Page 158 - DMGT408DMGT203_Marketing Management

Unit 6: Products, Services and Brands

Haier traces its history back to the Qingdao General Refrigerator factory, which was Notes
founded in 1958 as a cooperative to repair and assemble electric appliances. Till Chinese
entrepreneur Ruimin Zhang took charge of the factory in 1984, the company struggled
with its quality and incurred huge losses. Haier attracted tremendous publicity when
Zhang smashed faulty refrigerators with a sledgehammer, to send out a message about
his commitment to quality. Today, Haier commands approximately over 30% share of the
Chinese market in white goods and had revenues of US $9.7 billion as of 2003.
True to that event, Haier has built its brand on quality. Haier’s strategy has been to
establish a leadership position in the domestic market before venturing into global
markets. Unlike most players who concentrate on the low end of the market by offering
cheap products, Haier has focused on offering innovative products at a competitive price
and the brand is starting to see results. A case in point is that Haier is the leading brand in
the US in mini-refrigerator category.

Haier’s commitment to quality and innovation is evident by the 18 international product
design centers that it has established in Los Angeles and Tokyo which are in turn supported
by production facilities in US, Japan and Italy.
Though it is common to see charismatic CEOs such as Sir Richard Branson, Steve Jobs and
Bill Gates leading the brands in the western world, it is hardly the case in Asia. Many
Asian executives shy away from publicity. Ruimin Zhang has set an example to many
Asian companies about how the CEO can take charge of the brand and be the chief brand
ambassador. Zhang’s aggressiveness to build his brand, his commitment to quality and
his business acumen has attracted much deserved global accolades.

Ruimin Zhang was placed nineteenth among the twenty-five most powerful people in
business outside the US by Fortune magazine in 2003 and Haier was ranked the most
admired Chinese brand in 2004 by a Financial Times/PricewaterhouseCoopers survey.
Questions
1. Analyse the Haier case and identify significant issues.

2. Discuss Haier’s branding strategy.

Self Assessment

Multiple Choice Questions:

13. Which of the following is one of the five dimensions of customer-based brand equity
given by Walfried Lasser, Banwari Mittal and Arun Sharma?
(a) Performance (b) Image

(c) Vision (d) Worthiness
14. ………………… is the key concept intervening between the brand and its equity.
(a) Brand name (b) Brand identity

(c) Co-branding (d) Brand image
15. ………………… strategy combines umbrella branding and product branding strategies.
(a) Single branding (b) Family branding

(c) Double branding (d) Line branding

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