Haier's Marketing Strategies in India
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Case Code : MKTG112
Case Length : 22 Pages
Period : 2002 - 2005
Pub Date : 2005
Teaching Note :Not Available
Organization : Haier India
Industry : Consumer Durables
Countries : India
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Plans for India
By January 2005, Haier was assembling 20,000 television sets a month under manufacturing contracts with Indian companies. To address the needs of Indian consumers, Haier was in the process of setting up a Greenfield project near New Delhi to manufacture television sets.
The project was expected to be commissioned by December 2005 and would host a US$ 3.5 million R&D center. A refrigerator manufacturing facility was also planned to be set up by Haier by 2008.
As part of its strategy to make India the sourcing hub for South East Asia, the Middle East, and African markets, Haier planned to set up a color television assembling facility in the country.
The proposed capacity of the assembling unit was in the range of one million units and the company planned to start work on this project by early 2006. With Haier planning to sell over 500,000 color televisions in the Indian market in the fiscal 2005-06 and 750,000 units in the fiscal 2006-07, the assembling unit was in line with the company's plans...
The Challenges Ahead
The consumer durables market in India had proved highly unpredictable, with a new market leader emerging every three to four years. Indian brands like BPL, Onida, and Videocon, which have been market leaders earlier, were replaced by Korean brands like LG and Samsung.
For Haier, the challenge lay in understanding the consumer preferences and regularly coming up with value-added products. The Indian white goods industry was already in the consolidation phase, with three to four firms dominating each of the segments.
In the color television segment, the top four companies accounted for 50% of the market share. In the refrigerator segment, Whirlpool, Godrej, LG, and Samsung accounted for 75% of the market share. Haier faced fierce competition not only from the local Indian players but also from other Chinese companies like TCL which were establishing their own manufacturing facilities in India...
Exhibit I: An Overview of Consumer Durables Market in India
Exhibit II: Product Range of Haier in India
Exhibit III: Haier's Mobile Phones
Exhibit IV: Haier - Television Commercial
Exhibit V: Haier - Print Advertisement in Hindi