1. Describe Whirlpool’s global marketing strategy. Does Whirlpool use an extension product strategy or an adaptation product strategy?
2. What is the primary reason people buy and own major appliances such as a washing machine? Is there a secondary reason as well?
3. What are the key lessons to be learned from Whirlpool’s experience in emerging markets?

Whirlpool Corporation, headquartered in Benton Harbor, Michigan, is the world’s number 1 appliance company. The company sells more than $18 billion worth of “white goods” each year; this category includes refrigerators, stoves, washing machines, dryers, and microwave ovens. Whirlpool’s success has been achieved, in part, by offering a brand portfolio of products in different price ranges. These include the premium KitchenAid and Maytag brands as well as the medium-priced Amana and Whirlpool brands.
Not surprisingly, the global economic crisis translated into lower sales in North America and Europe, where Whirlpool generates nearly 75 percent of its revenues. By contrast, sales in Latin America and Asia are showing double-digit gains. Whirlpool is not new to foreign markets; for example, the company has had a presence in Latin America since 1957. Today, it is the market share leader there, offering global brands (Whirlpool, KitchenAid, and Maytag) as well as local (Brastemp) and regional ones (Consul).
At the beginning of 1993, David Whitwam, then chairman and CEO of Whirlpool Corporation, told an interviewer, “Five years ago we were essentially a domestic company. Today about 40 percent of our revenues are overseas, and by the latter part of this decade, a majority will be.” The former CEO’s comments came 3 years after he had placed his first bet that the appliance industry was globalizing. With the acquisition of Philips Electronics’ European appliance business for $1 billion, Whirlpool vaulted into the number 3 position in Europe. Whitwam pledged another $2 billion investment in Europe alone.

Expansion Abroad: Challenges
As the decade of the 1990s drew to a close, however, Whitwam’s ambitious plans for expanding beyond Europe into Japan and the developing nations in Asia and Latin America hadn’t achieved the desired results. Noting that Whirlpool stock underperformed in the bull market of the 1990s, analysts began questioning whether Whitwam’s global vision was on target. As one analyst put it, “The strategy has been a failure. Whirlpool went big into global markets and investors have paid for it.” Others faulted the company on execution. Another analyst said, “I respect Whirlpool’s strategy. They just missed on the blocking and tackling.”
The challenge Whirlpool faces is rooted partially in the structure of the appliance industry. In Europe, for example, the presence of more than 200 brands and 170 factories makes the appliance industry highly fragmented and highly competitive there. Electrolux, a Swedish company, ranks number 1. Whirlpool’s various brands are available in 30 countries; however, European appliance sales have been flat for years, with sales volumes growing at a mere 1 or 2 percent; industry overcapacity is a major issue. Although analysts expect to see a surge in demand from Central and Eastern Europe within a few years, there will also be an influx of products from low-cost producers in those regions.