Nordyne Joins

By Mike Murphy, editor-in-chief The average consumer doesn’t know a lot about Nordyne even though the company has been in business for more than 80 years. However, consumers do know the brands that Nordyne began licensing in 1997 — Frigidaire, Tappan, Westinghouse, Kelvinator, Philco, Gibson, and the most recent, Maytag. Perhaps not coincidentally, 1997 is the same year that the aggressive St. Louis company started chewing away market share from some larger manufacturing competitors. Nordyne seems to have leveraged their anonymity quite well, and with sound guidance from the company’s sales and marketing leadership. Vice President of Sales and Marketing, Dennis Kloster, explains, “Once every 12 to 15 years, consumers replace their heating or cooling appliance. They don’t really identify with any of the typical HVAC brand names because they don’t have to — the purchase doesn’t happen often enough. We wanted brands that would remain top-of-mind. What better way to do that than to hitch our wagon to established, quality brand names that consumers see in their homes every day?” Kloster says the company has completed its strategy with the recent addition of it’s most prominent white goods brand name — Maytag. Nordyne worked closely with Maytag to determine the best strategy for the brand extension. The companies studied each other carefully before deciding on the partnership. David J. LaGrand, Nordyne’s president and CEO says, “Maytag executives had been approached about a brand extension into HVAC before, but weren’t ready to lend their name to just anyone. We had experience in successfully managing and positioning other brand cross-overs. It’s a great fit for both companies.” Maytag was looking for a complete package for homebuilders. The well-known manufacturer already had a sizable portion of inside-the-house appliances locked up but wanted to create a powerful proposal to the builder that included all the appliances. “We measured up to their reliability expectations,” says LaGrand. Brand Strategy
Nordyne and Maytag worked together extensively to determine the product positioning. Kloster says, “Maytag has been one of the most successful companies at covering multiple tiers within a product family.” Typically, the HVAC market has been carved into three dominant product segments: premium, deluxe, and price-driven. Nordyne will position Maytag in a new premier niche. It may be the first time, in a long time, that a manufacturer has pushed the envelope with a truly high-end introduction. According to some contractors, this is a welcome change for an industry that is sometimes seen as being ground into a low-priced, commodity spiral. Maytag expressed interest not only in going after the premier segment but in penetrating the bulk of the HVAC replacement market, as well. In August, 2002, Nordyne began producing two tiers of Maytag products. The highly differentiated premier Maytag condensing unit will be easy to spot as you’re strolling the aisles of any trade show or driving through neighborhoods. The stainless steel full metal jacket and louvered coil guard glisten under the lights. The ultra premium line will include 12, 13, and 14 SEER units, filter driers and pressure switches. In addition, the unit carries the industry’s first 10-year parts and labor, factory backed, standard warranty. Kloster says, “The ground-breaking warranty on Maytag equipment balances the interests of contractors, distributors, and consumers. In particular, consumers will appreciate the 10-year parts and service warranty. The labor rates for contactors are based on the street rates for their area or, for a nominal fee, contractors can upgrade to a flat rate reimbursement. Nordyne offers this warranty because we stand behind the quality we build into our products. We’ve structured the warranty in this way to help contractors remain profitable with satisfied customers.” The premier heating product will feature variable speed blowers, two-stage heat operation, Smart Start® ignition system and the new ten year parts and labor warranty. Both premier cooling and heating lines will benefit from a generous coop support program. Distribution Plan
Nordyne expects the recent Maytag launch to fuel its aggressive growth plans over the next five years. One reason for Nordyne’s success in launching multiple brands has been the company’s strategy of limited wholesale distribution. Jim Burnes, director of sales for the residential business unit says, “We’ve taken a slow approach to all of our brand extensions. With our earlier Westinghouse launch, we only set up six distributors because we don’t want to overrun our other brands. We’ll take a similar, carefully planned approach with the new Maytag line of equipment.” Nordyne is counting on its distribution partners to successfully implement the latest brand strategy. Kloster says, “We are totally committed to two-step distribution. You may see our competitors enter into direct relationships with big-box manufacturers, but we’re not interested.” Nordyne has more than enough capacity to keep pace with distributor demands, having recently purchased a fifth manufacturing location in Poplar Bluff, MO, nearly doubling the production square footage. The Final Word
Kloster says, “Someone might say this industry really doesn’t need another brand name. We’re absolutely convinced, that there’s an upper end of the market that’s untouched.” Nordyne will have plenty of help reaching that market. Maytag heating and air conditioning products will appear in the full-line, color brochure that’s included with every Maytag appliance sold. Consumers will be able to get more information on Maytag’s website, www.maytag.com, or the new www.MaytagHVAC.com website. Maytag also has a separate sales force that calls on builders. (Wonder if they’ll mention HVAC?) In addition, Maytag recently launched a $50 million consumer advertising campaign. Need more be said?