Professional Documents
Culture Documents
Weber Grills - Final
Weber Grills - Final
It was a warm Saturday forenoon on the 31st of May 2014. Around a dozen people had
gathered for the barbecue MASTER CLASS, at the plush WEBER EXPERIENCE CENTRE
at the headquarters of the Indian subsidiary of Weber , USA. The office was overlooking the
placid Ulsoor Lake, situated on the north-eastern fringe of the city of Bengaluru in the south
of India. At 11.30 am, Aslam Gafoor- GM - Marketing, Weber India, stepped in and began
his address:
“Good Morning!!!! When people think of barbecue it is about chicken and fish. Even with
vegetarian, they think of mainly paneer and capsicum. We shall break many of these myths
in the next 3 hours or so. You are at India’s first barbecue center where the entire range of
barbecue grills made by Weber, USA, have been displayed in one place. It covers all the
popular models of the charcoal and gas grills – from the smallest to the biggest and also a
range of accessories – which enhance the grilling experience. What we realized is that
barbecue is known in our country and is not offbeat”
This was followed by the self-introduction of the participants.
The session shifted to an open area where there were Weber grills of different sizes. Aslam
demonstrated lighting of the charcoal briquettes with a Rapidfire Chimney starter. The
briquettes could be reused provided they were doused properly. Then Aslam showed how to
distribute the hot coal on the metal grate. He described the various features of the grill - the
damper, ash catcher, temperature indicator etc. Fresh charcoal could be added as and when
needed. Aslam mentioned that there were techniques for grilling pizza and fish and the
charcoal could be used accordingly.
The participants moved to another hall where Chef. Melvin coached them on the preparation
of Thin Crust Homemade Pizza, Grilled Italian Aubergine, Marinated Grilled Arbi and
Grilled Potato. Chef. Melvin demonstrated how to shape the dough with both hands, using
the fingers to flatten the dough, the technique of handling the knife while chopping
vegetables, use of different types of cheese for dishes etc. The participants took their turns
at different activities. Each dish was laid on the grill which had been fired up earlier and had
attained a temperature in the range of 200-300 °C. The group moved onto the preparation of
the next dish, as the earlier dish was sizzling on the grill. As each dish was ready to be
1
This case was prepared by Dr. N Ramesh ad Dr. N Barnabas of NMIMS University. The case was developed
solely as a basis for class discussion. The case does not intend to serve as endorsement, sources of primary
data, or illustrations of effective or ineffective management.
1
removed from the grill, the Chef demonstrated the technique of dislodging it from the grill.
There was obvious anticipation mixed with anxiety on each participant’s face to see if the
dishes they had prepared turned out good! The food was then relished by all, sharing
comments and lighter moments, about the shape, taste and texture. Shiva Kandaswamy– the
CEO, Weber India, joined the group as the technique of placing the skewers on the grill was
being demonstrated. He told the paticipants that a new accessory for making dosas was under
development and would be available in the market soon. The master class concluded with a
dessert - chocolate pudding. Back at the reception desk each participant filled in a feedback
form and the group dispersed after exchange of pleasantries and hoped to run into each other
in the future.
2
The Weber brand – Genesis & Growth
More than 62 years ago, George Stephen Sr. invented the dome-shaped closed-lid grill which
went on to shape an entire backyard barbeque culture of ‘covered cooking’ in the USA.
Stephen was working with the Weber Brothers Metal Works in Chicago, Illinois, a
manufacturer of marine buoys which cut in half served as the protype for his innovative grill.
Stephen later acquired the company in 1956, to set up the Stephen Weber Inc to manufacture
and market barbeque grills of several models. Weber continuously innovated on the features
of their grill such as the flavorizer bars, built-in-bucket for storing charcoal, and expanded
the product line by introducing the gas and electric grills in the 1970s. Weber grills were
sold in 72 countries, with a direct company presence in 48 countries. The values of the Weber
Brand2 is best captured in the following statements:
“By Grillers for Grillers … Grills that last. Grills that perform….Make us look like
superstars in the eyes of those who are most important to us….We love our grills because
we love our families and friends and yet-to-bes…..The gravitational pull of the grill is
undeniable – it pulls those who are close to us, even closer….Barbecuing has to be
uncomplicated – it has to be fun, effortless and delicious….You are not just making burgers,
you are making memories”
Shiva added:
“Weber corporate mission is centered around the Weber Experience and not simply sales
volume. Weber believes in being the best brand, and not necessarily the biggest brand”
2
Gathered from the Weber Company website
3
Barbecue was not new to India, especially in northern India. Tandoor / Sigri was the
traditional gadget used to barbecue to prepare tandoori dishes. But mostly this was eaten at
restaurants. Even if done at home, mostly in the semi-urban or rural areas, the sigri was used
for grilling only for a couple of months during the winter season. On those few occasions
when barbecuing was done at get-togethers as a fun activity of the youth, the result was
either burnt food, uncooked food coupled with the problems of handling the charcoal before
, as well as after the event. Barbecuing mirrored the lifestyle of the individual and family. A
person who travelled frequently and liked to spend quality time with family and friends
would value the barbecuing experience. In general, pastimes during the weekend were
limited to going to mall or watching a movie. Sporting and going to the park had not been
very common. Men did not generally cook. Moreover, there were a lot of hired help for
cooking available in India. The word barbecue, but not tandoor, would be considered
Western. There were two parts to this perception – visually barbecue was associated with
non-vegetarian food since most of the time the visuals showed meat and very little of
vegetable. There was also a perception that one had to be a specialist to barbecue – prepared
ingredients in a special manner, kept a few things overnight in the fridge et cetera. Space
was a constraint in Urban India. Many of the FGD participants wondered where to keep the
barbecue grill, as an additional gadget. Even during a party people tend to prepare the same
dish as they normally eat at home on the grill. The husband and wife would never decide to
barbecue in India, they would call their friends or neighbours. Barbecue was associated with
‘partying’. This meant that in India barbecuing was on special occasions, like going to an
Italian restaurant for dining. Weber grill could be seen as an expensive gadget for the value
proposition since the Chinese or a local grill were available at the local market for less than
half the price. The channel members in the trade of traditional household appliances in the
Mumbai market belonged to a business community who were pure vegetarian and would not
be comfortable dealing in products like barbecue grills, which had a non-vegetarian
association. Barbecue grills would be a niche product category patronised by the enthusiasts
keen about the barbecue experience. On the whole, barbecue grills would essentially be a
new category in the Indian market.
4
Shiva’s entrepreneurial journey
Soon after completing his graduation in commerce in 1993, Shiva set up a distributorship
for National Panasonic electric cooker in Coimbatore. Being a new category in the Indian
market, gaining dealers’ shelf-space proved difficult. Even after convincing the dealers to
stock the electric cooker, the product movement was sluggish. Most of the dealers chose to
return the cookers at the end of the credit period. Faced with this challenge, Shiva decided
to woo the customers directly through live demonstration of the features and benefits of
electric cooker in comparison with the popular pressure cookers. Shiva recounted:
“When people experienced little difference in taste but greater ease and convenience, they
began accepting the category. This was a time when couple working and the culture of
nuclear family was just about beginning to happen. I realized that experiential marketing
was the only way to change the perception”
The success of this approach encouraged Shiva to progressively expand his lines to cover
non-stick pan, lady’s hair-remover, electric chimney and microwave oven. The common
thread across these product lines was that they were new categories being introduced into
the Indian market by companies who were global market-leaders in those categories.
“ I have passion and vision to bring new categories and grow them and make them big. And
the other important thing – I get a lot of pleasure in doing something others consider
impossible! When I set up the distributorship for electric chimney, people wondered who
would buy an electric chimney for Rs. 8000 for their kitchen ,when an exhaust fan which
could perform the same function, cost only Rs. 500 ! I wanted to bring a new category into
the Indian market. I was narrowing down the options and felt that barbecue grill would be a
good category for the Indian market because of the food culture. Again people wondered
India and barbecue ! No way ! India is predominantly vegetarian and the weather is hot and
Indians are not used to outdoor activities. So the challenge was to educate people to get into
the culture. I was positive that if the customer education was done right, these challenges
could be overcome”. Initially, Weber was not keen to enter the Indian market since they
were engaged in expanding their European footprint to penetrate the east European markets
where the barbeque culture was growing and had drawn up plans to enter the Middle-East
market. Shiva visited Weber headquarters in USA several times during 2007, to persuade
them to allow him to distribute their line in India. After a yearlong efforts Shiva was
5
entrusted with an exclusive distributorship. In 2008 Shiva joined Weber-India fulltime as
their country head.
6
Familiarization session of one-hour duration was conducted free of cost on Fridays. The
Master Class of four-hour duration was held on Saturdays for which a fee of Rs.999 was
charged. A mobile Experience Centre was launched in 2013 in Bangalore to take the
barbecue experience to the doorstep of customers. The mobile unit visited colleges, gated
residential communities or even corporates if they wished to have a barbecue session
conducted for their employees. In the gated communities a one-hour grilling session was
conducted where the participants gained hands-on experience of grilling on Weber grills.
The community got their own marinated food. Barbecue Picnics were conducted in the
Farmer’s Market in Delhi, Gurgaon, Mumbai and Bangalore , typically in a 1000 sq. ft. area
picket-fenced for the event. An arrangement was made with a local restaurant to supply
marinated food to the participants who were taught the use of Weber Grills. The Weber-
India Facebook page was regularly updated with photographs of the recent demonstrations
and Master classes. The latest statistics showed about 4000 likes on the page (Refer FIG.1)
Channels of Distribution
There were three types of channels used by Weber to distribute their grills - the traditional
dealers, the modern trade and the specialty dealers( Refer FIG2). In each market the
traditional dealers were supplied, serviced and supported by one distributor (Refer Table-B
for details). The modern trade were supplied and supported directly by the company. The
specialty dealers were the ones who dealt in modular kitchen, flooring tiles etc. and were a
new type of channel being developed by the company. The criteria for selection of the
channel members included the length of their association with their current brands, their
passion for a new category and whether they were among the top ten or twenty dealers in
the market. The traditional trade accounted for 80% of the sale and the modern trade for the
balance. The company policy of single-price throughout the country and thin margin was
aimed at maintaining equity and controlling the temptation on the part of dealers to undercut
each other. The counter sales persons of the traditional trade were trained twice a year before
the season and after the season. Bhoopathy - DGM, Sales, said:
" The dealers find this new category interesting. It breaks the monotony of the routine of
selling the same old kitchen appliances the same old way. We try to involve the dealer sales
persons in the promotional demonstration activities that we conduct in their outlets"
Company’s own promoters pushed the grills in the outlets of the modern trade. These
promoters, generally, were present at the outlets during the weekend to handle the larger
number of customers. Weber had plans to expand channel presence to Hyderabad, Lucknow
and Goa in 2015. The share of the sale of grills during the off-season had improved from 5%
7
in 2010 to 40% in 2014. The regional breakup of sales was in line with other consumer
durable categories in India ( Refer FIG4 for the composition).
Shiva’s Dilemma
Shiva thought the problem of the poor frequency of use of the Weber grill could be either
due to the less enthusiastic customers buying the product or due to the inconvenience in
lighting up a charcoal grill and dousing and disposing of the burnt coal and the ash. The gas
grill was more convenient to use. But the gas grill could cannibalize the charcoal grill. This
could be controlled if the gas grill was promoted as the second grill in the house. Shiva was
more concerned about the gas grill diluting Weber positioning of its grills as an authentic
barbecuing experience, generally associated with the traditional charcoal grill. The sale of
charcoal grill accessories like charcoal briquettes, chimney starter, ash catcher etc. could
also be affected. Shiva decided to discuss these issues with his team, before he began to work
on his presentation at the upcoming annual conference of the Country Heads at the
headquarters of Weber, USA, scheduled the following week.
8
TABLE-A: FINANCIAL PROFILE - Weber , India ( 2010-2014)
Parameter /
Financial Year (
2010 2011 2012 2013 2014
Jan- Dec)
Sales Value (Index)
100 105 116 139 180
Gross Margin (%)
65 67 65 70 73
SG&A (%) 25 22 22 20 20
Contribution Margin 40 45 43 50 53
9
Shillong & Shillong : 3
Ranchi Ranchi : 7
FIG.1
10
Fig : 2 Distribution Flow
Weber India
Dealer
% share of Sales
10 25
SOUTH
30
NORTH
35 WEST
EAST
Source : Company
11
VP - APAC
CEO - Weber
India (Shiva)
Source: Company
TABLE-C DIPSTICK SURVEY FINDINGS
The survey also revealed that among the present owners of barbecue grills only 15% were regular
users.
12