Descripción: Sheet music Celebration Kool and the Gang
Question1: Identify the critical success factors of Chotukool to succeeded( is there any implication for its brand and overall corporate strategy for Godrej). Justify your answer with description from the case( factual information for the success of chotukool). Answer: Chotukool is a disruptive innovation by Godrej and Boyce. The innovation is made in the small refrigerator segment for the rural masses which was very much different from its conventional refrigeration solutions provided by Godrej. Chotukool was not segmented with small refrigerators but had its own segment as mini refrigerator. There are many critical success factors for the overall success of chotukool in due course of time. These success factors are both internal, which are firm specific factors and others are external, which are industry specific factors. The firm’s specific factors for success are: 1. Innovative technology : Chotukool was install with a rechargeable battery of 12 volts DC and electric current of 4-5 Ampere which was comparatively lower than the conventional refrigerators therefore could be accepted easily by rural masses. The design of chotukool was such that it could survive power surges and outages common in the rural area which again gave a positive impact for acceptance of chotukool. The technology used in designing of chotukool was very much different from the conventional refrigeration system, because of which many expensive parts like compressor were taken out of the system, which made the chotukool affordable by rural people. The technology they used was known as thermoelectric or peltier cooling method. For the charging of the refrigerator company provided a handy charger similar to that of laptops which again provided ease of usability for the product. They also used unconventional cooling fans used in laptops for cooling the circuit of the chotukool which again made it more cost effective for the customer. 2. Affordability : The sole purpose of chotukool was to provide affordable refrigerators to rural India and with its innovative technology Godrej was able to deliver such product with chotukool. Chotukool was available in two sizes of 30 and 45 liters which cost 3000 and 3500 Rs respectively per product. This price was 50% lower than the existing small refrigerators which were a positive sign for sales of chotukool.
3. Community based distribution model : Godrej used an innovative distribution model for distribution of chotukool in rural India. Company used different NGO’s, self help groups and micro finance institutions to sell its products. The people in rural India 1had much trust on these NGO’s and SHG’s and they were the major influencer for buying pattern of rural people which made it easily acceptable by people through this channel. 4. Cool and Trendy Appearance : The color of product is a major factor for acceptance of any product majorly in rural areas as people directly relate color with tuffness and ruggedness of the product. Chotukool came with candy red color which again was an attractive option for consumers. The outer appearance of the product was also designed to make it look more pretty and aspirational in nature. 5. Worked on Peoples Feedback : Godrej followed an innovative practice for designing its product that is, it took valuable feedbacks from its potential customers and tried to inculcate those into the final product design. These made the product easily acceptable by the people which made it successful. 6. Minimal or very low maintenance : The conventional refrigerators required heavy cost of servicing and repairing which was one of the reasons for denial of the product but with chotukool this cost has been completely eliminated which made it acceptable by the people. The above are all companys specific success factors, now we will look at some of the industry specific success factors : 1. Low penetration of refrigerators : refrigeration industry in india has not penetrated very well. In urban area only 18% and in rural area only 2% of the total population were using refrigerators this gives a great scope to cater to untapped market. With chotukool Godrej created a complete new segment for refrigeration which was cost effective and acceptable in the rural India. In the Exhibit 3 of the case we can see the majority of the population that is 90.9 mn people were in the consuming class which earned between 45000 and 215000 which are the potential customers for chotukool. 2. Growing consumerism in India : When chotukool was introduced in India the Indian market was in the growing stage and the consumer products were picking up both in urban as well as rural market. Talking about the refrigeration industry, it was growing at
an annual rate of 7-10% in urban area where as 25% in rural areas which was a clear indication that the product was been accepted by the people in rural area and thus chotukool also picked up its sales with the on going scenario. 3. Unconventional Usage: refrigerators in rural India was considered to be a luxury product initially. The usage of refrigerator was limited and was not much accepted by the people but with the introduction of chotukool the use of refrigerator was not restricted for storing vegetable and fruits but was also used by small retailers and pan shops for keeping their products thus chotukool entered into the sectors it was not meant for. Godrej and Boyce manufacturing company limited is a 17 billion Rs conglomerate which has a very diversified businesses and are into many diversified sectors and segments. Form manufacturing of Locks to furniture to home appliances and construction Godrej and Boyce was doing good in most of its businesses. Refrigerator market it has always been a major player supplying to Indian households. Godrej is an Indian brand which was very much trusted by everyone and was considered to be a premium brand which people wanted to be associated with. According to Exhibit 1 in year 2008 the market share of Godrej in refrigerator industry was 17.2% which was a good number competing with global brands. With the introduction of chotukool and its acceptance the company observed an initial increase in its sales of chotukool because of all its positive aspects for the rural market. It was very well penetrated into the rural market initially and people accepted the innovative technology provided by Godrej. As in Exhibit 1 we can see that in year 2009 and 2010 the market share of Godrej dropped down to 15.9% and 16.2% which was after the introduction of chotukool. Chotukool being very well accepted into the rural market was not able to give positive growth to Godrej refrigerator sector which was a clear indication that the sales of Godrej conventional refrigerators have dropped down. This market was well established was now seen a downfall with the introduction of chotukool which meant its conventional users were loosing trust one the company and which was once considered to be a premium brand is now looked upon as cheap product provider and thus the brand value of the conventional refrigerators of Godrej started declining as well as its sales. The issue sicussed in the above paragraph has been considered by the company also and a recent internet search I found that the company has discontinued with its production of chotukool. Though it been successful was hampering the image of godrej which was seen as a potential
threat for the whole Godrej group and because of which such steps were taken to deal with this issue.
