Strategy

Business Strategy

New Houses ApartmentsRenovated

HousesTenders

SmallHeating

Companies

ProjectBureaux InstallersRetailers

MTS

ADV & PR

ProductInformation

Convention Incentive POS Demo Zone

Call Center

MARKETING PLAN

ADV Campaign ExhibitionsPosters Demo ZoneCall Center Web Site

Targets Achieved vs. the Marketing Plan

1. Improve Product Display and Association of ARISTON & C&M brands with top Quality.

2. Increase the professional level of our distributors’ staff.

3. PR and ADV “new” image of ARISTON

4. Answer the needs of growing professional channel

Targets: Status:

1. Continuous distribution of pedestals, pocket holders, brochures, wobblers, stickers.

2.1 HEA training – once a month2.2 Dealers’ convention – Feb.2.3 Continuous training of shop

assistants throughout Ukraine

3.1 Articles in specialized magazines

3.2 Promo action “Ariston-Bonus”

4.1 Catalogues of HEA4.2 “Ariston – Club”4.3 Introduction of Rendamax?

1. Enlarge the actual distribution net.

2. Increase the professional level of our distributors’ staff.

3. Continue the Upgrade of the “White Goods” level channel focusing only on ARISTON quality and design products.

4. Increase MTS presence in the growing Professional Channel

General plan of action: Electrical Water Heaters (Ukraine)

Targets: Actions:1. Involve new retailers

into Ariston distribution.

2. Continuous product trainings.

3. To control the availability of Ariston products in retail shops, transfer orders.

Merchandising.4. High quality products

and a stronger marketing policy and support (banners, lightboxes, stands, labels)

1. All year round

2. All year round

3. All year round

4. All year round

Timing:

1. Continue to develop ARISTON (MTS) brand image as heating specialist.

2. Continue to create a consistent ARISTON brand loyalty.

3. To create first MTS’ Ukraine DEMO ZONE

General plan of actions: Wall hung boilers (Ukraine)

Targets: Actions:

1. To use Rendamax like a tool through the current and potential partners.

Beginning of the promotion of ARISTON solar systems.

2. ARISTON “GAS CLUB”

3. Use the support of ORBI (Lviv) like winner of first MTS’ Ukraine tender.

Timing:

1. Till the end of the 2004.

2. All year round.

3. Till the end of the 2004

Plan of Action ARISTON

1. Motivation and loyalty building among shop’ assistants

2. Increase sales of ARISTON range

Targets: Actions:

1.1 Locally organized product training and issue of certificates

1.2 “ARISTON – Bonus”

2.1 Promo action “ARISTON-Bonus” in Ukraine;

2.2 Promotion “ARISTON – Installer Club” in Ukraine

2.3 Promo action “Free Filter” in Azerbaijan

2.4 Promo action (Georgia, Moldova, Armenia)

Timing:

1.1 Throughout the year

1.2 July - Dec

2.1 July-Dec

2.2 Dec

2.3 Sep

2.4 Sep

Plan of Action ARISTON

3. Advertising in professional magazines

4. Support for Service Centers

5. Display of Products

Targets: Actions:

3. “Aqua-Therm”, and “Instal-Info” (Ukraine)

4.1 Distribution “professional equipment” to SC

4.2 Distribution of flags, badges, labels, displays

5.1 Local exhibition in Azerbaijan

5.2 Metal stands (Caucasus)5.3 Metal stands (Ukraine)5.4 Light box (Ukraine)

Timing:

3. Throughout the year

4.1 Nov – Dec

4.2 Oct – Dec

5.1 Sep

5.2 September5.3 June5.4 All year round

Plan of Action C&M

1. Product information dissemination

2. Product display

3. Advertising

4. Project Bureau

Targets: Actions:

1 General Catalogue

2.1 Metal Stands2.2 Light Box2.3 Iveco turbo daily

3. Articles in UIT’ “Nova Tema”

4. Project Bureau Presentation

Timing:

1. June

2.1 June2.2 July2.3 July

3. All year round

4. August

Program “ARISTON – BONUS”

1. Target group: sales assistants of “Thermolux” retail network throughout Ukraine;

2. Program duration: 1 July – 31 December;

3. Products: Super Glass, Bravo, Eureka, Ti Tech Round, Ti Tech Small, GIWH, Booster, Platinum, Ti Tech Square, Ti Tech Large, WSAN, Ti Shape, Wall Hung Boilers, RAC, SGA, ARK/ARH, WSE, NHRE, Ti Tech STI, SI 150 – 300, Floor Standing Boilers, Indirect Cylinders

Program “ARISTON – CLUB”

1. Target: installers in Western Region of Ukraine;

2. Beginning of Program: February

3. Main activities:- regular technical trainings;- support on product, spare parts availability;- Bonus – program according to “Ariston – Bonus”;- close involvement of project engineers;

Competition “THE BEST PROJECT ENGINEER”

1. Target: project Bureaux engineers in Kherson;

2. Product: All range of ARISTON gas products;

3. Duration: July – December

4. Description: Timing:- Announcement of the competition;- Election of “Review Committee”;- Submittal of work;- Prize ceremony

June, 2004June, 2004November, 2004December, 2004

Submitted projects are judged on the following criteria:1) Project data gathering techniques;2) Level of consistent quality in project design;3) Use Computer technology (Auto CAD);4) Project follow-up, and customer’ satisfaction.

Update of Marketing Costs - ARISTON

Update of Marketing Costs - ARISTON

Update of Marketing Costs – C&M

Models: Status: Timing:

PRODUCT LAUNCH STATUS

1. Ti Glass2. WSE3. WSAN4. ARK5. ARH6. SI 150 ~ 3007. SG 2,5 K8. RAC Split ARISTON, C&M9. Ti Shape

10. Bravo

11. T2 27/28 MFFI12. Eurocomfort13. EcoCombi, EcoSystem14. New Storage Cylinders15. New SGA Ariston, C&M

April, 2013Certification is completed

Certificates are pending Samples, CB, and EMC pending

June, 2013Certificates are pending

MARKET SCENARIO (UKRAINE)

Electrical Water Heaters

MTS presence (Ukraine)

White Goods Professional Bazar DIY0%

10%

20%

30%

40%

50%White Goods47%

Pro-fes-

sional12%

Bazar39%

DIY2%

Estimation of the 2013 Ukraine market volume*: 210 000 pcs.

46% 28% 25%MTS share:

20%

Market share EWH (Ukraine)

Estimated 2013 Ukrainian market volume: 210 000 pcs.*

MTS

Lorenzi

Gorenje

Electrolux

NovaTec

Fismar

Baxi

Atlantic

Others

0% 5% 10% 15% 20% 25% 30% 35% 40%

38%

30%

9%

7%

4%

3%

3%

3%

3%

Lorenzi Brand Share (Ukraine)*

ROUND *

THERMEX

ISEA

* Assembled in Ukraine

49%

28%

23%

AQS SWOT ANALYSIS IN UKRAINE

STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS

Effective price mix

Local assembly (ROUND)

Good price for value (ISEA, CLASSIC)

No direct presence in the country

Not clear Service policy

Sole brand distribution policy

Strong brand awareness

The widest range of products

Service

Rep. Office in Kiev

MTS LORENZIMTS LORENZI

No presence on low price segment

Launched of new models of EWH - WSE, WSAN, TI TECH SHAPE, ARK, ARH for widening the range of MTS and compete with Lorenzi with complete range.

New forthcoming DIY channel

MTS

Political instability and changes of customs duties

Drastic improvements in State Hot Water Supply (Kyiv’ example)

Increase in price of electricity

MTS

MARKET SCENARIO (Ukraine)

Gas Wall Hung Combi Boilers

DISTRIBUTION GWHB CHANNELS (UKRAINE)*

* MTS Source

Estimated Ukrainian market volume*: 60 000 pcs.

White goods

Professional

Bazar

DIY

37%0,5%

62%

0,5%

Total market of the GWHB (Ukraine) 2013: 60 000 pcs. (estimation)

Series10%

2%

4%

6%

8%

10%

12%

14%

16%

HERMANN

JUNKERS

BERETTA

WESTEN+BAXI

PROTHERM

FERROLI

ARISTON

C&M

VAILLANT

THERMONA

TERMET

VIESSMANN

OTHERS

GWHB SWOT ANALYSIS IN UKRAINE

STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS

Strong brand awareness

Wide range of products

Service (stock of spare parts in Ukraine)

Company in Ukraine

MTS MTS

MTS

Political instability ( forthcoming elections)

MTS

Working problems with cash receiving

No possibilities to combine EWH & GWHB shipments

The absence of warehouses into regions

The absence of right model on the market in low price niche (T2)

Aggressive price for market entering

Service centers in each oblasts

PRICE POSITIONING

Price positioning 80l. EWH: Dnepropetrovsk

Super G

lass

80

NOVA T

ech 8

0

Isea

80

S (Gla

sslin

ed)

Elect

rolu

x

TI TECH 8

0R

Therm

ex 8

0 S (S

tandar

d)

Round 80

S

gorenie

TG R

80

N

elen

berg W

H 80

tesy

ZN-8

0

SATURN 80

BAXI SV 5

80

Nova T

ech 8

0 in

ox85

95

105

115

125

135

145

155

165

175

185

109

91

159

111

9592

151

132

152

115

102 102

182

174

10297

110

9590

102

124

98

176

Базар Профи Быт. Техника Строит. Матер.

Price positioning 80l. EWH: Kiev

Isea

Round

Fism

ar S

Class

ic

Gal

met

her

os

Vikin

g

Style

boiler 8

0

Aristo

nSG 8

0 R

Therm

exS

FOX

Atlantic

O"P

RO

Gore

nje T

GR

ARDO

Gore

nje G

B

Atlantic

ACI7

5

Elect

rolu

x

Nova T

ec

TI Tec

h R

Ti Tec

h QB

Platin

um

8090

100110120130140150160170180190200210220230240250260270280290

105

8996

128121 131

112

156

210

171

231

249

111

104

110

138142

117123

150

132136

270

235

189

237

267

107

105

129

205

128

130126

150

141

245

98

188

238

283

WG Profi DIY

Price positioning 80l. EWH: Kiev – Sale Hits

SG

80

R

TI 8

0 R

Go

ren

je T

GR

80

Go

ren

je G

BF

80N

Atl

anti

c O

"PR

O 5

0

Pla

tin

um

50

100

120

140

160

180

200

220

240

260

280

144

219

145

170162

274

117

163

128139

125

249

max min

Price positioning 80l. EWH: Kharkov

85

95

105

115

125

135

145

155

165

175

185

195

205

215

225

100

110

142

215

105

120

115

229

187

120

155

177

229

125

137145

110

125

120

127

105

133

209

90

120

117

194

130

120117

148

130

112

106

137

212

100

134

117

191

112

230

190

121

150

121

102

125

144

127

115

153

Базар Профи Быт. Техника

Price positioning 80l. EWH: Donetsk

SG

80

SG

80

R

Ti

Tec

h 8

0

Isea

80

S

Isea

80

P

Atl

anti

c 80

Ro

un

d 8

0P

Ro

un

d 8

0 S

Fo

x 80

80

90

100

110

120

130

140

150

160

170

180

111116

170

95

115

115

127

98 97

116

125

177

100

120117

130

101

118

130

171

123

132

102

125120

104 100

Bazar Profi WG DIY

PROMOTERS ACTIVITY

Promoting activities: Geographical Centers

KievKharkov

Dnepropetrovsk

Donetsk

OdessaKiev – Konstantin Skvortsov;

Kharkov – Anna Bondareva;

Donetsk – Viktoria Khardikova;

Dnepr – Oksana Marchenko;

Odesa – Evgeniy Lubenets;

Lvov

Promotion activities: Functions

• Controlling the display of ARISTON products according to the corporate standard, distribution of POS materials;

• Maintaining weekly .xls database of retail outlets dealing in the sector of EWH, RIS, RAC;

• Monitoring and monthly report on changes in price positioning;

• Reports on yearly sales by retail outlet within the region;

• Product training for sales assistants;

• Segmentation of retail outlets (DIY, White Goods, Specialized “Heating and Water Solutions”, newspapers, internet, etc.);

• Follow-up, PR and promotion actions.

Promotion activities: Achieved Results

• Building-up and maintaining amiable relationship with retail shop assistants, who in turn influence final consumers;

• Disseminating product information among shop assistants;

• Tracking distribution route via warranty card number;

• Importance of each partner (retail outlet) evaluated on the basis of yearly sales, personnel changes;

• Continuous control and improvement of product display;

• Prompt correction of price positioning on the market;

Promotion activities: Plans

1. Provide adequate support for person in Odessa;

2. More close involvement in 6 month promotion action;

3. Identify all performers in professional channel “Heating + Water Solutions” throughout all regions, and supply their needs;

4. Improve training materials for sales assistants in White Goods retail outlets;

5. Build-up PR activities with project designers, city “Gazovoe Hozyaistvo”;

6. Direct involvement in “Ariston-club” and “Ariston-Bonus”.

Description: Timing:

1. June

2. July – Dec

3. June – Sep

4. June

5. July – Dec

6. July – Dec

MAIN COMPETITORS ACTION

TRADE MARK ACTION Rate

HERMANN Aggressive actions on the market through its exclusive distributor “Vodnaya Technika”. Exclusive distributor 1) started to print out its own magazine for heating engineers, active at each regional exhibition;2) Initiated program “Hermann – Bonus”, work w project engineers;3) Quantities are achieved through the sale of Habitat;

HIGH

JUNKERS 1) Active on each regional exhibition through its local partners2) Good training facilities - 3 regional in Kiev, Lvov, Dnepropetrovsk;3) Initiated “Junkers – Bonus” program;4) Expanded its sales representatives network throughout Ukraine;5) Efficient logistic flow of product and spare parts deliveries6) Introduction of colored versions of fan flue GIWH7) Emphasis on high technology used in GIWH (Hydro Power, mini dimensions, AA batteries)

MEDIUM

BERETTA 1) Active on major exhibition in Kiev, though operating through its Moscow Branch office;2) Low marketing profile compensated by very attractive price positioning on the lower level3) Strong effort to improve its image as “Spare parts are always available”

MEDIUM

Main Competitors Actions

“Junkers – Bonus” Programc

Bosch – Ukraine OOO officially initiated program “Junkers – Bonus” program during an exibition Aqua-Therm on 15 April, 2013.

“Hermann – Bonus” Program