The different marketing strategies of Haier

refrigerator in the China and US market

Student name: Yinqiu Chen

Student number: 4816870

Introduction
Haier Group is a company founded in 1984 which is headquartered in Qingdao, Shandong
Province, China. There are more than 70,800 people worldwide employees and revenue of
about 320 billion yuan as of 2014 (Anzidei, 2015). It is a multinational corporation and their
products mainly involve air conditioners, mobile phones, computers, microwave ovens,
washing machines, refrigerators, televisions and so on.

In the late 1990s, Haier Group entered "Internationalization Strategy Stage". Until now, Haier
has established some bases, industrial parks, manufacturing plants and trading companies
outside China.
In this article, we will talk about the differences in the ways of refrigerator which is mainly
popular product of Haier are marketed and/or consumed in the China and US market.

Haier in China
Product:
Haier researched the appliance market in China, then designing and manufacturing variety
products based on different types of consumers. Customers can select suitable products from
Haier thousands of appliance according to their different demands.
Innovation is the key that Haier became successful in leading the first place in terms of
appliance field in China during the last 26 years. Haier believes one circle products design
and development principle Every single product needs to listen the market. For example,
the Smart Child, designed and released in 1996, it is a famous refrigerator model both in
China and Haiers production line. Also it is the first refrigerator in China that has the slots to
make ices, the reason to develop this model is that a survey was received and it suggests to
add ice-maker function into refrigerator. Same year, the Smart Child became the best selling
in China. Also Haier provides reliable quality of refrigerators by using the leading technology
and great after-sales service.
The quality of products for Haier is above everything else. In April 1985, Haier Group CEO,
Zhang Ruimin, received a letter of complaint from a customer, he complained the quality of
Haier refrigerators. Zhang Ruimin decided to go to the factory warehouse, after the
inspection, he found that there are 76 sets of refrigerators with bad quality. He made a
decision, he took a sledgehammer to destroy all 76 sets of refrigerator. Since then, the
company established a concept that defective products are waste. Because of this concept,
Haier's products get the trust from customers.
Price:
1

The price is an important factor for both the supplier and the consumer. Setting products price
would maintain company to be profitable and stay competitive. Haier's aim is competitive
prices, ensuring the quality without raising prices. Their approach is selling high-quality
products and services with low price rather than reduce costs by reducing quality.

Place:
Place indicates the product distribution channel and the location where the product can be
brought. Haier Products can be purchased either through Haier mall online, Haier showrooms
through China, or independent electronic stores. Also, Haier set up a marketing center in the
bustling city to directly responsible for all the local sales work, in smaller cities, they set up
stores, so as to reduce the cost of sales, which is conducive to the management of retail
performance.
Promotion:
Haier played the banner of Chinese-made which strengthen the consumer's national pride and
loyalty support to the product. And in 2000, Haier refrigerators turned to a good sales
prospects of China's rural areas, they developed a series of marketing strategies and mainly
for the promotion. For example, for the family which bought refrigerator because of marriage,
they will be presented Some small gifts such as statue of Guanyin (in China, people think that
the status of Guanyin will bring the children to the newlyweds), and for some poor families of
remote areas, they will customize some cheap refrigerators, and organize some public welfare
activities. Finally, Haier achieved a great success in the rural market. In the highly
competitive market of China, Haier has always been the leader.

Haier in America
The US market is a mature market and is one of the countries which are the most difficult to
enter. From Haier exports refrigerator to the US to Haier has been established its own brand in
the US market now, the success of Haier is closely related with its special marketing
strategies.
Research:

Entering a strange new market, the first thing must be to do some research of new market. The
United States is a powerful economic with rapid development, also is an attractive market.
Although in this market, there are some well-known international brands such as Whirlpool,
GM, maytag, etc., the refrigerator of Haier in the US market still hold a part of the shares
because of the export from China to the United States before. After doing some market
research, Haier has developed a new program to improve their product structure to make it
more reasonable and then attempting to further enhance market share.
A survey of demand structure of consumer in the USA has been done by Haier, according to
the survey, in the US market, the refrigerator that larger than 200 liters has been monopolized
by GE, Whirlpool and other companies, and the number of refrigerator which is smaller than
160 liters is less. Also, the survey of Haier found a phenomenon that the household population
in the US is becoming less , people seem to get started like the refrigerator with a small
capacity. And because there are more singles and students, this small-capacity refrigerator is
more and more demand. So Haier takes it as the focus in the US market, they intend to
product 60 to 160 liters refrigerators because the big demand for this kind of product.
Product:
After researches, Haier has taken a number of marketing strategies to deal with the highly
competitive in the US market. First, they use the localization strategy into the product design.
They considered the differences of customers needs between the United States and China
such as climatic zones, voltage conditions, consumption habits and so on, which made people
need different kinds of refrigerator. Haier is an independent brands, basically created a
localization mode of "three in one" - combining design (Haier.net ,2016), manufacture and
sales and their employees are locals, they have a better understanding of the individual needs
of local users.
For example, Haier designed a small and energy-efficient freezers for college students in
America, these characteristics of small size and easy handling are welcomed by College
Students. And as an energy-efficient products, it meets the conservation of the US consumer
awareness of energy and cultural practices. In addition, Haier also has designed a kind of
super-efficient CFC-free refrigerator, the refrigerator not only meet the environmental
requirements of the international community, but also considering about the vital interests of
consumers for saving 50% of energy consumption and meet the standards of the US.

Whether a product is accepted by the market, the core part is the design. Since 1997, Haier in
the United States to look for appliance product design studio, by the Haier Holdings, the two
sides shared interests in joint ventures formation design center. Haier combines culture into
the design, which has become the core competitiveness of enterprises. For example, Haier has
designed a kind of wine cooler, because Americans often has a wine cellar at home, but it is
very inconvenient for people taking the wine out. For this problem, a refrigerated wine cooler
has designed so that people can easily get the wine, and this bar looks very beautiful, people
can put it in the room as interior decoration.
Price:
Low price also is a factor of the success of Haier refrigerators in the US market. In 2000,
Haier established their own production centers in the United States. The purposes of
construction overseas, the one is to make products more localized, the second is to make labor
costs cheaper and further reducing prices of product. For example, in Wal-Mart, the 14.3
cubic foot refrigerator of Haier is priced at $ 350, it is cheaper than similar products from
Whirlpool of $ 50, which for economic tensions consumers is a very attractive thing.
Place:
Another way to let everyone know that Haier is an advertisement. Haier in the United States
has adopted a number of advertising media, including billboards, magazines, airports,
television and so on. When you walk in the street, you could see a huge billboard of Haier
everywhere. Nowadays, Haier's products have entered the most important of the 15 home
appliances and department store retail chains in the US, such as Best Buy, Sears, Wal-Mart,
Target, and get the honor of "best supplier". Haier in the United States has more than 10,000
sales outlets. In July 1, 2004, the United States Target chain stores and Haier in New York set
a record of selling more than 7,000 air conditioners in 7 hours, the degree of popularity of
products can be seen.

Conclusion
After comparing the different marketing model of Haier refrigerators in China and the United
States, we can find, in China, because of good visibility, Haier has become the industry leader.
Haier takes innovation as the goal and puts more emphasis on quality rather than production.
In the United States, Haier is still in improving awareness of brand. They developed products

according to the needs of consumers and strives to localize the product and rely on quality to
attract consumers, to further defeat competitors to gain market share. Because of the different
cultures of China and the United States, Haier's marketing strategies in two countries are very
different.

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