Haier in India: Building a Mass Market beyond China

Haier In India: Building A Mass Market Beyond China

CASE BACKGROUNDHAIER IN CHINAHAIER IN CHINA-Diversification and GrowthDropped mono-product strategy and diversified into other electronics by taking over Qingdao Air conditioner factory and Qingdao general freezer factory1992-1998: Expansion by merging with and acquiring ailing Qingdao Air conditioner factory and Qingdao general freezer factory Focus on quality, improvement of distribution channels, after-sales customer experience & brand building30% market share by the end of 1990s with revenue of $2.6 billion

HAIER GOING GLOBALEntered Indian Market Followed Global Brand Strategy from 2005.Bought a factory in India in 2008.2004-2008ENTERING INDIAINDIA: THE WHITE GOODS MARKET

The market was hyped but the demand had not yet caught up.For Example, the installed capacity for refrigerators was 5 million units, but the demand was only 3.3 million units.Growth from 2003-2004 11% - 14%Expected growth from 2005-2010- At least 20%Plans were in place for new product lines, new plants, capacity extensions and even green field investments.

The factors that led to demand: MARKET COMPETITIONMajor CompetitorsA competitor analysis provides a firm with the knowledge to leverage its strengths and address its weaknesses and, conversely, take advantage of weaknesses of competitors and counter their strengths.LG

Samsung

Videocon

Godrej

Whirlpool

MARKET COMPETITION CONTD..Strategy Chinese MarketKnown for its high quality product, so very good brand reputationCloser to Chinese customers in comparison to other multinationals.High investment in R&D, thus new products every year, very innovative.High market responsiveness, focusing on meeting customers needs.Strategy in American MarketTo manufacture quality products and sell at premiumFocus on getting Haier products into large retail stores such as Wal-Mart and Home Depot etc.Focus on niche markets to avoid competition from biggies like GE.MARKET COMPETITION CONTD..Competition in IndiaThe promotional activities done by Haier are very less.The in shop displays of Haier products are very less in number as compared to its competitors.As survey stated the Haier customer never switches over to any other companys product.Haier, being a Chinese company is disliked by people.Revenues has grown to Rs 1500 cr. In the long-term, Haier eyeing a 10% share of the market from the current 4% and is also looking to be among the top brands in the next five years.

MARKET COMPETITION CONTD..SUGGESTION AND RECOMMENDATIONSIncreased promotional activities

Increased production capacity for more in-shop displays.

High margin should be offered to the dealers.(push strategy)

Company should arrange more demonstration.

Sales promotional schemes in regular.

Products should be made available in at least all major stores.

New innovative products should be launched in the market with effective .PROBLEMS FACEDHigh Tax BurdenEscalating Price WarInfrastructureTHREE-IN-ONE LOCALIZATION: GAINING FOOTHOLDBRANDING ITS WAY INTO INDIAMARKET POSITION AND PRODUCT OFFERINGCHALLENGES MAKEOVERSWOT ANALYSISSTRATEGY PROPOSED USING ANSOFFS MATRIX

PRICINGOPERATIONSINNOVATION AND MARKETINGPRODUCT PORTFOLIODISTRIBUTION NETWORKNEWS PAPER REPORTS ABOUT HAIER INDIA POST 2010

Link: http://www.business-standard.com/article/companies/haier-to-set-up-new-plant-in-north-india-post-may-2015-114021800631_1.html

Link: http://www.business-standard.com/article/companies/haier-eyes-43-growth-in-2013-113031000169_1.html

Link: http://www.business-standard.com/article/companies/haier-to-break-even-this-fiscal-with-33-increase-in-turnover-113062000607_1.htmlThank You !

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