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Case

Asian Journal of Management Cues


DAWLANCE (Private) Limited: 1-18
«.? 2019 Lahore UnIve r-sl ty of
Th«! Air Fryer Micr~wave Management Scl~nces
. Reprints and permissions:
Oven Launch · 1n.sagepub.com/journals-permlsslons~lndla
DOI: I0.l 177/09728201198S8S21
journals.sagepub.com/home/ajc
($)SAGE
Ehsan ul Haque'

Abstract
On September 17th, 20 I 5, Mr Hasan Jameel, Head of Marketing at Dawlance', needs to firm up marketing
mix details for the planned launch of their first microwave oven with air fryer technology. The original
plan was to launch the air fryer as a five-in-one microwave oven which would allow consumers to heat,
cook, bake, grill, and air fry food items using the same oven. Some managers at Dawlance; however, are
concerned that offering so many options In one oven would increase the complexity and costs leading
to high prices and reduced sales. They think that air fryer technology should be offered as a stand-alone
unit, similar to those of competitors. Pricing is also a concern. Various price points from PKR I 8,000
to PKR 30,000 are possible. Finally, the advertising and distribution spend is under consideration. Mr
Jameel needs to finalise his recommendations for the upcoming presentation to the MD.

Keywords
Marketing, air fryer. product launch, Dawlance, marketing mix, diffusion of innovation

Discussion Questions
l. Would you rate Dawlance as a successful company? If yes, then what in your opinion are its
KSFs?
2. How do Pakistani homemakers go about purchasing their durables?
3. Why is the microwave penetration in Pakistan far lower than that of other major durables?
4. As Hassan Jameel what marketing mix decisions would you recommend for the air fryer launch?
Why?

On 17 September 2015, the marketing team of Dawlance (Private) Limited; hereafter, Dawlance, was
engaged in animated debates regarding the planned launch of their first microwave oven with air fryer
technology. Dawlance, headquartered in Karachi, Pakistan, was a leading player in the consumer durable

1 Lahore University of Management Sciences, Lahore, Pakistan.

Corresponding author:
Ehsan ul Haque, Lahore University of Management Sciences, Lahore 54792, Pakistan.
E-mail: ehsan@lums.edu.pk
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launchwass~h~ .-~ .. _. . · h-fo ·eventu~l,presei:1ta,iqn
.. p~o~~c~.•~:the,co~uitrx; The ~fr fryer- nucrowave oven . .. d tails of the· l~unb . ' Mr ··o;w~oA. "had I ~ ; : .

~.' ~~e~~.--'Oe~etal ¥~ager.-Mm-ket1ng)•was busy finallz~g·ty~ ;harehol~~r. of;_~a~:l~~e:·· .··. d~r:uble·' pride
.' ·.tq._·ME. ,; B~r..Dawood ..CEO "and .found~r. and the maJOO · ·e, roduct·s ailP..h~..to9k_po_os~_· · ;_ l ·,.-k~
: -~~i~~,~·uy p_l~i.~cl ~ l~~~~g_·_role i~.:th~ marketing of_Dawlan:~l ~en( dt.th~:·t'aun~ii'P:~~-~~
_·-•~}~$: r?le, C~n~eqitently; M( Jamee\ wartted to ensure that no -~th ·eiein~nts.. or.·the; fuarketingr.i_u •· ·
~~~~-rJ-ifr·
· · Th-e. debate atnongst"the ma'rketing team was on almost all e . microwave oven. This would
Jameel was keen to launch the air fryer microwav~ oven as a ~ve-~:;~ the same microwave o-ve?.
allow c~~sum_ers to heat, cook, bake, grill and air fry fo~d ite_m ca a~ility. Some managers were m
Competitive air frying products in the market offered only air frying .p The second area of debate
favour of launching a less souped-up version or, better still, simply an atr fry~r- Id at two price points,
was the price of the product Competitive air fryer only products were bemtso Janee was thin.king of
PKR 2~,000' or anywhere b~tween PKR 12,000 to PKR 18,000. Given !hat :wld be charged without
laun_chmg a five-in-one product there was a debate as to how much premium s 0 f
th
ommunication
tummg off the price sensitive market. Finally, there was a fierce debate o_n e. mar s:;!:s a significant
t
plans for the launch. Given that the air fryer concept was new to P~stam hou h traditionally d
market communication investment was needed for consumer education. Dawlance a . • The
re ried on its
· extensive
. network of dealers to educate the market wit• h some support from telev1s1on. . f
air fryer microwave oven market seemed too small for any significant TV-based commumca ton.
However, some managers worried that not going on TV might lead to disappointing sales.

DAWLANCE (Private) Limited


Dawlance was established by Mr. Bashir Dawood in 1980 in Karachi as a private limited company.
His father, Mr. Suleman Dawood, was a leading industrialist of Pakistan in the sixties. The factory to
produce refrigerators was established in Hyderabad, about 100 kilometers north-east of Karachi. Prior
to Dawlance, most refrigerators sold in Pakistan were imported into the country. Dawlance soon created
a strong brand name in the refrigerator market for reliable products with great after-sale service. In
1988, Dawlance started making deep freezers and over time diversified into other home appliances (see
Exhibit 1). The core value at Dawlance had always been the reliability of its products and this claim
was ensured across various functions, such as manufacturing, HR and customer services. Dawlance
maintained superior quality standards by being the first Pakistani durable manufacturer to be awarded
the ISO 9001, ISO 14001 and OHSAS 18001 2 certificates.
By 2015, Dawlance had revenues of more thanPKR 20 billion, a head count of over 1800 employees,
and growth rate of more than 10 per cent in an otherwise sluggish economy. The company website
declared the vision of the company as 'Make Dawlance a global brand by practicing Reliability: Make
Pakistan proud of us'. Its mission_ was to 'pr~mote reliability in everything we do in the field of tht:
household appliance'. In the pursuit of beconung a global brand, Dawlance had ventured out to several
other countries. It was exporting its products mainly to Africa and the Middle East.

Consumer Behaviour
.th a population of over 190 million in 2015 (around40 per cent living in urban areas}, had a large
Pa ki stan, w1 . I d .h b .
market for consumer durables. Steady economic progress, coup e wit _ur an migration and exposure to
. . t dards had created a huge demand for durables. Increasingly many homemakers in urban
mo dem I1vmg s an
Haque
J
households were tnkin u ·ob . . .
products The cli f g P~ . s outside the house leading to increased demand for time- and effort-saving
and nir ~ond't' ma IC con hons of extreme heat during summers also led to a demand for refrigerators
1
. toners amongst those who could afford them. During the first decade of the twenty-first-
ce~tury s:vemment policies of easy availabOity of consumer credit gave a major fillip to both manufacture
an pure nse of consumer durables. Th.is trenl· however slowed down somewhat with the change of the
government and, more importantly, with the ~sive in~rease in electricity load shedding on account of
th e poor supply situation. The price of electricity also increased significantly from 2008 to 2014 in order to
bolh man_nge th~ de~and and circular debt created in the process. Nevertheless, the penetration of various
durables m Pakistani households continued to grow (see Exhibit 2 and 3).
Consumer buying of durables in Pakistan was no different from those in other countries. Major pur-
chases were made during the establishment ofa new household or for replacement purposes. I~ Pakist~;
how~ver, the mn~age season created a strong blip in the overall demand. Many parents gifted maJ~r
appliances to their daughters in order to assist the smooth settlement of the newlywed couple. In addi-
tion, many times families replaced their old appliances when shifting to a newly construct~d house.
Dnwlnnce managers did not have exact data on this; however, anecdotal accounts of their dealers
suggested that durable purchases were split evenly between new and replacement pur~hases. .
Most household durables like an air conditioner, TV, refrigerator, gas cooker, washing machines~ ~tc.
lasted anywhere from five to ten years. They were expensive and involved some awareness and fa1n1har-
ity with technology. Consequently, durable·purchases were well thought out and planned. Purchasers
would rely on their own experiences with currently in-use brands, recommendations of family and
friends as well as information collected from various media sources like television. By 2015, word of
mouth via social media had also become a significant source on account of the rapid growth of smart
mobile phones. According to Dawlance managers, while brand reputations were fairly important, the
role of dealers, who made the eventual sale, was critical in the purchase decision. As most dealers selling
durables in Pakistan were specialized durable retailers they invariably carried a whole range of competi-
tive products. Consequently, the enthusiasm and knowledge of the sales person could influence both
category and brand purchase decisions at the dealer premises. Most of these dealers were also clustered
in few locations (called markets) in the city. This made comparison shopping easy for the purchaser and
most customers usually visited a few shops before making the final decision.
According to Dawlance managers, conswners considered a variety of factors while making durable
purchases. Features like capacity, size and price were fairly important. However, the availability of the lat-
est models and innovative features were also considered. For some customers, aesthetics, colour and style
were important as most of these durables were part of the kitchen or living room. The customers were
conscious of the looks as it reflected their tastes and lifestyles and enhanced the decor of their homes.
Other attributes customers factored in were after-sales service, easy availability of spare parts and
warranties. According to research, 85 per cent of the customers considered after sales service when buy-
ing durables. On account of the importance of after-sales service, most customers preferred buying
established and trusted local brands compared to new foreign brands.

Competition
In 2015, there were four broad types of companies competing in the Pakistani home appliance business.
First, old, established Pakistani companies, such as PEL, Dawlance, Waves, etc., who manufactured-
cum-assemblcd many ?f th~se_ applia_nces loc~lly: Se~ond, global brand names, such as Samsung, LG,
Sony, etc., who were pnmanly 1mportmg and d1stnbutmg their high-quality products with uncertain plans
. Asian Journal of Managemen: ~ ,
4
·
fi cussed more
on the TV and entertanun:
t .1
1
for fu~e local manufacturing. These brands see_med to h~v~_oshares of such players wer~ airy s~~ll,
categones in Pakistan In other appliances, while the market rs One reason was their advert1smg
~heir brand names we.re very well established with the custome d~ertising spill-over from the Indian
investments in Pakistan which were further bolstered by strong a K nwood etc. who took advantage
c h annels. Thud,
· new international players, such as Gree, H0 mage ' ·d· e g products
' ' of good qua1I·ty and
of sourcing from low-cost Chinese manufacturers. They were prov1 mhOle range of mushroom brands
were sow 1 lYimproving
· their marketing presence. F.ma11Y, there was. a w •th limited market pene trafion.
which would pop up seasonally offering cheap products and pnces w~ ican and European made
In addition to regular competitors a few high-end retail outlets ~ept er e negt 1·g1·bte in Pakistan.
r ' . • h· t shares wer
app iances_. However, on account of their fairly high pnces, t eir uru . .
.
fthe appliance categones.
11
lnterestmgly, no Pakistani brand had an equally strong brand franchise m ad fio chise in the refrigerator,
On account of being first movers in the category Dawlance had a strong bran_ ran k t shares of various
PEL · th · •. . ' t ry Over tame mar e
m. e air conditioner, and Waves m the deep freezers ~a ego · . . for market share data).
competitors had changed; however, market perceptions contmued (see Exhibit 4

Marketing at DAWLANCE
D aw1ance took pnde
· m. prov1dmg
. . Pakistaru
. . customers the most modem and re1·iable products.at competitive
.
· -r · d 1· ·
pnces. iop management closely monitored new product and technology mtro uc 10ns m vanous trade
. fairs
in Europe and the USA. In addition, close tracking of the Indian durable market was _do~e for regionally
relevant market insights. 'Innovation is the key concept in Dawlance's success story', mamtamed ~- Jameel.
Dawlance offered a broad range of npplinnces that included refrigerators, deep freezers, nucrowave
ovens, washing machines, air conditioners, etc. Within each product category, various SKUs were offered
in order to cater to the varying tastes, needs, and capacity to pay off the heterogeneous Pakistani market. In
order to expand the portfolio, a range of small kitchen appliances, such as juicers, blenders, toasters, etc.,
were introduced in late 2014. Dawlance dominated the market in only a couple of durable product catego-
ries, i.e., refrigerators and microwave ovens. However, its product quality and reliability had led to a very
strong brand reputation overall. According to a consumer perception survey conducted by IPSOS in 2014
Dawlance was rated as the number one brand (by a wide margin) in the appliance category in the country.

Go to Market System
Dawlance ensured that its products were available in almost all appliances markets of Pakistan. In 2015,
there were approximately 2300 dealers of appliances all over Pakistan and Dawlance worked with 1900
of them. The dealers were chosen by gauging their reputation in the market, credit history, financial
strength and the attractiveness of the area where they wanted to locate. During the first year, dealers were
given products only on an advance cash basis. This was different from the practices of many competitors
who not only gave credit of 60 days but also provided a few items free for display pwposes. Once
Dawlance was comfortable with the credit wo~hin~ss of deal~rs they were offered a fifteen-day credit.
Sales volumes of dealers were dependent pnmanly on t~e size and affiuence of their catchment areas.
Large dealers in metropolitan cities sold close to 30,000 umts per year while small dealers in small towns
could only manage around 400 units. Some competitors offered different tenns of trade to dealers accord-
. to their volumes, making the large ones even a sub-dealer to service smaller dealers. Dawlance·
ro~ever, had a policy of not discriminating amongst its dealers on any basis. The top management fel~
Haque 5

that this was one of D becoming too big, but


also, petty jealou . awlance's strengths. This prevented, not only, any dealer h were treated fairly
and equally by Dsie; and pric~ wars amongst their dealers. The dealers fel~ that t ~y were expected to
keep a minimum aw ance lea~mg to stronger relationships betw~en the parties. D~a ~r~e retail premises.
Dealers were I stock of vanous Dawlance pr~ducts both in their warehouses an o In addition, dealers
had to a ~o expected to be fairly knowledgeable about Dawlance ~rands.. th key role that
d ensure reliable post-sale installation support and customer hand-holdmg. Given e
1
ea ers played in the sale of durables Dawlance maintained an ongoing dealer education progrhaml. t
Dawlan , . . . d 6 8 r cent, t e owes
ce s suggested retall pnces provided dealers a margm of aroun - P~ d I rs could
amongSt tbose offered by competitors. As the end customer price was somewhat vanable ea e
make up to 15 . th However there was a
. . per cent margins on few products during the hot summer moo s. ' • rices
practice m some m~rkets where dealers took an oath on the holy book to abide by suggeS t ed retail P, ·
In ° rd 1
er to keep sales excitement and some unpredictability in the market, Daw lance announce~ a sa es
poricy •each month. In this · policy' various dealer discount schemes
' · gift
like · ·items, specia
· 1weddmg pack-
ages, special discounts on SKUs~of-the-month, etc., were announced to the dealers on t~e firS t .day of
each month before 11 a.m. (see Exhibit 5). Interestingly, competitors had caught on to this practice aod
announced their special deals on the fifth day of each month, frequently copying Dawlance schemes.
Dawlance believed that reliable after-sales service was one of their key reasons for success.
Consequently, they had established 260 service centres all over the country. Nineteen of these were
company owned, twenty-five franchiser-owned, and the rest operated as authorized contract workshops.
All of these establishments were manned by Dawlance-trained engineers and technicians and carried
sufficient inventory of spare parts to ensure a quick tum-around of any complaints. A universal access
number was provided to customers to report any problems free of charge.
In order to service the vast dealer network, Dawlance had established a comprehensive sales manage-
ment system. The national sales manager reported directly to the managing director. Three regional
managers (north, south and centre) reported to him. Each regional manager had four to six branch man-
agers reporting and in turn, each branch manager looked after two to three territories. There was a total
of sixteen branch offices located in larger cities and forty-five territories. The primary responsibilities of
the branch managers included forecasting sales for the next four months on a rolling basis, allocating
stocks amongst territories and monitoring of sales and performance of territory sales managers (TS Ms).
TSM was the front face, and the backbone ofDawlance servicing anywhere from thirty to thirty-five deal-
ers within his territory. His responsibilities included meeting sales targets, timely shipments of goods to deal-
ers and collection of payments. A TSM would typically visit seven to eight dealers every day, book orders
generate invoices based on the availability of products in warehouses, and ensure shipment within four to fiv;
days. Every dealer was visited once a week. TSM played a key role in educating dealers about existing and
future Dawlance products and also_helped _dealers in ~ g their sales forecast to be sent to the headquarters
for annual pl~g. !S~ came with v~g academi~ bac~grounds and experiences. In 2012, a change was
made in the hmng cntena ~f TSMs. A rrurumum _quahficat1on of an MBA was introduced. At the same time
the emoluments were also mcr~ased so that a typical TS~ could earn a little over PKR 100,0003- of which
around PKR 50,000 would be 10 salary and PKR 55,000 m commissions. In addition, TSMs were provided
with a car and fuel costs. The turnover at TSM level was 7-8 per cent. Dawlance sales force was well t d
in the market and competitors had often raided Dawlance for sales and management talent. repu e

Marketing Communication Practices


According to top management, Dawl~nce kept a healthy balance between the push and pull components
of marketing as both were deemed important. Over the years, Dawlance had created a strong brand
Asian Journal of Management Co~~
6
th'rd most favourite brand amongst
b and being rated as t11e i · rvey conducted by
name in the market leading to Daw lance ~ din to a brand electton su
top ten brands from nil categories of Pakistan, accor g . lly less than 2 per cent ~f ~evenues
IPSOS Paki'stan Marketing communication spe nd was typica ent on ATL which primarily included
• · · · b dget was sp n. . I
(see Exhibit 6). Around 85 per cent of_the advertismg. u hi hli hted the quality attnbutes of J?aw ance
TV with a very small portion for Radio. Most campaigns g g ry well known. Campaigns were
. R 1· bl , had become ve . Th
products and the tagline 'Because Dawlance is eta e d ring product introductions. e
typically scheduled during the peak selling seasons of summer or B~L activities, dealer training and
remaining 15 per cent of the communication budget was ~pent on ear at the time of the annual
digital marketing. The communication budget was locked m June e~eJt~ t they obtained measureable
planning with some money reserved for contingencies. Management eh ; obtained via OOH media
01
reach with TV campaigns; however, they were not confident of about t e d' A couple of consumer
like bil~boards. Consequently, Dawlance did not spend money on outdoo~ :;at:d for this was not a lot.
pr~mot1ons schemes were also offered each year; however, the money a 1 . f with its use.
st
With the increasing importance of digital media, Dawlance h~d arted expen~en m~h two e-based
Hence, online provision of the Dawlance products was made available by collaborating wid'
. · social me ia 0 aw1ance
retailers, Daraz.pk and Yavyo.com. Similarly, in order to have a presence on '
launched a Facebook page in December 2014 with roughly 100,000 likes by 2015.

Development of the Microwave Category


Thanks to the discovery of gas in Sui, Baluchistan in the early 60s and rapid deployment of the
infrastructure of piped gas to many urban households of Pakistan, most homemakers cooked food on
gas cookers. In locations where piped gas infrastructure was missing LPG containers or kerosene-based
stoves were used. On account of the historical availability of inexpensive and abundant supply of gas,
cooking on electric stoves or ovens was fairly rare. Sales of electric cookers were also impeded by erratic
supply and increasingly high costs of electricity.
The early 1990s saw a slow introduction of microwave ovens in Pakistan. Many Pakistani homemak-
ers, especially the affluent ones traveling overseas, had been exposed to the convenience that microwave
provided to busy homemakers. A few imported brands like Panasonic and LG dominated the market at
the time. Dawlance, realizing that microwaves offered useful potential, decided to enter the market in
1995. Initially, Dawlance obtained an agency to sell two well-known Japanese brands, i.e., Sharp and
National. The sales growth was slow but steady. In 200.0, Dawlance mariagement decided to play a more
active role in the expansion of the market using Dawlance branded microwave ovens.

Launch of the Basic Model in 200 I


Once the decision to play a more serious role in the microwave category was taken, Dawlance management
took a deep dive to understand dealers' and consumers' perceptions about microwaves. They found out
that most consumers perceived microwave ovens as a non-essential, luxury kind of product used only for
heating and defrosting food. Some homemakers had various apprehensions about the microwaves. The
dealers were not very knowledgeable about the category either - one dealer in Hyderabad asked about
the use of this new TV. Dealers also provided a key insight that when durable purchases were made for
dowry purposes, parents would invest primarily in key durables like a refrigerator, washing machine and
TY. After having exhausted money on major durables parents were only interested in spending up to PKR
5 0004 on small kitchen appliances. Most microwave ovens available in the market were on average of 30
li~res capacity priced at PKR 15,000; hence, they did not fall in major nor minor appliances. Dawlance also
Haque
7

found out that microwave . . K


and Japanese mark t . ovens worl~wide were sourced primarily from Korea and C~a. The orean
dominated by ~ ~ _typically s~ld mtcrowave ovens of 30 litres capacity while the Chu_1ese market was
2512
there was h dl itres capacity products. On account of the small market size of rrucrowave oven5 ,
D ar Y~y cust0 mer education campaign conducted by any competitor in Pakistan.
1
Pakis~:Ua~e decided t~ intr?duce a microwave ·oven specially designed with the requirements of the
omemake_rs m mmd. They linked up with a leading supplier from Korea to .manufacture
0 1
:lly
aw ance branded ~crowave ovens with a capacity of20 litres only. This model EC 2? was ~unple, ~anu-
operated a~d pnced at P~ 5,000. A sticker was posted on each product high!ightmg quick heatn~~ of
ood 1~ two minutes. A massive dealer education campaign was developed and unplemented. Television
a~v~rhsements were deemed too expensive for the scale expected for the product. Conseq~ently, PKR 3 o
?'111h0n w~re spent on a print campaign where for three months the front page ads were c_amed every we~k
In four national newspapers, coupled with a few magazine insertions. In addition, the pomt of sale mat~nal
was developed and installed in all dealer outlets. This move by Dawlance dramatically changed the ~uc_ro-
wave market. In 2000, the total size of the microwave market was around 50,000 units with LG dommatmg
the market and brands sold by Dawlance capturing less than 10 per cent share. By 2002, the market size had
grown to 150,000 units with Dawlance capturing almost 45 per cent share. .
Dawlance continued to introduce different models of multiple sizes and capabilities in the following
5
years. In 2004, Dawlance launched an aggressive TV campaign with a budget of PKR 50 mill~o?. The
simple message of the TVC was the quick and easy heating of the microwave oven (see Exhibit 7 for
the storyboard). The campaign was very successful leading to Dawlance moving most communication
budget to electronic media. The same ad was used in 2005 and 2006 using almost similar budgets.

Launch of Cook King Series in 2007


By 2006, Dawlance management felt that Pakistani homemakers were aware and comfortable with the
use of microwave ovens. However, they were using it only for heating or defrosting pwposes. Dawlance
management believed that a higher level ofscale would only be possible if homemakers used the microwave
oven for regular cooking of food, in addition to merely heating. Experience from other countries had
suggested that microwave was also being used for cooking. In order to explore Pakistani homemakers'
views and interests in cooking using the microwave, Dawlance conducted in-depth interviews of a few
housewives in Karachi belonging to SEC A. Findings confirmed that microwaves were primarily being
used for heating. As far as cooking was concerned, respondents felt that it was fairly difficult to do as they
did not know the exact timings and different temperature settings of the microwave oven for these purposes.
Some hand-holding was needed. The majority showed interest in making, not only, Pakistani and Chinese
dishes (such as Biryani,6 Korma,7 Chowmin, etc.), but also, baking brownies and pizzas. Some suggested
that they would also like to cook homemade naan, paratha, and sheermal using the microwave if possible.
Armed with consumer data Dawlance management got in touch with their suppliers in China to explore
the development of such a microwave oven. They found out that a model was being sold in India which
could do limited dishes. Dawlance got hold of Chef Gulzar8 who had experience of using microwave ovens
to cook Thai and East Asian dishes. Chef Gulzar and Dawlance experimented with many Pakistani recipes
to calculate the appropriate cooking times and temperature settings needed for preparing high-quality
Pakistani dishes. This information was incorporated by the Chinese suppliers in software programs of the
microwave oven initiated by the user-friendly built-in menu. The user only had to press the appropriate
display button and the recipe was delivered without further interventions by the homemaker.
Dawlance named the new microwave oven series Cook King and launched-it in 2007. The product was
priced at PKR 7,0009 (for the basic model). In order to get the buy-in of.the dealers, extensive educational
programs were conducted for them where ChefGulzar visited them to demonstrate how to make Pakistani
. Journal of Management
Asian Cose,
-
~8---------------------:-.- - his supervision. In addition, a
d 15
'h di h themselves under 'th th oven A CD was
• es. Dealers were also encouraged to make the s es d to be provided ~ e · This CD
recipe booklet by Chef Guizar containing 40 recipes w~ pr_~pare . Daw lance nucrowave _oven. rth PKR
made to instruct the audience on how to make Pakistani recipes usmgt of that a TV campaign wo
was usedbYthe dealers to explain . vanous
• quenes· Of Purchasers. 0 •n opThe launch
' went weII and Dawd1ance
h
60 million was launched to introduce the new microwave oven sen~s.M 008 in Karachi suggeste t at
2
market share increased to almost 50 per cent. A study coocluc!ed m :y(see Exhibit 8).
homemakers were slowly adopting the idea of cooking with nucrowave

Launch of BBQ Microwave Oven in 2008 I


. . . 0
t mers value-added options, ~w ance
As part of continuously upgrading its product hne and proVIdmg cus ~ th . . rowave Pakistanis loved
m~agement started working on developmg · · lei
~ gnll coo ng op
tion m barbe
eir nucued items· could be made
gnl_led food. Consequently, this feature was mtrodu~e~ so that popu IarThe
easily. A rotisserie rod was added to ensure even gnllmg of ~e.~eat.
c!k King BBQ microwave
ecuted to support the launch
oven was launched in November 2008. Both ATL and BTL activities were ;x d the ease of making
in addition to the traditional education of the dealership_networ~ The TVC ocus: 0 ~ TV channel were
barbeque dishes with 1·ust one touch of a button. Special cooking programs on asa a .
sponsored where Chef Guizar showcased the convenience of mwung _,.: Pakistam· BBQ recipesj 9
The launch of the new model was deemed successful by Dawlance management. ~ anuary I 200 h'
Dawlance conducted a research (over 150 homemakers firom SEC a A nd B) in Karachi
. to measure t
E hib"t 9)e
overall consumer attitudes and behaviours regarding microwave ovens. The findmgs (see x 1
showed satisfactory results. The awareness levels of various a~ributes_of the BBQ oven were decent and
the interest in using a microwave oven for cooking was sufficiently high.

Launch of Health Zone Series in 20 I0


In 201 O, Dawlance launched a health zone campaign for its various durables focussing on the healthy
aspects of its products. For microwave, a calorie indicator was added in some models which would
indicate the calorie levels of various food items being cooked so as to keep diet-conscious individuals
infonned about their calorie intake.

Launch of Convection Microwave Oven in 2012


Dawlance managemen_thad noticed that many Pakistani homemakers who enjoyed cooking were interested
in baking cakes, biscuits, cookies and pizzas. They felt that a microwave oven with baking capability would
do well in the market. Consequently, in 2012 two new microwave models, 112 and 115, were launched with
convection cooking features. A special Teflon-coated Tawa was included with each in order to make Pakistani
breads, such as naan, taftan, sheermal, etc. In addition, a recipe book containing 60 recipes by ChefMahboob
was provided. The lallflch was supported by regular ATL and BTL (including conswner home visits and
dealer shop activation) act~vities. Special_coo~~ pro~ on Masala TV channel were sponsored where
Chef Mahboob ed_ucated VI~wers on b_aking_his s~g11ature dishes using Dawlance microwave oven. He also
participated in vanous cooking shows m vanous hfestyle events held in Karachi and Lahore
Dawlance management believed that by 2012, many households were aware of and u·s•· ·
. . , ng microwave
ovens. However, the penetration rate was stlll far below those of televisions and refrigerators. A small
Hoque 9

in-depth survey of ~2 homemakers in Karachi listed the following reasons (respondents' words) for lack
of regular use of Illlcrowaves for cooking:

• It is very expensive because of high electricity consumption.


• Cooking on the stove is far easier and takes less time.
• My cook does not know how to cook using a microwave.
• It can~ be used for cooking in large quantities.

Thanks to Dawlance's aggressive development of the microwave category the ove~all market had
expanded to around 400,000 units by 2015. Dawlance offered a broad range of IDICr_owav~ ovens
providing multiple choices to customers. The 24 SKUs offering various features and pnce points are
presented in Exhibit 10. The more inexpensive models (less than PK.R 10,000) contributed around 6 5-?S
per cent of unit sales while models above PKR 15,000 contributed around 5 per cent.

Air Fryer Microwave Development


In 2012, Dawlance management noticed a limited availability of air fryers in the market. Air frye~s
were stand-alone electric gadgets where hot air circulation was used to provide the effect of deep 011
frying with the use of very little oil. The dealers suggested that some health conscious _customers w~re
interested in buying air fryer as it provided them with a healthy and guiltless altemat1ve of prepanng
food with the taste and crunch of deep oil frying. Few options that were available in the market ranged
from high priced Siemens model (PK.R 60,000) to low-end Chinese brands (PK.R 12,000). Dawlance
management believed that many of the Chinese brands' importers were sourcing from the same company
at roughly two-thirds the cost. The most popular item in Pakistan; however, was the Philips air fryer
selling at PKR 24,000. Overall sales of air fryer were very low on account of fairly limited market
development activities carried out by these brands. No advertising campaigns on any mass media were
run to introduce or promote the air fryers.
Daw lance management felt that this product had great potential in Pakistan as many popular Pakistani
foods and snacks were deep fried in oil which was considered bad for people with health problems.
According to health indicators of Pakistan, around 21 per cent of the adult population (over 18 years of
age) were overweight and 5 per cent obese. In addition, around 25 per cent of the adult population suff-
ered from high blood pressure and 19 per cent of deaths could be attributed to cardiovascular problems.
Many doctors recommended a reduced intake ofdeep-fried food items as a preventive measure. Dawlance
management met with their supplier in China to develop a microwave oven with air fryer technology. By
mid-2014, the supplier supplied the prototype version for testing. This microwave was essentially a five-
in-one product where consumers could heat, cook, bake, grill and air fry food items.
As part of the market assessment, dealers and customers were surveyed to find out their awareness
levels and likes and dislikes about the new product. The dealers had mixed opinions about the product.
They pointed out that rich, older consumer would like it if their expectations of the air fryer making typi-
cal Pakistani deep fried items such as Lahori fried fish, samosas 10 and pakoras 11 were met. On the other
hand, they were worried that it might consume a lot of electricity. They suggested that a range of air fryer
microwave ovens from the capacity of 20 litres to 30 litres be launched. The price range suggested was
between PKR 18,000 to PKR 20,000. The dealers said that Dawlance should aggressively advertise this
product on TV to create awareness as it would be very difficult for them to create believability about its
air frying feature at the point of purchase.
10 I of Management Cas~
..____ AsianJournua1~:..;..:..:....--=----~ ),
Ar · ___________:_____ ---~ I gy was mostly
tnuted consum . fiyer techn° 0 h
~eard of. Only 13 er survey conducted in Karachi suggested that the air ncept ofliking and pure ase
intent scores w d percent ofrespondents knew about it (see Exhibit 11). The co this data with orto convert
these intent scoere ecent. .However, Dawlance did not have any norms to complare n the lower side.
res to actual purehase percenbges.
. .
Price expectations seemed a so o

Launch Decisions
Dawlance to O15 with a half-yearly sales
target of
12
&1 m~agement wanted the product to be launched in October 2 and focus to the debates
going b uru~. The anno~ncement of the launch date brough~ an urgency ushing for different
price ~ a out vanous marketmg mix decisions. Different marketmg grou~s "!'ere ~ that the current top-
O

f th p~mts. The sales team strongly suggested a unit price of PKR 18,000 pomtmg ou ld be difficult
0
~ e- me Dawlance microwaves were similarly priced and that achieving sales targets wou • emium
Wt out an attractive introductory price. They informed that even with this price there w~ a pnce pr Id
of PKR 6,000 over Ch'mese lDlports.
. 'How much more premiums do you think Pakistaru consumers wou
Th
pay for Dawlance?' they asked. The new products team was pushing for a p~ce of~~ ,000~ :~ 27
argu~d th~! the customers will only be from the upper class; hence, not very pnce sensitive. They gu
that if Philips air fiyer, with no additional features, could be sold at PKR 24,000 then customers would be
more than happy to pay a premium for Dawlance five-in-one air fryer microwave oven. In any case~ affluent
customers with health issues would be looking at product benefits rather than price. The marketmg team
insisted that the air fryer microwave be priced PKR 24,000 at parity with Philips. They were of the view
that at the time of the launch price of the new product should be the same as that of close competitors. Once
the market was better understood Dawlance could always charge a premium.
Pricing issue was linked with the product design issue as well. While the customer and dealer survey
conducted by Dawlance was of a five-in-one microwave product, some managers felt that this was
overkill. They argued that most high income households in Pakistan already have a microwave oven.
Why would they want to purchase another microwave oven only to get the benefit of an air fryer? They
suggested that Dawlance should follow Philips idea of producing a standalone air fryer. This product
could be then sold profitably at a much lower price point (around PKR 14,000) and with the strong brand
name and marketing clout of Dawlance a huge market could be captured.
They asked:
This product has the potential to be a 'hit' mass product in Pokistan. Remember how our consu _ • t d
·
pricing of microwave change d the comp Iex1on
· of the m· dus try m
. 200 l. As a standalone air firy •t mer
h onen
h e
· · b · h d
potential. Why are we forcing 1t to e a me e pro uct ? er, 1 as t e same

Opponents of this idea felt that a five-in-one decision had already been made and th
· I l ere was no need to
revisit it even 1fthe expected sa es were ow.
Coming up with an appropriate marketing communication plan had also engende d .
· re an arumated debat
The low awareness levels of customers about aJr fryer technology suggested an . . e.
· h d 11 k · aggressive marketmg ca
paign including all elements ofp_u~ an pu mar etmg. The ad agency had made a few fl e m-
dealer and retail out!ets (see Exh1b1t 12). They could even be used as print ads if there w Y rs for use at the
no TVCs were envtsaged. The brand team was unhappy about this. They felt that as a nee~._1:1°wever,
would not be able to create strong awareness and believability of product b fi BTL achv1ttes alone
PK.R 30 million was needed to break the clutter in the television market Th ene its.1:1ey felt a budget of
rod
television commercial itself required close to PKR 5- 7 million. The broad ~.P uctton of a good 30-sec
. PKR 25 million for reasonable GRPs. Dawlance management· how cas mg coS ts would be additional
' ever, was reluctant to provide this
Haque
II

amoWlt. They argued that all Dnwlnnce product lines had paid for their advertising budgets. An expected
annual sales of 2400 units of air fryer did not provide the gross margins needed to indulge in any ambitious
TV campaign. In addition, they argued that this was a niche product in any case which did not require mass
marketing. Some managers suggested sponsoring popular cooking shows instead. They believed that by
spending around PKR 1 million Dawlance could not only introduce the product to the relevant target mar-
ket but also demonstrate its proper use by celebrity chefs making exciting fried products using only one
drop of oil. This could be supplemented by using social media. Live streaming of cooking fries and fish
could be done using Dawlance's Facebook page at a cost of around PKR 1 million.
In the absence of an aggressive pull campaign, the brand team suggested a strong push campaign.
They suggested conducting forty seminars in various cities and towns of Pakistan where chefs could
demonstrate the use of the new product to invite dealers. Dawlance salesforce could also participate in
these seminars and get the first-hand experience of the air fryer product and its benefits. The cost of such
a campaign would be around PKR 15-20 million. However, the bigger issue was that it might lead to
postponing the launch date by two months if all forty seminars were to be completed before launch.
With all the debates about air fryer launch buzzing in his head, Hasan Jameel sat down and turned to
his computer. There was no time left. He had to present his launch plan to Mr. Bashir Dawood next day
for the final go ahead.

Declaration of Conflicting Interests


The author of this case declares that there is no conflict of interest.

Funding
The author received no financial support for the research, authorship, and/or publication of this article.

Appendix

Exhibit I. Major Milestones at Dawlance

Year Activity
1980 Began Operations
1981 Introduction of Refrigerators
1988 Introduction of Deep Freezers
1995 Introduction of Microwave Ovens
2000 Production of Washing Machines
2001 ISO 14000 Certification
2004 Introduction of Split ACs
2007 Introduction of Cook King Microwave Oven and
Reflection Glass Door Refrigerator
2010 Introduction of Health Zone range of Appliances
2012 Launch of world's largest Direct Cool Refrigerator
2014 Introduction of the small Kitchen Appliances Category
2015 Introduction of Health Zone Plus series
Source: Company documents.
. J urnal of Management Case~
Asian o ....::. ,
12

Exhibit 2. Penetration of Durables and Home Appliances In Pakistan


Rural
Durables 11 Rest of Urban u
Overall IO Key Cltles 83
Electric Iron 93
87* 95 44
Washing Machine 83
58 91 44
Color TV 75
55 82 29
Refrigerator 60
42 74 12
Electric Mixer 30 34
18 3
Clothes Dryer 18 11
7 2
Microwave Oven 22 10
7 3
Paraffin Stove 5 8 11
Water FIitering Device 2 6 3
Separate Deep Freezer 2 s 2
Electric Kettle 3
Cooker 4
Vacuum Cleaner 3
Dish Washing Machine I
Source: Consumers Book of Pakistan 20 I+-20 I5, lpsos, Pakistan.
Note: ~o be read as 87% of Pakistani households owned an electric Iron.

Exhibit 3. SEC Wise Penetration of Four Major Durables

Refrigerator Color TV Washing Machine Microwave Oven


SEC Urban Rural Urban Rural Urban Rural Urban Rural
A 84* 70 70 70 91 80 53 10
B 79 55 80 64 91 68 30 4
C 70 37 80 so 89 SI 16 2
D 64 25 80 45 87 42 7 0
E SJ 11 78 27 82 25 4 0
Source: Consumers Book of Pakistan 20 I+-20 I5, lpsos, Pakistan.
Note: ~o be read as 84% of urban Pakistani households belonging to SEC A owned a refrigerator.

Exhibit 4. Market Share Estimates in Various Durable Categories

Market Share
Category 2013 2014 2015 Ranking of Dawlance
Refrigerators 45% 46% 48%
Deep Freezers 24% 26% 26% 3
Air Conditioners 20% 18% 18% 3
Washing Machines 9% 10% 12% 4
Microwave Ovens
Oawlance 52% 55% 58%
10% 11% 17%
Homage
Orient 15% 16% 11%
11% 10% 8%
Haier
12% 8% 6%
PEL
Source: Case Writer's Estimates.
Haque 13

Exhibit 5. An Exam le Of
.. p Monthly Sales Policy Announcement
Exciting Sales Polic
Dawlance celebrat y ~ Ei~ ul_Azha from Dawlance
0
. . to win BUMPER
GIFTS es Eid with its Dealers by providing them a fantastic opportunity 'ded on the
on purchase of all products. Even better these BUMPER GIFTS would be prov•
regular Invo,ce
· wit
· h out any target or other conditions.
'

(This offer is valid on selected models for a limited period only)


As per Dawlance traditions, BUMPER GIFT offer is provided for September 201 5 so th at dealers
could maximize their Incentives by invoicing more items.
Now you can invoice Refrigerator models according to Table A below
TABLE A
Models/Series Models/Series Quantity Free Gifts Gift Quantity(s)
Any Bedroom 3 DWEK-8223 or DWTE- 2
refrigerator model 8004
Any REF 9122 / REF 3 MD-4 or MD- I0 2
9144 REF 9166 models
Any REF 9144 WB/ REF MD-4 or MD-7 or MD
9 I 66WB /REF 9 I 70WB 10 or MD-5
/ REF 9 I 7SWB/ REF
9188 models
Any REF 9188 WB / 3 DW-1 I 2CHZ or DW- 2
REF 91996 models l 31 HP or DWI 28G or
DW-5100 or DWFJ-1002
And invoice Split Air Conditioner models according to Table B below
TABLE B
Models/Series Models/Series Quantity Free Gifts Gift Quantity
Any Split AC Model MD-4 or MD-10
(1,1.5,2 Tons) ·
For details on schemes for Microwave Ovens and Automatic Washing Machines contact your
nearest Sales Branch Manager or TSM.
Source: Company documents.

Exhibit 6. Estimated Ad Spends for Various Durable Brands (PKR In Million)

Air Conditioner Category


2013 2014 2015
Brands Spend Spend Spend
Dawlance 35 40 62
Gree 12 6 JO
Haler 12 13 40
Orient 21 23 56
Kenwood 25 72
(Exhibit 6 continued)
14 Asian Journal of Management c~~
(Exhibit 6 continued)
Refrigerators Category
2015
2013 201 ◄
Brands Spend
Spend Spend
Dawlance 67
70 26
Haler- H 66
55
Or-lent 24 100
67
PEL 55 102
5◄
Microwave Category
2014 2015
2013
Brands Spend Spend
Spend
Dawlance 32 18 10
Homage 18 10 17
Source: C:ue Writer's Estimates.

Exhibit 7. Advertisement for Dawlance Microwave Oven

Video: Hen brings an egg to be hatched in a Video: Hen places the egg in the oven and
microwave oven press the start button
Audio: Mus ic and hen clucking Audio: Music and hen clucking

Video: Hen waits for 2 minutes


Video: After 2 minutes the chick is hatched
Audio: Music and hen clucking
Audio: Chick: Mama Hen: My baby
(E.xhibit 7 continued)
15
. '

(fantb.'t 1 C\'11ti, ,u~1)

Vidoo: Han w~lks I\Wil)' with tht., now born VhJao: Chick stllnds In front uf O1\whrnco
Audio: 1"-falo volco ovor: Evel)•t/1/nr ters hcorcd /11 2 Mlcrowl.\VO Ovon
minu~s in Oawfoncc /v1icrowove O,-en Audio: Only Oow/onctt brlnas sofurlons.
Source: Comp11ny documents.

Exhibit 8. Consumer lnslghu for Cook Kint (Ml\)' 2008) Awnronon crnd Us&\11 or Dlff1ront
Mlcrownvo Functions
Functions Aw1ronoss Usngo
Heiatlng 86X 6◄X
Defrosting 100 ◄3
Cooking 79 21
Biaklng 54 29
Grllllng ◄3 II
Auto menu ◄3 7
Source: Comp1ny documents.

Exhibit 9. Koy Mmrkot Rosemrch Findings Unn 2009) (PI of 2)

Top of Mind Awnrcmoss Brnnd Ownorshlp


Br.ind May 2008 Jnnunry 2009 Mny 2008 Jnnunry 2009
Dawlnnce 36% 40% 27% 28%
LG 21 17 IS 16
PEL 2 3 2 3
Kenwood I 4 0 0
Haler 3 0 7
Orient 7 2 s
Source: Compl\n)' documonts.
f6
~
Asian journal ofManagement C~
Exhibit 9 Ko
• '1 Market Research Findings Qan 2009) (P2 of 2)
Awarenoss Le
1
Ve s of Various Attributes o( Convection MWO ljan 2009)
Item
% Aware
BBQ Convection
BBQ Rod 63%
65
Fnmlllarlty With Ch f G I
e u zar 87
Gulznr•s Recipes
58
Prompted A
wareness of Pakistani Recipes
Response
Yes May 2008 January 2009
No response 28% 70%
10
WIiiingness to Cook In Ml
crowave
Response
Yes May 2008 January 2009
46% 88%
No response
II
Source: Company documents.

Exhibit I 0. Dawlance Microwave Oven Price Range


Price Range Microwave Oven Capacity Type
S,000-8,000 MD-4N 20 L Heating
MD-5 20 L Heating
MD-8 20 L Heating
MD-9 20 L Heating
MD-7 20 L Cooking and Heating
MD-10 20 L Cooking and Heating
8, I 00-11,000 DW-296 20 L Heating
DW-387 23 L Heating
DW-390 M 23 L Heating
DW-295 20 L Cooking and Heating
DW-373 23 L Cooking and Heating
DW-297 GSS 20 L Cooking, Heating and Grilling
I I, I 00-16,000 DW-112 CHZ 20 L Cooking, Heating, Grilling and Baking
DW-393 GSS 23 L Cooking, Heating and Grilling
DW-250 CS 25 L Cooking, Heating and Grilling
DW-395 HP 25 L Cooking, Heating and Grilling
DW-397 HP 25 L Cooking, Heating and Grilling
DW-128 G 28 L Cooking, Heating and Grilling
DW-131 HP 30 L Cooking, Heating and Grilling
(Exhibit IO continued)
Haque 17

(Exhibit IO continued)

Price Range Microwave Oven Type


Capacity
DW-133G 30 L Cooking, Heating and Grilling
DW-136 G 36 L Heating and Grllllng
16, I 00-25,000 DW-115 CHZ Cooking, Heating, Grilling and Baking
25 L
DW-142 HZP 42 L Cooking, Heating and Grilling
DW-162 HZP 62 L Heating
Source: Company do~uments.

Exhibit I I. Results of the Air Fryer Product Concept Test


Awareness of Air Fryer Technology
Response Percentage
Yes 13
No 87
Liking and Purchase Intent Scores• of Air Fryer Microwave
Likeability 2 3 4 s 6 7 8 9 10
- 7% 47% 40% 7%
Purchase 2 3 4 s 6 7 8 9 10
Likelihood
40% 27% 27% 7%
Expected Price of the Air Fryer Microwave

Price Range (Rupees) Percentage


I 8,000-18,500 27
19,000-20,000 47
21,000-22,000 13
23,000-25,000 13
Source: Company documents.
Note: "'where I is lowest and IO highest liking / Purchase Intent score

Exhibit 12. Proposed Leaflets for Air Fryer Microwave Oven

(Exhibit 12 continued)
18 Asian Journal of Management Cases

(Exhibit 12 continued)

Source: Company documenu.

Notes
l . ln 2015, the average exchange rate for the U.S Dollar to the Pakistani Rupee was 102.65. Source: State Bank of
Pakistan, www.sbp.org.pk/ecodata/ibf_arch.xls, accessed December 2017.
2 . OHSAS 18001, Occupational Health and Safety Management Systems-Requirements (officially BS OHSAS
18001) is an internationally applied British Standard for occupational health and safety management systems.
3 . In 2012, the average exchange rate for the U.S Dollar to the Pakistani Rupee was 93.28. Source: State Bank of
Pakistan, www.sbp.org.pk/ecodata/ibf_arch.xls, accessed December 2017.
4. In 200 l , the average exchange rate for the U .S Dollar to the Pakistani Rupee was 61 .81 . Source: State Bank of
Pakistan, www.sbp.org.pk/ecodata/ibf_arch.xls, accessed December 2017.
5 . In 2004, the average exchange rate for the U.S Dollar to the Pakistani Rupee was 58.40. Source: State Bank of
Pakistan, www.sbp.org.pk/ecodata/ibf_arcb.xls, accessed December 2017.
6 . Biryani was a popular, slightly spicy dish typically made of equal part rice and meat.
7. Korma was a dish consisting of meat or vegetables braised in a spiced sauce made with yogurt, cream and nuts.
8 . Guizar Hussain was one of the celebrity chefs of Pakistan made famous on account of the huge following of
food channels like Masala TV, especially by homemakers. Guizar was reputed for oriental and continental
dishes.
9 . In 2007, the average exchange rate for the U.S Dollar to the Pakistani Rupee was 60.72. Source: State Bank of
Pakistan, www.sbp.org.pk/ecodata/ibf_arch.xls, accessed December 2017.
1o. Samosa is a fried or baked dish with a savoury filling, such as spiced potatoes, peas, minced meat, etc.
1 l . Pakora is a fried snack (fritter).
1
12 _ Lahore, Rawalpindi, Islamabad, Quetta, Hyderabad, Karachi, Faisalabad, Gujranwala, Peshawar, Mu tan.
13 . 40 cities other than the l O key cities.