Frigidaire Company: Launching the Front-Loading Washing Machine

copyright 1999
ISBN 0-324-03072-X

Case Teaching Package
A case teaching package is available for this case. It includes strategies for case presentation, key concepts, solutions to the assignment questions in the case, and suggestions for the most effective ways to work this case into your course.

Length
This case is 14 pages in length and its case teaching package is 10 pages.

Abstract

In 1996, the Laundry Products Division of the Frigidaire Company introduced a new, horizontal axis, front-loading washing machine in the United States. The introduction was possible only after several years of development and was intended to expand Frigidaire's position in the marketplace by establishing itself as the industry leader in energy-saving and environmentally sound laundry products. However, to accomplish this goal, Frigidaire had to create customer demand for the new technology and faced several marketplace challenges. First, although well-established as the preferred washing machine model in Europe, the front-loading washing machine was virtually unknown in the U.S. and faced a strong market preference for conventional top-loading machines. Second, the cost of this new technology almost doubled the price to consumers. Third, other major competitors in the U.S. were poised to enter the market soon with their own front-loading machines. In order to overcome these factors, Frigidaire had to carefully position its product in the marketplace and successfully implement an effective marketing plan for the front-loading washing machine. However, sluggish sales for the first three months after product introduction suggested that the marketing plan needed to be reviewed and possibly changed.

This is a field research-based case supported by Frigidaire. The authors designed the case for use in advanced undergraduate or graduate courses in strategic marketing.

Study Questions

1. Which customers should Frigidaire target for the front-loading washing machine? What are the characteristics of these customers? How do their needs and wants match the product offering? Can a market be created for the front-loading washing machine?
2. How should Frigidaire persuade consumers, through advertising and promotions, to adopt the front- loading washer?
3. Who are Frigidaire's major competitors and what competitive threat, if any, do they pose to the introduction of the front-loading washer?
4. What retail price should Frigidaire set for the front-loading washer, considering consumer price-sensitivities and competitive threats?
5. What strategic options does Frigidaire have with respect to improving sales of the front loader?