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Preview Edition - IFA International

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Exclusive Interview

Exclusive Interview Levent Çakiroglu CEO of Arçelik Behind the Big Brands Exclusive Interview: IFA Keynoter, Levent Çakiroglu – CEO of Arçelik Part of Koç Holding Group, Turkey’s largest industrial and services group, Arçelik is a name that is little known in the rest of the world, but which is behind some of the world’s biggest names in the home appliance industry. IFA International Editor-in-Chief Richard Barnes travelled to Istanbul where he visited one of the company’s main factories and met with company CEO Levent Çakıroglu, who for the first time will be delivering a keynote at this year’s IFA – on Friday September 5 at 2pm. With Arçelik supplying more than 100 countries we put the question to Mr Çakıroglu as to what this means when it comes to understanding different cultures and ways of living We have put the consumer in the centre of our strategy, and we have been trying to be an ever more consumer centric / market centric company. Therefore it has been our objective to be close to the consumers - to the users of our products. Actually we have managed this quite well in the countries where we have been operating starting with Turkey, where the company was established 59 years ago. Thanks to this experience, we have been applying that very same principle in the other markets where we are working and we are doing this through our business partners: retailers, buyers and shop floor sales staff. We talk to the people… We knock on their doors, we visit their homes in different income segments and we try to understand their lifestyles. This is the motivation behind the development of different brands with different product lines and I think we have been very successful in that respect; as we have been able to design and manufacture the most suitable products to accommodate the needs of specific customers in different markets. Innovation is at the heart of our strategy. Innovation in our company is triggered by the technological advancements or new ideas stemming from our research and development team along with the market analysis and consumer insights, which are fed back by all the sales and marketing teams. Once again, we try to understand the consumers everywhere we are operating. How is your company's branding strategy evolving? We are operating with 10 brands in our portfolio. Some of them are just national brands available in one country, like Arctic in Romania or Elektra Bregenz in Austria. We have regional brands like Blomberg, available in Germany and Nordic countries, and when it comes to international global brands, there are two: Beko and Grundig. Beko has been a global brand in the white goods segment and last year we decided to leverage on the strength of our Grundig brand and introduced Grundig branded major domestic appliances in order to complement Beko in the global markets. We came to that decision after listening to the consumers to measure the brands’ awareness and perception as well as talking to the retailers, and we decided to come up with a new product range for Grundig branded white goods. It has been perceived particularly well! We started in Germany just four months ago and the brand is also already available in the UK and in Scandinavian countries. It's the beginning of a very long journey. 18

Exclusive Interview IFA is the most important event in our industry to exhibit our products and to share our new products and ideas to the world Grundig white goods and Beko white goods will be complementing each other in the markets. What do you see as being the main trends in the home appliance sector at the moment, and which direction do you think the industry will take in the next two to three years? Actually, climate change has become one of the major topics in our lives. I'm not talking about the business world, but as a person it's an important issue. I know this is close to your heart as you represent Turkey in connection to this Yes. You may remember that I am the spokesperson for the climate platform in Turkey. When we look at our products, more than 90% of the carbon emission occurs during the usage stage at home. During research and development, manufacturing and supply chain phases, all of these only generate less than 10% of the carbon emission in our products’ life cycle. Therefore in order to reduce the carbon emission it is very important for our industry to invest in energy efficiency. Going forward, energy efficiency and water efficiency will be the most important aspects of the products. In addition to that, with the development of smart devices, connectivity has become more and more important. We can think about an apartment or home as an eco-system consisting of different appliances: small appliances, white goods, TV and so on. Everything will need to be connected together in a smart way. It will be one of the leading trends going forward in our industry. Of course, when we talk about the comfort of the consumers, we need also to be aware of the impact of our products; not only from an environmental, energy or water efficiency point of view, but also the level of noise, which is also very important, and we have been working intensely on the noise levels of the products. Durability is just as important. Another important aspect is also the user interface. I believe it is necessary for the products to be as userfriendly as possible. When we look at the evolution of demographics in different countries, we need to also be aware of the ergonomic aspects of our products, for elderly people for example. How do you support your partners when it comes to training, marketing and communication? It's important to understand their needs and it's important for us to serve them better in order for us to grow our business and in order for us to strengthen our brands. We believe we need to satisfy our business partners in that respect. We have been strengthening our supply-chain processes in order to serve them on a timely basis; we have been trying to be as flexible as possible and that brings us an advantage to serve them better when the demand changes quickly in the markets. Also of course we provide them marketing supports through different programs like in-store marketing tools, training on the shop floor, attending their programs as well as road shows. We are also trying to cooperate with them in certain cases through their joint marketing programs. We have a strong central support team and we have the mirror teams in all subsidiaries who work with the retailers or business partners. They support them through merchandising activities, occasionally with shop-in-shop activities in different countries. We work with them very closely to understand their needs and try to respond as effectively as possible. How does IFA Berlin fit into your marketing strategy? I think IFA is the most important event in our industry to exhibit our products and to share our new products and ideas to the world. We increasingly introduce our newest products and newest ideas in the most attractive way possible at IFA. We have been trying to enlarge the space that we occupy and hopefully this year we will have a much larger space for our exhibit! It is also a good opportunity to be in the beautiful city of Berlin. Don't miss the IFA keynote by Levent Çakıroglu Friday 5 September – 2pm Arçelik factory, Istanbul Testing noise and vibration levels – an important part of R&D IFA International • Monday 1 st September 2014 19

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