I. Localization Timeline

In order to build a famous brand name and improve its products quality, Haier has gone through many stages in its localization strategy in Indian market. Haier was launched in India in 2004, Banerjee wanted Haier to be in the top three brands in the home appliances in India .To achieve that position in the market Banerjee pushed for the localization strategy.

2004: Haier was launched in India in 2004. The company first operated in the Northern part of India. Within the first 5 year, low end products (color TVs) were outsourced to local companies and the high end products were imported. The low end products were not left completely to the local companies but demanded high quality standards that Haier had. Since these first step in India, Haier was aimed to gain 20% market share by 2009 and become one of the top 3 brands in India. 2007: Instead of making bold moves and executing rapid localization, it took a step-by-step approach, Haier adopted “three in one” localization strategy in which R&D, manufacturing and marketing was done in local way.

Situations in other countries were slightly different. . In US, full version of Three in One strategy opened. The Marketing Centre is in New York, the Design Centers is in Los Angeles and the Manufacturing Center located in South Carolina In USA, Haier exported products through scattered channels and then arrived at a common channel. After this it implemented the Localization strategy. But whereas in India, India it was only one manufacturing factory in Pune for assembling washing machines & AC’s, which was aimed to become a supplying hub for other countries in Africa, Middle east & southern & western Asia. And it started with the Localization strategy and then made a foot print in the market through other strategy of entering the mass markets.

2010: Haier invested USD22.2mn to upgrade its factory capacity in order to manufacture new and good quality products and increase gross margin. Furthermore, the company launched a marketing program called “You Inspire Us”, in which it projected itself as a global brand delivering latest technology and marketed its products as premium.

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II. Localization strategyAs to be more specific, I will be presenting a number of significant element in Haier entry and expansion strategy in India. But first of all, could any executive help me to point out some important strategies launched by Haier in its early stage in

India? Thank you for your answers, so to move on, lets have a look at these 5 major elements of Haier

strategies in Indian market. ALLIANCES - Haier established a joint venture company in the sale and production in India in

1999, and r established an Indian factory by Haier’s owned 100% in 2004, It started local production of air conditioning for the Indian market. Then, Haier was aim to Virtuous and whirlpool work together, and started the local production of air conditioning for the Indian market.LOCAL MANUFACTURING: This is in line with the “3 in 1” strategy Haier was implementing, in which R&D, manufacturing and marketing were carried locally according to the local demands. Indeed, Haier used local human resources to establish business. As a result, local manufacturing helps in reducing timelines for other markets.

PREMIUM PRICING- Several Chinese manufacturers who entered India priced their products low by compromising on quality, thinking that Indian consumers preferred to buy low priced products irrespective of their quality. This gave Indian consumers the impression that anything "made in China" would be cheap and of poor quality. However, Haier went on with pricing strategy which is above market premium price by 5% and focused on value war rather than price wars.

PRODUCT QUALITY –The company did not compromised on quality and offer innovative products. Haier introduced a comprehensive range of products in India to cater to the needs of different consumer segments. While its competitors introduced one product after another, the company flooded the Indian market with several new products like bottom mounted refrigerators and detergent free washing machines. Haier also launched mobile phones and unveiled plans to bring out laptops.

SIMPLE COMMUNICATION : Haier spent a considerable amount of time on deciding its brand strategy for Indian markets. Initially, the focus was on the fact that it was a global brand delivering the latest technology.

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Overall, Haier strategy is to be out of crowd, not to be in price war, Innovation, Adapt Localization.

II. Pre-Braganza StateI am sure you all know who he is. Can you say his name then? ..

This is T.K. Benejee, who was appointed as Haier India’s President and CEO in 2004 when the company first started its operation

in the market. He was the one who push the launch of localization strategy in Indian market. However, besides positive effects of extensive branding and manufacturing campaigns, establishment of a factory and localization changed perception of people that Haier was a non made-in-china product, the company still faced with many issues due to the drawbacks of its strategy. So could you one more time, identify what went wrong in this Pre-Braganza State?

LATE ENTRANT Drawback of late entrant in market, Entered India almost 7 years after its rivals LG and Samsung. At the time, the Indian white goods industry was already in the consolidation phase, with three to four firms dominating each of the segments.PREMIUM PRICE POLICY Premium price policy kept away from massive market segment. Additionally, heavy taxation policies lead to decrease in profit margin which resulted in decrease in demand. Thus, the company had low market share. POOR RETAIL INFRASTRUCTURE: Haier consistently worked towards building its brand and developing distribution network in India, however, the company still relied heavily on local retailers and also third-party dealer networks to market their products in either urban or rural areas.POOR AFTER-SALE SERVICE: Poor After Sales Service due to lack of service centers, and due to unavailability of spare parts in them.

HIGH COMPETION: High competition from Korean vendors in price. After taking hold of the low priced market, LG later seeped into the medium -end segment by offering feature -rich products and branding itself as an "inspirational brand".Samsung on the other hand while initially launching products ,later crossed into the mass market and released more price-sensitive products ,aiming for leadership in both the premium and large -volume categories.The Korean giants believed in R&D. The allocated some amount of the budget to R&D, so that they understand the market better and come up with products suitable for the Indian consumers and the situations.

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STAGNENT GROWTH It failed to achieve the set revenue targets. It could gain 3.5% share of the market vis-à-vis the target 15%.

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