2000 M-63 North MD-4302
Wholly owned subsidiary of Whirlpool Corporation
Incorporated: 1924 as KitchenAid Manufacturing Company
Sales: &Dollar;600 million
SICs: 3634 Electric Housewares & Fans; 3639 Household Appliances Nec
KitchenAid manufactures and markets a full line of premium-price home appliances, including microwave and conventional ovens, cooktops, refrigerators, dishwashers, in-sink garbage disposal units, and automatic clothes washers and dryers. The company also continues to manufacture the product on which its name was built, the popular KitchenAid electric stand mixer. Acquired in 1986 by the Whirlpool Corporation, the largest appliance maker in the world, KitchenAid has increased its market share through the expansion of its product line.
The name KitchenAid was first introduced as a brand name for an electric stand mixer developed by the Hobart Manufacturing Company in 1919. In the early 1900s Hobart had begun producing the first electrically driven machines for grinding food items, including coffee beans, peanuts, and hamburger. In 1915 the company's subsidiary, Troy Metal Products, introduced the first model of an electric mixer. Designed to mix large quantities quickly, the appliance featured "planetary action," in which an individually rotating beater traveled in one direction around the inside of a mixing bowl. Allegedly, when Hobart executives brought the first mixers home for testing, one executive's wife remarked, "I don't care what you call it, but I know it's the best kitchen aid I ever had." KitchenAid was subsequently adopted as the mixer's trademark.
The KitchenAid mixer became wildly popular during the 1920s and 1930s. Like most housewares at the time, the mixers were sold either door to door or through a KitchenAid party at which a salesperson demonstrated the appliance's functions by using it to prepare a meal for the guests, who were then encouraged to order a KitchenAid mixer. During this time several attachments were developed for use in mixing a variety of foods, and the KitchenAid name was also given to an electric coffee mill introduced by Hobart. In 1924 Hobart's Troy Metals subsidiary was renamed the KitchenAid Manufacturing Company, and its headquarters were set up in Dayton, Ohio.
In 1926 Hobart acquired another appliance manufacturer that would figure prominently in KitchenAid's future. The Crescent Washing Machine Company was founded by Josephine Cochran, who had build a dishwashing machine--initially for her own use in the home--that was named the top invention at the 1893 World's Fair. Quickly realizing the marketing potential for such machines in restaurants and other institutions, she founded the Crescent Company in 1880, which built both hand and power operated dishwashers. More than forty years later, Hobart, already recognized as a leader in the commercial dishwasher market, purchased the highly successful Crescent company and began to explore further the feasibility of producing a dishwashing machine for use in the home. Research and development were curtailed during World War II, but finally, in 1949, Hobart introduced a new home dishwasher, the KD-10, featuring a patented washing mechanism and the KitchenAid brand name. The KitchenAid home dishwasher soon established a reputation for reliability.
KitchenAid gradually came to be known for other products as well. In 1966 Hobart acquired the Plumbing Equipment Division of the National Rubber Machinery Corporation. Benefiting from the expertise of this division, the company developed a KitchenAid food waste disposer, which it began to market in 1968. An instant hot water dispenser was brought out in 1971, and the following year the KitchenAid trash compactor was introduced.
During the 1980s the company underwent several changes. In an effort to broaden its product line, it acquired a major manufacturer of built-in cooking equipment, the Chambers Corporation of Oxford, Mississippi. KitchenAid subsequently introduced a line of ovens and stovetops. By 1985 the company was one of the most successful manufacturers of home appliances, while Hobart had become one of the foremost producers of appliances for use in commercial kitchens.
That year the company was approached by the Whirlpool Corporation , a leading manufacturer of home appliances interested in acquiring KitchenAid, and a deal was soon negotiated whereby Whirlpool would pay &Dollar;150 million for KitchenAid while Emerson Electric Company would purchase KitchenAid's dishwasher and trash compactor operations. However, an antitrust suit filed by appliance manufacturers White Consolidated Industries and Magic Chef delayed the acquisitions for a year. The two companies alleged that Whirlpool's arrangement with Emerson would give them an unfair amount of power in the market, allowing them to take away a substantial amount of business from White and Magic Chef. After an investigation by the Federal Trade Commission, the suit proved unsuccessful, and in February 1986 KitchenAid was acquired by the Whirlpool Corporation.
Whirlpool had several immediate plans for its new acquisition. In August of that year, KitchenAid's Ohio staff was relocated to St. Joseph, Michigan, to be nearer Whirlpool's Benton Harbor headquarters. St. Joseph native and Whirlpool chairman, president, and chief executive officer Jack D. Sparks had arranged for Whirlpool to purchase a historic brick school building to serve as the KitchenAid division's new administrative, marketing, and sales headquarters. Whirlpool reportedly spend over &Dollar;3 million to purchase and renovate the building through an "adaptive reuse" renovation plan that aimed to preserve the structural integrity of the building while modernizing it for office use. Beginning in October, the Jack D. Sparks Administrative Center was opened to the public for tours, amid much celebration and local press coverage.
Also during this time, the company began developing plans to market a full line of major home appliances under the KitchenAid name, to be introduced through an aggressive marketing strategy targeted at, according to KitchenAid president Glen S. Olinger, affluent and "quality conscious" consumers. KitchenAid first exhibited the entire line at the National Association of Home Builders Show in Dallas in early January 1987. Making the appliances available to the general public that spring, the company offered high profit margins to selected dealers who carried the entire KitchenAid major appliance line. They also assisted in the construction of elaborate store displays, some of which featured full-sized kitchen units entirely equipped with KitchenAid appliances.
The marketing strategy was twofold. First, KitchenAid hoped to emphasize the quality of their products by selling only to "quality oriented" dealers, rather than those whose focus was on sales volume and low prices. Second, the company hoped to discourage customers from "cherry-picking" their appliances from a variety of brand names in favor of, in the words of former KitchenAid president Ken Kaminski, "selecting a single full line brand of high-end appliances." Kaminski noted that customers could then benefit from having "a full kitchen's worth of appliances with coordinated colors and styling, and one point of contact for sales, delivery, use and care and after-the-sale services.
KitchenAid considers the marketing strategy a success, noting rapid and impressive growth in all product categories since the Whirlpool acquisition. The traditional KitchenAid stand mixer sold in record numbers in the late 1980s and early 1990s, and the major appliance line reportedly has experienced double digit annual growth since its debut.
In 1987 Sparks retired as president and CEO of Whirlpool. Taking his place was David R. Whitwam, whose strategy included a reorganization of Whirlpool's subsidiaries. The once centralized appliance group, which included KitchenAid, Whirlpool, Roper, and Estate brands, was subsequently divided into separate independent business units: Roper and Estate marketed budget appliances; Whirlpool represented the mid-range brand; and KitchenAid remained the premium line of appliances. By 1988 KitchenAid had achieved a total of &Dollar;308 million in sales, and three years later KitchenAid appliances were being sold in nearly 4,000 retail outlets, roughly 30 percent of all outlets in the country. At this time the brand divisions were again reorganized, this time into a North American Appliance Group (NAAG), set up to distinguish the American brands from Whirlpool's growing international concerns.
Boosting its advertising budget by ten percent in 1990, KitchenAid also developed a television advertising campaign that proved profitable. The following year the company began airing a series of ads featuring a reunion of three generations of one family congregating in the kitchen, which is full of KitchenAid appliances that have endured over the years. Advertising experts noted that the sentimental depiction of a traditional family reunion was particularly effective during a time in which America was engaged in a war in the Persian Gulf and consumers were sympathetic to the homecomings that received much publicity. Furthermore, the KitchenAid ads received a tremendous amount of exposure since the company had purchased the majority of its ad space during major network news programs popular during the war.
Despite the economic recessions during 1990 and 1991, which hit the appliance manufacturing industry particularly hard, KitchenAid remained a profitable component of Whirlpool, steadily gaining market share.
KitchenAid products are manufactured in Ohio, South Carolina, Mississippi, Indiana, Arkansas, Ontario, and Quebec, and its appliances are distributed throughout North America. Regarding the 1990s consumer as more sophisticated and concerned about quality, KitchenAid also opened a design center in St. Joseph, Michigan, which was committed to the improvement of product design through market research. As global marketing became increasingly important to parent Whirlpool, KitchenAid also hoped to explore designs and technology used by appliance manufacturers worldwide, after having established itself as the premier marketer of premium home appliances.
Berg, Eric N., "The Appliance Brand-Name Game," New York Times, August 23, 1990, p. D1.
Berry, Jon, "KitchenAid and Norman Rockwell," Adweek's Marketing Strategy, February 11, 1991, p. 4.
Mumford, Louis, "A New Career for Old School," South Bend Tribune, October 2, 1986.
Pepple, Steve, "Whirlpool Aiming at Affluent Buyers," St. Joseph Herald Paladium, October 2, 1986.
Schiller, Zachary, "Is the Latest Appliance Merger One Too Many?" Business Week, March 25, 1985, pp. 31, 34.
Stuart, Don, "KitchenAid Grows Through Emphasis on Quality," St. Joseph, Michigan: KitchenAid, 1991.
Verespej, Michael A., "Whirlpool's New Kitchen Recipe," Industry Week, September 21, 1987, p. 56-57.
Whirlpool Annual Reports, Benton Harbor, Michigan: Whirlpool Corporation, 1986, 1989, 1990.
Zellner, Wendy and Zachary Schiller, "A Tough Market Has Whirlpool in a Spin," Business Week, May 2, 1988, pp. 121-22.
Source: International Directory of Company Histories, Vol. 8. St. James Press, 1994.