Electrolux Annual Reports - The importance of AEG brand to corporate marketing strategy and the ongoing consumer boycott

Interested public can download for free the Annual Reports 2005 .

Related to our subject of the impact for the ongoing Electrolux boycott from most interest is chapter "Continued investment in building a strong, global Electrolux brand", starting on page 10.

They introduce the companies marketing strategy, which relies to focus on one global Electrolux brand. However, "A number of brands were double-branded in 2005, including the important AEG brand in Europe." The importance of the AEG brand can be seen on every companies press release , which always stated proudly "Every year, customers in more than 150 countries buy more than 55 million Electrolux Group products for both consumer and professional use sold under famous brands such as AEG, Zanussi, Frigidaire, Eureka and Husqvarna."

Obviously the AEG brand is not simply one of dozends of brandes under the umbrella of Electrolux. It's a strategic module in their global marketing strategy.

But how will a boycott and the desastrous image of Jobkiller Electrolux challeging their marketing targets? Let's listen agian to Electrolux, to understand more about the specifics of white goods market.

"Since consumers do not buy household appliances frequently, most of them have limited awareness of the market offering and how products have evolved since their last purchase. In addition, an appliance represents a substantial of outlay for most consumers. The confidence generated by a strong brand is of great significance for infrequent purchases of expensive products."

Having this specifics of white goods market in mind, we understand much more, why the top priority of Horst Winkler, European Operations Manager, for the remaining year will be a marketing campaign to improve "harmed image of premium brand AEG". Sources from Electrolux mention to media, that the company will **spend 40 million €. That's equivalent to 21% of last years profit before taxes of 190 million €.**

But Electrolux is not only vulnerable through a boycott in general. The image attack on brand AEG will challenge them on their Achilles heel. Simply because for a premium brand it's much more important, what Electrolux describe as general vision for a strong brand: "A brand is strong when it is well-known, associated with quality, innovation and value, and has the trust and loyalty of consumers. A strong brand enables higher prices and stimulates loyalty as well as the desire to repurchase."

AEG have been a strong brand and it has the trust and loyalty of consumers. Looking into the boycott list we read many comments stating "I've always satified with the quality of AEG products, but now I'll boycott this ruthless jobkiller ..." .

The AEG sales have been fall off by 46% in the first two month of 2006 in Germany. This figure, given by union leader Jürgen Wechsler, have been denied by Electrolux. However, company spokesman refused to give any figure about revenue decrease to media. Probably Electrolux is looking forward to improve the dramtic figure in second half of the year. In this sight it's again a hard set-back, that Jürgen Wechsler, who is also member of supervisory board of AEG Germany GmbH, call on a Electrolux boycott at march 20th during a workers meeting. Surley the IG Metall, one of the biggest unions worlwide, won't join official the boycott due to legal concerns. However, in march 2006 edition of their members newspaper, the union makes notable positive notes about the boycott as "good idea".

How does Electrolux counter-strike the image attack? Some - not representative observations in several cities - indicate a tactic, no marketing guy ever will confirm. It seems to be, that the dramatic loyalty loss of consumers have forced Eelctrolux not only to additonal 40 million marketing spend, but also to massive sales discounts. The might work short term to stabilize the sales figures. But long term this discounts will finalize, what the image attack of the NGO "Social Forum Nuremberg" driving the Electrolux boycott would never be able to realize by their own resources: Destroy the image and market value of Electrolux "premium brand AEG":