Are Your Fans a Competitive Advantage?
Matthew is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
One of the big frustrations as a homeowner comes when a household appliance quits working. They seem to break at the most inopportune time, like the day you come home with a vacation's load of dirty laundry. Unfortunately, there are decisions galore and each with a hefty price tag attached. Just like with investing each one comes with its own risk factors and set of cost benefit analyses.
Given the fact that my machine has been around for a decade or more, I don’t want to try and fix it myself, nor do I want to try and schedule around a repairman’s schedule. Before I purchase a new machine I thought it would be a wise idea to do a little research. Over the years appliances have become a commoditized item -- companies can differentiate themselves by offering a quality product at a good value. By having a quality brand that is embraced by consumers, a company can develop a competitive advantage. Of the publicly traded companies involved in manufacturing appliances, whose brand do consumers trust?
While most of my post-vacation laundry is now clean, it is still hanging all over the basement, so I’ll be focusing on which appliance maker has the highest rated dryers. Of the top eight rated dryers, half of them are Whirlpool (NYSE: WHR) owned brands. In a Consumer Search review, Whirlpool had the best budget electric dryer and best budget gas dryer. Because I need to buy a gas dryer, I was of course drawn to the best budget gas dryer, which had the following review on Home Depot’s website, “The Maytag Centennial MGDC300XW receives a high overall rating of 4.7 stars out of a possible 5 from roughly 40 users at HomeDepot.com. Owners say it dries clothes quickly and well, and the moisture sensor is accurate. Although a couple of users find it noisy, the vast majority agree that they would recommend this dryer to a friend.” That last line is a key competitive differentiator, it’s what Facebook is trying to monetize.
Of their publicly traded competitors, iconic General Electric (NYSE: GE) still rates as one of the best appliance makers. While, the business generates a small portion of GE’s revenue and profits, it still resonates with the consumer. There was a point a couple of years ago where they explored spinning off this business, but those plans have been shelved. For GE, which Consumer Reports hails as an industry leader in laundry centers, the business is one of their key touches with everyday Americans. It is a touch that they excel at -- a search on Home Depot’s website has GE’s dryers in my price range taking the top five spots based on average customer review.
The worst rated dryers were from Sears’ (NASDAQ: SHLD) controlled Kenmore brand. In every review that I read they were rated as ok machines at best. Of the top eight dryers reviewed, theirs ranked in eighth place with the review starting off by saying, “a less impressive list of features and somewhat weak customer services…” Not exactly a review that would make a reader continue reading.
While the reviewers had a specific set of criteria, I’m more interested in what the average consumer thought. Where better to turn than Facebook and see what brand consumers liked. Given what reviewers were saying I was quite surprised to see the stats. Kenmore came out on top by a landslide with 518,600 likes, GE followed with 200,319 likes for GE appliances and Whirlpool’s three brands had the following followers, the Whirlpool brand had 38,891 while their owned brands Maytag had 44,804 likes and Amana had 14,405 likes.
In a future article I’ll take a deeper look at whether the social numbers are driving an increase in their financial numbers. In the meantime, I’d like to hear your thoughts on which appliance maker you’d recommend and why. Finally, do social media sites play any role in buying a bigger ticket item or do you turn to professional reviewers. Sound off below.
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