PROJECT REPORT ON “MARKETING MIX MAPPING FOR HAIER INREFRIGERATORS, WASHING MACHINES AND AIR CONDITIONERS SEGMENT” SUBMITTED TO PROF ABRAR ALI SAIYED FACULTY INTEGRATED PROJECT ON GLOBAL BUSINESS BY MEHUL RAVAL
SERIALNO CONTENTS PAGE. NO.1. ABSTRACT 42. INTRODUCTION: 6 • ABOUT THE TOPIC • ALL ABOUT THE PROJECT • RESEARCH OBJECTIVES3. METHODOLOGY 124. LIMITATIONS 135. MARKETING MIX STARETEGIES 14 • THE MARKETING MIX INGREDIENT FOR SUCCESS • APPLIANCES MARKET OPPORTUNITIES • INDUSTRIAL STRUCTURE AND DEVELOPMENT6. BRAND AWARENESS 33 • CUSTOMER AWARENESS SURVEY ANALYSIS • DEALERS INTERACTION7. ANALYSIS AND PRODUCT MAPPING 30 • REFRIGERATORS • WASHING MACHINES • AIR CONDITIONERS8. PLACE 64 • COMPETITORS PRESENCE IN GUJARAT • BRAND WISE MAJOR DEALER MAPPING IN AHMEDABAD • SERVICE MAPPING12. PROMOTION 55 • LG AND SAMSUNG INNOVATIVE PROMOTIONAL AND ADVERTISEMENT INITIATIVES • PRINT ADVERTISEMENT ANALYSIS OF DIFFERENT BRANDS • BTL ACTIVITIES OF ALL BRANDS IN AHMEDABAD.
9. PRICE 69
AcknowledgementsI am extremely grateful to Mr. Pallav Jain, branch manager, Haier Appliances Ahmedabad, forhelping me and providing me with me useful information. By interacting with him, I learnt fewfacets of professional management in the consumer durable industry and I am sure theknowledge imparted will go in a long way in enriching my career.I wish to acknowledge my indebtedness to my project guide Mr.Sumit Kujur , managementexecutive, Haier appliances and my faculty guide Prof. Abrar Ali Sir. The project could not becompleted without their able support guidance. Thanking them is a small gesture for thegenerosity shown.Finally, I take this opportunity to thank all senior executives, staff members and every associateof Haier Appliances, without their cooperation I would not be able to complete this project.
AbstractFOR a company with a relatively young history, Chinese manufacturer Haier Electronics GroupCo Ltd has achieved a global profile that companies with a longer presence in the market will beenvious of.This project intends to map the current image of the brand “Haier” in the Refrigerator, Airconditioners and washing machine segments, comparison of Haier marketing mix of Haier vis-à-vis other more established brands in Ahmedabad and finally marketing mix mapping of Haierin refrigerator and washing machine segments with other companies.For mapping the marketing mix of Haier with the other consumer durable brands inRefrigerators, Air Conditioners and Washing machine first essential step is to know the currentbrand image of the Haier in these segments, for this the a brand awareness survey is already forHaier. This gives some valuable inputs to the organization. Like in the survey it was found thatstill most of the people surveyed perceived Haier as an electronic brand which manufactures TVand mobile phone. Marketing communication done so far for Haier is not accurate this can beunderstood by this fact that despite focusing on world 2nd largest brand status still 65% of thepeople surveyed doesn’t know that it is world 2nd largest appliances brand.In Product mapping it was found that Haier quality is good comparing to their competitorsespecially in appliance i.e., washing machines, air conditioners and refrigerators. Haier is thefirst consumer electronics company to launch the Bottom Mount Refrigerators in India and alsoone of the few companies to introduce an exclusive 100 per cent clothes dryer in the market. TheCompany recently launched refrigerators with a unique VC Fresh technology that helps to keepfood fresh in the refrigerators for a longer period of time and introduced ACs with the digitalInverter technology for energy efficiency.In the semi automatic washing machine segment one of the findings is that Haier needs to builda powerful USP for its semi automatic washing machines like they did it for Refrigerators(BMR) so it can clearly differentiate with others. Currently Haier is focusing more on fiber
body, timer and powerful motor, which is almost same for all the present brands, othercompetitors like LG despite of all these features focusing more on technology ,like Punch PlusThree, for whirlpool its 1-2,1-2 Hand wash, for Godrej it is Force Four, and for Samsung it isSilver Nano.Pricing always plays a major part, especially in Ahmedabad market no one can deny itsimportance. This study gives an insight in to different pricing strategies adopted by the differentcompanies. In one way it will give comparison of the customer prices in the same segmentamong various companies and in the other way it will give valuable competitive informationregarding pricing benefits given by the other companies to their intermediaries, like what are themargins they are giving to their dealers, to direct company dealers and to the distributors.With current brand status, where people accept it as a quality brand and 6 years of business inIndia now time has come for Haier to go for “good quality in a affordable price” definitely valuefor money.Finally there is much more possibilities for the brand Haier in the market let me put it this way.The market is expanding and it is yet to reach full maturity. So, there is always a hugeopportunity for new players. For example, in any category, let’s say consumer electronics, themarket leader three years back has gone into oblivion and there is a new market leader now. Itall depends on how well one can drive its business, how well the company understand theconsumers and accordingly introduce value-added services for them. The opportunities are stillthere. The TV market has grown to nine million and refrigerators to four million. Therefore,there is no reason why a global leader with proven technological strengths cannot find afootprint.
IntroductionAbout the topic:“By the way of doing the marketing mix mapping for the Haier, it will provide necessary marketinformation, competitors marketing mix strategies and accordingly comparison can be done andwhich will ultimately help to offer the product with the right combination of the four Ps and withthis Haier can improve their results and marketing effectiveness in Refrigerators, washingmachine and A.C segment”Consumer durables Industry is growing at a rapid pace. Price Affordability, Product Awarenessand availability have helped the industry players to generate great business. But doing businessin Indian Market is not easy. Continuous improvement in Product quality and post sales serviceat affordable price is common to all Consumer durable manufacturers across Industry. But thecompany which would introduce innovative product, with unique technology and provideconvenience by satisfying them with something new would surely attract customers. HaierAppliances which is one of the largest Home Appliances brand in the world. Haier is knownworldwide for “inspiring the living” of customers with the unique and patented product likeBottom Mounted Refrigerators.The company was established in 1984, and in only 23 years, it has attained global recognition,including a 25th spot ranking in the Worlds Most Respected Brands list by Forbes in 2006. Ithas consistently been among Chinas top-performing companies domestically for the past 20years, but the company is now aiming to entrench itself as one of the mainstays of the globalconsumer electronics industry.Haier India was launched in India in December 2003 and by August 2004 had an all-Indiapromotion launched with over 55 products across six product categories -- refrigerators, colortelevision/DVDs, washing machines, microwave ovens and dishwashers. Haier India has alsolaunched its brand of mobile phones in India.
There are more worries than just fierce competition even for a late entrant like Haier, a $9.2-billion giant, to get a toehold in an already crowded market. Almost the entire industry wasunanimous that its image as a Chinese manufacturer will be a challenge -- its country cousin likeKonka and TCL entered, and left India, making no impression, but leaving some unpleasantmemories. Other cheap Chinese products have flooded the Indian market over the last few years,leaving Haier with little chance for a premium positioning. Trade circles have similarapprehensions, and fighting this image is taking most of Haier time in India.Despite this Haier entered the Indian market with a premium line of products, which prohibitedthe brand from building a mass appeal. Although, there are so many players in the market andthere is enough space for players like Haier seeing the economy grow at around 8-10%. But it isalready more than 6 years of Haier launching in Gujarat market, their business is not like whatshould be for the brand which is 2nd largest appliances brand in the world. This calls reevaluationof Haier marketing mix strategies in the market.Haier product categories range from refrigerators, refrigerating cabinets, air conditioners,washing machines, televisions, mobile phones, home theatre systems, computers, water heatersand DVD players. By April 2006, the Haier Group has obtained 6,189 patented technologycertificates and 589 software intellectual property rights. On January 31, 2004, Haier was namedone of the brands among world’s 100 most recognizable brands, listed by the World BrandLaboratory, one of the world brand evaluation organizations.The marketing mix is a vital part of any marketing strategy. This is a tool whereby the marketertakes decisions on what and how a product should be, where it can be sold, how it should bepriced, how it will be promoted, how to equip the people who are responsible for selling theproduct… and so on.
All about the project:1. Why marketing mix mapping for Haier appliances.Haier is world’s 2nd largest home appliances brand, manufacturing household electricalappliances in 96 categories with 15,100 specifications, launched in India in 2003, currentlyhaving 3% market all over the segments in Indian market. But despite having better productrange and better quality especially in refrigerator, washing machine and in AC segments are notdoing well in Ahmedabad market. Brands like TCL and Godrej are selling in large number inAhmedabad as compare to Haier, which ultimately suggests reevaluation of marketing mix inAhmedabad market for Haier in these product categories and also to establish Haier from thescratch.2. Design of the study: 1. To know the perception regarding the brand “Haier”. 2. Marketing mix mapping for Haier in Refrigerator, Washing machine and A.C segments.3. Identify and monitor competitors’ marketing strategies and activities:This is about monitoring key competitors’ marketing mix strategies and evaluating theirPotential implications for Haier. It includes assessing the corresponding opportunities andthreats, and recommending appropriate actions across the marketing mix to develop and/orprotect HAIER`S products.4. Marketing mix Mapping for Haier in Refrigerators, Washing machine and Air conditionerssegment with their competitors.This is about evaluating the Haier marketing mix i.e. product place, price, and promotion incomparison with the competitors undertaking a strategic assessment of an organization’senvironment also to identify potential opportunities and threats relevant to future marketingpolicy and building the effective marketing mix strategy for the Haier in the Ahmedabad market.
OBJECTIVE OF THE STUDY: ➢ To study brand awareness for Haier in the market place. ➢ To produce valuable inputs for the Haier from the Ahmedabad market with respect to element of marketing mix, i.e., Product, Price, Place and Promotion. ➢ To Study Haier competitors marketing mix strategies, and then comparative mapping with other major appliances players in the market, finding loopholes and building effective marketing mix strategy for Haier in Refrigerator, washing machine and Air conditioners segment with respect ➢ To analyze right strategic direction for Haier firstly by the way of studying current image of the brand “Haier”, secondly through market mix mapping.”It gives valuable inputs regard to difference that the brand is dealing with their competitors. Likeif LG, SAMSUNG, WHRILPOOL, GODREJ, ELECTROLUX are present in a segment,satisfying same customer need, what is the difference in terms of product offering, technology ofthe products, pricing strategies of the competitors. This is also suggests competitors directmonetary pricing benefits to distribution intermediaries, i.e. distributors, direct dealers, dealers,and finally to the customers. Which clearly identifies the different requirements that customerslook to be satisfied and at what prices. These different requirements can then be used to developthe alternative strategies that need to be implemented, to better access the segments and tune theproduct offers to suit the customer requirements and to the level of competition.To make this study more accurate for mapping of Haier against the competitors, a directinteraction with the major consumer durable dealers is being done, which suggests regarding
possible selling counters for Haier in Ahmedabad market, what are the brands these dealers aredealing with, their focused brand, why they are focusing on theses brand, what the dealers pointof view regarding the Haier, specific product perception in the Washing machine, Airconditioners and Refrigerators segment and finally exploring the possibilities of widening thedistribution network in the Ahmedabad market, other than that if the dealer is already Haierdealer, this interaction is a effort to know how can company will make dealers motivated to sellHaier.For the mapping of Haier Refrigerators, Air conditioners, and washing machines, an essentialstep is to gather information regarding marketing mix i.e. product, place, price, promotion, andto know the different marketing mix strategies adopted by other players in the market so can themapping of Haier product should be done. it will show where Haier product stands incomparison to their competitors , it will also give insight in to product requirement to fight withthe competition and what are the Haier strengths in these segment in comparison to itscompetitors. For product mapping detailed information regarding the product lines of majorplayers, their USP, various product models, product features, different technology adopted bythe players in these segments had been collected.
Methodology:1. Primary Data CollectionFor Product: Customer survey through use of a structured questionnaire.For Price: Direct meeting with the dealers to know other companies pricing, by collecting andanalyzing prices for customers (MRP) dealers (D.P),direct dealers, and distributors.For Place: Obtaining feedback from the existing dealers of Haier and other consumer electronicdealers in the Ahmedabad market through direct interviews. To establishing and implementingprocesses for obtaining ideas, Information and insights from the dealers regarding the Haiermarketing proposition for refrigerators and washing machine, after that evaluating the feedback,assessing the benefits and any risks associated with possible options, and makingrecommendations towards enhancing the HAIER marketing proposition especially “place” or inother words dealer expansion in Ahmedabad city.Promotion: Observing the number of marketing activities done by the other companies bykeeping the record of activities done by them, and also attending the activities to feel thedifference between the Haier marketing activities.2. Secondary Data Collection through company websites, journals & annual reports.3. Analyzing and interpretation.4. Mapping with respect to other competitors in the market in Refrigerator and washingmachine and Air conditioners category.5. Findings and conclusion can be drawn.
Limitations of the Study: Due to time, geographic and monetary constraints. It may not be able to go deeper in to search This study is related to Ahmedabad market only. This project is primarily focused on Refrigerator, Washing machine Air conditioners product category. Unavailability of data. Especially for promotional strategies of competitors. There could be some errors, data collection, data interpretation, and even the environment plays an important role in the outcome of the results. Respondents may not provide full or accurate information during the survey
The Marketing Mix: Ingredients for SuccessThe marketing mix, earlier known as the 4 P’s, (but now has a few more), is a vital part of anymarketing strategy. This is a tool whereby the marketer takes decisions on what and how aproduct should be, where it can be sold, how it should be priced, how it will be promoted, howto equip the people who are responsible for selling the product… and so on. Getting themarketing mix right is equally important for the large corporation and the small business owner.One of the most critical marketing management decisions is that decision of setting themarketing mix values, and selecting and employing strategy that periodically changes thatmarketing mixes in response to changing business environment. The marketing mix probleminvolves setting the values of the marketing decision variables; the four P’s; namely, Product (itsquality), Price, Place (distribution and sales-force expenditures) and Promotion (advertising,selling). Developing an effective marketing mix is important for product planners seeking togain competitive advantage in industrial markets. The decision regarding specifying themarketing mix depends on a set of variables, such as competitors price, competitors productquality, competition level, forecasted sales and others. These types of variables necessitateadoption of appropriate approaches that can deal with such variables nature marketing mixmapping is a step done to achieve this.Product:A lot of thought and effort goes into designing a product offering. The most importantquestion, as a marketer, a person need to ask is whether there is a need for that type of productand how this product satisfies that need better than those of their competitors. This will force tothink of why that product is unique, and thereby help to evolve that product’s Unique SellingProposition.Price: This element of the marketing mix can be many a strategy’s undoing. A completeunderstanding of the financials that drive a business is essential before deciding a pricingstrategy. Base your decision after considering the following – what is the perceived value ofyour product in the eyes of the customer? How price elastic is the market? Do you wish to loadoverheads on to the new product, if an existing product line is capable of absorbing them? What
is your objective – do you plan to gain market share on the strength of a rock bottom price or doyou wish to create a premium image targeted at niche customers and price your productaccordingly?Place: This is probably that element of the marketing mix that has undergone a complete changein definition. Traditional trading and distribution models have given way to remote or virtualchannels. While reaching the customer may have become simpler, your job as a decision makerhas become that much more complex. You now have a plethora of options to choose from – doyou go for brick and mortar or direct mailing, use the phone or sell door to door? This decisionshould, first and foremost, be driven by customer preference and then by other considerationslike logistics and economics. Indeed most businesses rely on a multi distribution channelstrategy.Promotion: In a commoditized industry, this is what makes the essential difference. Possibly noother marketing mix element draws as much attention from strategy makers. Again, let consumerneeds drive your efforts. Does your marketing communication address a specific need of thetarget audience? Is the message memorable? Does it spur action? Here again, the entirelandscape has changed from what it was a few years ago. Promotion has gone way beyond mereadvertising and public relations – it is now a highly evolved process, ranging from live events tointernet marketing. In these times of information overload, promotion strategies must packsufficient punch to cut through the clutter.The marketing mix is a dynamic entity and needs to be reviewed and refined periodically. Italways helps to stay in touch with the latest developments. Marketing mix mapping for thebrand is done to know the standing of the brand mapped with their competitors with respect toessential element of marketing mix i.e., product, price, place, and promotion. It ensures Studyingmarketing mix strategies of the brand mapped and reviewed and refined periodically accordingto market condition and competition comparative mapping with other major players in themarket, finding loopholes and building effective marketing mix strategy for Haier inRefrigerator and Washing machine segment
Appliances market opportunities:The top 67 cities in India are also the key potential market for appliances companies’ .Accordingto NCAER, usage pattern of consumer durable in these cities reflect a growing trend forappliances such as refrigerator and washing machines. Ownership of refrigerators, for instance,in these 67 cities is much higher than the national average 492 out of 1000 household in thesecities own refrigerators compared to the national average of 134 to 1000 households. Similarly,316 households per 1000 households in the top 67 cities owned washing machine compared tothe national average of just 72 household’s among every 1000 households.Year 2007 was a very good year for the appliances sector in India. Air conditioners andmicrowave ovens grew by 24-25 percent. And even washing machine- which have traditionallyseen poor sales – have seen moderate growth.The housing boom in these cities is increasing the demand for appliances. The increasingnumber of double - income families also bodes well for the sector.The frost free segment of the refrigerator market is seeing spectacular growth as more urbanfamilies are replacing their old refrigerators.Consumers in the south and western regions of India go for high- end models of applianceswhile the north and east continue to prefer lower-end models and direct cool refrigerators.Optimistically we can say that robust appliances sales will continue in 2008, particularly sincechanges in the electricity scenario is making it power accessible to more Indians in the urban aswell as rural areas.
Industry structure and developmentThe growth in the refrigerator and in the washing machine category has been marginal in theyear under review with a growth of 7% for the year 2006-2007. Some segments have howevergrown faster than others. For instance in the refrigerator category, the frost free category (27%contribution) has had a double digit growth, while the large DC segment actually decline,leading to an overall growth in the refrigerator of 8% the washing machine category which hasbeen remained flat for several years saw a growth of 4% led by a full automatic segment whichhas registered strong double digit growth. The large 70% semi automatic segment registered amore modest growth of 3%. Given the fact that refrigerator category has shown a reversal oftrends, and with washer growth expected to continue, the overall growth is likely to be better inthe ensuring financial year.The air conditioners have been growing steadily at a rate of 25% and this is expected tocontinue. The AC market has been more capacities being offered and there is a distinct trendtowards split air conditioners.The Indian market size for refrigerators was estimated at 4.1 million units in 2004 and theinstalled manufacturing capacity of these players is above 6.5 million units per annum. Also thewashing machines market in India was estimated at 1.45 million units in 2004 while the installedmanufacturing capacity is near 3.75 million units. This clearly indicates much lower capacityutilization for most of the players. The quality of these products manufactured still needs to beenhanced if they are to catch up with the global standards. This could partly be due to highlylabor intensive operations with low automation and also because of the prevailing technologygap.The concept-to-market time for most of the plants in India is still higher than the global normand except for LG, exports from India haven’t really picked up as projected. There still seems tobe quite a way to go before India becomes one of the global appliance production and exporthubs like China.
LG is one of the leading players that offer a full range of appliances to Indian consumers –right from refrigerators to CTV to mobile phones, etc. Other players can also adopt a similarstrategy as this will help these companies to increase their influence on the supply chain as moredealers / distributors will be willing to display a full range of products rather than a couple ofappliances. This can also help absorb costs for the loss-making products at the expense ofprofitable ones. Whirlpool is working on improving cost efficiency and is operating a 5 dayextended shift in its plants. The company is determined to invest further in India to regain itsmarket leadership.
Haier GroupCompany FactsCorporate OverviewThe Haier Group is China’s largest home appliance brand and one of the world’s leading whitegoods home appliance manufacturers. Haier was founded in 1984 in Qingdao, ShandongProvince, China and manufactures home appliances in over 15,100 different specifications under96 categories. By April 2006, the Haier Group has obtained 6,189 patented technologycertificates and 589 software intellectual property rights. Haier products are sold in over 100countries. Haier is the official Home Appliances Sponsor of the Beijing 2008 Olympic Games. Headquarters: Qingdao, Shandong Province, China Employees: Over 50,000 worldwide Financial Information: Haier’s global revenue in 2005 reached RMB 103.4 billion Average annual growth of 68% between 1984 and 2005 No. of Subsidiaries Over 240 Listed Subsidiaries: Haier Electronics Group Co., Ltd. listed on the Hong Kong Stock Exchange Qingdao Haier Co., Ltd. Listed on the Shanghai Stock Exchange
Business Scope: Technology research ○ Product development and manufacturing Trade ○ Financial services Key Product Lines: Refrigerators/Freezers, commercial air-conditioners, microwave ovens, washing machines, dishwashers, televisions, mobile phones, computers Global Presence:• Trading Companies: 64• Design Centers: 8• Industrial Complexes: 15• Sales Network: Over 58,000
Board of Directors • Chairman and CEO: Mr. Zhang Ruimin • President: Ms. Yang Mianmian • Vice Chairman: Mr. Wu Kesong Recognition:• Ranked 86th among the world’s 500 Most Influential Brands by World Brand Lab in 2006. Only Chinese brand to be ranked in top 100 for three consecutive years• Ranked 1st among Chinese brands with the most potential by Glebors Global Financial Reports of Canada, 2006• Ranked 1st among China’s Top 10 Global Brands by the Financial Times in 2005• Ranked 1st among China’s Top 10 Global Brands by China State Bureau of Quality and Technical Supervision (CSBTS) for refrigerators and washing machines in 2005• CEO Zhang Ruimin ranked 26th among World’s Most Respected Business Leaders by the Financial Times in 2005• CEO Zhang Ruimin ranked 6th among Asia’s 25 Most Powerful People in Business by Fortune magazine in 2004
• Received a World Climate Award from the United Nations Development Program and the US Environment Protection Administration in 2000 Source : http://www.haier.com
The Haier Group was founded in 1984 with headquarters in Qingdao, Shandong Province, PRC.In 1984, Haier produced only a single model of refrigerator, today it is one of the world’s leadingwhite goods home appliance manufacturers. Under the leadership of Chairman and CEO ZhangRuimin, Haier manufactures home appliances in over 15,100 different specifications under 96categories. Haier products are now sold in over 100 countries around the globe.Haier has over 240 subsidiary companies, over 110 design centers, plants and trading companiesand over 50,000 employees throughout the world. Haier’s focused industries include technologyresearch, manufacturing, trade and financial services.The global revenue of Haier for 2005 was RMB 103.4 billion. Haier Electronics Group Co., Ltd.(HKG: 1169), a subsidiary of Haier Group, is listed on the Main Board of the Stock Exchange ofHong Kong. Qingdao Haier Co., Ltd. (SHA: 600690), also a Haier subsidiary, is listed on theShanghai Stock Exchange.On 12 August, 2005, Haier signed an agreement with Beijing Organizing Committee for theOlympic Games (BOCOG) in Qingdao to become the official sponsor of the 2008 BeijingOlympic Games for white goods home appliances.Unmatched Home Appliance Product OfferingsHaier’s product categories range from refrigerators, refrigerating cabinets, air conditioners,washing machines, televisions, mobile phones, home theatre systems, computers, water heaters,DVD players and integrated furniture, among which 9 are ranked market leaders in China, and 3are ranked among the top 3 worldwide in their respective industries. Haier is also a world leaderin the technology domains of intelligent integrated home furniture, networked home appliances,digitalization and large scale integrated circuits.By April 2006, the Haier Group has obtained 6,189 patented technology certificates and 589software intellectual property rights. Haier’s proposal for safe care water heater technologyinitiative was accepted at the 66th IEC Conference in 2002 and Haier dual drive washingmachine technology was included in the 2006 IEC standard proposal. This clearly demonstratesHaier’s world-class innovation capabilities in product R&D.24 | P a g e
Global Branding StrategyHaier’s global branding strategy aims at positioning the company as a local brand in differentworld markets in conjunction with enhanced product competitiveness and strong corporateoperations. Haier’s international business framework encompasses a global network of design,procurement, production, distribution and after-sale services. Today, Haier has established 15industrial complexes, 30 overseas production factories and bases, 8 design centers and over58,000 sales agents worldwide.In China, Haier’s 4 leading product categories - refrigerators, refrigerating cabinets, airconditioners and washing machines - have over 30% market share. In overseas markets, Haierproducts are available in 12 of the top 15 chain stores in Europe and 10 leading chain stores inthe USA. Haier is now approaching its goal of being “local” in American and European marketsvia localized design, manufacturing and sales processes. In addition, Haier has set up productionfacilities and plants in the USA, Italy, Pakistan, Jordan and Nigeria.Haier’s innovative management principles, such as Haier’s OEC management model, “market-chain” management and “individual goal combination” – a system of assigning incentives-basedresponsibility to staff to ensure the quality of products delivered to their customers – have gainedhigh recognition among international management institutes. Haier business case studies areincluded in the text books of Harvard University, University of Southern California, LausanneManagement College, European Business College and Kobe University.ServicesWith the concept of “customers as the foundation of growth”, Haier provides a one-stop starservice to its customers. In a joint survey conducted by the China Consumer Association and theChina Enterprise Research Centre of Tsinghua University on China’s domestic durablecommodities for 2003 and 2004, 8 of Haier’s product categories were ranked No. 1 for customersatisfaction and overall satisfaction.In addition to high quality home appliances, Haier is also focused on offering best-of-breedservice solutions to its customers. Haier’s service system runs throughout the production processfrom product design, production, manufacturing, to pre-sale, under sales and after sales service.25 | P a g e
Since 2002, Haier has successfully established a network of over 5,000 domestic professionalservice suppliers to deliver timely customized service.PartnersHaier has established an extensive sales network around the globe. Key partners in perspectivemarkets include:• China: Strategic alliance with Suning and Gome chain stores• America: Cooperation with TOP 10 retailers, e.g. SEARS, Lowes, HOME DEPOT, Best Buy,PC-Richard, Wal-Mart, Sams, Costco, BrandsMart and Target• Japan: Cooperation with TOP 10 retailers, e.g. YAMADA, KOJIMA and JUSCO• Europe: Cooperation with KESA, Media Market and Carrefour • Home appliances General home appliances26 | P a g e
○ Refrigerators Haier is one of the world’s largest and most advanced refrigerator manufacturers, producing over 12 million units of refrigerators and freezers annually at its 20 production facilities worldwide. Haier consistently applies leading global technologies in the manufacturing of its products. Haier is the first company to make breakthroughs in integrating fluorine-free, energy-saving technologies with large freezing capacity, and solve technological problems related to sterilization. Haier has also rolled out the world’s first variable- frequency refrigerator, which is made of heat insulating material designed for aerospace.Household Air Conditioners At its eight large production bases in China, Haier uses theworld’s most advanced automatic flexible production lines to ensure the delivery of largequantities of highly reliable air conditioners, which are exquisite in quality and free of defects.27 | P a g e
Washing Machines Haier produces washing machines of 5,000 different specifications under 18categories, and is the only company in the world with the capability of large scale production oftop load washing machines (popular in Asia), front load washing machines (popular in Europe),agitator washing machines (popular in America) and dual-drive washing machines. Haier, with amission of “customer-oriented design”, pays great attention to safety, health, and theenvironmental concerns of consumers in designing its products. Haier has introduced a series ofnew hi-tech environmentally-friendly washing machines, staying ahead of the market trend anddemonstrating the technological innovation capability of the company.Freezers Haier produces 1.8 million units of freezers each year. Haier is licensed to supplyproducts for military provisions, and is the only company to win the bid for three consecutiveyears. Haier freezers have received ISO9001 quality, ISO14001 environmental compliance, andISO12001 metering and testing certification. Haier is also China’s first freezer maker to receiveTUV International Safety Certification, and was the first to receive a no-fluorine certificate fromthe United Nations Development Programme.Vacuum Cleaner Developed with the Haier spirit of continuous innovation, Haier dustcollectors consistently lead the trend in the dust collection market. Haier’s dust bag series areinnovatively designed to collect dust from all directions. The user-friendly design includes suchfeatures as a speed-adjustment button on the handle, dust bag design, and lightweight aluminumalloy cord. Home appliances for kitchen and bathroomIntegrated Kitchen Haier integrated kitchen products come with an advanced green safetysystem, and are equipped with environmentally friendly material, dust-free digital technology,28 | P a g e
high-quality sync installation and one-stop green service channel, thus bringing customers theultimate green and safety experience. Haier Kitchen Company is the only company in its productsegment to receive ISO9001 quality certification in China.Water Heaters Haier manufactures water heaters of 300 specifications under 12 categories,including electric water heaters, gas water heaters, solar energy heaters, and gas boilers, in thecategories of mechanical, electric, and network-based, and with the capacity range of 5-litres to500-litres. With the application of high technology, Haier produces water heaters in a wide rangeand specifications both for home and commercial use. Haier follows its “Safety-based Products”philosophy in manufacturing water heaters and leads the industry in safety technologies.Kitchenware Haier’s kitchen appliances cover 4 categories: dishwashers （ see aboveintroduction, exhaust fans, gas cookers and sterilizing cupboards, in more than 300specifications. Haier Kitchenware products are based on environmentally-friendly technology,with zero leakage and low radiation. The products have won environmentally friendly and greenproduct certifications in both China and the US.Microwave Ovens Haier offers microwave ovens in 50 varieties under 8 categories, includingmechanical，electronic and digital, and with the capacity range of 17-litres to 40–litres. Haierovens feature both stainless steel and painted stoves, and come with top doors and side doors. In2003, Haier developed the steam microwave oven, taking the lead in the application of newtechnology. Haier is committed to manufacturing high-quality, high-tech and environmentallyfriendly products, using components made by the world’s top 500 companies. Haier microwaveoven products have received FCC and FDA certificates from the U.S Federation DrugAdministration.Audio and video productsColor TVs Growing at an annual rate of 141% over the last 9 years, Haier color TVs aremanufactured with the application of high technology. Haier aims to provide the right products29 | P a g e
for different consumer groups, gaining high customer recognition. Haier is committed tostrengthening its global competitiveness, with the creation of a global supply chain under theconcept of “competitive cooperation”. Haier’s extensive range of products, including traditionalTVs, flat-panel TVs, digital TVs, wireless TVs, touch TVs and 5.1 sound system TVs, aim tobring more freedom, comfort and greater entertainment to homes and customers.DVD Players Haier offers a diverse line of DVD players of exceptional quality. Haier DVDplayers are favored by consumers for their performance and after sales service. The productshave won a number of awards for environmental protection and energy efficiency.Commercial Air ConditionersHaier has become a well-known global brand for commercial air-conditioners for its strongR&D, excellent product performance, and marketing capability. Haier delivers commercial airconditioners, large multi-system air conditioners and large cold-water air conditioning units in 8categories and 260 specifications, featuring an integration of fluorine-cooling, wind-cooling andwater-cooling functions. Haier’s variable-frequency, variable capacity multi-system centralconditioners, flexible variable-capacity screw compressors, and household variable-frequencycentral air conditioners lead the industry trend with their energy efficiency.30 | P a g e
Communication and IT productsMobile PhonesBased on the philosophy that the technology and fashion can co-exist, Haier integrates state-of-the-art wireless communication technologies into a complete range of in-fashion mobile phones.Haier mobile phones include such latest features as GSM/GPRS technology, integrated digitalcameras, MMS, MIDI Polyphonic ring tones and color LCD screens. The product line includesbar-type phones, clamshell phones, smart phones and the new and unique slim phones.IT productsComputers (desktop and laptop) With a special attention to users’ health, and eye-protection,Haier makes desktop and laptop computers for personal and commercial use in different ranges,including the world’s first laptop with 2.0 mega-pixel camera. Haier is committed to delivering afull-service package, and offers free software commissioning. By establishing strategic allianceswith suppliers, such as Intel, Microsoft, China Unicom and China Netcom, and taking advantageof the technology and resources of its partners, Haier consistently improves the quality of itscomputers. In product R&D, Haier employs a team of top class engineers from the U.S., Japan,Republic of Korea, and China’s Taiwan region, and has established a strict-quality controlsystem.Digital Information Products Haier offers a number of patented digital information products,including MP3 and MP4. Haier is committed to delivering personalized products, services andapplication solutions to meet the individual needs of users.Haier PharmacyFounded in 1996, Haier Pharmacy is the newest growth area within the group. The productofferings cover 80 specifications under 60 categories including medical raw materials, tablets,capsules, granules, oral liquid, medicine powder for injection, lyophilized powder for injection,eye drops, etc. The products of Haier Pharmacy fall into four categories of marine drugs,Chinese medicine, Western medicine and healthcare products, with focused areas of the heart and31 | P a g e
cerebral system, digestive system, osteoporosis, diabetes and healthcare, all of which havereceived GMP certification in China.Haier servicesIntelligent Home Integration Haier’s intelligent system is the mainstay of Haier E-homeprogram. Haier provides comprehensive solutions for communities, hotels, supermarkets, officebuildings, factories, urban security departments and homes, and delivers a series of intelligentproducts, such as digital video phone systems, security monitoring systems, anti-burglary alarms,home environment control and access control systems.Networked Digital Home Solutions Haier launched the third generation of networked homeappliances, called “Haier E-home”, in 2005. Haier deploys “Haier E-home” using atechnological system based on proprietary intellectual property rights, such as home networksystem structure and home network communications technology. The home network is dividedinto a main network transmitting high speed information, and a sub-network transmitting lowspeed information. Haier E-home can enable remote access to home appliances and theinterconnection of appliances through the Internet, PDA, mobile communications network, cableTV network and fixed line networks.Travel Haier Group’s Conference & Exhibition Division provides one-stop service fororganizing meetings and conferences, from preparation to hosting the event. Haier’s hotel systemis able to provide conference services, accommodation, catering and entertainment. HaierScience and Technology Museum is an exhibition hall of modern industries invested in by theHaier Group. The museum, based on Haier’s enterprise culture, is a comprehensive facilityserving as a science and technology museum and cultural center, and providing travel andentertainment services. The Haier International Travel Agency mainly offers business travelservices.32 | P a g e
Insurance Established in 2001, Qingdao Haier Insurance Agency delivers insurance policies onbehalf of insurance companies through Haier’s comprehensive network and large customer base.The company also makes loss assessments and handles compensation on behalf of insurancecompanies.Logistics Haier Logistics was established in 1999. By establishing a global network of suppliers,Haier has gained significant advantages in terms of cost and R&D. Haier aims to establish anefficient supply chain and provide customer-oriented value-added services. Haier logistics isgrowing into a global trade company through continuous supply chain managementoptimization.Haier SoftwareQingdao Haier Qingda Software Company, established in 1998, is a high-tech enterprise engagedin development of embedded systems, information software, and system integration. Its mainbusiness is focused on the development of commercial intelligent systems and embeddedsystems, software outsourcing, system integration and the development of multimedia systems.Haier Group’s LCD TV and plasma TV control panels are all designed by Haier Qingda.Haier Real EstateQingdao Haier Real Estate Development and Investment Company is a wholly-owned subsidiaryof the Haier Group. In developing its real estate business, the company pays high attention toimproving the quality of construction and living conditions, while making efforts to preservecultural heritage and to facilitate a healthy and civilized living environment.33 | P a g e
Brand awareness survey Out of the people surveyed 30% people opted to purchase CTV, this shows that still the electronic segment is having growth potential and it is lucrative. This also shows that still if acustomer wants to purchase white good first opted preference is CTV. The percentage interestshown by the people in purchasing refrigerators and Air conditioners is seasonal only due tosummers.Other hidden aspect of this finding is that if the brand popularity is there in CTV, it can beextended to other product categories also. Stronghold brand presence should be established inelectronic segment then it can be extended to other product categories. 2. Preferred brand in the last purchaseOut of people surveyed 36% LG in their last purchase, and this preference was mainly for AC`s,refrigerators and televisions. Only 9% of the people surveyed opted for Haier and that wasmainly for mobiles that were branded for Reliance Communication CDMA phones.34 | P a g e
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3. Factors affecting their preference for preferred brand:Brand name matters always that’s why most of the companies which was opted by the customers, they preferred because of the brand name the market leaders like LG , Samsung is dominatingbecause of their aggressive brand building exercise.After this service factor comes in the pictures, for each surveyed brand people preferencerevolves around two major factor brand image and service. consumer durables representslifestyle and if a person wants to purchase any consumer durable item he/she prefers thoseproducts which is already established, or in other worlds which gives them a “proud to own”feeling.People opted Haier in the attributes like product features, it was 60% for Haier more than anyother brand, it represents if the product features of Haier can be communicate suitably, there ismuch more potential in the brand itself. This also suggests that Haier needs to push productsbefore a customer enters inside the store; it will enhance the brand value and will push the brandsale as well. 4. Brand awareness for HaierThis shows how much customers are aware of Haier, and in other way what is the effect of allthe marketing exercises, and the communication done so far for the Haier. Still 64% of thepeople surveyed were not aware of Haier; this suggests reevaluation of marketing strategies forHaier to enhance their brand awareness and visibility in the market place.36 | P a g e
5. Haier influence on purchase decision36% of people surveyed knows about Haier but only 20% of the people surveyed had look onHaier product before making the purchase decisions, this is surrounded by many factors like“Place” strategy of Haier, because of unavailability of the brand in the customers preferred multibrand store, other factor could be their will be dealers demonization to sell the Haier Products,less effort by the sales intermediaries. 36% people know but didn’t want to see the products arealso showing the uncertainty in the minds of the customers in their minds.37 | P a g e
6. Brand awareness:25% of the people surveyed don’t know the most common strategy adopted by the Haier tocreate brand awareness for the brand i.e. Haier is the second largest appliances in the world.There was several lacking in their marketing communication, because of that the people whoknows about the brand still don’t know about this fact.There could be other side of this fact that by the way of promoting as a second largest appliancesbrand, it automatically promoted the brand which is largest appliances Brand in the world,because by the way of communicating that Haier is the second largest it is automatically creatinga willingness in the minds of the customers that which is the largest brand, in the world.38 | P a g e
7. Awareness regarding the product lines of HaierStill people perceived Haier as an electronic and mobile manufacturing brand, the supremacy forHaier lies in the appliances category, and it has proved worldwide.By the way of the marketing strategies adopted by the company it has created a electronic brandimage , it has a positive side which was earlier discussed that to promote brand in the appliancescategory it is better to promote the brand in the electronic segment first , because still peopleprefer to buy a color television first, but for that as a company it needs various options for thecustomers in form of various variants, wider option in electronic segment and the models whichcan compete with the brands which is present in that segment because the competition is stiffthere.If as a brand it is unable to convert those potential customers in to their customers. It is losing inboth the fronts, in that category in which it was promoted and secondly where it wants to move.39 | P a g e
8. Origin of Haier:Haier is perceived as a Chinese brand by 37% as a European brand by 28% and as an Americanbrand by 20% of the people surveyed. When it was asked to the customers about that whatcountry origin meant to you regarding the product quality.Still 62% people is having negative perception regarding the Chinese companies, for 28% peoplethe company origin doesn’t meant anything for them ultimately what company is giving in theform of quality is matters .European brand image is also perceived by the people surveyed still people perceived Europeanbrand as a quality brand.40 | P a g e
9. Customer Perception for Haier:One thing is coming good out for Haier is that people perceived it as a brand for quality out ofthe 60 people surveyed 34 told positively about the quality for the brand. They perceived it as aquality brand but in the service front 48 people voted negatively about it.This suggests that somewhere in the customer mind it is present that if they will purchase Haierthey will face service problem in the future. They perceived that because of their foreign origincompany is not having appropriate service arrangements.Haier need to focus on this they have to erase this kind of perception that they are lacking inservice front. Suitable communication effort should be done in the market place to gaincustomers confidence in service front.28 people surveyed said that Haier products are reliable and 32 negatively perceived in thisfactor, because of the Chinese image people somehow thinks negatively about it. But the marginis very less so still there is right way for the Haier in the reliability front.33 out of total people surveyed said that Haier products are not affordable. There could be otherreasons for it but company needs to focus on India specific products and the pricing should bebased upon it.A direct interaction with the major consumer durable dealers in the Ahmedabad market:Findings: 1. Factors affecting dealers focus on brands:41 | P a g e
From the above bar graph it is showing what the factors which are affecting the dealer focustowards the brand, no doubt the profitability is the first factor but this other factors also affectoverall focus of the brand .Like from this market insight it is clearly coming out that in city like Ahmedabad dealers don’twant to put more effort to sell brand they are happier if the brand it is getting sold itself in themarket. This is clearly evident that despite having good product line, better marketing supportfrom the LG, still 13 out of the dealers surveyed said that they are focusing on LG because theydon’t want to give much more effort to sell it.Like it is 1 for Haier, 9 for Samsung, 9 for whirlpool, 6 for Godrej, and 2 for Electrolux. Itclearly suggests that now it is time to create the brand awareness, and push products before acustomer enters in to store. Right now the dealers in Ahmedabad city are dealing Haier muchmore because of the profitability after sale service.42 | P a g e
Interested in HaierVisited 5 dealers responded positively for Haier and they can be negotiated for the dealership,other these 4 dealers gave mixed reaction which can also be converted.The market insight and factors influencing dealer focus1. No push sale, no need to push these company products, less sales effort: LG and SAMSUNGcreated that kind of image in the minds of the customers, where before making any purchasedecision, customer is more inclined towards the products of these company, and finally whateverthe customer will purchase he/she will definitely have a look for these companies productsbefore making purchase decision. Less Customer Complaints, Customer Awareness about theBrands.2. Profitability and holding cost: Better Volume Sale Which Ultimately Leads to Better Margins,And Better Bargaining with the Companies. And No blockage of money, stock gets clearedeasily3.Whirlpool is having wide product line in refrigerator category which ultimately gives moreoption to select from to customers with this their service support is good and the customercomplaints are also less especially due to home care program of whirlpool .4.Godrej is giving extra profit margin as compare to other competitors i.e. dealer price +schemeof 3% + 3% distributors margin+ FOC , and there is enough possibilities of large sell accordingto them because of launch of new product line series in appliances segment. With this thecompany better support in the form of marketing efforts, recently company gave 5 A.C displaypanel stands and other POP material to many dealers.43 | P a g e
5. Fair pricing strategies LG and Samsung prices are almost open to everyone are aware of dealerprice and customer price.6. Samsung Loan Mela and LG No Filing Charges, No Interest Finance Scheme on AirConditioners Is Creating Good Response among Customers.44 | P a g e
RefrigeratorsA refrigerator (often called a "fridge" for short) is a cooling appliance comprising a thermallyinsulated compartment and a mechanism to transfer heat from it to the external environment,cooling the contents to a temperature below ambient.Refrigerators are extensively used to store foods which deteriorate at ambient temperatures;spoilage from bacterial growth and other processes is much slower at low temperatures. A devicedescribed as a "refrigerator" maintains a temperature a few degrees above the freezing point ofwater; a similar device which maintains a temperature below the freezing point of water is calleda "freezer".The first known artificial refrigeration was demonstrated by William Cullen at the University ofGlasgow in 1748.Refrigerators are of two types:1. Direct cool Refrigerator: Cooling comes from the compressor only, need to defrost the icewhen the frost created inside the freezer.2. Frost free Refrigerator: A combined fridge/freezer which applies the frost free system to thefreezer compartment only is usually called "partial frost free", while one which also applies it tothe fridge compartment is called "total frost free". The latter features an air connection betweenthe two compartments, with the air passage to the fridge compartment regulated by a dumper. Insuch a way, a controlled minor part of the dry and fresh air coming from the dynamic coolingelement located within the freezer can reach the refrigerator.Haier is one of the world’s largest and most advanced refrigerator manufacturers, producing over12 million units of refrigerators and freezers annually at its 20 production facilities worldwide.Haier consistently applies leading global technologies in the manufacturing of its products. Haieris the first company to make breakthroughs in integrating fluorine-free, energy-savingtechnologies with large freezing capacity, and solve technological problems related tosterilization. Haier has also rolled out the world’s first variable-frequency refrigerator, which ismade of heat insulating material designed for aerospace45 | P a g e
Direct cool refrigerators capacity mapping B r a n d 1 0 0 170 175 180 185 190 195 200 205 210 215 230 243 250 260 300 Lts Lt Lt Lt Lts Lts Lts Lts Lts Lts Lts Lts Lts Lts Lts Lts s s s Haier Godrej Whirlpool Samsung LG Electrolux Comparative product models mappingFrom the direct cool Refrigerator capacity mapping and comparative model mapping it can beeasily understood that just because to give wider option to choose from, companies aresegregating the already segregated direct cool product category. Most of the Refrigerators whichare getting sold in India belong to direct cool refrigerator product category. It is compulsory forthe appliances brands to make strong hold present in this segment to create brand preference inhigher product segments. That’s why Whirlpool is having 36 models (consisting variants also)which represents strong hold in the segment.Companies are lying strongly in the entry level Refrigerators that’s why they have flooded thesegment with various liters capacity. Companies like Whirlpool having presence in170, 175, 180liters capacity. This strongly suggests the strategy of Whirlpool to offer the same product fordifferent customers for different usage pattern and need.46 | P a g e
Company like LG is also having presence in 4 sub segments, like 175, 180,185,190 literscapacity with different design and variants to choose from, in other way it is focused to thecustomer who just want a fridge which can cool, and the customer don’t want to spend muchover it, with this LG is also focusing on that customers which is seeking different productattributes for the product, which he/ she want to purchase.Direct cool segment is the segment where Haier is having presence in 190 and 210 liters, withonly 11 models and specifically in entry level it has only 7 models whereas their competitors arehaving 15 models. Whirlpool is having 25 models in this category where as Godrej is having 15models.Haier is having Refrigerator with 190 liters capacity in their entry level, company must arguethey are giving higher capacity then their competitors in the segment but ultimately we also haveto consider that Gujarat market is primarily a rural market where in the entry level customerdon’t want to stretch their purchase level, they can compromise in seeking product liter capacitybut they don’t want to budget for the purchase.They only want a refrigerator with a 170 -175 liter capacity which can cool only in summers. Ifthey can find that they are unnecessary spending more on purchasing a higher capacityrefrigerator they will easily switch over to other brandFor Haier there is a immense need to launch few new model in entry level segment or to increasethe variants of the present models to increase the no of models offered by the brands in order toretain the customers and to give wider option to their customers.47 | P a g e
Features mapping direct cool refrigerators entry level (175-190) Features Haier HRD Whirlpool Samsung Electrolux LG 181PP4 211 MP Genius RA18QHMb1 Deo fresh Gross Capacity (Liters) 190 175 180 180 180 Defrosting Semi Semi Semi Semi Semi System Automatic Automatic Automatic Automatic Automatic Direct Cool Direct Air Flow Type Direct Cool Direct Cool Direct Cool Cool Insulation PUF PUF PUF --- Maxi 2 Clean Back Deodorizing Tomato bin Temperature Dial Dial Dial Dial Control Dial Detachable gasket Number of 1 1 1 1 1 Doors Type Of Door Single Door Single Door Single Door Single Door Single Open Door Alarm Reversible Door Swing Door Lock Large Bottle --- 0 place Material Used Wire Wire Wire Wire Wired for Shelves Adjustable Shelves Egg Rack Removable Removable Removable --- ---48 | P a g e
Crisper or Large Vegetable Tray transparent Plastic Crystal Crystal Acrylic Material Moisture or Double Humidity humidity Control controller Quick Freezing Rolled bond Component freezer Large chiller Chiller Tray tray Blue, Grey, Mild Blue, Aubergine Colours Red, Silky Red and Deep Red and Red, Silky Available Red/ grey Grey White Metal Grey. Grey Anti-rust Powder Powder Powder Exterior Finish Powder Galvanized Coated Coated Coated coated Iron Body Price 8400 8500 8650 8700 870049 | P a g e
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Haier is known worldwide for “inspiring the living” of customers with the unique and patentedproduct Bottom Mounted Refrigerators. While taking a first look at this product it looks likesomebody has reversed the product, but that is not the case. In- fact the two sections,Refrigerator and Freezer has been interchanged. This idea has really hit the market, because therefrigerator section has usage of 80% and freezer section has 20% usage, because this product isupside down 80% times the customer doesn’t have to bend. The customers of this refrigerator arethose who really care for their family.Think a wife who is expecting a child bending is not good for her; it is easy for her to use thisrefrigerator, she will purchase BMR because she does not have to bend. Besides this there areother features that are different from the conventional Frost Free like the VC fresh technology.This technology keeps the fruits and the vegetables fresher for a longer period of time.Haier refrigerators are also equipped by spacious design. One will feel quite surprised he/shefound that the Vegetable box size of 240 liter BMR is larger than the 270 liter normal DoubleDoor Refrigerator.It has also a one biggest advantage “as the compressor and vegetable box is downwards innormal two door refrigerators, and Vegetable Box is upwards in the BMR, the Compressordoesn’t occupy space of Vegetable box which is upward in the BMR, which it generally occupiesin the Normal two door Frost Free Refrigerators”.This product has done wonders worldwide and considering the kind of requirement Indiancustomer has, in the days to come it will surely add more Customers in its kitty and inspirepeople to live with uniqueness in India.Haier BMR has drawn a considerable amount of attention from the customers whohave appreciated this concept and are using this technology to express their caringnature towards their families. This is a truly a family refrigerator.51 | P a g e
Frost free refrigerators capacity mappingBrand 200 220 230 240 245 250 260 275 280 300 310 315 340 365 3 3 4 Lts Lts Lts Lts Lts Lts Lts Lts 75L 90L 00L Lts Lts Lts Lts Lts lts ts ts tsHaier Godrej Whirl poolSamsu ngLG Electrl ux Comparative product models mapping Frost free segments: 1. 200-235 liters 2. 240 -260 liters 3. 275- 300 liters Haier is having good presence in this segment of frost free refrigerators, with a models present in all three categories, its strong hold needs to be capitalize seeing the product potential of BMR refrigerators, which others companies are not having. The total number of Haier models is 15 more than Godrej only keeping this thing in a view need to capitalize in building strong segment presence. 52 | P a g e
Place Competitor’s presence in GujaratHaier presence in Gujaratmarket is less compare to theircompetitors like LG, whirlpool, Samsung, Godrej it is greater thanonly Electrolux, one thing is also evident that Haier is present inmajor counters with LG and Samsung, Haier also need to focus onthose dealers were it will not face direct competition with LG andSamsung. Competitive strategy should be like this were first Haier53 | P a g e
should wipe out smaller brands compare to LG and Samsungbecause this brand also have market share larger than Haier, andHaier is not in competition of LG and Samsung it should target onbrands like Electrolux Godrej , TCL first, so it can compete thebigger brand later on.54 | P a g e
Service mapping in Orissa market55 | P a g e
PromotionSamsung Innovative promotion and advertising initiativesTo establish trust and confidence among Indian consumers, Samsung did active promotion andadvertising by taking the following initiatives. • Samsung India associated itself with the ruling passion of the Indian mass consciousness: Cricket. Samsung launched the Team Samsung campaign with the stars of the Indian cricket team, which caught the imagination of an entire nation. In 2004, Samsung also brought to India what was possibly the biggest cricketing spectacle of this decade, the historic India vs. Pakistan cricket series - ‘The Samsung Cup’. • Not confining itself to cricket, Samsung sponsors the Indian contingent to the Olympics and the Asian Games. It also ran training programmes for deserving Indian athletes under the Olympic Ratna banner. Samsung has also helped bring to India, for the first time, the Olympic torch relay. Samsung also brings every year to India - the World Cyber Games, which is regarded as the Olympics of the Cyber world. • Samsung also launched a series of innovative below-the-line activities. In mobile phones, Samsung tied up with noted painter Satish Gujral for his paintings to be available as downloads on Samsung mobile phones. • Product placement was done in movies and popular television serials like ‘Jassi’ where Samsung products were set in lifestyle environments. • For Microwaves, Samsung ran a Kitchen-on-Wheels programme where mobile kitchens with microwave ovens went to various localities demonstrating the advantages of microwave cooking. • Samsung branded its products as superior technology and environment friendly ones. The Samsung refrigerators and ACs incorporate a revolutionary new technology called Silver Nano Health System that ensures freshness and bacteria free environment. It launched the56 | P a g e
“Bio” range of products. In microwave ovens, features like the bio-ceramic coating and 3D shower waves keep in mind the health conscious public of today. • Launched a special marketing campaign for Flat TVs including a focused advertising campaign ‘Duniya Hai Gol, TV Flat’ and attractive exchange offers. As a result, flat- screen TVs make up over 50 per cent of Samsung’s TV sales compared an industry average of 17 per cent.Customized products for Indian Consumers • Samsung understands the local cultural sensibilities to customize its products according to the Indian market. It has set up a “usability lab” at the Indian Institute of Technology in New Delhi to customize Samsung products to meet the specific needs of Indian consumers. This industry-institute partnership is helping Samsung to study and analyze consumer response in aspects of product design, including aesthetics, ergonomics and interface. • Through its research done on consumer preferences in India, Samsung has concluded that Indian consumers want more sound oriented products. Thus, the Samsung televisions for India have a higher sound capacity than their foreign counterparts. • For the semi-automatic segment of Samsung washing machines, Samsung has introduced for the first time in India a feature called Super Dry. It is present in three of Samsung’s semi automatic models and dries the clothes better than the rest. • Samsung washing machines have an additional menu that takes care of the local Indian wardrobes. They also have a ‘memory re-start’ that takes care of the frequent power failures in India.57 | P a g e
Innovative marketing strategies of LGTo make itself a known brand in the consumer electronics sector, LG has taken innovativemarketing and promotional initiatives: • Launch of new technologies in consumer electronics and home appliances. • LG was the first brand to enter cricket in a big way, by sponsoring the 1999 World Cup, and followed it up in 2003 as well. LG brought in four captains of the Indian cricket team to endorse its products. LG invested more than USS 8 million on advertising and marketing in this sport. • LG has differentiated its products using technology and health benefits. The CTV range has ‘Golden Eye’ technology, air-conditioners have the ‘Health Air System’ and microwave ovens have the ‘Health Wave System’.Local and efficient manufacturing • Reduce cost and to overcome high import duties, LG manufactures monitors and refrigerators in India at its manufacturing facility at Noida, Delhi. LGEIL had already commissioned contract manufacturing at Mohali, Kolkata and Bhopal for CTVs. This has helped LGEI to reduce costs. • LGEIL is implementing a “digital manufacturing system”DMS) as a cost-cutting innovation. • This system is a follow-up to the Six Sigma exercise LGEIL had initiated earlier.Product localization • Product localisation is a key strategy used by LG. LG came out with Hindi and regional language menus on its TV. • Introduced the low-priced “Cineplus” and “Sampoorna” range for the rural markets. • LG was the first brand to introduce gaming in CTVs. In continuation of its association with cricket,LG introduced the cricket game in CTVs.58 | P a g e
Consumer Durables used 31% of sales promotional ads during H1’07.• Maximum usage of Sales Promotional ads by Television Sets.• Exchange Promotion was most widely used by Durables followed by Multiple Promotion andAdd on Promotions.59 | P a g e
• There was a tie between Mirc Electronics and Samsung India with equal share in H1 07.• 90% of advertising by Mirc Electronics in Television Sets (with brands like Onida Pure FlatTV, IGO Flat TV etc.) and Air Conditioners (with brands like Onida Air Conditioner, Onida CoolPoint etc.).• Samsung India focused their advertising on Television Sets and Refrigerators.60 | P a g e
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Advertisement analysisHeadline: A rainy evening and she finally calls you for dinner. Perfect. She loves the pink shirtonyou.Subhead: Pity, you put it into a wash just this morning...Body copy: Whatever be the time or the weather outside, the LG Washer and Dryer with DirectDrive System gives you 100% dry clothes, along with noiseless and perfect cleaning. So, goahead and let your pink shirt cast a spell on her.Baseline: Get ready. Right now.LG has used Abhishek Bacchan as their brand ambassador for washing machine unlike theircompetitors, which generally focus women in their ads because the washing is still related towomen in Indian homes, LG communication is based through a man. Message is very clear inthe ad that use of LG washing machine is so simple and uncomplicated so that a man can alsouse it.62 | P a g e
LG intends to change the usage pattern as it is a advertisement of fully automatic washingmachine the pictorial presentation is just in the lines of ad headline and its subhead.The use of Abhishek Bacchan presents the image of independent, successful and modern Indianyouth, and finally the ad is connected through a call from a girl for a dinner and because of thewhether it is not possible to dry the shirt which was put it into a wash just this morning, focus isbased on around the USP, i.e. 100% dried cloths through LG washing machine.63 | P a g e
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1. Headline: Barsaat main jhoom ja Stain ko bhool ja Subhead: Starring Stain wash Daag dhoye aise ke phir bheeg jaane ka mann kare Bodycopy: Whirlpool Stain wash washing machines ensure that stains disappear with the press of a single button. This range is equipped with a special Stain wash function which comes hot wash and a unique 1-2, 1-2 hand wash action that removes 6 stubborn stains, like shoe polish, red sand etc Baseline: Whirlpool. You’re magic in homemaking Headline: What women want Subhead: Someone with a spotless reputation Bodycopy: The new Sensation from Whirlpool with Stain Wash, a unique program that cleans even the most stubborn stains, be it curry or pickle, that other machines cannot. Baseline: You and Whirlpool. The worlds best homemakers. Use of Ajay Devgan and Kajol in the ad of whirlpool is giving a homely feeling the67 | P a g e
Headline: Whatever role life gives you, play it big.Bodycopy: Every day, life throws a million opportunities your way. We believe you should makethe most of each one of them. And it is the very belief which has made us a $4 billion globalconglomerate, with manufacturing and R&D facilities across the world, and the distinction ofbeing rated Indias Most Valuable Consumer Durable Company.68 | P a g e
Consumer durables represents lifestyle here in this Videocon ad two biggest youth icon frombollywood and cricket has been used , the ad is focused to give a Indianans’ touch to it , by theway of representing the Videocon as a Indian multinational. The image of both Ms Dhoni andShahrukh Khan is perfectly used, one is representing the upper class and whereas M S Dhonicommon middle class image is being used.69 | P a g e
Haier ads are focused on unknown faces and to the product quality, a smiling Indian face is standing in front of Haier refrigerator it shows that life is smiling with Haier refrigerator, Haier ads also shows that Haier don’t feel that it will be carry with the image any popular face but it want to create the space in the Indian market with product features. BTL Activities of All Brands in market place BTL Activity For All BrandsDate Brand Media Activity Samsung Loan Mela in all leading4.02.08 Samsung Samsung Loan Mela counters(Hilighted by flex)4.02.08 Haier Display Mobile Van Display Mobile Van For the costal Gujarat19.2.08 LG Ear Pannel Buy any AC and get a microwave free Just Pay Rs:26590 For 1.5 ton split AC &19.02.08 Sansui Ear Pannel get a Microwave oven free21.02.08 LG Paper Add (Refrigerator) Display Mobile Van For all Gujarat22.02.08 Samsung Paper Add (AC Dhamaka) Display Mobile Van For all Gujarat Paper Add (Samsung22.02.08 Samsung All Gujarat Dealer Meet Digital Home Carnival) Local Cable Add (Otv) of Relating Business Plan 08-09 &22.02.08 Haier AC & BMR launching of new products22.02.08 Videocon Display Mobile Van All Gujarat Dealer Meet CTV Exchange Offer, 54cm Flat+DVD22.02.08 Onida Dvd Paper Add =6680/- & DVD @ Rs2490/-23.02.08 Samsung Paper Add (Home Theatre) (Home Theatre)23.02.08 Sansui Paper Add23.02.08 IFB Paper Add23.02.08 LG Paper Add24.02.08 LG Mall Activity (Pantaloon) (Pantaloon)24.02.08 LG Ear Pannel25.02.08 Samsung Paper Add (AC Dhamaka) (AC Dhamaka) 70 | P a g e
26.02.08 Videocon Display Mobile Van26.02.08 Godrej Display Mobile Van Whirlpoo27.02.08 Dealer Meet l Whirlpoo28.02.08 Media Coferance l29.02.08 Videocon Dealer Meet29.02.08 Hyundai Paper Add2.03.08 LG Ear Pannel Buy any AC and get a microwave free Just Pay Rs:26590 For 1.5 ton split AC &3.03.08 Samsung Paper Add (AC Dhamaka) get a Microwave oven free4.03.08 Sansui Paper Add K2K 21 Flat Rs;-4990/-,29wtg Rs:-9990/-2.03.08-- Godrej Display Mobile Van Display Mobile Van For all Gujarat8.02.08 71 | P a g e
After analyzing the BTL activities of all brands in a month it is evident that Haier competitorsare way ahead in comparison of no of activity done. Haier has done two activities; one wasmobile van and other was local TV ad whereas their competitors have done 7-8 activities in thatparticular month. Brand visibility and awareness can be created by the increased number of BTLactivities, Haier has to increase the number of BTL activities so that brand visibility can becreated. For Haier competitors their activities were also very much different and focused like LGhas done mall activity at pantaloon, one thing is also evident that others brands are focusing verymuch on local paper ads, but Haier didn’t had any paper ad on that particular month, localnewspaper ads is a very different way of marketing communication and the main benefits whicharrived from it is that there is high rate of connectivity with the people in local language incomparison to other medium.There is also evident from the analysis that in the particular month market was also flooded bydifferent offers but Haier didn’t have any offer on that month.72 | P a g e
Pricing strategies:If we look upon the pricing strategies adopted by the consumer durable brands we can see thatthere is not much difference. Every company is trying to give variable product option in variableprices to focus on different pool of customer incomes, and requirements with the same brand.The refrigerator of a company like LG which is a market leader is starting from 7500 in 175 litercapacity in direct cool refrigerator category. They are so much of variable option in samesegment to attract different type of customers one of the reasons is that LG business is now is onsuch heights now due to mass production there landing manufacturing cost is comingcomparatively much lesser than their competitors.There 6.2 kg washing machine is starting at RS 5990 much more lesser with respect to theircompetitors with same kind of features.LG pricing strategy is totally matches with its corporate strategy. First they have created a kindof brand image where they don’t have to depend upon their dealer and distributors, their productsare getting sold itself in the market. They keep on capitalizing in their strategy to push theproduct before a customer gets enters in the store in order to pull demand from the market.Samsung is also adopting same kind of pricing strategy but they are different from LG in respectto their price positioning they have got the clue that modern day demand is pulled by the youngaspiring middle class, they want lifestyle in their life and prefer life style product and services,Samsung understood that fact and started to position as a lifestyle product brand and their pricepositioning is accurately based upon it. With this they are so much of variable option in samesegment to attract different type of customers.Samsung starting entry level refrigerator starts from 8200 with a clear differentiation with theircompetitors in this segment.Godrej with a launch of new product line also want to create and to give a fresh look in to theirbrand with vibrant colors and design and in order to come up from old Indian brand image.Godrej pricing is very much competitive in one way they are giving economical models and theyare also focusing on high end models with their new launch. Godrej is giving extra profit margin73 | P a g e
of 1.3% other then what they are giving currently, with a wider focus on brand visibility andpromotion.Whirlpool is having wider option both in refrigerator and washing machine they are also havinghighest no of refrigerators models. They are also focusing majorly on to give lifestyle feeling andtheir pricing is based upon it.Haier entered the Indian market with a premium line of products, which prohibited the brandfrom building a mass appeal. Although, there are so many players in the market and there isenough space for players like Haier seeing the economy grow at around 8-10%. In the beginningHaier was clear that it will target niche segments. For instance, it had 2.3 kg washing machine,targeted at small washing jobs, priced at Rs 6,990, and a bottom mounted refrigerator priced Rs42,900, which are not offered by any other brand. Although globally, Haier is a big name inappliances, with this segment contributing 70% to overall turnover, in India it wants a strongshowing in CTV’s also that’s why they focused more in electronic segment first because of thatthey lacked focus in appliances in India.Haier is focusing on premium pricing seeing the negative perception of Indian people regardingChinese brand.Haier core offerings till now have been high-end products but it should enter the mass marketwith some starting models in direct cool refrigerators and other such mass volume categories inan attempt to gain a bigger chunk of the market. This will also create equity for the brand.Seeing the market changing environment Haier focus should be to take the brand to the nextlevel in terms of mass penetration and for this focus should be made on network, products andretail expansion wherein organized retailers will play a very important part.For Haier a price plank will not work, since its likely to reinforce the image of a cheap Chineseproduct. Haier is a premium brand, and Haier positioned it in same way, however now time hascome to on the basis of additional features Haier should be positioned as value-for-moneybrand. Like If Haier prices its semi-automatic washing machine at Rs 6,200 against the industryaverage of Rs 6,000, it also offers an all-plastic body, which others dont. Overall, Haier has to74 | P a g e
build its brand on the platform of technology and innovation with taking value for money statuskeeping in the mind.Products like the bottom-mounted refrigerator that the company sells is based on the insight thatconsumers use the freezer less often and its placement at the top means a person has to benddown every time he wants to use the food storage compartment. Putting the freezer at thebottom makes it easier for the consumer.Finally Haier has the ability to develop 1.3 new models every day and has some 13,000 modelsin 38 product categories. "Haier is a brand which has given global players a run for their moneyand theres no reason it can’t create that position in India, where consumer insights play an evenmore crucial role their verdict.75 | P a g e
Conclusion and recommendations: 1. The first and most important thing which Haier needs to do is to, it was found in customer survey that still 64% of people surveyed were not aware of Haier, even dealers who are in consumer durable business from more than past 20 years are not aware of Haier, for the brand which is only having capability to compete against the Korean giants LG and Samsung needs to push the products before a customer enters inside a store. 2. Haier needs to increase the number of BTL (below the line) activities to generate common awareness and visibility at grassroots level, because it can be understood from the figures of their competitors BTL activities that Haier BTL activities is not up to the that mark in comparison to other competitors. 3. In Ahmedabad market dealers don’t want to put direct push effort on brands that’s why unlike other cities market where if a dealer deals in LG they prefer not to deals with its direct competitor Samsung, but in Gujarat every dealer is having collection of brands, they want to be ready for everything like whatever customer demands they can easily find out in their store. Currently Haier is available with most of the major dealers in Ahmedabad, Haier needs to focus on those dealers also where it will not face direct competition with LG and Samsung , a small and dedicated brand dealer will work not only for margins but they also can see the future opportunities in form of Haier. 4. Good thing about Haier is that they got somehow success in positioning themselves as a quality brand the customer survey and the dealer’s survey tells the story about it. People perceived Haier as a good product quality brand. If this can be associated with better pricing also there will be immense possibilities for Haier. Need to create a value for money brand image which can give good product quality at affordable prices.76 | P a g e
5. Company product range is inappropriate especially in refrigerators whereas every company is having 165 literssegment as an entry level refrigerator. Haier is having 190 liters. If company will launch a new refrigerators in entry level with less pricing it can attract those customers who want to opt for a refrigerator in the entry level segment in less pricing there are much more scope for selling. 6. Haier needs to build strong dealer relation in order to provide better “place” strategies for the brand. Haier lacks in company support factors and most of the existing dealers in the dealer survey said that. Like most of the companies are having their regular company dealers meet to get together with their dealers, Haier lacks needs to do this in order to regain dealer support 7. Service arrangements need to be strengthen, still people thinks that because the company is having foreign origin and it is new too, if they will purchase any product they will face service problem in future . Like Haier is having 6 service centers whereas its competitor’s whirlpool, LG, Samsung, Godrej is having 14, 9, 9, 6 service centers respectively. Service policy of Haier is that a customer complaint has to go from dealers, which give unnecessary work burden on them. Customers in rural Gujarat not aware of the service call center facilities and don’t know how do it, company is not having the service centers also there in those area , customers passes the complaints to dealers, and dealers to distributors, and finally distributors has to log this complaints to the call center, which creates overburden for them. 8. Any one accepts that as a fully fledged brand, Haier can only compete with the Korean giants LG and Samsung. Product lines and variants in the refrigerators should be increased to give wider option to choose from to the customer because the Haier refrigerators could be proved as a benchmark product for Haier because of its unique differentiation with others as a BMR refrigerator. 9. Most of the products are not attractive, looks simple and not represents the brand quality, mostly in refrigerators segment even the logo on refrigerators are not attractive as compare to others.77 | P a g e
10. Haier should adopt aggressive marketing strategies to cut down competition and visibility at market place. 11. Appropriate product knowledge should be given by the company to dealers and to dealers to create awareness towards quality. 12. Overall there is much scope for Haier in Gujarat market. But Brand visibility should be increased so it can convince dealers and customers like LG and Samsung are more customers driven, where company demand is initiated by the customers, these company products pulls demand from the market. 13. Company must have to focus on print ads, because where in the TV ads, a person can see only if he/she open the TV and if the ads is getting broadcast that time, whereas print ads any person can see going through the news paper throughout the day. 14. Products should be more attractive refrigerators looks very simple and ordinary especially direct cool refrigerators Entry level Refrigerators can do better because of price and 190 capacities. 15. In the semi automatic washing machine segment one of the findings is that Haier needs to build a powerful USP for its semi automatic washing machines like they did it for Refrigerators (BMR) so it can clearly differentiate with others. Currently Haier is focusing more on fiber body, timer and powerful motor, which is almost same for all the present brands, other competitors like LG despite of all these features focusing more on technology ,like Punch Plus Three, for whirlpool its 1-2,1-2 Hand wash, for Godrej it is Force Four, and for Samsung it is Silver Nano. 16. Haier presence in Gujarat market is less comparedto their competitors like LG, whirlpool, Samsung, Godrej it is greater than only Electrolux, one thing is also evident that Haier is present in major counters with LG and Samsung, Haier also need to focus on those dealers were it will not face direct competition with LG and Samsung. Competitive strategy should be like this where first Haier should wipe out smaller brands compare to LG and Samsung because this brand also have market share larger than Haier, and Haier is not in competition of LG and Samsung it should target on brands like Electrolux Godrej , TCL first, so it can compete the bigger brand later on.78 | P a g e
References: 1. Mckinsey Global Institute `The Bird Of Gold`: The Rise Of India’s Consumer Market, May 2007 By Mckinsey & Company 2. www.wikipedia.com 3. www.google.co.in 4. www.haierindia.com 5. Marketing management by Philip kotler 6. Prof Malcolm Mc Donald, Ian Dunbar Marketing Mapping & Segmentation Vol 2003.1 By The Marketing Process Company 7. www.aykya.com 8. Suresh Khana Secretary General CETMA Competition Issue In Consumer Electronic And Durable Industry 9. “Haier features in Asia’s Most Admired Companies” Survey by BusinessWeek.com New Delhi, -- July 2007. 10. “Haier we go” The Pioneer, New Delhi, November 24, 2005 11. “Haiers Marketing Strategies in India” international marketing case study by ICMR at www.icmr.icfai.org 12. “Consumer and Trade Promotions - Haier Appliances (I) Pvt. Ltd” a case study by ICMR www.icmr.icfai.org 13. www.lgindia.com 14. www.samsungindia.com 15. www.electroluxindia.com 16. www.godrej.com 17. www.whirlpoolffindia.com79 | P a g e