The process for consumer-driven product development is used for all new products. Close collaboration between the Group’s marketing, R&D and design functions – the Innovation Triangle – increases consumer insight and market knowledge thereby enabling products to reach the market at a faster pace and ensuring that these products are preferred by more consumers.
All product development in the Group is based on in-depth consumer insight. By performing an extensive number of interviews and home visits, Electrolux acquires understanding of consumer needs and behavior in the use of various household appliances. Based on this information, Electrolux develops solutions that simplify the everyday lives of consumers. The Group has also increased its culinary expertise to enable the creation of more innovative products for food preparation, food preservation and cleaning. A key factor in this is the transfer of knowledgefrom the Group’s professional business to consumer products.
70% preference model
The product development process also facilitates sales via new channels, in new markets and in ventures into entirely new product categories. In order for a new product to be launched, at least 70% of the consumers in a test group must have expressed a preference for it above similar alternatives in the market. If this requirement is not met, the product is sent back to the product development team to be reworked.
More research and development
Over a number of years, Electrolux has gradually increased its investment in R&D. As a consequence, product quality has been further improved, which, has led to reduced costs for warranty spend. Since 2009, warranty costs have decreased by an amount that essentially corresponds to the increase in R&D costs The sum of these two cost items for the entire period was around 5% of net sales and the aim is for this trend to continue. Increased investment in new technology is focused on the development of intuitive and user-friendly control panels as well as solutions with less environmental impact.
Strong global positions
Electrolux aims to develop winning products in various categories and regions by focusing on innovation and cost efficiency. The Group’s strongest global position is currently held in the cookers category. Electrolux cooking solutions for the world’s best chefs and restaurants can therefore be leveraged when developing consumer appliances.
Electrolux also commands a strong global position in vacuum cleaners and is growing rapidly in the area of small domestic appliances by utilizing global economies of scale. Other strong positions held by the Group include the market for front- load washing machines and dishwashers, which are low penetration segments in most markets. Among adjacent product categories, Electrolux identifies major global potential for air-conditioning equipment and water heaters.
Products for various segments and regions
The share of product development that encompasses global projects rose to 35% in 2013 compared with 10% in 2010. The objective is to further increase the level of differentiation for new launches in the premium segment and at the same time compete profitably in mass-market segments. Brand differentiation, rapid product development and efficient production are required to reach consumers with products in mass-market segments. The Group’s global manufacturing platforms facilitate the spread of successful launches from one market to another, with adaptations to local preferences.
Electrolux also has a number of development centers for household appliances across the world that focus on rapidly growing areas such as induction and steam.
Investments in service and aftermarket
Electrolux offers efficient service, rapid upgrades and a strong range of accessories and consumables. The Group strives to offer the market’s best service. Well-functioning service activities have the dual advantage of increasing customer satisfaction and providing opportunities for profitable aftermarket sales. The long-term ambition is that the share of a product’s sales value comprising service, consumables and accessories increases by a minimum of 10%.
