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Escaping the Middle market Trap: Lesson From Electrolux!


 

In 2002, Electrolux was facing a rapidly polarizing appliance market. At one end, low-cost Asian companies such as Haier, LG and Samsung were applying downward price pressure. At the other end, premium competitors such as Bosch, Sub-zero and Viking were continued to grow at the expense of the middle-of-the-road brands. Electrolux new CEO Hans Straberg who took over the reins decided to rethink Electrolux customers’ wants and needs. Rather than accepting the stratification between low and high, Straberg  segmented the market according to the lifestyle and purchasing patterns of about 20 different types of consumers – unveiling 20 product positions. Electrolux then started marketing its steam ovens to health-oriented consumers and its compact dishwashers developed for smaller kitchen to broader consumer segment interested in washing dishes more often.

To companies finding themselves in middle-market trap,  I offer this words of advice:
  Start with your cut stomers and understand what their latent needs are and what problem they are experiencing. Then put the puzzle together to discover what they really want to have – figure out what they really want though some might not express it. Then figure what competition is doing, aspiring to achieve, and future.

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