Marketing Management

MKTG3P24 2024
Instructor: Dr. Waqar Nadeem

Session 13 and 14
Agenda for Session 13 and 14
Haier’s High-
End Brand
Casarte: Can
Multi-
Branding
Work?
(W20941)
 Casarte was established in the year
2007.

Revenues failed to meet Haier’s

expectations till 2015
• (Ref)Average: 22.89 and Casarte: 4.1
Introduction •
•
(WM) Average: 26.46 and Casarte: 0.90
(AC) Average: 12.26 and Casarte: 0.02

Whether to continue investing in

Casarte or abandon it?
 What are “White goods”?

Some of the top big appliance

manufacturers are:
Background • Haier, Midea Group, Gree Electric,
Whirlpool Corporation, Electrolux

What is the cause of this demand?

Analysis

Image credit: https://qualitycontactsolutions.com/company-news/top-telemarketing-companies-in-the-u-s-swot-analysis-for-2020/

 SWOT
Strengths Weaknesses

1. Financial resources 1. Poor competitiveness in the market. BI and TOMA

2. Good brand image and product quality 2. Multi -brand operations? and brand confusion
3. Strong technical force 3. Considerably less market share
4. Conditions for economies of scale 4. Promotion focused on hard-to-understand functions
5. Cost advantage

Opportunities Threats

1. New market segment (Tier 1, 2 & 3 cities) 1. New competitors

2. New consumer demand 2. Alternative products?
3. Product innovation(French 6-door, Italian 3-door) 3. Industry growth slowdown?
 Cannibalization
Do you think there is cannibalization happening in What could be the decisions or behaviors that
Haier and Casarte’s case? may foster product cannibalization?

• Products are similar • Top management pressure for growth from new
products
• Products compete in the same or a similar
market segment and used in the same scenarios. • Inadequate positioning of new products

• Casarte’s sales growth comes at the expense of • New products that steal the market share of
Haier’s sales some original products
Development
Strategy
 Growth Share or BCG Matrix

High Question Marks Stars

Casarte
Incubation period Growth period

What should be the development strategy? What should be the development strategy?
Expansion Expansion
Market
growth

Dogs Cash Cows

Haier
Vicious competition period Mature period

What should be the development strategy? What should be the development strategy?
Withdrawal Maintain
Low

Low High
Market share
Give up or
Retain
Casarte
 To Give Up or Retain Casarte?
Option A:
Give up Casarte and launch
high- end series by Haier
Option B:
Retain Casarte and undertake
reforms
Pros
• Haier’s resources can focus on its own
business reducing both its management and
marketing costs
• Large investments in Casarte can be saved
or redirected reducing risk
• Haier can learn from the mistakes of
Casarte , and the resource generated can
help Haier’s high -end series
• High end market can be seized with
independent brands and meet their needs
by fulfilling(emotional needs) thus
increasing mindshare
• Multi -brand operations can help Haier gain
higher profits and reduce risk.
• Retaining a high -end brand is beneficial for
Haier and can demonstrate its strength and
improve its brand image.
Cons
• Single series may not be enough to occupy
the whole high - end market. Giving up
Casarte also means losing some opportunity
to compete in high- end appliance market.
• If Haier adopts a brand extension, Haier’s
marketing strategy to meet the needs of
high-end consumers may dilute and blur
Haier’s existing brand image
• More investment will be needed from the
Haier’s side as high- end brand operations
cost more.
• High -end brand operations are very
difficult, and the resource requirements
for technology, marketing, and service are
relatively high
• There is still a risk of failure
 Casarte’s Reform Plan
Who are the target customers?
• High-end users and their families

What are the common features of the brand’s

products?
• Innovative technologies(such as membrane oxygen control
technology and fresh keeping technology); artistic design
appearances

What message does the brand convey?

• Concepts are: art, fashion, taste, status
• Brand spirit: love, family, life
 Reform plan based on Marketing Mix
Price Promotion
• Should the pricing strategy of the new product be • Should seasonal promotions be used to reduce the
changed?(maintain high prices or lower prices)? inventory backlog?

• What philosophy should the brand spread(product features

Product and cutting-edge technology or the art of family and life)?
• What model should product development follow(consumer-
centered new product development or technical team-based • Which communication strategy should be
new product development)? adopted(information release or in person-experience)?

• Should users be involved in product design? • Should Casarte share Haier’s publicity platform?

• What product strategy should be adopted(is the launch of

complete set of household appliances necessary)? Place
• Should Casarte continue to appear in Haier’s chain store?

• Should it enter high-end home décor shopping malls as an

Read More: Nadeem, W., Tan, T. M., Tajvidi, M., & Hajli, N. (2021). How do independent brand?
experiences enhance brand relationship performance and value co-creation
in social commerce? The role of consumer engagement and self brand- What’s your decision based on these questions?
connection. Technological Forecasting and Social Change, 171, 120952.
 Apple
Watch:
Managing
Innovation
Resistance
(W18034)
 Apple watch was launched in 2015

Reality check
Introduction • Suffered from restricted product utility

Developing countries consumers were

different..
• Apple still strategized to expand
 Smartwatches industry
• Leading product category = 59% in 2016

Traditional time-keeping was transformed

• 1st smartwatch was pebble launched in 2012 through

Background
Kickstarter
• More utilities and multifunctionality

Common smartwatch platforms

• Applewatch OS, Tizen, Pebble OS, Android and Android
Wear (Android Spinoff)
 Linkage with other IOS Devices

Differing opinions
• For some it was a square wrist computer

Apple How was the watch positioned?

•
•
Fitness tracker. 2nd generation updates
Water sports

Watch Various options

• Colors, materials, high/low-end customers
• Partnership with Nike and Hermes to offer exclusive software

Economic Value Estimation =

• Combination of reference value and differentiating value
 Main
Challenges
 Main Challenges
Do you think resistance is the normal response to any
innovation? Different types of adopters of innovation?
• Innovators, early adopters, early majority, late majority, laggards.

What was the case in Apple’s watch adoption process?

• Outright rejection, postponement, opposition
• Apple’s anticipation of demand increase
• Industry reports suggested about permutations

Were there any competitors for Apple watch in the

health/fitness tracker domain? Could other domains be
explored?
• Jawbone Up, Nike Fuel band, Fitbit
• Internet of things, smart homes, contactless payments, (NFC) replacing credit
card

Any problems associate with “inability to see the value of

the watch” by consumers? In what areas value could be
projected?
• Seen as mere extension of smartphone
• Canoeing, swimming, heart rate

Do you think the buyers are uninformed?

• Information asymmetry and more meaningful proposition?
Addressing
the
Challenges
 Addressing the Challenges
How could apple escape outright rejection?
• Outright rejection to postponement?
• Communicability at early stages
• Peer recommendations, word of mouth, influencer marketing, try outs, demos,
user friendly

Do you think different consumer segments will

have different kind of barriers?
• Value barrier i.e., performance to price
• Usage barrier: co-dependency barrier
• Risk barrier: includes physical risk, social risk, economic risk.
 Customer
Segmentation

and

Frameworks
 Customer Segmentation
Passive Innovation Resistance(Pre-Persuasion Stage)
Inclination to Resist Changes
Low High
Status Quo Satisfaction Low Low Passive Resistors Cognitive Passive
(repeat behavior/ less switching
behavior)
Resistors
Which segment will High Situational Passive Dual Passive Resistors
you target? What Resistors
can be offered?
• Technical support
• Higher
compatibility Active Innovation Resistance(Post-Persuasion Stage)

Psychological Barriers

Low High
Functional Barriers Low Non-Resistors Psychological Resistors
High Functional Resistors Dual Resistors

Source: Laukkanen, T., Sinkkonen, S., & Laukkanen, P. (2009). Communication strategies to overcome functional and psychological resistance to Internet banking. International journal of information management, 29(2), 111-118.
 Research Framework
Controls
• Age
• Education
• Gender
• Income
• Experience

REASONS —
AGAINST
PERSONAL • Lack of Realism
VALUES AND • Perceived H3b-
H1a- Deception
BELIEFS H3a-
• Skepticism
H2a-
Perceived Value
Compatibility H1c+
Relationship
Connectedness H5+ Performance
H1b+ to the AR App
H2c+ with the AR app
Openness to
Change REASONS —
H4b+
FOR
H2b+ H4b+
• Entertainment
• Trendiness
• Interaction
• Customization
• Augmentation
Quality

Wannakicks AR App
 Value Proposition Statement Should
Address..
• What product/service the company is selling?

• What is the end benefit of using it?

• Who is your target customer for this product or

service?

• What makes your offering unique and different?

Source:: http://www.wordstream.com/blog/ws/2016/04/27/value-proposition-examples
 Class
Activity
 Who would be the ideal customer for an Apple
Watch?

Create a Persona or Ideal

Customer Profile that you believe
will represent the Apple watch
market..

• For Persona Template: https://xtensio.com/user-persona/

• Additional Resource for Automatic Persona Generation: https://persona.qcri.org/

• Additional Reading: Consumer Segments in Social Commerce (W.Nadeem et al., 2017):

https://onlinelibrary.wiley.com/doi/full/10.1002/cb.1632