The subject revolves around the subject of 'Customer Value' and how a product like Chotukool which is a product of Disruptive Innovation flares in the market.

1. Marketing Basics: Case
Study - 1
Creating Customer Value: “Chotukool” from Godrej
Center: Anna Nagar - Chennai
Beneesh Bhaskaran
Gopalakrishnan J
Saravana Srinivas M
Shridhar Gokhale

2. Refrigerator Industry: MACRO VIEW

Market Value – Rs. 40 bn
in the year 2010
Unsaturated Market –
18% Urban & 2% Rural
Market Growth
Urban – 7 – 10%
Rural – 25%
“ChotuKool” by Godrej was an attempt to transform the Refrigerator
Industry & penetrate the rural unsaturated market by the process of
‘Disruptive Innovation’

3. Problems “Chotukool” tried to solve
 Food Spoilage: According to the UN Commission, one third of food is lost to spoilage.
 Refrigerator Penetration: According to sources, refrigerator penetration in India was
only 18% then.
 Mitigate Power Shortage: 70% of the Indian Population still lives in villages where the
power supply is limited.
 BOP Segment: There were no viable refrigerator products available for the BOP (
Bottom of the Pyramid) consumer segment.
 Space: Space is a major constraint in Rural Households.

4. Strengths – That helped solve the problem
 Simple Design – Top Loading, compact & Portable cooling solution with no
Compressor, but instead has a Cooling Chip.
 Size: Relatively a small size that fits in the rural household.
 Price: It would by far be the cheapest mini refrigerator ever sold at Rs.3790 with
a very low Operational cost.
 Power Consumption: “Chotukool” can operate in Battery, Invertor or even solar
energy.
These strengths essentially had a vision to solve complex socio- economic problems
of the rural households.

5. Weakness / Challenges:
 The segment of customers ( BOP) had more complex problems than just price,
like literacy levels, communication media, logistics & distribution that was not
considered.
 The Scale up operations & around the model was not envisaged as the product
was a new venture in the segment.
 Effective Distribution channel were not available for the segment of customers.
 Non availability of an established Business Model.
 Low Purchasing power of the target customers who are essentially non-users.

6. Opportunities: that mitigated the key
problems
 Problem Statement Opportunities
Food spoilage More demand can be created by
efficient consumption
Refrigerator Penetration Huge growth potential in the under
penetrated market.
Power Consumption Saves power & thereby cost as it can
also be used with a battery source.
Pricing Priced as the lowest Refrigerator in the
country for the BOP segment.
Space Very compact & light in weight.

7. What could have they done better!?
 Built in an effective & low cost Distribution business model.
 The could have focused on being more Customer Oriented than being too
Product Oriented.
 Could have managed to avoid a myopic view in defining their Market. (
Marketing Myopia)
 Could have segmented their target customers in a more accurate & thereby
better way.
 Could have set Manufacturing plants across the target Markets.
 Could have analysed the competition & aligned strategically better.

8. Delivery of Value : To Rural households ( B2C)
Sr. no. Strength Weakness
1 Low cost cooling solution as compared to
prevailing Refrigerators
High cost solution as compared present
solution being used at poor rural homes i.e.
Mitti ka Ghada, Box inside box etc.
2 Low operational cost. Ability to keep things
cool for 3/4 hrs. without power
Consumes more power as compared to
conventional cooling solutions in rural areas
i.e. Mitti ka Ghada etc.
3 To prevent wastage of left over food In rural house hold left over food preservation
was not an issue as they cook limited food
each time.
4 Opportunity to earn extra income with role
of an entrepreneur termed as Sakhi
Sales commission of RS. 150/-per Chotu kools
did not encourage many.
5 Easy availability at remote villages through
India Post network.
6 Negligible maintenance cost
Take away:
It is evident that Godrej involved the Target Customer in designing the final product but they did not
work to know “what is the target customer’s problem” for which they need a solution.
Chotu kool had competition with conventional cooling solution i.e. Mitti ka Ghada but it could not
deliver better cost effective value than it.

9. Delivery of Value : To Grocery stores in rural areas( B2B)
Sr. no. Strength Weakness
1 Low cost cooling solution as compared to
prevailing Refrigerators
Limited storage space & therefore the
capacity.
2 Low operational cost. Ability to keep things
cool for 3/4 hrs. without power
5 Easy availability at remote villages through
India Post network.
6 Negligible maintenance cost
Take away:
It was valuable to small grocery stores in rural areas but volumes were limited

10. Delivery of value : To Panwala’s corner shop
Sr. no. Strength Weakness
1 Low cost cooling solution as compared to
prevailing Refrigerators
Many cool drink companies offer subsidised
refrigerators
2 Low operational cost. Ability to keep things
cool for 3/4 hrs. without power
3 Easy availability at remote villages through
India Post network.
4 Negligible maintenance cost
Take away:
It did offer value proposition to Panwalas in urben areas but it had competition with Refrigerator
being provided by cool drink companies at subsidised rates so it was not needed.

11. Delivery of Value : Road side Flower & Fish seller
Sr. no. Strength Weakness
1 Low cost cooling solution as compared to
prevailing Refrigerators
Limited space not enough to store flowers
hence one was not enough
2 Low operational cost. Ability to keep things
cool for 3/4 hrs. without power
3 No wastage of flowers & Fish Limited benefit as they keep only stock for the
day.
4 Easy availability at remote villages through
India Post network.
5 Negligible maintenance cost
Take away:
It did offer some value proposition to Flower & Fish sellers but it had limited space so of not much use

12. Delivery of Value : Urban middle class as portable cooling solution
Sr. no. Strength Weakness
1 More effective portable cooling solution as
compared normal cool box
2 Low operational cost. Ability to keep things
cool for 3/4 hrs. without power
3 Negligible maintenance cost
4 Positioning as life style product
Take away:
It was a good value proposition as portable cooling solution but has limited market.

13. THANK YOU!