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BSH AT IFA INNOVATION IS “THE” MESSAGE Interview by Richard Barnes IFA International spoke to Jean Dufour, Head of Marketing and brands for BSH, about their involvement at IFA this year. We asked what the main thrusts are… HOME APPLIANCES @ IFA The very important information is of course the decision of the home appliance industry to attend this fair. I think is it important to show that home appliances are an important part of this industry and to underline their role in energy saving. Just changing existing technology in the household with new appliances can be a big step in conserving energy. A lot of things have changed in the past years when it comes to white goods. There is much more innovation than in the past. Another point is that the kitchen is increasingly becoming a part of the living room… taking on another function. It comes down to design and lifestyle and this trend is not only limited to Europe, but also worldwide. We are the market leader in Europe in built-in appliances and when it comes to lifestyle appliances related to the kitchen this is becoming increasingly important. From that point of view, it is essential that we be at IFA because lifestyle is an important topic there. One might think that we are only there for kitchen appliances, but no … it’s lifestyle. What are the main demographics of people buying built-in equipment and what is important for them? It’s the owners of houses and apartments. The important thing for people who are in the market for new home appliances is brand. Not only does the equipment have to function well and be beautiful, but it reflects social standings. So brand recognition is another reason why we should be present at IFA. Just how much more important is brand today than it was in the past? I think it’s more important, because in the past, there were many more brands. But now, due to consolidation, there are fewer premium international brands. And coming back to my point, brands represent something… an expectation of not only function. People need to trust a brand and that is something we are happy about, because we have very strong brand reputation, with over 100 years’ background. On top of our major brands – Bosch and Siemens – we have specialised brands such as Thermador in the US, Gaggenau in Germany, Neffe and so on. This is what IFA is good for… for promoting brands worldwide. How important is that for Bosch/Siemens? If IFA was just a German exhibition, then I would think twice about investing so many resources in one place over a couple of days. But the fact is that IFA is truly international. The location of Berlin is also important, as it is near Eastern Europe, and it is unbelievable how fast the lifestyle gap is closing between east and west. The building market in Eastern Europe has completely changed. In Russia, for example, in one year it went from 5% to 20%. We are also inviting our customers from more than 20 countries. It is a truly European event. The Euronics group presented Bosch/Siemens with an award for best supplier in the white goods category. Why was that so do you think? We are always happy to receive compliments. But we are also embarrassed, because it is the third time in a row! This is interesting in two aspects: hard facts and soft facts. Hard facts are very clear and we have the strict criteria such as innovation, quality, and sales and marketing support, and we were evaluated as being the best. But I also think we have soft facts, such as partnerships. And it’s interesting, because Euronics is present in 28 countries, IFA-International Editor-in-Chief Richard Barnes with Jean Dufour, BSH with, I believe, more than 10,000 outlets. This shows we are supporting the dealers. But not just the large accounts, we also support independent dealers and, from that point of view, to receive this honour proves to us that what we are doing is right. Education and information of sales teams is important. How do you do that? In all countries, we have a local team and sales organisation. A sales team can only convince customers if they themselves are convinced. That is the reason why first we need to have continuity. Our sales organisations are very long in the company. We have a very small rate of turnover. Second is for each brand that there is a unique sales organisation. We make a big effort in the training of our own teams, they then have to convince, train, and support the sales community. We have decentralised sales organisations, and this is one of the most important factors in our success. What would you say is the main message you are trying to get across the retailers and buyers at IFA? Innovation, innovation, innovation, and we have a lot of examples of that. We present our “active water” dishwasher at IFA. It is the new generation dishwasher and we are the world-wide market leader in dishwashers, so we have to be at the top in marketing and technology. We also launch at IFA new built-in products in all our brands. These products are on show for the very first time at IFA. There is our fully automatic espresso machine, which is doing very well, because it’s a lifestyle item. We are also presenting a new energy-efficient dryer, because as everyone knows, the dryer takes the most energy, and people have recently been hesitant to buy dryers because they use so much energy. We are presenting an “A” class dryer, based on heat-pump technology which reduces energy consumption by up to 40%. Hall 3.1 / Stand 106 Hall 1.1 / Stand 101 28 www.ifa-international.org IFA International • Wednesday, 3 rd September 2008
HOME APPLIANCES @ IFA FROM “WHITE GOODS” TO “ARTISTIC GOODS” EXCLUSIVE INTERVIEW WITH A MARKET LEADER YOUNG HA LEE PRESIDENT AND CEO LG DIGITAL APPLIANCE COMPANY Interview by Richard Barnes Mr. Y.H. (Young Ha) Lee is the President and CEO of the Digital Appliance Company at LG Electronics. Since joining LG in 1979, Mr. Lee served in various managerial positions including Head of the Air Conditioning Compressor Division, Head of the Refrigeration Division, and later as a Managing Director and Executive Vice President. From 1995 to 1996, Mr. Lee played a vital role in the restructuring efforts of the company as a member of the Innovation Task Force Team. He was named Executive Vice President in 2002 and later assumed the role of CEO of the Digital Appliance Company in 2004. In 1993, the Electronic Industries Association of Korea recognised Mr. Lee with a Commendation for his role in the development of the Korean electronics industry. Mr. Lee graduated from Inha University with a Bachelor of Science degree in Chemical Engineering. “The true values of our brand identity which is first, stylish design and second, smart technology…” What is different about LG White Goods? Of course other companies are all working very hard to differentiate themselves, but I believe that the differentiation of LG and the Digital appliance segment can be very well represented by the true values of our brand identity which is first, stylish design and second, smart technology… they are the key differentiating factors. In terms of design, you refer to our products as “white goods” but actually we are trying to say something different, “coloured goods” or actually “artistic goods”. We do see that our consumers especially those with higher living standards are getting more stylish, luxurious, and also very different depending on personal tastes. And what we are trying to do is to provide a wide range of design selections that are well harmonised with each other, so that consumers can pick the digital appliance that best suits their interior design needs and tastes. For example, we have in the refrigerator range, our Art Dios line. On the air conditioning side, our Art Cool range, and on the washing machine side we also have a line of harmonious products. This means that if consumers want, they can have a truly harmonised set of digital appliances. We also do different glass prints or textures and matching colours. I think the key differentiating factor is that LG was faster than other companies in providing a wider diversity of well designed digital appliances. The second factor is smart technology. This is developed from detailed and deep customer research on what actual customers are doing and to identify the so-called pain points of customers as they use the digital appliances. One good example would be our three-door refrigerator, which had a very good response in the US market. This product had actually introduced a third compartment on the bottom of the refrigerator for the freezer. Through surveying user patterns, we realised that frozen goods were not frequently taken out or put into the refrigerator, and so it would be better to place it on the bottom as people would use it less frequently. What we did instead was two side-byside doors on the upper side of the refrigerator for the higher frequency usage. This three-door approach had a very good response from the US market and that is a good example on how our smart technology differentiates what we do in digital appliances. Hall 1.1 / Stand 103 IFA International • Wednesday, 3 rd September 2008 www.ifa-international.org 29
