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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By 2004, Haier had emerged as the second largest home appliances brand in the world, next only to Whirlpool, manufacturing household electrical appliances in 96 categories with 15,100 specifications. The company had six manufacturing facilities in China and 13 facilities across the globe including the US, Europe, Middle East, Africa, and South Asia and the sales network was spread across 166 countries.
In 2003, the total turnover of Haier group stood at US$ 9.2 billion, which increased to US$ 12.2 billion by 2004. Haier was the only Chinese brand to make it to the list of the World Brand Laboratory's 100 most recognizable brands in 2004.
Haier was formerly known as Qingdao Refrigerator Factory (Quingdao General), a Collective Enterprise (CE)7 manufacturing refrigerators for sale in China. During the early 1980s, the company had no funds to invest in new product development or to pay employee salaries and was on the verge of bankruptcy with debts of more than US$10 million.
In 1984, Zhang Ruimin (Zhang), a bureaucrat with the local government took over the reins of the company and announced that his goal was to make it the best refrigerator manufacturer in China. Zhang realized that the employees of Qingdao General were not bothered about either the quality of their products or about customer satisfaction. Realizing that he would have to take quick action to set things right, he began importing technology from German company Liebherr in 1985 in order to manufacture refrigerators that were technically superior to the ones being manufactured in China. Zhang said, "From speaking to the Germans, I realized that the quality of the goods represented not only a company, but the whole country.
I figured I couldn't raise the entire worth of China, but I could raise the worth of this company."8 Under Zhang's leadership, the company broke even within a year. In 1989, Qingdao General changed its name to Qindao Refrigerator Company Limited...