GODREJ CHOTUKOOL

Q1 : - Asses the business case for chotukool. What are the critical success factors for this
product to succeed.?

ANS :-

 Chotukool was a small refrigerator which was made for the rural India. The
refrigerator was made in such a way that the refrigerator used to operate on 12-volt
battery power and was priced at Rs3500.The refrigerator market in India was
estimated at 40 billion. Despite of the fact that the refrigerator had immense utility,
still the penetration level was below 18% for the urban market and 2% in the rural
market which was very less in the rural market because of the factors like price,
inadequate electric supply and size.

Therefore the Godrej people came up with Chotukool – a cooling solution for mass markets.
This refrigerator was small, not very expensive and did not use electricity for its operations ie
they used Peltier cooling in the prototype. These were the critical success factors for
Chotukool.

***************************************************************************
**********

ANSWER 1.For Chotukool to succeed following factors should be there:

(i) Product utility: Channelizing on the ability of product to satisfy the demand of different
users like roadside kiosks, wayside grocery stores and flower vendors

will help for the success of product in long term.

(ii) Pricing: With price about half of an entry level refrigerator, Chotukool creates a new
product category, with a targeted value proposition that serves a new segment of customers.

So, for the product to succeed the target segment must be convinced to pay the price for the
product i.e. customers who are aspirational should find the pricing reasonable.

(iii) Promotion of features: The product satisfies the need of rural population due to its
affordability, non dependency on electricity and its availability in less than 100l segment,
Chotukool is well suited for rural customers. Thus making the target customer aware of these
different product aspects will lead to huge demand from the untapped market.
(iv) Proper distribution model: Deeper penetration will be achieved by the companies
community distribution model incorporating help of NGOs and self help groups.

Q3:- Is there a threat of quick imitation by competitors that Godrej should consider? If
so how?

Ans: -

 Most of the rural residents considered a refrigerator a “luxury” item, and would not
even think of buying the product. For many, the price of the product is just not
affordable.
 While Chotukool is much cheaper than the lowest cost refrigerators in the market, the
market feedback is that it still was not affordable to many of the rural residents.
 No there was no direct competition to chotukool, but there was threat that the
traditional refrigerator manufacturers would bring same kind of low cost model of
refrigerator reducing the existing price gap.
 Chotukools current price was just about 50 percent of the lowest cost refrigerator,
unlike other classic disruptive innovations.There were other low cost alternatives
such as Mitticool by Mr Mansukhani Prajapati which had a different functionality,
custom value proposition and market segment , posing less of a direct immediate
threat to chotukool.
 Mitticool requies No electricity,
 Price between 2500-3000, Two compartments and is Made out of clay.
 However, such innovations along with prospective low cost versions in the category
of traditional refrigerators, posed a threat of potential substitutes eventually appearing
in the market.
 ANSWER 3. Yes there is a quick threat of imitation by competitors which should be
considered by Godrej.
 The idea for a low cost cooling solution has been there before with Mitticool.
 The market being untapped and having high potential for growth will certainly appear
to be lucrative to the competitors with the risk of imitation even becoming larger if
Chotukool receives a positive response. The risk compounds from the fact that the
cooling technology thermoelectric or peltier cooling being known for decades.

*********************************************************************
Q4:- What is your take on the simultaneous pursuits of two parallel business models in
the same cooling industry (Mass market vs. Urban Market).? Does it entail any risk for
the Godrej. ?

Ans: - ChotuKool is a product by Godrej & Boyce Manufacturing Company Limited, a Fast
Moving Commercial Goods (FMCG). . 20 per cent of its business was done overseas with
presence in more than 60 countries. . Chotukool was an unconventional cooling solution
targeted at BOP segment. . Chotukool was an unconventional cooling solution targeted at the
bottom of the pyramid (BOP) segment in India. . Chotukool was an unconventional cooling
solution targeted at the bottom of the pyramid (BOP) segment in India. . Chotukool was an
unconventional cooling solution targeted at the bottom of the pyramid (BOP) segment in
India. The traditional refrigerators have the customers who use refrigerators at homes which
were used for household needs and these customers mostly belong to urban areas. These
traditional refrigerators where priced in the range of Rs7000-8000 . There is no risk involved
in the two parallel business because the customers targeted are totally from a different
background. The two markets targeted do not have links between them .

ANSWER 4. The simultaneous pursuit of two parallel business models by Godrej is a

promising and challenging approach. While the traditional refrigerators have the urban
customers who can afford 100+ liters of refrigerators for personal and commercial use in the
range of 7000-70,000.

Chotukool is targeting rural consumer who cannot afford traditional refrigerator and is priced
in range Rs 3000 to Rs 3500. The rural market opens new avenues to Godrej. It does compete
with its existing market range and expands its market to untapped segments.

The simultaneous pursuit does poses the following threats to Godrej:

(i) Godrej has a good brand image among the rural masses, if the product being launched in
the cooling solutions category fails to deliver customer value it will tarnish their image for
other products also.

(ii) Pursuing rural market involves setting up of new sales channels and thus involves the
complexity of dealing with unforeseen scenarios.

******************************************************************
**********

Q5:- How should Godrej pursue its strategy for chotukool? . What are its implications
for brand and overall corporate strategy.?

 Innovations in design: Godrej should also try to bring more innovations in

the design of chotukool. They can also make design more simple to handle.
 They should make use of new technology and can also incorporate solar power
technique
 Advertising and distribution : Create awareness by door to door campaign.
The distribution channel shoud always be reachable when the customer tries to
approach. Chotukool requires demonstration which doesn’t happen So
something must be done to solve this issue. Proper information should be
provided to the rural segment
 Affordability : Price of Chotukool should not be increased .
Godrej should invest in ChotuKool. This product will help in raising the
standard of living of rural segment

ANSWER 5. Godrej should pursue its strategy for Chotukool in tactful manner since the
market being targeted is timid. Innovative advertising and distribution methods are required
to attract the customers who are quite different from their existing customer base. The
distribution strategy through NGOs and self help groups and making customers part of their
sales force by providing them commission for each unit sold will prove to be effective.
Promotion at village haats, festival gatherings as well as demonstration drives will attract new
customers.

The involvement of local bodies in the distribution model as well as the value delivered to
different customers types helping them in their business will establish Godrej’s image as a
noble brand.

**************************************************************************

Q6:- What challenge you envisage for Godrej in its journey of taking Chotukool to
various geographical markets across the country.?

The challenges faced by godrej in its journey for taking ChotuKool for various geographical
market across the country are as follows:

 To manage the transaction problems .

 issues related to advertising and distribution
 cultural differences, and usage patterns
 Price conscious.
 People less information about the product

ANSWER 6. The major challenges that are likely to be faced by Godrej have been listed
below:

1. Rural people have less experience in using cooling solutions, so educating them about the
product utility for them will be daunting task.
2. Lack of organized channel for reaching end users will also be an issue.

3. There is a great amount of market diversity in view of the different climatic conditions in
which different users like roadside kiosks, wayside grocery stores and flower vendors will
use the product.

4. Rural masses are price conscious since prices even 50 percent less than the traditional low
cost refrigerator did not seem affordable to some people.

6. Substitute products as well as imitation by competitors seem to be a possibility in the near

future.