What Makes Electrolux Successful?
While there have been several factors that have contributed to Electrolux’s success over the years, research on the company indicates that the key reasons can be summarised as follows:
Product Design and Quality
Global Footprint
Product Portfolio
Focus on Sustainability
Brand Identity
Innovative Product Design and Quality
Electrolux's success stems from its commitment to innovation and product excellence. The company's appliances are known for their cutting-edge features, efficiency, and durability. This dedication to creating high-quality products has garnered customer trust and loyalty over the years.
Global Footprint and Local Presence
Electrolux's extensive global presence is bolstered by its understanding of local markets. The company tailors its products to meet the specific needs and preferences of different regions while maintaining a consistent level of quality and innovation.
Diverse Product Portfolio
Electrolux's wide range of products caters to various aspects of household and commercial needs. This diversification not only enhances revenue streams but also positions Electrolux as a one-stop solution for customers' appliance requirements.
Sustainability and Environmental Focus
With increasing awareness about environmental issues, Electrolux has strategically incorporated sustainability into its business practices. The company's efforts to create energy-efficient appliances and reduce its carbon footprint resonate with environmentally-conscious consumers.
Strong Brand Identity
Electrolux has built a strong brand reputation over the years, associated with reliability, innovation, and modernity. This brand identity has contributed to customer loyalty and positive word-of-mouth marketing.
How Have Its Marketing Campaigns Contributed To Electrolux’s Business Strategy?
Electrolux's success isn't solely attributed to its products; the brand's strategic marketing campaigns have played a pivotal role in reaching and engaging customers across the world.
We will discuss some of these global campaigns and assess how they were able to create a connection between the company and its customers while contributing to the overall business strategy:
"Thinking of You"
This campaign focussed on emotional connections, resonating with the idea that every appliance is designed with the user in mind.
It comprised a series of four scenarios showcasing Electrolux’s broad range of premium home appliances that includes washing machines, cooking hobs and hoods, ovens, air-conditioners, and refrigerators.
The core message was to show that Electrolux appliances help home-makers 'shine' and enable them to provide meaningful and extraordinary experiences for their loved ones in their own homes.
"Shape Living For The Better"
The campaign is aimed at young people; mainly Gen Z, who are the future of homeownership. It resonates with their values and aspirations with an emphasis on sustainability, and it offers them a way to be part of shaping the future of living.
The campaign used a variety of channels, including social media, video, and interactive experiences, to reach its target audience.
As part of the campaign, Electrolux is conducting a global survey of 14,000 young people between the ages of 15 and 20; asking young people about their visions for sustainable homes, including the features they would like their homes to have, the technologies they would like to use, and the ways they would like to reduce their environmental impact.
"The World Is Noisy Enough"
The "The World is Noisy Enough" campaign aimed to raise awareness of the problem of noise pollution and the benefits of having a quiet washing machine. The campaign used a variety of media, including posters, digital screens, and social media, to reach its target audience.
To emphasise the key message of the campaign in key noisy locations around Europe, such as Old Street Foundry in London and Calle Princessa in Madrid, posters were set up with decibel meters. The meters displayed the noise levels in real-time, and they were accompanied by messages about the harmful effects of noise pollution.
Electrolux was the only appliance manufacturer shortlisted at the M&M Awards, an annual benchmark of industry excellence in Europe’s media and marketing arena. The company
was awarded the top prize, “Campaign of the Year,” beating out high-profile competitor campaigns such as Sony Ericsson’s “Take a music mind trip,” Royal Dutch Shell’s “Creative energy,” Puma’s “Until then,” HP’s “Take action. Make art,” and Vodafone’s “UEFA promotion.”
They also won two additional first prizes: “Best use of creative media” and “Best out of home.”
To learn more about its evolving marketing strategies, read about the transformational steps taken at Eletroclux in this article that appeared in the online edition of Harvard Business Review, titled How We Transformed Marketing at Electrolux
How Has Electrolux Adapted To Digital Transformation and E-commerce Strategies?
Electrolux's success has also been fueled by its embrace of digital transformation and e-commerce strategies.
The company strategically expanded its online presence, making its products available through various e-commerce platforms. This move catered to changing consumer behaviours and facilitated easy access to its products.
They invested in creating interactive online experiences, such as virtual showrooms and augmented reality tools. These initiatives allowed customers to visualize how Electrolux appliances would fit into their homes and lifestyles.
Electrolux also capitalized on the power of social media to connect with customers. Engaging content, including recipes, cooking tips, and home improvement ideas, established the brand as a valuable resource in addition to being a product provider.
How Important Is Sustainability For Electrolux?
In an era where corporate social responsibility and sustainable practices hold increasing significance, Electrolux stands as a shining example of a company committed to making a positive impact.
This global leader in home appliances has consistently demonstrated its dedication to sustainability through its products and actions, aligning its efforts with the United Nations' Sustainable Development Goals (SDGs).
Electrolux's commitment to sustainability is not just a marketing tagline but a deeply ingrained ethos that permeates its business operations. The company's annual sustainability reports provide a transparent insight into its efforts, showcasing its progress in various areas of sustainable development.
One of the remarkable ways in which Electrolux showcases its social responsibility is through the creation of sustainable products. The company places a strong emphasis on energy efficiency, designing appliances that minimize resource consumption and carbon emissions.
From energy-efficient washing machines to refrigerators that minimize food waste through advanced preservation technologies, Electrolux consistently pushes the boundaries of innovation to create products that align with a sustainable future.
Electrolux's commitment to the SDGs is evident through its active engagement with relevant goals. The company's efforts span multiple SDGs, including Responsible Consumption And Production (Goal 12), Climate Action (Goal 13), and Partnerships For The Goals (Goal 17). By focusing on these interconnected goals, Electrolux ensures its sustainability efforts have a meaningful and lasting impact on both the environment and society.
In its 2022 Sustainability Report, Electrolux outlined its goals for 2030, which include:
reducing its absolute greenhouse gas emissions by 80% compared to 2015
using 100% renewable energy in its operations
making all of its products 100% recyclable or compostable
investing in social programs to improve the lives of its employees and the communities where it operates
Electrolux has made significant progress towards these goals in recent years. In 2021, the company reduced its absolute greenhouse gas emissions by 78% compared to 2015. It also used 55% renewable energy in its operations and made all of its major appliances 100% recyclable or compostable.
Electrolux's commitment to sustainability is evident in its products, its operations, and its corporate culture. The company is a leader in the appliance industry when it comes to sustainability, and it is setting an example for other companies to follow.
Here are some specific examples of how Electrolux is making sustainable products and being a socially responsible company:
The company has developed several energy-efficient appliances that help consumers save money on their energy bills.
Electrolux is using recycled materials in its products, such as plastics and metals.
The company is working to reduce water usage in its products.
Electrolux is investing in renewable energy projects to power its operations.
The company is providing training and education to its employees on sustainability.
What Is Electrolux’s Commercial Strategy in Response to Current Economic Fluctuations?
When asked about the strategic focus of Electrolux under the current global inflationary landscape, one of the senior executives at Electrolux shared, “In light of the intricate economic landscape, characterized by the tumultuous post-COVID demand surge and the subsequent inflationary constraints on a global scale, a highly refined commercial strategy has emerged. This strategy is attuned to the complexities of the environment, emphasizing the cultivation of premium brands and star products as the principal drivers of enhanced profitability.”
The following are the key elements of Electrolux's commercial strategy:
Focus on premium brands and star products: Electrolux will focus its resources on its premium brands and star products, which are the most profitable. These brands and products will receive the most marketing support and will be the main focus of sales efforts.
Data-driven, sell-out-based approach: Electrolux will use data to drive its commercial strategy. This data will be used to identify the most profitable opportunities and to target the right customers with the right messages. Electrolux will also use a sell-out-based approach, which means that it will focus on selling products rather than just generating leads.
Maintain and gain share in key categories: Electrolux will focus on maintaining and gaining share in key categories with its premium brands. This will involve investing in marketing and sales to reach more customers and convince them to choose Electrolux products.
Leverage the scale of mass premium brands: Electrolux will leverage the scale of its mass premium brands to drive profitability. These brands are already well-known and trusted by consumers, so Electrolux can focus on marketing them to a broader audience and on selling them at a lower price point.
Milk tactical brands and products: Tactical brands and products will only be supported with a strategy to milk them without additional efforts or investments. This means that Electrolux will continue to sell these products but will not invest in marketing or sales to promote them.
They explained that this approach taken is inherently discerning, concentrating the entirety of endeavours and resources within a rigorously data-driven framework. This framework pivots around a sell-out-oriented methodology, meticulously designed to fortify and augment market shares across pivotal categories prominently featuring premium brands. The strategy capitalizes on economies of scale through the adept utilization of mass premium brands, strategically positioning the enterprise for optimal leverage.
They further elaborated that tactical brands and products at Electrolux are meticulously calibrated to align with a strategy delineating minimal additional investment or exertion. This approach, colloquially termed "milking," seeks to extract sustained value from these offerings while redirecting primary focus and resources towards the apex of the brand pyramid.
Innovation Continues At Electrolux
Electrolux's journey from a vacuum cleaner manufacturer to a global leader in home appliances showcases the significance of innovation, strategic marketing, and adaptability. By focusing on product excellence, global expansion, localized marketing, and digital transformation, Electrolux has succeeded in maintaining its relevance in a rapidly evolving industry.
The brand's ability to foster emotional connections with consumers through marketing campaigns that emphasize user experience and a better way of living has undoubtedly contributed to its enduring success.
As Electrolux continues to navigate the dynamic landscape of the home appliance industry, its legacy of innovation and customer-centricity remains an inspiration for businesses worldwide.
To learn more about the global leader in home appliances, visit their website at https://www.electroluxgroup.com/en/
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