Though the U.S. housing market is just beginning to show signs of a recovery, appliance giant Electrolux is already betting big on a turnaround.
The Stockholm-based company, which markets brands like Frigidaire, Eureka and Electrolux, plans to proactively market its brands in the coming months, even as the appliance category continues to be soft. For the first time in two decades, Frigidaire is embracing TV advertising. Meanwhile, the more upscale Electrolux brand is continuing on an aggressive marketing trajectory that has included a partnership with actress and talk-show host Kelly Ripa.
"We don't know when the homebuilding market will come back, but by investing now we'll be well-positioned when it does come back," said John Weinstock, chief marketing officer for North America.
The North American marketing initiatives are part of a global initiative by the world's second-largest appliance maker -- Whirlpool leads the category -- to position itself front and center with consumers ahead of an economic recovery.
A GOOD BET
At the moment, the move looks like a good bet, with a variety of industry watchers beginning to throw around the "r" word -- as in recovery.
The National Association of Realtors recently reported that existing-home sales rose about 9% nationally in August compared with a year earlier. The industry group's chief economist, Lawrence Yun, said favorable buying conditions are helping to boost sales.
"The housing market is steadily recovering, with consistent increases in both home sales and media prices," Mr. Yun said.
Electrolux aims to put an emphasis on consumer branding in the coming months, investing heavily in marketing its Electrolux and Frigidaire brands, Mr. Weinstock said. Those plans are, in part, what attracted him to the company in the first place.
Mr. Weinstock joined the company in August 2011, following stints at LG Electronics and Johnson & Johnson. Already he has strong ideas about how to grow the company's brands. When it comes to the 90-year-old Frigidaire, for example, Mr. Weinstock says the brand's marketing has been lacking. This is despite the fact the word "fridge" became a common noun, thanks to the brand.
"Historically we have not actively promoted the benefits or features of our Frigidaire products to consumers. We knew that we needed to change this approach because we are industry leaders in many categories. But we weren't actively telling this to consumers," Mr. Weinstock said. "We're really looking to reinvigorate the marketing efforts behind Frigidaire, and we looked at a lot of different things. History and heritage resonated very strongly with consumers, and this campaign plays to that . But also brings it to the modern day."
The Frigidaire brand includes gradated levels of appliances -- the basic Frigidaire Core, the midmarket Frigidaire Gallery and the top-end Frigidaire Professional.
"These are consumers, often moms, who are looking for practical solutions. They need reliable, affordable, yet attractive appliances that they can count on to get the job done in an efficient manner," Mr. Weinstock said.
The company has created innovative, time-saving features with busy parents in mind. Two full-size ovens can cook two meals at different temperatures simultaneously, ease-of -use buttons include a "chicken nugget" option and the newly designed dishwasher includes four times the typical spray power, so no one has to scrape plates.
THE LEGEND CONTINUES
The Frigidaire campaign, created by DDB, carries the tagline "The Legend Continues." The launch spot begins with a quick history of Frigidaire' firsts, including the electric refrigerator and room air conditioner. It concludes with presenting the new dual oven range and dishwasher technologies. Coming commercials will feature other appliances and innovations, with the overall campaign slated to run through the end of 2013. Mr. Weinstock declined to put a spending figure on the campaign, but a spokesman classified it as "very significant."
"We don't see this as a risk," Mr. Weinstock said. "We see this as a good investment decision for an iconic brand. We believe we will benefit immediately from this campaign."
The company's measured-media spending has declined dramatically over the last several years, from a high of $48 million in 2008 to just half that in 2011, according to Kantar Media.
The premium Electrolux brand has been a bright spot for the company since it was launched in the U.S. in 2008. The percentage of consumers who associate Electrolux with premium household appliances jumped from just 10% in 2007 to almost 70% in 2011, the company says.
In the U.S., the marketing association with Ms. Ripa has been a particularly good fit, as Electrolux sought to establish a connection with the "want-it-all" woman. Its appliances include specific features to appeal to that targeted segment, such as a "Perfect Turkey" button and an induction cooktop that can boil water in 90 seconds. The company recently announced an Electrolux $100,000 Grande Cuisine professional oven, a niche product for well-heeled foodies, arriving in 2013.
Even as the company markets and innovates, Electrolux has felt the sting of the recession, however. The company expects sales in North America to rise about 2% this year. While far from earth-shattering, that 's still better than overall industry projections of flat growth or declines. The latest Association of Home Appliance Manufacturers figures, which cover sales of the core washer, dryer, dishwasher, refrigerator, freezer, range and oven categories, show only a slight uptick of 0.8% in August results. And for the first eight months of the year, sales were down 3.2%.
But Electrolux is prepared to be patient.
"We are staying the course," Mr. Weinstock said. "As a company we are really committed to investing and marketing behind the brands."