Authors Name: Muhammad Naeem, Zulkifal Raza, Muhammad Asad Abbas Lodhi, Muhammad Abid and Muhammad

Sakib

Registration ID: (FA12-MBT-059), (FA12-MBT-093), (FA12-MBT-049), (FA12-MBT-043) and (FA12-MBT- )

Section: A

The topic is concern: Haier Inspired Living

Subject Name: Applied Marketing

Submitted To: Mam Jawaria Fatima Ali

Date: 19/12/2014

Haier had been originated as Qingdao

Refrigerator Co. in 1984 by Ruba Sez

group. Haier is a purely Chinese

company which is incorporated by

government of china. Haier is world‟s

No.1 leading brand in appliances

industry. Haier Pakistan is a strong

evidence of Pak-China relationship. The

joint venture between Ruba General

Trading Company and Haier group of

China brought Haier into Pakistan eight

year ago.

Haier was founded in 1984. In the last

30 years, through its entrepreneurial

and innovative spirit, Haier has

transformed itself from an insolvent

collectively-owned factory on the brink

of bankruptcy into the number one

global home appliance brand. In 2013,

Haier‟s global revenue and profit

reached RMB180.3 billion (USD 29.5

billion ) and RMB10.8 billion (USD 1.76

billion ) respectively. Profit growth was 2

times revenue growth. Based on the

statistics of Euro monitor International, a

world leader in strategy research for

Consumer markets, Haier have been

the number one global home appliance

brand for five years in a row. On the

2012 World‟s 50 Most Innovative

Companies list published by the Boston

Consulting Group, Haier was the only

Chinese company in the top 10, as well

as the top-ranked consumer product

retailer.

Company Philosophy & Mission

Haier is known for disruptive innovation

in its product solutions and management

model. As an open platform company,

Haier provides leading home appliance

solutions to its users. Qingdao Haier

(600690.SH), referred to internally to as

the 690 Platform, uses disruptive

innovation to create smart appliances

for its users with the aim of becoming

the leader in the home appliance

industry. Haier‟s five R&D centers

around the world have forged strategic

partnerships with first-class suppliers,

research institutions, and prestigious

universities to create an innovative

ecosystem composed of over 1.2 million

scientists and engineers connected by

virtual and physical networks. To

achieve company philosophy Haier has

made its mission statement as following

“To deliver valuable products &

services for the broad satisfaction

of our consumers and maximize

returns for all stakeholders through

ideal use of resources”.

Haier in Pakistan air conditioner

market:

Expecting the massive potential of

Pakistani market, Haier has set up a

state-of-the-art industrialized park at

Raiwind Road Lahore. It has a strong

value chain in Pakistan. Having state of

art technology for production of home

appliances, Haier has proven itself as

No.1 home appliance brand in Pakistan.

Many of home appliances such as

washing machine, air-conditioner and

refrigerators are the leading products in

intensely competitive market of

Pakistan. Haier air conditioners are the

leading product line in the market

despite of having tough competition.

This segment has a large potential for

profit and growth so all home appliances

manufacturers are competing to get

maximum market share. Haier using its

production facility and innovative culture

became successful to be a leading

brand in Pakistan.

Haier entered in Pakistan‟s air

conditioner market by realizing good

marketing environment for the business.

First of all Pakistan and china has a

friendly political relationship and both of

the government encourage trade

relation between each other. In social

perspective Pakistani consumers are

adopting modern life style and use

modern appliance such as air

conditioner for cooling temperature.

Another major opportunity was

environmental condition of Pakistan

where summers season are long and

may remains eight to nine months. At

the peak of season temperature can go

to 45C to 50c. In this condition it

becomes hard to survive without air

conditioner to moderate the

temperature. There was also huge

growth of per capita income in Pakistan

that was about 20 to 25% increases in

last decades so customers have started

to spend on necessary home appliance.

Despite of all these great market

opportunities from macro environment

Haier had to face an intense competitive

market to enter the segment. Air

conditioner market was occupied by

some of the major home appliance

manufacture. Haier faced a tuff

competition in air conditioner market

from

Mitsubishi

Pel

Orient

Dowlance

Gree

General

Panasonic

Samsung

Haier had to face several threats from

industry forces; there was a strong

rivalry among the competitor. All the

players in the market were seeking for

largest share in this profitable segment.

Another major threat was high

bargaining power of customers. As

customer have a lot of choices to buy an

Air conditioner which they needed.

This tough competition brought several

benefit for the customers. Such an

intense competition requires air

conditioner manufacturers to

differentiate their products by offering

innovative and more efficient air

conditioners to compete in such a

competitive market. This competition

enabled customers to have a variety in

air conditioners features and functions.

It also helped customers to have a

choice in features and functions of air-

conditioners. Such a variety in demand

made consumer behavior more complex

and sophisticated like now they don‟t

only need an air conditioner for cooling

purpose or for their core need but they

also demand for more efficient, smarter,

advanced and ecofriendly air

conditioners. This has put a pressure on

manufacturers to make a more

customized product line to satisfy

customer needs and wants. Following

diagram shows what features and

functions are demanded in air

conditioner market that put pressure on

manufacturers to produce differentiated

products.

To face difficulties of tough competition

and sophisticated consumer needs

Haier needed to develop a wide product

line of air conditioners to meet different

consumer needs and to compete with

differentiated products. Haier used its

line of air conditioners to meet the need

of their customer. Product line consists

of different models of air conditioners

varying in features and functions.

In Air conditioner market Haier

segmented there customers on the

basis of lifestyle, benefits, user status,

readiness stage and income level for in

consumer segment and it also

segmented commercial segment. Haier

carefully targeted consumer and

commercial market to satisfy there

needs. Consumer segment is

considered to be more profitable as it

has more growth potential in pakistan.in

commercial segment it provides

solutions to its corporate customers. In

consumer segment Haier position itself

asHaier positioned itself as a trend

setter with a tag line “think different, tell

different & deliver different. It also

positions itself as one of the leading

brand of Pakistan. Haier AC Product line

tries to satisfy diverse needs of

customer. Haier has largest marketing

share in consumer segment due to their

differentiated and variety products.

Haier uses line filling strategy to make

their product line complete and to make

it a demanded line. Line stretching also

enables Haier to serve all type of

consumer in air conditioners segment.

Haier also use product bundling in

dowry packages as dowry is a major

cultural and social need on wedding

occasions in Pakistan.

Haier offers following different types of

product in their air conditioning line.

DC invertors

Long throw

150 V

20% saving

Rapid cooling

Cabinet

Pricing is a major decision to compete in

this market as most customers are price

sensitive in Pakistan. Another major

price factor is due to nature of the

product. As air conditioners are

seasonal product and most of the

demand is created in peak of summer

season. Another time for demand is

wedding season when people are

purchasing air conditioner for dowry.

Haier price their products on seasonal

basis as they sell their air conditioners

at high price for their differentiated

products in summer season and reduce

prices in winter. Haier also uses special

event pricing such as in wedding season

they price their product at maximum

price as it sees a great demand in this

season. Haier also use bundling price in

dowry packages.This different type of

pricing according to demand played a

vital role in success of Haier‟s air

conditioner product line.

Haier has a wide and strongdistribution

network in Pakistan. They have 1,000

sales outlets, 15 large experience

shops, 305 exclusive shops, 17 service

centers, more than 120 service outlets,

a call service centerhad been

established in Pakistan besides the

amazingly improved marketing network

too. Haier Pakistan‟s sale service

network always stands in front to supply

the most convince service and provides

a strong and beneficial relation to their

distributors.Haier makes their product

available to consumer segment through

placing their products at maximum

retailers of home appliances. Haier

make it sure that their product become

available to consumer at their

convenient point of purchase.. Haier

offers persuasive sale incentives to

attract retailers and place their air

conditioner in their stores. High price

models are mostly placed in urban area

where there is a demand for such high

priced air conditioners. Economic and

regular models of air conditioners are

placed at sub urban and rural area

To be a successful brand an efficient

promotional strategy is needed so Haier

successfully implemented their

promotional strategy to make their brand

better recognized as a leading and

innovative brand.Haier use different

types of promotional tools. . 40%

spending of their budget is Print Media,

20% goes on TV, 20% on Outdoor

activity and balance 20% on Sales

Promotion activity. They believe that

print media andoutdoor activity help

them to reach to their target customer.

Company can use these tools for

promotion purpose

Advertising

Sales promotion

Personal Selling

Direct Marketing

Due to excellently designed and

executed product mix Haier has

generated good brand equity. It has

proven itself as major player in air

conditioner market. It remained

successful in generating a favorable

image in mind of customer through their innovative product features and functions.

Haier uses marketing research to make

sure that their products are updated as

customer is demanding. Additionally

Research and development plays a vital

role in success story. Haier always

inspire their customers through

innovative and efficient home

appliances due to strong research and

development focus. The competitive

advantage of Haier group is the

improvement being the crucial point of

the company‟s mission as well as their

high-quality in consumer satisfaction.

The core competitive strategy is

satisfying consumer needs through

innovative products and a strong

relationship with the distributors. By

sponsoring sport teams, they are

showing the community their attention in

the social events.

Conclusion

Haier is a leading global brand that

recognizes and respects the realities

and circumstances of its customers and

responds to these by rewarding them

with inspiring solutions they can always

rely on. Haier comes from the belief that

progress lies in continued technological

advancement in order to make

customers‟ lives easier, more efficient

and more productive and it will continue

making all the efforts to excel in the

market. As Haier is moving towards

Eco-Life which will be very effective in

making customers‟ life more convenient

in terms of products usage & efficiency.

The idea of Eco-Life will reflect the Haier

promise of „Smarter Life, Better Planet‟

for the masses in Pakistan.