Words: 516
After the success of vacuum cleaner, Dyson had the high expectation to its new appliance product, a new washing machine called Contrarotator launched in November 2000. Dyson claimed that this machine with turbulent washing action was much more like the more efficient hand-washing action that washing machine had replaced. For many customers, other considerations beyond the quoted price also apply, such as quality, availability of stock, product performance, after-sales service, brand value and many other issues. (Lynch, 2006)
Similar with the vacuum cleaner, Dyson’s Contrarotator aim at the high performance, premium-priced and top market segment. As mentioned before, the main reason of success in vacuum cleaner market was that it satisfied the trend of replacement demand. Even though possessions of good distribution but the market share of Contrarotator in 2003 was less than one per cent of the British market. As a result, it lost retail space in some of the main domestic appliance retailers. The demand of Contrarotator was much less than that of vacuum cleaner for the European market.
No one could suspect the outstanding design of Dyson but the value for money and the true market needs. Products in one market without concentration on the consumer needs would be failed even with high performance function. Several reasons might be suitable to interpret the condition of Dyson: b. Low upper-priced market segment across European market Market segmentation is the identification of specific groups of customers who respond differently from other groups to competitive strategies.
They can be important in strategy development because they provide the opportunity to dominate part of the market. (Lynch, 2006) Based on the statement the upper-priced segment in the European automatic washing machine market during the period was only about 10 per cent of the market by volume and 15 per cent by value. Only small portion of consumers inside the market could afford the premium-priced washing machines c. Low value money Furthermore, the differentiation among the Contrarotator and other washing machines might be low evidence.
Value for money, which includes quality, branding and other factors, represents the broader element that will determine and condition pricing for many customers. (Lynch, 2006)For instance, customers might not be able to distinguish the washing quality of clothes no matter he / she put them into the washing machines even Dyson’s. By comparison with vacuum cleaner, the benefits of washing machine are extremely intangible. d. Inappropriate pricing strategy Pricing strategy was another problem for Dyson. The price decision will be determined by a balance of factors under the general headings of costs and competitor analysis. Lynch, 2006) When Dyson decided to launch the new model of washing machine, it might just focus the remarkable function of the washing machine but neglect the essential pricing strategy analysis for the market. Although the vacuum cleaner mainly aimed at the top market segment with one hundred per cent higher costs, it could still be acceptable for consumers in the medium to low market segment. However, the price for Contrarotator was two to three times higher than conventional products. This made customers chose other brand rather than Dyson.