The Annual General Meeting (AGM) of Hawkins Cookers Limited provides valuable insights into the company’s operations and strategies. The AGM speech and the subsequent Q&A responses offer important insights into the competition, their brand, borrowing and lending, testing procedures, recruitment process, the DNA of Hawkins Cookers and much more.
Let’s delve into the key highlights and insights from this informative speech.
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Hawkins Views on Various Topics
Pricing Dynamics in the Industry
- In a business-to-business environment, it’s easier to take price increases and corresponding price decreases through negotiations.
- In a business-to-consumer environment, the consumer is not in a position to negotiate with the Company except that she negotiates with her feet, that is, she does not buy or she buys something cheaper.
Reference: 2022 AGM Speech
Unique Cost and Product Dynamics
The challenge is to keep down our costs without short-changing the consumer. For example, the soap that you are buying is shrinking regularly but the MRP is not changing. You cannot do that with pressure cookers and cookware.
Reference: 2022 AGM Speech
Brand
- If you have a good brand people are ready to pay that extra premium in order to get the satisfaction and the surety of a good brand.
- Hawkins sells Pressure Cookers at about 30 to 40% more premium than the average of the market and people pay that premium for the satisfaction and safety of buying a good brand.
Reference: 2022 AGM Transcript
Borrowing and Lending
Borrowing
- Hawkins does not aggressively borrow for expansion
- The company prefers to fund the expansion with their own money
- The expansion aligns to meet the demand
Lending
- Hawkins is not comfortable with other people using their money
- 996 of the dues are collected without fail
- Products are not sold on credit, but on cash
- Discounts are provided for upfront payments – So a part of the money comes as an advance that helps in their daily operations.
Reference: 2019 AGM Speech
Testing
Everything is tested, be it products or people.
Product
- There are two kinds of testing: (1) Technical testing and (2) Testing in the test kitchen.
- “Every pressure cooker that goes out into the market is tested, with its lid in place, by dipping it into water to ensure that it does not leak. To my knowledge, no other pressure cooker manufacturer in the world does this. Largely because it’s a messy thing where you have to immediately dry the cooker, otherwise you will get watermarks.” – 2019 AGM Speech
- This apart there are 25 other tests done on randomly selected finished pressure cookers.
People
“Every human being that we employ today has come through a test, not just a viva or interview but a written test.” – 2019 AGM Speech
The people working in the company are tested for various requirements including physical endurance. We will explore more on this topic in the heading “Recruitment Process”.
Philosophy of Hawkins
Growing Demand
It is a 6 Step process. We will see these steps in brief. However please read through the 2015 AGM Speech for complete details.
Step 1: Assessment of consumer need for a new product or an improved product.
- What advantage is required over competitive products?
- What is the desired price range?
Step 2: Design and development of the new and improved products.
It has questions on
- Product function
- Durability required by the customer
- User safety and convenience
- Form of the product to have a pleasing appearance and strengthen the brand image of the product
- Packing for protection during transit, display brand value and communication of product benefits
- Customer instructions and recipes
Step 3: Increase Supply
Increased supply of good products wanted by consumers in turn leads to the growth of demand for such products, largely through word-of-mouth recommendations from one consumer to the other.
Step 4: Product Distribution
- This is not achieved merely by sending out salesmen with pricelists and order books.
- Conference with dealers are held which includes cooking demonstrations and food tastings.
- The dealers and the Hawkins management both look forward to such events which serve to strengthen relationships and improve our customers’ understanding of our products and promotional policies
Step 5: Advertising
- The purpose of advertising is “To make the cash registers ring!”
- Television films are made in 6 to 8 languages
Step 6: The Magic of Word of Mouth
- Once well-designed and well-packaged, highly needed products are placed in widespread distribution and display and effectively advertised, you get to the sixth and ultimate stage when the magic of ‘Word of Mouth’ takes over.
- This is the nirvana which is dreamt of by all marketing professionals. This is what Hawkins aims at always and achieves sometimes.
Design and Development of New Products
The decision for a new product or new line of business is taken by the management assigned by Marketing. It has questions around:
- What is the consumer need that the product has to fill?
- What advantage over competitive products is required?
- What is the desired price range?
These inputs are given to the technical team to design and develop the new product.
Note: It is a 7-step process. I have shared them in brief. Kindly read the AGM Speech 2014 for more details.
Step 1: Product Function
- Ensure the product works as needed by the customer
- Ensure user safety, convenience and is slightly better than any competitor product
Step 2: Product Form
- Aesthetics to enhance saleability
- Pleasing distinctiveness to strengthen the brand image of the product
Step 3: Packaging
- Package protects in transit and storage
- Display value on dealer’s shelves
- Contribute to the brand image of the product
Step 4: User Instruction
- Comprehensive and tested instruction for the users
- It has details on safety precautions, Do’s, Don’ts of using the product
- Other details: Recipes and helpful tips for cooking
- Information on product service and spare parts
Step 5: Product Durability and Serviceability
This covers the serviceability of the product, availability of spares, tools for serving, training service centres, and availability of service manuals.
Step 6: Prototypes and Testing
- Prototypes are made and tested both in the factory and test kitchen
- Test kitchen reports on product performance and also develop the user instruction of Step 4
- Quite often product design is changed to address the points raised by Test Kitchen
Step 7: Productionising
- The drawing, specifications and bill of materials are approved
- These approved details are handed over for mass manufacturing
Purpose of this 7-step design: Be the best in the market and not the first in the market.
Building Supply
Building Supply is a discrete activity, controlled by the Company. It has the following steps:
- Plan the increase in capacity
- Apply capital
- Acquire or develop technology
- Obtain regulatory approvals
- Build or expand factories
- Enter contractual arrangements
- Use an appropriate mixture of in-house and outhouse manufacture and
- You have additional or new products.
Reference: 2013 AGM Speech
Test Kitchen
We just saw that Hawkins does two kinds of testing. One of the test is done in the ‘Test Kitchen’. Here the product is subjected to real-world conditions simulating consumer usage.
- This testing is done on the prototype of a new product
- The product is used as how a consumer uses and checks the product performance
- Does the handle get too hot?
- Does the food burn at the base?
- Can you pour without dripping?
- OK water pours fine, but what about milk?
- Milk is fine, but what about Rasam
- This relentless validation is key to new product development and many an otherwise promising product idea has been killed in our Test Kitchen because it does not meet Hawkins’s standards.
- Every product that passes the Test Kitchen comes with the assurance that it will be a pleasure to use in the consumers’ homes.
- Thereafter if needed, Hawkins does consumer testing with a panel of consumers.
Reference: 2019 AGM Speech
Recruitment Process
- Advertising: The process starts with the advertising of requirements
- Scrutinize: Applications come in which are scrutinized
- Written tests: Shortlisted candidates appear for written tests. Anyone, from a worker to a Vice President has to go through a written test. Each applicant will write an essay in his own handwriting on why they want to join Hawkins.
- Test for physical endurance: The candidates have to run 5 kilometres in less than 30 minutes, the Vice President is spared this.
- Process for senior roles: Management trainees and more senior positions are additionally invited to Mumbai for group discussions and final interviews in which the selection panels included one or two executive directors.
- Training and Practical Experience: The recruits have to undergo an 18-month training program. All Technical Management trainees in Hawkins must work six months as a worker on the shop floor, a trainee in Marketing or Sales will spend a year in the field.
Reference: 2019 AGM Speech
In a Nutshell...
Lessons from Hard Times
Hawkins has survived hard times. Each time the company got a valuable lesson that became part Hawkins’s DNA. There are 4 main lessons:
- The need for Courage: Along with passion in their blood, the leadership needs to have ice water in their veins.
- Do not act on Fear: If you are not going to act on the basis of fear and if you are not just going to do the expedient thing, you will have to work out your policy and strategy on the basis of your principles, your beliefs, your values. What is true? What is fair? What is legal? What is ethical? What is beneficial in the long haul?
- The need for Communication. Whether you deal with government or with customers, whether you deal with militant labour or a court of law – communicate, communicate, communicate.
- Need for best effort: Put in your best efforts and continue no matter how bleak the outlook appears to be. Have faith in God. Seek His guidance and grace in prayer. Sleep well, enjoy your work, and enjoy life.
Reference: 2012 AGM Speech
Seven strands in the DNA of Hawkins Cookers
- Follow the Golden Rule. “Do unto others as you would that they do unto you”.
- Respect both Ends and Means. The results have to be achieved and the means have to be right.
- Seek the Best. From the choice of materials and machines to the selection and promotion of our people, we choose to work with the best we can get or create.
- Hot Focus. Today, as a result of following this policy of Hot Focus over many decades, we know as much or more than any other manufacturer in the world about pressure cookers and cookware.
- Prudence. We don’t “Bet the Company” on anything – no matter how exciting the prospect.
- Courage and Resolution. Where an important principle is involved, be bold, brave and resolute.
- Do Your Best and Leave the Rest to God. Apart from anything else, this allows us to sleep soundly at night.
More details of these 7 Strands can be read from 2009 AGM Speech
Conclusion
The Hawkins AGM speech provides valuable insights into the company’s strategies, values, and operations. From their approach to competition and branding to their testing procedures and recruitment process, Hawkins demonstrates a commitment to quality, customer satisfaction, and long-term growth. By adhering to its core principles, Hawkins has established itself as a trusted leader in the cooker manufacturing industry.
We come to an end to the 4 part blog on “Cooker Manufacturing” Industry.
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