Sub-Zero

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TABLE OF CONTENTS I. Problems & Goals II. Company History & Marketing

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III.Situational Analysis

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IV. SWOT Analysis

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VI.Secondary Research

VII. Results VIII. Solution

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Personal Interviews

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PROBLEM & GOALS

Sub-Zero has had great success with older generations of customers such as the baby boomer generation. However, they have recently encountered difficulty maintaining a connection with the younger generations that will someday control the bulk of the purchasing power. Generation X has come to view the Sub-Zero brand as no better or worse than any other line on the market.

This information has helped Sub-Zero realize that before they can move forward with a strategy to garner the respect and admiration from Generation X they must fully understand their motivations and perceptions. One major aspect of the buying experience that needs to be understood is why these generations, who may not see the substance behind the Sub-Zero name, are perceiving the brand the way that they currently do. It is key that we recognize what is driving the purchasing decisions of Gen X and understand how they perceive the brand. We also know that older generations such as Baby Boomers have always seen the Sub-Zero brand as the undisputed champion of refrigeration, while other consumers have more recently come to view the Sub-Zero brand as just another brand. This information presents us with perhaps the most important problem to be solved: What exactly is driving the gap in perception between these two generations with regard to their appliance brand preference.

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COMPANY HISTORY & MARKETING Sub-Zero is a third generation, family owned company headquartered in Madison, Wisconsin. This year they are celebrating their 70th anniversary of manufacturing high-end refrigeration products. Over the years, Sub-Zero has come to be known as the preservation specialist for their high quality refrigerators, freezers, and wine storage units. Sub-Zero acquired the residential side of the Wolf brand fifteen years ago.

Wolf is known as the cooking specialist for their restaurant-grade cooking ranges, ovens, and other cooking products.

Sub-Zero and Wolf utilize a two-tier distribution system in which they sell their products to a distributor who in turn sells the product to the retailer. Their distributors carry exclusively Sub-Zero and Wolf products and they have showrooms in most major US markets. While consumers are able to experience many of their products in these showrooms, they are not able to buy the products and awareness of the showrooms is relatively low.

The retailers that sell Sub-Zero and Wolf are typically specialty stores that carry an array of other brands. The company does not sell their products in mass retailers such as Home Depot and Lowe’s.

However, consumers may also purchase through a home builder or interior designer.

Sub-Zero’s marketing emphasizes several key components of the brand’s image. The company is well-known for the extremely high quality of its products. Sub-Zero connects their high-quality reputation with the fact that it is a third-generation, family-owned business, focused on the “long haul” with the families who have used Sub-Zero products for decades. For example, in a press release celebrating seventy years in business, the President and CEO – grandson of the company’s founder – said the fact that it is a family business sets it apart in the appliance industry.

In a positioning move similar to other products that command a premium price, Sub-Zero emphasizes that it provides its customers with much more than simple refrigeration. Sub-Zero provides an experience focused on the kitchen and the family who cooks, eats, and lives there. Sub-Zero notes that it provides a food preservation system that keeps food fresher, avoids spoilage, provides anti-microbial air purification, and runs on less electricity than a 100-watt bulb. Sub-Zero explains its superior technology and longevity as well as its variety of models and customizations for the customers’ own aesthetic feel in their homes. Sub-Zero also likes to point to its use of completely recycled parts and the fact that its units are also recyclable.

Sub-Zero has a very informative and easy to use website that provides product descriptions, ideas for kitchen designs, detailed information about the use and care of its products, an abundance of service and assistance resources, and trade resources – including a mobile specs app – for contractors and others who install Sub-Zero products. A digital and print brochure is available to potential customers on its website. The website allows a viewer to type in a zip code to find the closest Sub-Zero dealers. The results provided include not only dealer locations, but the location of the nearest official Sub-Zero showroom.

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SITUATIONAL ANALYSIS POLITCAL The legal environment surrounding refrigerators mostly deals with the proper disposal of old refrigerators. Federal law, as controlled by the EPA, requires two things: that refrigerant be taken out of the refrigerator prior to disposal, and that universal waste, used oil, and PCB from the refrigerator be properly disposed. Further state laws may require certification of the disposal company, or require that certain materials from the refrigerator be recycled. It’s important that consumers understand the proper disposal procedure when removing a refrigerator, which is typically when a consumer is considering buying a new refrigerator. It might be useful for Sub-Zero retailers to also be familiar with companies who dispose of refrigerators as well as sell them because offering to remove the old refrigerator and install a Sub-Zero could be a strong selling point.

The Refrigerator Safety Act (1956) mandates that all refrigerators must be able to be opened from the inside. The Refrigerator Safety Act was created in response to people abandoning old refrigerators and children playing in them and being unable to get out, leading to accidental deaths.

This is a federal law that affects all refrigerator manufacturers; however, some states have further laws regarding the proper disposal of refrigerators. Certain states make it illegal to abandon a refrigerator, and consumers who do so may be subject to a fine. Once again, it is important for consumers who are looking to buy a new refrigerator that there are requirements for disposing of the old one.

There are laws for appliances that require a minimum standard of efficiency. Laws surrounding energy efficiency and energy conservation for commercial equipment set standards that all kitchen appliances must follow. It might be useful for Sub-Zero and Wolf to understand the minimum standards so they can communicate to consumers how Sub-Zero and Wolf appliances function better than average kitchen appliances.

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ECONOMICAL The United States economy seems to be slowly but steadily improving after the 2008 recession, but despite this the kitchen appliance market saw a 3.6% decrease in sales. Even with disposable income rising, consumers tend to be more interested in other categories, such as electronics, and would rather spend their increasing disposable income on a new iPad rather than a new oven (1). Sales and shipments of kitchen appliances peaked around 2005 according to Statista, and the market has been slowly increasing since. However, the kitchen appliance market hasn’t reached pre-recession levels yet. As consumers do more product research online, there is also more incidence of kitchen appliance purchase online. Especially with the option of home installation from several retailers, being able to research then immediately purchase is attractive to many consumers, and could save them money because they are able to find and compare the best deals.

After the 2008 financial crisis the demand for housing significantly declined. Consumers began purchasing real estate less, meaning that less affluent Gen Xers were buying new homes. With fewer new homes being built, and consumers less willing to spend money of their homes for fear of foreclosure, consumers haven’t been in a economic position to buy new homes or remodel. The financial crisis affected affluent Generation Xers fairly hard because many lost their jobs, thus their source of income to pay their mortgage. In the economic downturn Gen Xers were hardest hit losing 45% of wealth between 2007 and 2010. Government data released last year showed that 37% of all unemployed people are Gen X. (realtor)(2).

SOCIAL Consumers are increasingly interested in do-it-yourself (DIY) household projects. According to Mintel, most DIY projects are undertaken by consumers ages 25-44, which includes some of Generation X. (DIY Home Improvement and Maintenance - September 2015). Media like the DIY network on television and Pinterest gives consumers the information and inspiration they need to take on their own DIY projects. It’s rare that a consumer would take on the installation of their new range, oven, or refrigerator, but this new trend in DIY remodeling might make consumers more anxious to purchase new appliances.

Americans are cooking less than they have in the past, and this trend seems to be continuing.

Despite the popularity of cooking shows and The Food Network, Americans are cooking less and less each year. This is true for all incomes. Americans are cooking less because Americans’ work lives are increasingly busy, and women, who traditionally were the chefs of the household, now have full time jobs that leave them less time to cook at home. In the 1950s women spent more than 112 minutes cooking, but now women spend an average of 66 minutes cooking (3). The price of food and time it takes to cook are the biggest barriers to home cooking, and means that even though 85% of families want to cook healthy meals at home, only about 50% do so (4).

1. http://dishwashers.reviewed.com/features/2014-shaping-to-be-formative-year-for-us-appliance market 2. http://www.realtor.com/news/trends/why-gen-x-is-the-most-screwed-by-the-real-estate-market/

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According to Mintel, remodeling homes is becoming increasingly popular. The National Association of Home Builder’s Remodeling Market Index, which measures remodelers’ confidence in quarter-over-quarter improvement in the remodeling market, reached an all-time high of 60 in Quarter 4 of 2014.This is particularly beneficial for kitchen appliance market since kitchens are the focus of most home renovations. The acceleration of remodeling activity is also creating an opportunity to place importance on cumulative convenience and lifestyle oriented appliances. However, Mintel also provides information that home ownership rates have been declining primarily among younger adults since the 2004 peaks when easy credit rates permitted an all time high. The number of homeowners aged 35-39 has dropped 23% from 10 years ago, according to the report. Instead of buying, Gen X are prolonging their stay in the rental market for much longer (5). In a recent Gallup poll, 41% of nonhomeowners said they do not plan to buy a home in the foreseeable future. This signifies that most of those in Gen X are content with renting for a long-term period (6). Generation Xers, unlike their Baby Boomer parents, are not prioritizing purchasing a home.

TECHNOLOGICAL The kitchen appliance market has been increasingly innovative and brands have been highlighting new technology as a selling point. Appliance manufacturers are trying to make their home appliances “smart” to appeal to consumers. Refrigerators with access to satellite tv or a built in control panel similar to a tablet are available to consumers. Other innovations like super fast chilling compartments and in-fridge cameras are also available in the market. Appliance manufacturers are proving that they can keep in in an increasingly digital world, especially with other household innovations like “smart” thermostats and home security systems. Technological innovation in the kitchen appliance market has been growing despite economic downturn. Appliances are continually improving and keeping up with consumer needs. An article in Freshome specifically cites Sub-Zero Wolf as an innovative brand of kitchen appliances (7). The market for kitchen appliances is expected to grow significantly, by up to 22%, in the next seven years (8).

Not only have the actual appliances become more technologically innovative, but sales methods are moving to digital as well. Shopping online allows consumers to compare prices, shipping costs, installation costs, and options for removal of their old fridge. While brick and mortar stores have advantages, such as it’s easier to purchase something once a consumer has seen it, and installation and removal services, retailers will need to be able to cater to consumers shopping online.

Even if consumers do not purchase online they may look at websites for purchasing kitchen appliances to do research that will inform them about what they choose to buy in a brick and mortar retailer.

3. https://www.washingtonpost.com/news/wonk/wp/2015/03/05/the-slow-death-of-the-home-cooked-meal/ 4. http://bittman.blogs.nytimes.com/2012/02/01/wait-so-people-are-cooking/?_r=0 5. http://money.cnn.com/2015/06/25/real_estate/generation-x-homeownership/ 6. https://www.mainstreet.com/article/generation-x-and-millennials-are-choosing-to-remain-renters

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SWOT STRENGTHS

WEAKNESSES

+ Solid reputation for Quality and service

+ Family ownership may mean less capital available for expansion/R&D than a publicly traded company would have at their disposal + Relatively high product cost restricts scope of market share + Built-in feature of majority of product lines limits potential market + Family-ownership could pose vulnerability if family members do not agree about how to operate the business

+ Family ownership allows for more control over business decisions than a publicly traded company that has to answer to shareholders +Superior technology and unparalleled presentation features

OPPORTUNITIES

THREATS

+ Raise operating capital by taking the company public + Develop a lower cost product that is free standing, i.e., not built-in, to avoid involvement of traditional middlemen, e.g., home builders and architects, and to break into more traditional home appliance market

+ Competitive brands are constantly updating their lines to integrate trendy features such as tablets, televisions, and coffee machines into their refrigerators +Economic and housing downturns have a profound effect on the sales of luxury product lines such as Sub-Zero

7. http://freshome.com/2013/10/05/10-kitchen-innovations-for-improving-your-new-generation-home/ 8. http://www.transparencymarketresearch.com/pressrelease/smart-kitchen-appliances-market.htm

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PRIMARY RESEARCH PRIVATE INTERVIEWS SUMMARY From the 6 personal interviews conducted, the majority of consumers were not familiar with the brand Sub-Zero. When asked to name brand names they were most familiar with, GE, Whirlpool and Frigidaire were the most popular. When asked which factors they deemed most important when seeking a kitchen appliance, quality was notably the most important characteristic followed by price. Participants stated that they did feel style was important but ultimately considered it more of a luxury than a necessity.

Interviewees stated that they only purchased kitchen appliances when their current appliance began malfunctioning. When asked which features they considered ideal for their refrigerator, they stressed that capacity was important along with a water and ice dispenser. Stainless steel was also an ideal feature.

SURVEY SUMMARY For a quantitative element to our research, we conducted a digital survey that could be completed using Qualtrics software. Through this software, we were able to acquire 155 completed surveys. All participants were between the ages of 31 to 45 with an annual household income of over $100,000. A majority of the participants were married. The survey respondents were split with females accounting for 65% and males accounting for the remaining 35%. Our findings were capable of establishing a solid foundation of Generation X’s perceptions of Sub-Zero, identifying major competitors, and the factors that ultimately influence their purchasing behavior.

As a broad interest question regarding appliance preferences we asked survey participants to first list which brands they would most consider purchasing in the next 3 to 4 years. This question helps gauge which brands dominate top-of-mind awareness. Focusing specifically on refrigeration, the results are as follows:

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Based on the results GE, Samsung, and LG are the three brands that dominate top-of-mind awareness in the kitchen appliance industry. Sub-Zero ranked 7th place following brands like Kenmore, Frigidaire, and Whirlpool.

When asked to rate (Very Likely to Very Unlikely on a 7 point scale) how likely they were to purchase an appliance from a provided list of 7 brands, these were the respective means:

Most Likely : Samsung (m=5.50) GE Monogram (m=5.30) KitchenAid architect (m=5.03) Sub-Zero (m=4.87) Viking (m=4.67) Wolf (m=4.51) Least Likely: Thermador (m=4.36)

These results are not spectacular for the Sub-Zero brand and ultimately indicate which brands are their primary competitors. This could be because other brands like Samsung, GE, and Kitchenaid are advertising more than Sub-Zero and Wolf. This could also be because Sub-Zero and Wolf appliances are only sold through specialty retailers, and unavailable at locations for convenient for most consumers. Consumers may not consider Sub-Zero or Wolf because they may not live near a showroom or retailer, and would prefer the convenience of a brick and mortar retailer nearby that will install their new appliance.

Next, we explored which factors consumers considered most important when purchasing kitchen appliances and found:

Most Important: Performance (m=4.67) Reliablilty (m=4.36) Capacity (m=4.24) Appearance/Style (m=4.24) Price (m=4.11) Energy Economy (m=4.00) Customer Service (m=3.87) Least Important : Brand name/ Reputation (m=3.86)

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These findings are a bit remarkable considering the fact that Sub-Zero currently relies heavily on its high status to appeal to its affluent market. The notion that brand name is the least important factor echoes our secondary research , which states that Generation X opposes the status quo. Instead consumers regard performance and reliability as the most important characteristic for an appliance, an opportunity for the company to capitalize on.Concerning their purchasing behavior, we asked which sources of information they use to help make their final purchasing decision. Our findings were as follows:

56% Consumer Reports 55% Review Sites 54% Friends & Family 45% Retail Visit 21% TV 20% Manufacturer Show Rooms 17% Magazines 5% Other internet sources 3% Tradesperson These results indicated that Generation X consumers turn to the web to seek information on other consumers’ experiences with various products and services. This massive trend of opinion seeking is popular among this demographic with high-household incomes. With unlimited access to large quantities of information, consumers can now research any company or product with just a click of a button on their mobile device. This “lifeline” allows Generation X to employ a process of elimination by viewing average ratings, and seeking expert’s opinions When asked about their perceptions of Sub-Zero our respondents did not have the perception that people who purchased this brand were snobby or cared about status. When asked if the demographic identified with the brand, the neither strongly agreed nor disagreed. Our results indicate that the brand fails to communicate its quality and reliability, the two most important factors that influence their purchasing behavior. Below are the results for this particular question: People who buy Sub-Zero appliances are very snobby (m=3.28) Sub-Zero is a brand that is for my parents (m= 3.17) Sub-Zero is a brand for people who only care about status (m=3.07) Sub-Zero is a brand for people who care about family (m=2.55) Sub-Zero is a brand for people like me (m=2.37) Sub-Zero appliances are very energy efficient (m=2.33) Sub-Zero appliances are very reliable (m=2.12) Sub-Zero appliances are very stylish (m=2.07) Sub-Zero appliances have high quality (m= 1.94) PAGE 12

SECONDARY RESEARCH GENERATION X Generation X consists of people born between the years 1961 to 1981, making members of Generation X ages 34-54. There are approximately 84 million members of Generation X in the United States currently. This Generation culminated in an era of two-income families, rising divorce rates and a faltering economy. Women were joining the workforce in large numbers, which created an era where children cared for themselves. This resulted in Generation Xers being independent, resourceful and selfsufficient. It’s common for Generation Xers to have a family, which means that time is precious to Generation X parents. Generation X values freedom and responsibility, and adapts well to new technology. They grew up in tough economic times in the 1980s and witnessed their parents lose hardearned positions. Given the uncertainty of this era, it’s easy to comprehend the flexible and occasionally skeptical nature of this cohort. Over half of Generation X feels that advertising is manipulative, and affluent members of Generation X are especially likely to be cynical about corporations. Members of Gen X are postponing independent living, marriage, and children. The struggles of Gen X is attributed to student debt, job availability, tight credit standards, and careers that are likely require moves (9).

Nonetheless, with the economy on an incline and unemployment rates on a decline, the future is looking brighter for typical household formations.

The Richards Group is specifically interested in targeting affluent members of Generation X with a median household income of over $100,000. Some of these consumers are part of the “Winner’s Circle” according to PRIZM. Members of the Winner’s Circle are wealthy, middle aged suburbanite homeowners that have a family, and some live in new-money subdivisions where their home is being built or has recently been built (10). Since the home ownership rates are declining especially for those under the age of 45, other of the Generation X consumers are opting for rentals, smaller houses, or a delay in leaving their parent’s home. Fewer Generation X consumers are opting to purchase major home appliances. Homeownership among ages 35-54 has dropped the most of any other age group since 1993, according to Harvard’s State of Nation 2015 Housing Report.

Affluent members of Generation X consider being a unique individual more important than their Generation X counterparts with a lower income by 7 percent. Affluent Generation Xers regard luxury items as items that set them apart and are willing to pay a premium for what they perceive to be a differentiator between themselves and their friends (11). Affluent Generation Xers own smartphones and tablets and are comfortable using this technology. The internet has changed the way Generation X searches for, shares, and receives information.

9. http://academic.mintel.com/display/574884 10. https://www.claritas.com/MyBestSegments/Default.jsp?ID=30&menuOption=segmentexplorer&pageName=Segment%2BExplorer

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MEDIA HABITS Generation X was the first generation to grow up with computers and are comfortable using PDAs, cellphones, e-mail, laptops, and other technology used in the workplace. Over 80 percent of Generation Xers are online on social media websites such as Facebook, Myspace, and Twitter.

Facebook is a heavily trafficked site for them with 65.6 percent using Facebook in the past 30 days.

Generation Xers enjoy watching video on demand, and are 26 percent more likely to have streamed a movie in the past 30 days using the internet, and are 25 percent more likely to have streamed television in the past 30 days using the internet. Generation Xers are 22 percent more likely to photos than their Millennial or Baby Boomer counterparts. They watch television programs such as American Idol, House of Cards, and True Detective. Generation X parents are also major consumers of kids media because of the structure of their household and are acquainted with movies like The Lego Movie and Frozen (12).

SHOPPING HABITS Generation Xers are more likely to use their smartphone when making purchase decisions than Baby Boomers. Generation X does 52 percent of their shopping online, which allows them to thoroughly research a product before making a purchase decision. Generation Xers are equally likely or more likely to use a tablet to make a purchase than Millennials or Baby Boomers for various purchase categories (auto, consumer electronics, consumer packaged goods, and travel)(13). They like to be able to do their product research quickly and easily. Generation Xers tend to be well informed and they have expectations that sales staff at retail stores are as knowledgeable or knowledgeable than them. It’s important to note that all consumers are more likely to purchase a refrigerator, freezer, oven, and range together as a set when moving or remodeling.

11. http://academic.mintel.com/display/574884/ 12. http://www.mediapost.com/publications/article/228996/generational-social-media-behaviors.html 13. http://www.adweek.com/news/technology/infographic-here-are-devices-your-target-audience-using-1640

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COMPETITION The home appliance industry is a growing market valued at 5.4 million dollars. According to the Freedonia research group, world demand for major household appliances is expcted to rise "3.4 percent annually throughout the course of 2015 to 395 million units". A sharp rise in housing starts and consumer confidence have caused consumers to seek new and improved models of household appliances (14) (15). As technology continues to flourish within this industry, smart appliances are becoming increasingly popular. While high technology brands such as Samsung and LG Electronics try to evolve their products to feature the newest technologies, many manufacturers continue to produce basic lowcost appliances for first-time buyers. According to Statista’s most recent market share statistics, Whirlpool Corporation is the largest appliance producer in the United States with an overall market share of 30.4 percent in the second quarter of 2013. Other brands that dominate the home appliance industry include General Electric with 15.9 percent market share, LG (14%), Samsung (10.5%), and Electrolux (8.4%).

While Sub-Zero competes with numerous appliance companies of varying price and quality, it’s main competitor is Viking because this brand appeal to the same affluent demographic. Viking has built a strong reputation for it’s luxurious and high quality kitchen appliances. The company’s product line includes upscale dishwashers, disposals, refrigerators, freezers, ovens, blenders, mixers, outdoor grills, cookware, and stoves. In 2014 the company became invested in improving its technology and debuted over 50 new products at the 2014 Kitchen and Bath industry Show.

KitchenAid has also proven to also be a threat to the Sub-Zero brand. The brand was first introduced in 1919 as the first stand mixer, today, the company has numerous appliances ranging from refrigerators to kitchenware. Their name is simple and easily conveys what the product does, aid you in the kitchen. After their merger with Whirlpool, that the company began to develop plans for a full line of major home appliances, along with an aggressive marketing strategy towards “affluent and quality conscious” consumers. Their strategy emphasized the quality of their products and encouraged buying the full line rather than “cherry picking”. KitchenAid received rapid growth, with just a couple years after their acquisition their products were being sold in roughly 30 percent of all outlets in the country.

KitchenAid is now showing consumers that “there’s so much more to make”. They are challenging consumers to expand their cooking skills. They have significantly increased their marketing spending and that has shown to be great for their sales. They have had print media partnerships with Bon Appetit and Food & Wine with content built around co-sponsored culinary events such as Feast Portland. They’ve also increased their social media efforts by creating a blog, KitchenAid Kitchenthusiast, as well as recipes tabs for current KitchenAid owners. KitchenAid has hosted a “Cook for the Cure” in partnership with Susan G. Komen. This event has raised over $9 million for Breast Cancer research. KitchenAid’s overall marketing approach has made them a leader in their category.

14. Housing starts is an economic indicator that reflects the number of privately owned new houses (technically housing units) on which construction has been started in a given period. This data is divided into three types: single-family houses, townhouses or small condos, and apartment buildings with five or more units.

PAGE 15. http://www.thebrandonagency.com/blog/article/talkin-bout-my-generationmedia-usage-by-generation-x/

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While the recent acquisition of General Electric’s appliance division by Electrolux is still pending, following a suit by the U.S. Justice Department, it is clear that this deal will have a major impact on the competitive market for kitchen appliances in the U.S. if it were to go through.

The Justice department claims that the consolidation of the two companies would result in a duopoly and cause prices for home builders, property managers, and eventually retail customers to rise. This is significant because if prices for appliances that are frequently used by home builders and property managers rise, they could potentially start to consider other more expensive appliances such as Sub-Zero in order to maximize the quality that they get for the higher price that they are invariably going to pay. This could be a great opportunity for Sub-Zero to capitalize on a market that is becoming geared towards premium prices.

FURTHER CONSIDERATIONS The overarching question users ask and answer on the Internet is if Sub-Zero refrigerators are “worth” the price. Consumer Report, a trusted website for lab reviews on over 7,000 products, explains to their readers that Sub-Zero products are not worth the high price for a luxury kitchen renovation.

Consumer Report makes note that there are other refrigerators that have the same functionality as Sub-Zero. The other brands included and suggested were Thermador and Jenn-Air. Another aspect that ConsumerReport discusses is that the Sub-Zero refrigerator may be considered louder and noisier compared to other refrigerators on the market. Moreover, ConsumerReport mentions the loss of an accessible water dispenser when utilizing integrated panels (16).

However, they do note that the brand recognition of Sub-Zero is high and has a luxurious connotation that comes with the name. Those who see the name brand in the kitchen will know that the owners have spent top dollar on the appliances. This is beneficial when there are future plans to sell the house down the line. ConsumerReport caps off their review by explaining that there is no right or wrong answer if Sub-Zero is worth the price. It is important to know what reasons you would be choosing Sub-Zero over others.

Boston Appliance, a blog that hails to offer over 70 years of honesty, integrity, and reliability claims that Sub-Zero is the best brand on the market for a luxury kitchen. They focus on Sub-Zero’s luxury design, their All-American company history (American made and family owned), and superior craftsmanship. The blog also includes impressive technicalities and details that differentiate Sub-Zero from other cooling refrigerators. Some of those details include: a dual compressor system, NASA designed air purification system, extra- durable lexan plastic compartments, and an industry- leading warranty. These details are important for the potential consumers because it explains the efficiency, filtration, and quality that dominates the market. One example that the post includes is NASA designed air purification system that reduces bacteria, odors, viruses, and Ethylene gas. This filter is designed for space shuttles so Boston Appliances makes a point that the filters designed to keep astronauts alive are used in Sub-Zero refrigerators.

16. http://www.consumerreports.org/cro/news/2012/08/are-sub-zero-refrigerators-worth-the-price/index.html 17. http://blog.bostonappliance.net/best-built-in-refrigerator-brand/ 18. http://www.consumeraffairs.com/homeowners/subzero.html

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Consumer Affairs is another website that contains threads of reviews from Sub-Zero owners all around the US. The most recent personal reviews and comments from the 2015 calendar were filled with unsatisfied customers that put 1-2 out of 5 stars for satisfaction ratings. Most of these customers were dissatisfied with the amount of repairs they needed in maintaining the Sub-Zero refrigerator (17). The repairs were described excessive and costly—ranging from $700- $1,500. There were few positive reviews. The positive comments came from those who mentioned that repairs were needed but how great Sub-Zero was in providing customer service (18).

It is quite clear that Sub-Zero is associated with luxurious living. In the article, “Real Estate: Defining Luxury,” the author explains, “Although no two condos in the building are the same, each comes with hardwood floors, Wolf and Sub-Zero appliances, and Italian-granite countertops.” This is important because Sub-Zero and Wolf appliances are defining factors of a luxury apartment. Focusing on the luxury home/apartment experience is important because sales for the highest-priced luxury homes do not fluctuate and remain steady. Anthony Lanier is a developer whose firm, EastBanc, built the Ritz-Carlton in Georgetown, states that the true luxury real estate holds their own in the long run. Tapping into the luxury development market and presenting them with the importance of quality and reliable brand-name appliances should influence their decision to make an investment in Sub-Zero appliances.

RESULTS Overall, the brand is having a hard time communicating the quality of their products to this specific target audience compared to their competitors. There is a clear communication gap for affluent Generation X consumers because they don’t understand the superior quality and reliability that Sub-Zero and Wolf appliances have to offer. Sub-Zero needs to make their brand personality more relatable to Generation X consumers. Sub-Zero and Wolf also need to highlight the impressive product benefits that their appliances offer. The consumers surveyed and interviewed didn’t seem to care as much about product style or appearance as they do about reliability and quality. Sub-Zero and Wolf should highlight their superior quality, rather than appearance, in their next campaign in order to appeal to affluent Generation Xers.

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SOLUTION Sub-Zero should focus on promoting the superior technological capabilities of their products rather than focusing on the brand’s prestigious reputation. Promoting the why not the what will give these performance conscious consumers the justification they need to purchase Sub-Zero. Due to the time in which this generation was raised, they are more skeptical. Sub-Zero should emphasize their product’s reliability and performance to this generation to appeal to them.

Generation Xers tend to be very skeptical of the intentions of the big corporations and they are distrustful of traditional advertising. Sub-Zero should try alternatives to traditional advertising and focus on targeting affluent Generation X influencers to advertise Sub-Zero and Wolf appliances. Generation Xers turn to the internet, consumer reviews, and Consumer Reports for product research, so by creating positive word of mouth buzz about the performance of Sub-Zero and Wolf appliances they are more likely to reach affluent Generation Xers.

THOUGHTS FOR THE FUTURE Generation X is not buying homes at the same rate as generations before them. Due to this decline in homeownership, we recommend that Sub-Zero target luxury real estate developers to encourage them to install Sub-Zero refrigerators in their apartment buildings. Encourage them that Sub-Zero is a good business decision because of their reliability and ability to outlast other appliances, so they will not need to replace appliances as frequently. In addition, Sub-Zero is essential to achieving the luxury feel their clientele demands.

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APPENDIX S​ingle consumer aged 35 years old 1. What features does your ideal refrigerator have? a. I am more concerned with the aesthetics of my kitchen appliances and my refrigerator is no exception.

2. What made you want to purchase your current Refrigerator? a. I was dissatisfied with the brand that came with my house so I bought a GE, not because of intense research about the product but simply because I already use multiple GE products/appliances and have liked the results that these have given me thus far

3. How often do you purchase new kitchen appliances? a. Our family does a lot of moving from city to city so we typically replace all of the appliances that come with the home as soon as we move in unless the house already has after-market appliances that we know that we can depend on.

4. How important is the design and style of your kitchen? a. The design and style plays an integral role in our lives since we cook so frequently and often find ourselves in the kitchen together as a family for much of the day.

5. Have you ever heard of the brand Sub-Zero? a. Yes 6. If you were to choose between Viking, Sub-Zero, and a General Electric refrigerator, which would you choose and why? a. I would choose a General Electric because they are the most reasonable of the 3 price wise but are also a high quality product. You lose out on the sexy name brand with GE that you would find with Sub-Zero or Viking but you retain the quality, which is the most important for me personally. ​ Single consumer aged 30 years old

1. How often do you purchase new kitchen appliances? a. For small kitchen appliances I will purchase something every 2 years. It depends if I see something useful that I don’t already have.

2. How much research do you typically conduct prior to purchasing an appliance? a. It depends if I know the brand already to gauge the quality. If it is something online it will probably take me a week so I can get the right product.

3. Where do you typically go to purchase kitchen appliances? a. Department stores or even a place like Bed, Bath, and Beyond.

What sources do you use to conduct research on household appliances?

4. a. I surf online mostly. If it’s an in store purchase maybe I will even compare prices and read the descriptions.

5. What sources do you believe are the most trustworthy for conducting research on kitchen appliances? a. I think other customer reviews are the most trustworthy. I like to know how most people feel about a product or a brand. I will only buy a product if it has positive reviews.

How important are the following factors to you when making your purchasing decisions?

6.

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a. Well quality is obviously very important. Price is important too. If there is a product with a price ranging at an average of $100 i won’t pay $900. I would pay $200 though if it said to be a good product and it matches my style. I think style is important. If it’s a kitchen appliance I would prefer it go with my kitchen. Brand is important some what- i can usually gauge an appliance based on what brand it is and any other products I have used of that brand.

How important to you is the design and style of your kitchen appliances?

7. a. It’s very important to me. I want everything to look nice and match my style.

8. Which of the following brands of kitchen appliances have you heard of? a. I’ve heard of Frigidaire, GE, Samsung, and Whirlpool. I know those because I’ve seen them all around and I’ve also seen commercials on tv for them.

9. Have you ever heard of the brand Sub-Zero? a. No I haven’t I don’t think.

10. What features does your ideal refrigerator have? (open ended) a. Well i would want it to be easy to clean and have large compartments to fit large juices and beverages. I would like it to be bigger.

11. What does your ideal refrigerator look like?(open ended) a. I don’t have an ideal refrigerator but I would like it to match appropriately in my kitchen.

12. If there was an less expensive model of Sub-Zero would you buy it? a. Sure. ​Married couple aged 45 years old

1. How often do you purchase new kitchen appliances? a. Not often – whenever something breaks.

2. How much research do you typically conduct prior to purchasing an appliance? a. I generally check Consumer Reports and some online sources about price and, reliability.

3. Where do you typically go to purchase kitchen appliances? a. I’ve used Best Buy and Sears, but I’m open to other places that have good deals on good appliances.

What sources do you use to conduct research on household appliances?

4.

Consumer Reports magazine and online sources, including the manufacturer’s a. website and sites that sell the brands I’m looking at to read consumer reviews.

5. What sources do you believe are the most trustworthy for conducting research on kitchen appliances? a. Consumer Reports. The online reviews may be fine, but I’m never sure if some of them are fake.

6. How important are the following factors to you when making your purchasing decisions? a. Quality and Price are the most important. If I’ve had good experience with a particular brand, I’ll start with that brand and go from there.

7. How important to you is the design and style of your kitchen appliances? a. Not very important. I certainly want something that looks nice and fits into the kitchen décor, but otherwise I’m flexible.

8. ​Which of the following brands of kitchen appliances have you heard of: Frigidaire, Whirlpool, General Electric, Amana, Kenmore?

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a. Heard of all of them.

9. Have you ever heard of the brand Sub-Zero? a. Yes 10. W​hat features does your ideal refrigerator have? a. Large enough to handle the food we usually have on hand, good size freezer capacity, ice maker, door access to ice and water, and easy access to what’s inside.

11. W​hat does your ideal refrigerator look like? a. I like the side by side design. Stainless steel is a nice look. So is black. I don’t like the freezer on the bottom.

12. If there was a less expensive model of Sub-Zero would you buy it? a. Probably, if it was rated as reliable as the more expensive model.

Affluent, married homeowners aged 44 years old

1. How often do you purchase new kitchen appliances? a. Tom - Not very often. b. Denise - 10-12 years apart on average. We don’t purchase them until they break.

2. How much research do you typically conduct prior to purchasing an appliance? a. Denise - Not much. Less than an hour. b. Tom - We didn’t do any.

3. Where do you typically go to purchase kitchen appliances? a. Denise - I think the last things we’ve gotten have been from Lowe’s.

Why Lowe’s?

4. a. Denise - They have good prices, that have fast and cheap delivery. And it’s close to our house.

5. What sources do you use to conduct research on household appliances? a. Tom - None, we used to use Consumer Reports. For some products we use rating on websites. b. Denise - We’ll look at the Lowe’s website and look at the number of stars and read those reviews.

What sources do you believe are the most trustworthy for conducting research on 6. kitchen appliances? a. Tom - I would say Consumer Reports because they don’t take any advertising. To some degree product ratings on websites.

7. How important are the following factors to you when making your purchasing decisions? Price, Brand, Quality, Style. a. Tom - Quality is most important, then brand, then style, then price. b. Denise - Style would be last actually for me.

How important to you is the design and style of your kitchen appliances?

8. a. Denise – Kitchen is medium. I wouldn’t want something really ugly in there, but I wouldn’t buy something on style alone. b. Tom – I mean, you want it to look good. c. Denise – It’s somewhat important, but not hugely.

9. Which of the following brands of kitchen appliances have you heard of? Check all that apply: Frigidaire, Whirlpool, General Electric, Amana, Kenmore a. Tom - Frigidaire – yes, Whirlpool – yes, General Electric – yes, Amana – yes, Kenmore yes 10. Have you ever heard of the brand Sub-Zero?

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a. Tom - Yes 11. What features does your ideal refrigerator have? a. Denise - Ice maker. I like having the water and the ice in the door. A lot of shelves or different compartments for storage, like how we can put milk in the door of ours.

Different types of storage. b. Tom – A good water filter. Probably energy efficient.

12. What does your ideal refrigerator look like? a. Denise – side by side, the only thing I don’t like is ours isn’t wide enough. If I were to buy a new one I would buy one with a freezer on the bottom that pulls out, with just a refrigerator on top. I think if we bought new stuff we’d go with stainless steel. b. Tom – Stainless steel.

13. If there was a less expensive model of Sub-Zero would you buy it? a. Tom – yes b. Denise - yes ​Consumer aged 45 years old and married

1. What features does your ideal refrigerator have? a. It would be stainless steel, It would talk to me and it needs to have an icemaker and a water dispenser. I also think it should be energy efficient. It’s got to have a lot of compartments with a big freezer.

2. What made you want to purchase your current Refrigerator? a. I needed a refrigerator so my food wouldn’t spoil. Duh. 3. How often do you purchase new kitchen appliances? a. I purchase something new every 6 or 7 years.

4. How important is the design and style of your kitchen? a. It depends, If you have money you want to buy something nice and matches. If you don’t you just buy a regular refrigerator. Right now its not that important because I don’t have the funds for anything fancy, but if I did I’d be super picky.

5. Have you ever heard of the brand Sub-Zero? a. No I haven’t.

6. If you were to choose between Viking, Sub-Zero, and a General Electric refrigerator, which would you choose and why? ? a. I usually go with the brand you know so right now I would go with GE. If I knew who 7.

Sub-Zero was then I would buy one.

How much research do you typically conduct prior to purchasing an appliance? a. I would just Google the brand and I spend a couple of hours. I don’t have an exact amount per-sey.

8. Where do you typically go to purchase kitchen appliances? a. I would say Home Depot, Lowes, Sears. I go there because it’s a more common place, people used to go to furniture stores but not anymore.

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9. What sources do you use to conduct research on household appliances? (Check all that apply) a. Google and Consumer Reports. I also check out personal reviews online.

10. How important are the following factors to you when making your purchasing decisions?

(Likert Scale) Price, Brand, Quality, Style. a. I think the quality and the efficiency are important, then price is also another factor that follows quality, brand and style follow.

Consumer aged 45 years old How often do you purchase new kitchen appliances?

1. a. It depends if I see something useful that I don’t already have or when I feel that I need to replace current items 2. How much research do you typically conduct prior to purchasing an appliance? a. I typically buy the brands that I’m familiar with. I shop at the same place for them too.

3. Where do you typically go to purchase kitchen appliance? a. I go Target and Sears for smaller items

4. What sources do you use to conduct research on household appliances?

I go into the store a couple times before I actually make the purchase

5. What a. sources do you believe are the most trustworthy for conducting research on kitchen appliances? ? a. I think talking to my friends about their appliances always seems to help

6. How important are the following factors to you when making your purchasing decisions? a. Quality is very important. I don’t want to pay a hefty price for something that I will have to replace too soon. I look at style as well, I just remodeled my kitchen, so that played a major role in influencing what 7.

I ended up purchasing

8. How important to you is the design and style of your kitchen appliances? a. Important but not as important as the quality and price Which of the following kitchen appliances have you heard of ? a. Check all that apply: i. Frigidaire ii. Whirlpool iii. Kenmore Have you ever heard of the brand, Sub-Zero?

9. a. Like the temperature?

What features does your ideal refrigerator have?

10. a. It needs to be easy to clean, double doors with an ice maker, stainless steel 11. If there was a less expensive model of Sub-Zero, would you buy it? a. It really just depends

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