my recent and best report ever

1. Report on
Electronics and consumer durable goods (Haier)
Submitted by
Mohammed Naseer Khan
(1226114117)

2. Summary:-
The consumer durables section consists of Refrigerators, Washing Machine, Air Conditioners,
Televisions, Wine Cellars, and Microwave Ovens etc. The segments I had to do research on were
refrigerators and washing machine. As being a competitive analysis, I had to go through all the companies
competing Haier i.e. LG, Samsung, Godrej, Whirlpool and Videocon in refrigerators segment and LG,
Samsung, Whirlpool, Godrej, Videocon, IFB and Onida in washing machines segment.
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.
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.
In Ahmadabad 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 Ahmadabad, 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.
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.

3. Introduction:-
The continuous inflow of disposable income and the advancement of technology, the need for the varied
consumer durable goods are increasing. This in turn is leading to a strong competition among the different
consumer durable brands available in the nation as well as the price gap between the same consumer
goods of different companies are narrowing down. Day by day these goods are becoming cheaper. The
rural and urban market of consumer durables has been growing at a rate of around 15 % on an average.
Growth prospects:-
India is likely to emerge as the world’s largest middle class consumer market with an aggregated
consumer spend of nearly US$ 13 trillion by 2030, as per a report by Deloitte titled 'India matters:
Winning in growth markets'. Fuelled by rising incomes and growing affordability, the consumer durables
market is expected to expand at a compound annual growth rate (CAGR) of 14.8 per cent to US$ 12.5
billion in FY 2015 from US$ 7.3 billion in FY 2012. Urban markets account for the major share (65 per
cent) of total revenues in the Indian consumer durables sector. In rural markets, durables, such as
refrigerators, and consumer electronic goods are likely to witness growing demand in the coming years.
From US$ 2.1 billion in FY 2010, the rural market is expected to grow at a CAGR of 25 per cent to touch
US$ 6.4 billion in FY 2015.

4. Some of the top consumerdurables brands in India are:
 LG
 Nokia
 Philips
 Samsung
 Sony
 Whirlpool
 Blue Star
 Carrier
 Godrej India
 Hitachi India Limited
 Sharp India Limited
 Tata
 Toshiba India Private Limited
 Videocon
 Voltas

5. About Consumer Durables:-
Consumer durables refer to those consumer goods that do not quickly wear out and yields utility over a
long period of time. Some of the popular and common examples of these kinds of items are electronic
goods, kitchen appliances, home furnishings and leisure equipments etc. Consumer durables can be
broadly categorized into the following 3 heads:
White Goods: White goods mainly include air conditioners, refrigerators, washing machines, audio
equipments and speakers.
Brown Goods: This kind of consumer durables mostly include kitchen appliances like chimneys, electric
fans, grinders, iron, microwave ovens, mixers and varied other cooking ranges.
Consumer Electronics: Some of the mostly used consumer electronic goods are DVD players, MP3
players, mobile telephones, telephones, VCD players etc.

7. Consumer electronics in India:-
According to a McKinsey 2005 report, while Food and Grocery took the highest share of wallet, and
electronics took only a mere 5%, the proportion of spending on electronics was definite bound to increase
by 2015 and also the growth rate for the share of organized retail in the electronics segment was set to
increase from 15% to a astounding 45% in 2015. A graph representing the share of wallet to the share of
organized retail is shown below.
Segment Definition:-
In general consumer electronics refers to a variety of electronic equipment used by private customers.
This industry can be divided into many segments:

8. 1. ‘Traditional’ Consumer Electronics: audio and video equipment
2. Computing Devices: Computers, Calculators, Laptops
3. White Goods: Household /Domestic Appliances such as washing machines, irons, vacuum cleaners,
grinders, etc
4. PersonalCare:Hair Dryers,shavers, electric toothbrushes.
In addition to this, the emergence of telecommunication has lead to the convergence of mobile technology
into the consumer electronics industry and hence this paper will only deal with traditional consumer
electronics, mobile phones and computing devices which can be termed as Brown Goods as per industry
definitions. Henceforth in this paper consumer electronics will refer to Brown Goods.
COMPANY PROFILE:-
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 leading white goods
home appliance manufacturers. Under the leadership of Chairman and CEO Zhang Ruimin, Haier
manufactures home appliances in over 15,100 different specifications under 96 categories. 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 companies and over
50,000 employees throughout the world. Haier’s focused industries include technology research,
manufacturing, trade and financial services.
The global revenue of Haier for 2005 was RMB 103.4 billion. Haier Electronics Group Co., Ltd., a
subsidiary of Haier Group, is listed on the Main Board of the Stock Exchange of Hong Kong. Qingdao
Haier Co., Ltd., also a Haier subsidiary, is listed on the Shanghai Stock Exchange.
On 12 August, 2005, Haier signed an agreement with Beijing Organizing Committee for the Olympic
Games (BOCOG) in Qingdao to become the official sponsor of the 2008 Beijing Olympic Games for
white goods home appliances.

9. ABOUT HAIER INDIA:-
Haier Appliances (India) Private Limited is a wholly-owned subsidiary of Haier Group. Haier India was
launched in India in December 2003 and by August 2004 had an all-India promotion launched with over
55 products across six product categories -- refrigerators, color television/DVDs, washing machines,
microwave ovens and dishwashers. Haier India has also launched its brand of mobile phones in India.
The India launch was started with innovative products which were designed keeping the day to day
customer needs in mind -- products that will transform the customer's everyday living into inspired living.
'Products that will make your today better than yesterday.' Haier India launched BMR technology for the
first time in India. Even the Double Drive is a newly patented technology.
The India operations already has an established dealer network of approximately 1600 dealers all over the
country, which is backed by a strong service and after sales service network.
HAIER INDIA VISION
To be the Most admired brand in India providing innovative, state of the art, user friendly products of
lasting value to our customers, to make their today better than yesterday.
 Over 4000 Retail outlets selling Haier products

10.  21 Planet HAIER (plus some exclusive stores)
 Presence in all major cities
 Brand recall – better than other new brands.
 18 Branch Offices & 25 warehouses.
 6 Direct Service Centers & 135 Haier customer care centers (covering all India)
 24x7 Call Centre
 Present status of Haier considering the time span, is appreciated by the Industry.
Swot analysis of Haier company:-
MAJOR PLAYERS IN CONSUMER DURABLES SEGMENT
 Haier
 LG
 Samsung
 Onida

11.  IFB
 Godrej
 Videocon
 Whirlpool
 Sony
 Siemens
Stratigies:-
1. Three phases of haiers innovation strategy
a. Brand building (1984-1991)-quality is prominent for haier .
b. Product diversification (1992-1998)-acquisitions of companies with bad management infusing life into
them.
c. Globalization (1998-2005)-attacking the difficult markets first followed by relatively weaker ones .

12. Principles followedfor expansion:-
1. Best efforts are made to fully develop the current industry before entering segment of relative products.
2. Best efforts are made to gain the leading position in the new segment of the industry after a certain
period.
Global Branding Strategy:-
Haier’s global branding strategy aims at positioning the company as a local brand in different world
markets in conjunction with enhanced product competitiveness and strong corporate operations. Haier’s
international business framework encompasses a global network of design, procurement, production,
distribution and after-sale services. Today, Haier has established 15 industrial complexes, 30 overseas
production factories and bases, 8 design centers and over 58,000 sales agents worldwide.
Scope of haier:-
In terms of Purchasing Power Parity (PPP), India is the 4th largest economy in the world and is expected
to overtake Japan in the near future to become the 3rd largest. Indian consumer goods market is expected
to reach $400 billion by 2010. India has the youngest population amongst the major countries. There are a
lot of young people in India in different income categories. Nearly two- thirds of its population is below
the age of 35, and nearly 50 % is below 25. There are 56 million people in middle class, who are earning
US$ 4,400- US$ 21,800 a year. And there are 6 million rich households in India. The upper-middle and
high-income households in urban areas are expected to grow to 38.2 million in 2007 as against 14.6
million in 2000.
Rural sector offers huge scope for consumer durables industry, as it accounts for 70% of the Indian
population. Rural areas have the penetration level of only 2% and 0.5% for refrigerators and washing
machines respectively. The urban market and the rural market are growing at the annual rates of 7%-
10%and 25% respectively. The rural market is growing faster than the urban market. The urban market
has now largely become a product replacement market.
The bottom line is that Indian market is changing rapidly and is showing unprecedented business
opportunity.

13. 4ps of haier:-
For Product:

14. For Price:
Direct meeting with the dealers to know other companies pricing, by collecting and Analyzing prices for
customers (MRP) dealers (D.P),direct dealers, and distributors.
For Place:
Obtaining feedback from the existing dealers of Haier and other consumer electronic dealers in the
Ahmadabad market through direct interviews. To establishing and implementing processes for obtaining
ideas, Information and insights from the dealers regarding the Haier marketing proposition for
refrigerators and washing machine, after that evaluating the feedback,
Assessing the benefits and any risks associated with possible options, and making
Recommendations towards enhancing the HAIER marketing proposition especially “place” or in other
words dealer expansion in Ahmadabad city.
Promotion:
Observing the number of marketing activities done by the other companies by keeping the record of
activities done by them, and also attending the activities to feelthe difference between the haier
marketing activities.
Global Presenceofhaier:-
· Trading Companies: 64
· Design Centers:8
· Industrial Complexes: 15
· Sales Network: Over 58,000
Recognitionand achievement:
· 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

15. Fortune magazine in 2004
· Received a World Climate Award from the United Nations Development Program and The US
Environment Protection Administration in 2000 Source.
Partners of haier:-
Haier has established an extensive sales network around the globe. Key partners in perspective
Markets include:
• China: Strategic alliance with Sunning and Gomes chain stores
• America: Cooperation with TOP 10 retailers, e.g. SEARS, Lowe's,HOME DEPOT,Best Buy,
PC-Richard, Wal-Mart, Sam's, Costco, Brand smart and Target
• Japan: Cooperation with TOP 10 retailers, e.g. YAMADA,KOJIMA and JUSCO
• Europe: Cooperation with KESA, Media Market and Carrefour

16. Challeneges:-
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.
2. Haier needs to increase the number of BTL (below the line) activities to generate Common awareness
and visibility at grassroots level.
3. In Ahmadabad 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 Ahmadabad, 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.
5. Haier should adopt aggressive marketing strategies to cut down competition and visibility at market
place.
6. Appropriate product knowledge should be given by the company to dealers and to dealers to create
awareness towards quality.
7. 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.
8. 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.
9. 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.
10. Haier presence in Gujarat market is less compared to 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.

17. References:
1. Mckinsey Global Institute `The Bird of Gold`: The Rise of India’s Consumer Market, May 2007 By
Mckinsey & Company.
2. www.haierindia.com
3. Marketing management by Philip kotler.
4. Prof Malcolm Mc Donald, Ian Dunbar Marketing Mapping & Segmentation Vol 2003 by the
Marketing Process Company.
5. www.aykya.com
6. Suresh Khana Secretary GeneralCETMA Competition Issue In Consumer
Electronic and Durable Industry
7. “Haier features in Asia’s Most Admired Companies” Survey by BusinessWeek.com
New Delhi, -- July 2007.
8. “Haier we go” The Pioneer, New Delhi, November 24, 2005