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Haier Case Study

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Submitted By stevenxaverius
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INDEX

|Contents |Page Numbers |
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|EXECUTIVE SUMMARY |2 – 4 |
|CERTIFICATE FROM MIMA | |
|CERTIFICATE FROM COMPANY | |
|ACKNOWLEDGEMENT |5 |
|COMPANY PROFILE |6 – 10 |
|INDUSTRY PROFILE |11 - 16 |
|RESEARCH PROBLEM AND ITS BACKGROUND |17 – 19 |
|OBJECTIVES, HYPOTHESIS AND SCOPE |20 – 22 |
|RESEARCH METHODOLOGY |23 – 28 |
|REVIEW OF LITERATURE |29 – 36 |
|DATA PRESENTATION AND ANALYSIS |37 – 74 |
|FINDINGS AND CONCLUSIONS |75 – 77 |
|SUGGESTIONS AND RECOMMENDATIONS |78 - 79 |
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|ANNEXURES |80 |

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|EXECUTIVE SUMMARY |
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EXECUTIVE SUMMARY

In my summer internship of 2 months, I joined Haier (India) Pvt. Ltd. and the topic which I got to do research on was ‘Competitive Analysis of companies, competing Haier’. In India, consumer durable sector is rising with the increasing income of public. The consumer durables section consists of Refrigerators, Washing Machine, Air Conditioners, Televisions, Wine Cellars, Microwave Ovens etc.

The segments I had to do research on were refrigerators and washing machine. As being a competitive analysis, I had to go through all the companies competing Haier i.e. LG, Samsung, Godrej, Whirlpool and Videocon in refrigerators segment and LG, Samsung, Whirlpool, Godrej, Videocon, IFB and Onida in washing machines segment.

For this research I had to go to various places, such as

• Visit to various retail outlets throughout Pune.

• Visit to manufacturing plant of Haier in Ranjangaon, near Pune.

• Visit to customers homes for survey.

For the further research people to whom we surveyed by the help of questionnaire were

• Dealers

• ISDs

• Customers

The survey of dealers was done in order to find out

• Most demanded product in the market.

• Features liked by them.

• Fastest moving model

• No. of models displayed of each company.

• Margins given to them by various companies.

The survey of ISD (In Shop Demonstrator) was done in order to find out

• Salaries provided by different companies.

• Customer mindset before purchasing.

• Customer’s reaction on Haier products.

The survey of customers was done in order to find out

• Details about refrigerators.

• Their reaction on different company names.

• Whether they are price conscious or quality conscious.

Basic customer needs in refrigerators and washing machines. etc…

ACKNOWLEDGEMENT

This is to certify that I, Paresh Gupta, a student of PGDM – BA course from MITCON Institute of Management, Pune has done his 2 months duration summer internship from Haier (India) Pvt. Ltd., Pune.

I am deeply indebted to my External Guide, Mr. Pralay Ghosh and Mr. Sameer Badola, Branch Manager of Haier (India) Pvt. Ltd., Pune Branch who shared their golden knowledge to nourish my knowledge.

I am greatly thankful to Prof. Gautam Pherwani who assisted me throughout my project.

I am heartily thankful to Mr. Sanju Davis, the Dean , Dr. Vidyadhar Vedak, the Director and Mr. Santosh Mahajan, the Registrar of MITCON Institute of Management who throughout the project gave me moral support.

Finally, acknowledgements to all the employees of Haier (India) Pvt. Ltd. Who throughout the project helped me out to nurture my skills.

To all I’d like to express my most sincere thanks.

Paresh Gupta

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|COMPANY PROFILE |
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COMPANY PROFILE

The Haier Group was founded in 1984 with headquarters in Qingdao, Shandong Province, PRC. In 1984, Haier produced only a single model of refrigerator, today it is one of the world’s leading white goods home appliance manufacturers. Under the leadership of Chairman and CEO Zhang Ruimin, Haier manufactures home appliances in over 15,100 different specifications under 96 categories. Haier products are now sold in over 100 countries around the globe.

Haier has over 240 subsidiary companies, over 110 design centers, plants and trading companies and over 50,000 employees throughout the world. Haier’s focused industries include technology research, manufacturing, trade and financial services.

The global revenue of Haier for 2005 was RMB 103.4 billion. Haier Electronics Group Co., Ltd., a subsidiary of Haier Group, is listed on the Main Board of the Stock Exchange of Hong Kong. Qingdao Haier Co., Ltd., also a Haier subsidiary, is listed on the Shanghai Stock Exchange.
On 12 August, 2005, Haier signed an agreement with Beijing Organizing Committee for the Olympic Games (BOCOG) in Qingdao to become the official sponsor of the 2008 Beijing Olympic Games for white goods home appliances.

Unmatched Home Appliance Product Offerings
Haier’s product categories range from refrigerators, refrigerating cabinets, air conditioners, washing machines, televisions, mobile phones, home theatre systems, computers, water heaters, DVD players and integrated furniture, among which 9 are ranked market leaders in China, and 3 are ranked among the top 3 worldwide in their respective industries. Haier is also a world leader in the technology domains of intelligent integrated home furniture, networked home appliances, digitalization and large scale integrated circuits.

By April 2006, the Haier Group has obtained 6,189 patented technology certificates and 589 software intellectual property rights. Haier’s proposal for safe care water heater technology initiative was accepted at the 66th IEC Conference in 2002 and Haier dual drive washing machine technology was included in the 2006 IEC standard proposal. This clearly demonstrates Haier’s world-class innovation capabilities in product R&D.

Board of Directors

Chairman and CEO: Mr. Zhang Ruimin

President: Ms. Yang Mianmian

Vice Chairman: Mr. Wu Kesong

Global Branding Strategy

Haier’s global branding strategy aims at positioning the company as a local brand in different world markets in conjunction with enhanced product competitiveness and strong corporate operations. Haier’s international business framework encompasses a global network of design, procurement, production, distribution and after-sale services. Today, Haier has established 15 industrial complexes, 30 overseas production factories and bases, 8 design centers and over 58,000 sales agents worldwide.

CERTIFICATION AND ACHIEVEMENT

• April,1992, the first in China to get ISO9001

• Aug.,1996, the first in China to get ISO14001

• All the Cooling products sold in European market have CE and GS certification

ABOUT HAIER INDIA

Haier Appliances (India) Private Limited is a wholly-owned subsidiary of Haier Group. Haier India was launched in India in December 2003 and by August 2004 had an all-India promotion launched with over 55 products across six product categories -- refrigerators, color television/DVDs, washing machines, microwave ovens and dishwashers. Haier India has also launched its brand of mobile phones in India.

The India launch was started with innovative products which were designed keeping the day to day customer needs in mind -- products that will transform the customer's every day living into inspired living. 'Products that will make your today better than yesterday.' Haier India launched BMR technology for the first time in India. Even the Double Drive is a newly patented technology.

The India operations already has an established dealer network of approximately 1600 dealers all over the country, which is backed by a strong service and after sales service network.

HAIER INDIA VISION

To be the Most admired brand in India providing innovative, state of the art, user friendly products of lasting value to our customers, to make their today better than yesterday.

• Over 4000 Retail outlets selling Haier products

• 21 Planet HAIER (plus some exclusive stores)

• Presence in all major cities

• Brand recall – better than other new brands.

• 18 Branch Offices & 25 warehouses.

• 6 Direct Service Centers & 135 Haier customer care centers (covering all India)

• 24x7 Call Centre

• Present status of Haier considering the time span, is appreciated by the Industry.

ORGANIZATIONAL HIERARCHY

MD

COO

DIRECTOR

Marketing Finance HR Product Branch Logistics

Head Head Head Head Manager Head

MD – Mr. Shi Zhiyuan.

COO – Mr. Pranay Dhabhai.

DIRECTOR – Mr. R. T. Rajan.

BRANCH MANAGER – Mr. Sameer Badola (Pune Branch)

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|INDUSTRY PROFILE |
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INDUSTRY PROFILE

With the increase in income levels, easy availability of finance, increase in consumer awareness, and introduction of new models, the demand for consumer durables has increased significantly. Products like washing machines, air conditioners, microwave ovens, color televisions (CTVs) are no longer considered luxury items. However, there are still very few players in categories like vacuum cleaners, and dishwashers.

Consumer durables sector is characterized by the emergence of MNCs, exchange offers, discounts, and intense competition. The market share of MNCs in consumer durables sector is 65%. MNC's major target is the growing middle class of India. MNCs offer superior technology to the consumers, whereas the Indian companies compete on the basis of firm grasp of the local market, their well-acknowledged brands, and hold over wide distribution network. However, the penetration level of the consumer durables is still low in India. An important factor behind low penetration is poor government spending on infrastructure. For example, the government spending is very less on electrification programs in rural areas. This factor discourages the consumer durables companies to market their products in rural areas.

Introduction

Before the liberalization of the Indian economy, only a few companies like Kelvinator, Godrej, Allwyn, and Voltas were the major players in the consumer durables market, accounting for no less than 90% of the market. Then, after the liberalization, foreign players like LG, Sony, Samsung, Whirlpool, Daewoo, Aiwa, Haier etc. came into the picture. Today, these players control the major share of the consumer durables market.

Consumer durables market is expected to grow at 10-15% in 2007-2008. It is growing very fast because of rise in living standards, easy access to consumer finance, and wide range of choice, as many foreign players are entering in the market.

On the flip side, the presence of a large number of players in the consumer durables market sometimes results in excess supply.

Sector Outlook

There has been strong competition between the major MNCs like Samsung, LG, Haier and Sony.

LG Electronics India Ltd. has announced its extension plan in 2006. The company is going to invest $250 million in India by 2011 and is planning to establish a manufacturing facility in Pune.

TCL Corporation is also planning to establish a $22 million manufacturing facility in India.

The Indian companies like Videocon Industries and Onida are also planning to expand. Videocon has acquired Electrolux brand in India. Also, with the acquisition of Thomson Displays by Videocon in Poland, China, and Mexico, the company is marking its international presence.

According to Isuppli Corporation (Applied Market Intelligence), country's fiscal policy has encouraged Indian consumer electronic industry. The reduction on import duty in the year 2006 – 07 has benefited many companies, such as Samsung, LG, and Sony. These companies import their premium end products from manufacturing facilities that are located outside India.

Indian consumers are now replacing their existing appliances with frost-free refrigerators, split air conditioners, fully automatic washing machines, and color televisions (CTVs), which are boosting the sales in these categories.

Some companies like Samsung Electronics Co. Ltd. and LG Electronics India Ltd. are now focusing on rural areas also. These companies are introducing gift schemes and providing easy finance to capture the consumer base in rural areas.

SWOT Analysis

Strengths

• Presence of established distribution networks in both urban and rural areas

• Presence of well-known brands

• In recent years, organized sector has increased its share in the market vis a vis the unorganized sector.

Weaknesses

• Demand is seasonal and is high during festive season

• Demand is dependent on good monsoons

• Poor government spending on infrastructure

• Low purchasing power of consumers

Opportunities

• In India, the penetration level of white goods is lower as compared to other developing countries.

• Unexploited rural market

• Rapid urbanization

• Increase in income levels, i.e. increase in purchasing power of consumers

• Easy availability of finance

Threats

• Higher import duties on raw materials imposed in the Budget 2007-08

• Cheap imports from Singapore, China and other Asian countries

MAJOR PLAYERS IN CONSUMER DURABLES SEGMENT

• Haier

• LG

• Samsung

• Onida

• IFB

• Godrej

• Videocon

• Whirlpool

• Sony

• Siemens

Scope

In terms of Purchasing Power Parity (PPP), India is the 4th largest economy in the world and is expected to overtake Japan in the near future to become the 3rd largest. Indian consumer goods market is expected to reach $400 billion by 2010. India has the youngest population amongst the major countries. There are a lot of young people in India in different income categories. Nearly two- thirds of its population is below the age of 35, and nearly 50 % is below 25. There are 56 million people in middle class, who are earning US$ 4,400- US$ 21,800 a year. And there are 6 million rich households in India. The upper-middle and high-income households in urban areas are expected to grow to 38.2 million in 2007 as against 14.6 million in 2000.

Rural sector offers huge scope for consumer durables industry, as it accounts for 70% of the Indian population. Rural areas have the penetration level of only 2% and 0.5% for refrigerators and washing machines respectively. The urban market and the rural market are growing at the annual rates of 7%-10%and 25% respectively. The rural market is growing faster than the urban market. The urban market has now largely become a product replacement market.

The bottom line is that Indian market is changing rapidly and is showing unprecedented business opportunity.

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|RESEARCH PROBLEM AND BACKGOUND |
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RESEARCH PROBLEM

The topic allotted to me for the research was ‘Competitive Analysis of companies, competing Haier’ in the Pune region. The research constituted of the refrigerator and washing machine segments only. The problem of the research was to find out the current position of the company and also the level of competition which is their in the consumer durables market. In addition the problem was also to find out the effectiveness of promotional strategies opted by Haier. Other points which were considered during the survey were to find out the in shop displays of Haier products, after sale services and also the quality of the products in comparison to its competitors.

BACKGROUND

Competitive Analysis is an important part of the strategic planning process.

Why competitive analysis?

Some businesses think it is best to get on with their own plans and ignore the competition. Others become obsessed with tracking the actions of competitors. Many businesses are happy simply to track the competition, copying their moves and reacting to changes.

Competitive analysis has several important roles in strategic planning:

• To help management understand their competitive advantages / disadvantages relative to competitors. • To generate understanding of competitors past, present and most importantly future strategies. • To provide an informed basis to develop strategies to achieve competitive advantage in the future. • To help forecast the returns that may be made from future investments (e.g. How will competitors respond to a new product or pricing strategy?)

Haier being a world renowned consumer durables company which has its head office in China. It came to India in 2003 when the Indian consumer durables market was being dominated by LG and Samsung. Thus, it was difficult to stand in the Indian market.

So, the need of competitive analysis came into being.

The western region which includes Maharashtra (Mumbai, Pune), Gujarat (Ahmedabad) etc. is one the most developed part of India, so the competition here is more fierce than any other part of India.

My survey was limited to the Pune region only. So, I had to find out the market potential of the Haier’s products in comparison to its competitors i.e. LG, Samsung, Whirlpool, Godrej & Videocon (in refrigerators) and LG, Samsung, Whirlpool, Godrej, Videocon, Onida & IFB (in washing machine) segments.

The motive of this survey mainly was to first of all to study the product line of the competitors in comparison to Haier’s products so that we could determine our competitors, our customers and their expectations, strategies that could provide us with a distinct advantage, the barriers that can be developed in order to prevent competition from entering our market and any weakness that can be exploited within the product development cycle.

Pune, which is the second largest in the state of Maharashtra, is also the eighth most populous metropolitan area in India. In the latest survey the population of Pune was found to be around 5 lacs. There are overall 436 home appliances shops in Pune including the major retail giants such as CROMA and HOME TOWN. This shows the demand of home appliances product in the Pune market. Every company has their exclusive showrooms in Pune.

The high demand of home appliances has increased the competition due to which new entrants face severe problems. Thus, competitive analysis becomes the only effective tool to sustain in the market and avoid others to cut your market.

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|OBJECTIVES, HYPOTHESIS AND SCOPE |
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OBJECTIVES

1. To find the competitiveness of companies competing Haier in the refrigerators and washing machine segment. 2. To find the company’s current position in the market. 3. To analyze the features of the highest demanded product of competing companies with Haier’s equivalent product. 4. To identify effectiveness of promotional strategies of the company. 5. To study the factors considered by customers while purchasing.

HYPOTHESIS

1. The after sales services provided by Haier are far much better than the competitors. 2. The quality of refrigerators of Haier is better than its competitors. 3. Promotional activities of Haier are less in number. 4. In shop displays of Haier’s product is less as compared to its competitor.

SCOPE

1. The study was limited to Pune region only. 2. Geographical area under the study has been divided into various parts: • Yerawada • Hadapsar • Aundh • Chinchwad • Pimpri • Nigdi • Kothrud • Fatima Nagar • Satara Road • M G Road & Camp • Tilak Road • Khadki • Deccan • Bhosari

3. Time: Time also was a very important and crucial factor, as I have dedicated 1 and a half month for all the surveys and the practical part of it.

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|RESEARCH METHODOLOGY |
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RESEARCH METHODOLOGY

The research consisted of various steps

COLLECTION OF DATA

PRIMARY DATA SECONDARY DATA

DATA SORTING AND ANALYZING

DATA PRESENTATION

DATA INTERPRETATION AND RESULTS

Sources of Data Collection

1. Primary data :

Data observed or collected directly from first hand experience is known as primary data. In other words original data derived from a new research study and collected at source, as opposed to previously published material.

In my research following are the ways through which I derived the primary data

• Direct Visits to retail shops.

• Interview to the dealers.

• Interview to the customers.

• Telephonic interview.

• Interview to the ISDs (In Shop Demonstrators).

2. Secondary data :

Data collected from the second hand experience is known as secondary data. In other words we can say that data collected apart from the direct surveys is called secondary data.

Under my research secondary data were as follows

• Internet.

• Monthly Magazines.

• Haier official website.

• Haier journals.

• Customer Database provided by Haier.

• Catalogues.

RESEARCH DESIGN

A plan for collecting and utilizing data so that desired information can be obtained with sufficient precision or so that a hypothesis can be tested properly. This is research design.

It could be also said as a framework or plan for a study that guides the collection and analysis of the data.

TYPES OF RESEARCH DESIGN

• Exploratory Research

o Designed to generate basic knowledge, clarify relevant issues uncover variables associated with a problem, uncover information needs, and/or define alternatives for addressing research objectives.

o A very flexible, open-ended process.

• Descriptive Research

o Designed to provide further insight into the research problem by describing the variables of interest.

o Can be used for profiling, defining, segmentation, estimating, predicting, and examining associative relationships.

• Casual Research

o Designed to provide information on potential cause-and-effect relationships.

o Most practical in marketing to talk about associations or impact of one variable on another.

This research which was of ‘Competitive Analysis of Companies, competing Haier’ was totally of exploratory in nature.

METHODOLOGY

1. Type of Research: Exploratory Method

2. Sample: Area wise

3. Methods of Data Collection:

o Primary: Direct Visits, Interviews etc.

o Secondary: Catalogues, Monthly Magazines etc.

4. Sampling Unit: Dealers and Customers.

5. Size of Sample:

o Dealers: 30 shops.

o Customers: 50 customers.

NATURE OF STUDY

The research study was totally exploratory in nature because the study was fully of findings as I took out the feedbacks from the dealers and the customers regarding the Haier products and the services provided by Haier.

Under this process I had to visit to many places such as

• Visits to various retail outlets.

• Visits to Ranjangaon near Pune where the manufacturing plant of Haier is located.

• Visits to customer’s homes.

• Visits to various canopy activities conducted by Haier.

• Visits to service centre of Haier.

• Visits to exclusive showrooms.

• In addition I also acted as an ISD (In shop demonstrator) supervisor in 2 stores i.e. in Big Bazaar, Chinchwad and Radhika Electronics, Pimpri & Nigdi. as stated to me by Haier executives.

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|REVIEW OF LITERATURE |
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REVIEW OF LITERATURE

A literature review is a body of text that aims to review the critical points of current knowledge on a particular topic.

Competitive Analysis

Competitor analysis is an important part of a firm's development of its strategy. Its importance lies in the understanding of competitors, their strategy, and resources and capabilities. More specifically, competitor analysis also allows a firm to assess its own firm versus competitors and plan for what competitors' actions may be as a reaction to actions the firm may take.

A competitor analysis provides a firm with the knowledge to leverage its strengths and address its weaknesses and, conversely, take advantage of weaknesses of competitors and counter their strengths. Finally, competitor analysis also gives a firm a better understanding not only of the competitors but also their overall sector and where the emerging opportunities may be.

In the time of internship as working on the topic of competitive analysis, I referred to various literatures as published on internet on consumer durables, white goods, various consumer durables companies etc.

Consumer Durables in India

A combination of changing lifestyles, higher disposable income, greater product awareness and affordable pricing has been instrumental in changing the pattern and amount of consumer expenditure leading to robust growth of consumer durables industry.

The continuous increase in the consumer demand has led to the industry clocking accelerated growth rates in the recent past. While the industry recorded growth rates of 8.5 per cent in 2005-06 and 11.5 per cent in 2006-07, it is estimated to grow by 12 per cent in 2007-08. Going by the industry figures, sales have rocketed by 22 per cent in value terms in 2007.

According to ORG-GFK data, the combined size of five big-ticket product categories-color television, refrigerators, washing machines, air conditioners and microwave oven-rose from US$ 4.1 billion in 2006 to US$ 5.1 billion in 2007.

The higher growth in the sales value compared to volume growth rates can be explained by the surge in the sales of high-end consumer durable goods. Products like split air-conditioners (60 per cent), frost-free refrigerators (54 per cent), fully automatic washing machines (35 per cent), microwave ovens (35 per cent), high-end flat panel TV (100 per cent) are all estimated to record impressive growth rates in 2007-08.

Survey on Consumer Durables

Earlier in October 2005, FICCI conducted a survey on consumer durables.

Executive Summary of Survey

The Federation of Indian Chambers of Commerce and Industry (FICCI) has carried out a comprehensive Survey of industries in the consumer durable goods sector.

The FICCI Survey, based on feedback and interaction with representatives of consumer durables industry, allied industry organizations, associations, Government agencies and public sector undertakings, reveals that sector is poised for a quantum leap due to technological improvements, falling prices due to competition, aggressive marketing and declining import tariffs.

The Survey reflects the changing dynamics of consumer behavior – luxury goods are now being perceived as necessities with higher disposable incomes being spent on lifestyle products. There is a discernible shift in the consumers’ preference in favor of higher-end, technologically superior branded products, the demand being spurred by increasing consumer awareness and preference for new models.

This shift is also explained by the growing trend of products being manufactured in the organized sector of the economy and the narrowing down of the price differential between branded and non-branded goods. Competition has forced companies to offer efficient after sales service and support and this, in turn, has swayed customer preference for branded products.

The Survey highlights the positive growth trends in consumer durable segments – white goods and consumer electronics during April-March 2004-05 and points to sustained growth during 2005-06 because of emerging opportunities and strong fundamentals of the economy.

The FICCI Survey offers insights into the dynamics of growth in a competitive market environment. The Survey has identified some of the salient features of developments as follows:

• Quality products with superior technology and technology up gradation have helped the industry to achieve higher growth in terms of volume and also in higher realization in value terms. Though CTV segment faced a de-growth in April- June2005 sales of CTVs declining by 5.3 per cent and in value terms by 14.1 per cent due to the Value Added Tax (VAT) regime introduced in April 2005, the flat CTV category achieved a volume growth of 36.2 per cent and value growth of 25.8 per cent in the first quarter of 2005-06.

The refrigerator segment also has shown a similar trend with frost-free segment having about 54 growths with about 15 per cent de-growth indirect cool refrigerators. There has been qualitative change in consumer’s preference –going for higher end products.

Rate of growth in production has been more in terms of quantity or in volume growth rather than the growth in value terms for a number of products. This has happened because of constantly falling prices over the years due to competition among the major players, aggressive marketing strategies, declining import tariffs.

• Because of growth in production in the organized segment and domestic availability of branded products due to lowering of import duties and other liberal measures, the share of unorganized segment has come down sharply to only 8 to 10 per cent from 40 to 50 percent. The production of VCD/DVD has shifted to the organized sector, which has come out with branded DVD players with multi-facilities combined.

• The price difference between branded and unbranded goods has narrowed down and with branded players providing good after sales services and support consumer prefers to buy branded products.

• The consumer durables industry appears to have two clearly differentiated segments. The MNCs have an edge over their Indian counterparts in terms of technology combined with a steady flow of capital. The domestic companies compete on the basis of their well-acknowledged brands, an extensive distribution network and an insight into local market conditions.

• Competitive strategies revolve around strong brand differentiation and prices.

• Bargaining power of customers is high due to availability of many brands.

• Demand is Cyclical and seasonal. Demand is high during festive season and is generally dependent on good monsoons. Purchase necessarily is done only during the harvest, festive and wedding seasons — April to June and October to November in North India and October to February in the South.

• Rural India, which accounts for nearly 70% of the total number of households, offers plenty of scope and opportunities for the white goods industry. The urban consumer durable market for products including TV is growing annually by 7 to 10 % whereas the rural market is zooming ahead at around 25 % annually.

• Increasing consumer awareness and preference for new models have added to the demand. Products like air conditioners are no longer perceived as luxury products but are treated as necessities in the changed socio-economic environment with changed life styles.

• Attractive consumer loan schemes with reduced interest rates over the years by the financial institutions and commercial banks and the hire-purchase schemes have added to the surge in demand. Besides, the consumer goods companies are themselves coming out with attractive financing schemes to consumers through their extensive dealer network.

• The phenomenal growth of media in India and the flurry of television channels and the rising penetration of cinemas have spread awareness of products in the remote markets.

• The Internet being now used by the market functionaries that will lead to intelligence sales of the products. It will help to sustain the demand boom witnessed recently in this sector.

Growth Highlights

The sectors which have recorded excellent growth rates of more than 20 per cent in terms of quantity produced are Air Conditioners (25 per cent), Split Air Conditioners (42.6 per cent) Micro Wave Woven (27.3 per cent), DVDS (25 per cent) VCD/MP3 (20 per cent), Color Picture Tube (23 per cent,).

The sectors which have recorded high growth rates between 10 and 20 per cent in April-March 2004-05 over the corresponding previous period are Color Television (12%), Window Air Conditioners (18.8 per cent ), Washing Machines (18.1%), Watch (10%), Frost Free Refrigerators (13.8%).

Some sectors which have recorded moderate growth of 0 to 10 per cent are refrigerators (5 per cent),), clock (8 per cent), Direct Cool Refrigerator (2.8 per cent). The sector recording negative growth is B&W TV (- 16.7%).

The Refrigeration Industry has reached 3.9 million units in 2004-05 from 3.7 million units in the last year with a growth of 5 per cent.

The Air-Conditioners Industry has reached at 1.2 million units during 2004-05 with a growth of 25 per cent from 9.8 lakh units in 2003-04.

Washing Machines is estimated to have grown by 18.1 per cent from 1.35 million units in 2003-04 to 1.6 million units in 2004-05.

Microwave ovens have grown by 27.3 per cent growth with 3.5 lakh units compared to 2.75 lakh units in 2003-04.

The Indian Colour Television industry has grown by 12.1 per cent in 2004-05 by reaching 9.25 million units in 2004-05 from 8.25 million units in 2003-04.

The B&W TV has recorded a negative growth of 16.7 per cent from 3 million units in 2003-04 to 2.5 million units in 2004-05.

Watch and clock have registered growth of 10 per cent and 8 per cent from 20.6 mn units and 26.3 million units in 2003-04 to 22.6 mn units and 28.4 mn units in 2004-05.

The VCD/MP3 industry has registered 20% growth and has achieved production of 8.4 million units. The unorganized sector has occupied a major share in manufacturing and supplying VCD/MP3.

DVD Players are estimated to have grown by 25 per cent in 2004-05 with the volume estimated to be 625000 units.

The first half of the year and the first quarter of the financial year, 2005 have seen a little setback for the domestic consumer electronics and durables industry with the two largest segments of the industry - color televisions (CTV) and refrigerators facing decline in production and sales during the period. But the Air conditioners and washing machines market have grown at the rate of 20%.

The de-growth seen in the first quarter of the current fiscal has been mainly due to the value added tax (VAT) regime introduced in April, 2005, as held by the industry representative.

Overall, the refrigerator segment had achieved a negative growth of 4.3 per cent in volume terms and two per cent in value terms during the period.

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|DATA PRESENTATION AND ANALYSIS |
|FROM CUSTOMER POINT OF VIEW |
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FOR REFRIGERATORS

[pic]

DATA ANALYSIS

The graph shows the percentage of peoples having refrigerator at home out of the survey of 50 customers. 49 peoples surveyed had refrigerators whereas 1 house was not having refrigerators. This shows how common a refrigerator had become in peoples home.

[pic]

DATA ANALYSIS

The graph shows the percentage of people out of 50 people surveyed having branded refrigerators.

Out of 50 customers surveyed, 13 peoples had LG refrigerators, 12 peoples had Whirlpool refrigerators, 9 peoples had Samsung refrigerators, 6 peoples had Godrej refrigerators, 5 peoples had Haier refrigerators, 3 peoples had Videocon refrigerators and rest 2 peoples had been segmented in Others as they had Siemens and Electrolux refrigerator respectively.

This shows that LG, Whirlpool and Samsung are highest demanded brands whereas Godrej, Haier and Videocon had to work more in order to serve better to the customers. Siemens and Electrolux are totally different from the normal players as these brands are chosen by high income group.

[pic]

DATA ANALYSIS

This graph shows the type of refrigerator people possess. Out of 50 peoples surveyed, 16 of them were having Direct Cool refrigerators, 26 of them have Frost Free refrigerators, 6 of them had BMR (Bottom Mounted) refrigerators and 2 of them had Side By Side refrigerators with them. This shows that the Frost Free refrigerators have become the most common among people and the commonness of Frost Free has decreased the market of Direct Cool refrigerators.

The BMR being new to the Indian market still needs time to get into common people’s homes. Whereas Side By Side is a fully luxurious refrigerators and it is only popular in high income families.

[pic]

DATA ANALYSIS

This graph shows the feedback given by Haier refrigerator users as from where they got the information of Haier refrigerator before purchasing it.

This shows that out of 5 peoples having Haier refrigerators 2 got information of Haier refrigerator from Salesman & Dealers and out of the rest 3 peoples 1 each got information from friends, experience and TV ads. respectively.

This shows a vital role played by salesman & dealers in the sales of Haier products.

[pic]

DATA ANALYSIS

This graph shows the feedback given by Godrej refrigerator users as from where they got the information of Haier refrigerator before purchasing it.

This shows that out of 6 peoples having Godrej refrigerators 3 got information of Godrej refrigerator from TV ads. and out of the rest 3 peoples 1 each got information from friends, experience and salesman & dealers respectively.

This shows a vital role played by TV ads. in the sales of Godrej products.

[pic]

DATA ANALYSIS

This graph shows the feedback given by LG refrigerator users as from where they got the information of LG refrigerator before purchasing it.

This shows that out of 13 peoples having LG refrigerators 7 got information of LG refrigerator from TV ads, 3 from catalogues and displays, 2 from salesman & dealers and 1 got information from friends.

This shows that TV ads. and catalogues & displays play a vital role in the sales of LG products.

[pic]

DATA ANALYSIS

This graph shows the feedback given by Samsung refrigerator users as from where they got the information of Samsung refrigerator before purchasing it.

This shows that out of 9 peoples having LG refrigerators 4 got information of Samsung refrigerator from TV ads, 3 from salesman & dealers and 2 of them bought it because of past experience.

This shows that TV ads, Salesman & Dealers and Past Experience play a vital role in the sales of Samsung products.

[pic]

DATA ANALYSIS

This graph shows the feedback given by Whirlpool refrigerator users as from where they got the information of Whirlpool refrigerator before purchasing it.

This shows that out of 12 peoples having Whirlpool refrigerators 4 got information of Whirlpool refrigerator from TV ads, 1 from salesman & dealers, 2 from friends and 5 of them bought it from past experience.

This shows that TV ads and Past Experience play a vital role in the sales of Whirlpool products.

[pic]

DATA ANALYSIS

This graph shows the feedback given by Videocon refrigerator users as from where they got the information of Videocon refrigerator before purchasing it.

This shows that out of 3 peoples having Videocon refrigerators 2 got information of Videocon refrigerator from past experience and 1 from catalogues & displays.

This shows that Past Experience play a vital role in the sales of Whirlpool products.

[pic]

DATA ANALYSIS

This graph shows the view of people surveyed as what they like of their refrigerator product.

Thus the survey shows that out of 50 peoples surveyed all over Pune, 12 people care the most of quality, 10 people go for appearance, 9 each go for energy saving and convenience respectively, 8 people go for functions and 2 percent think features are all needed to buy for.

[pic]

DATA ANALYSIS

This graph shows what people think out of product

So, out of survey of 50 people, 12 people each think brand and service respectively matters the most for the sale of the product, 11 people think price matters the most, 9 people think promotion matters the most, 5 people think manufacturing location matters as it is being manufactured in India or is been imported from outside and rest think other things also matters a lot as the retail outlet where it is displayed.

FOR WASHING MACHINES

[pic]

DATA ANALYSIS

This graph shows that out of 50 customers surveyed 45 had washing machines in their homes whereas 5 peoples surveyed did not had it.

[pic]

DATA ANALYSIS

This graph shows the brand of washing machine owned by 50 peoples surveyed out of whom 45 had washing machines whereas rest 5 did not had it.

This shows that out of 45 people having washing machine, 10 had IFB washing machines, 8 each had Onida and Whirlpool respectively, 7 people had Samsung, 6 had LG, 3 had Haier, 2 had Videocon and 1 person had Godrej washing machine.

This shows that IFB, Onida and Whirlpool washing machines are having good washing machine market.

[pic]

DATA ANALYSIS

This graph shows the type of washing machine people have.

Out of 45 people having washing machine 20 people had semi automatic washing machine, 17 had top loading and the rest 8 had front loading washing machine.

[pic]

DATA ANALYSIS

This graph shows the feedback given by Haier washing machines users as from where they got the information of Haier washing machine before purchasing it.

This shows that out of 3 peoples having Haier washing machines, 1 got information of Haier washing machine from TV ads and 2 of them got the information from Salesman & Dealers.

This shows that TV ads and Salesman & Dealers play a vital role in the sales of Haier products.

[pic]

DATA ANALYSIS

This graph shows the feedback given by Godrej washing machines users as from where they got the information of Haier washing machine before purchasing it.

This shows that out of 2 peoples having Godrej washing machines, 1 got information of Godrej washing machine from Catalogues & Displays and 1 of them got the information from Salesman & Dealers.

This shows that Catalogues & Displays and Salesman & Dealers play a vital role in the sales of Godrej products.

[pic]

DATA ANALYSIS

This graph shows the feedback given by LG washing machines users as from where they got the information of LG washing machine before purchasing it.

This shows that out of 6 peoples having LG washing machines, 4 got the information of LG washing machines from TV ads, 1 each got information from Salesman & Dealers & Catalogues & displays respectively.

This shows that TV ads. play a great role in the sales of LG products.

[pic]

DATA ANALYSIS

This graph shows the feedback given by Samsung washing machines users as from where they got the information of Samsung washing machine before purchasing it.

This shows that out of 7 peoples having Samsung washing machines, 3 got the information of Samsung washing machines from TV ads, 2 got information from past experience and 1each got the information from Friends & Catalogues & Displays respectively.

This shows that TV ads. and past experience play a great role in the sales of Samsung products.

[pic]

DATA ANALYSIS

This graph shows the feedback given by IFB washing machines users as from where they got the information of IFB washing machine before purchasing it.

This shows that out of 9 peoples having IFB washing machines, 2 got the information of IFB washing machines from TV ads, 1 got information from friends and 6 of them got the information from Catalogues & Displays.

This shows that Catalogues & Displays play a vital role in the sales of IFB products.

[pic]

DATA ANALYSIS

This graph shows the feedback given by Whirlpool washing machines users as from where they got the information of Whirlpool washing machine before purchasing it.

This shows that out of 8 peoples having IFB washing machines, 2 got the information of Whirlpool washing machines from TV ads, 1 of them got information from Catalogues & Displays, 2 of them got it from Salesman & Dealers and 3 of them bought it from past experience.

This shows that quality of Whirlpool washing machines are too good that’s why Past experience plays a vital role in the sales of Whirlpool products.

[pic]

DATA ANALYSIS

This graph shows the feedback given by Onida washing machines users as from where they got the information of Onida washing machine before purchasing it.

This shows that out of 7 peoples having Onida washing machines, 2 got the information of Onida washing machines from TV ads, 1 each of them got information from friends and Salesman & Dealers respectively and finally 3 of them got the information of Onida washing machine from Past Experience.

This shows that past experience of quality of Onida washing machines play a vital role in the sales of Onida products.

[pic]

DATA ANALYSIS

This graph shows the feedback given by Videocon washing machines users as from where they got the information of Videocon washing machine before purchasing it.

This shows that out of 3 peoples having Videocon washing machines, 2 got the information of IFB washing machines from past experience, and 1 got information from TV Ads.

This shows that Videocon being an old company, past experience play a vital role in the sales of Videocon products.

[pic]

DATA ANALYSIS

This shows that what people care about their washing machine.

Here in the survey of 50 peoples 45 had washing machines, thus this shows their view about care of their washing machine.

13 people use washing machine as per Quality, 9 people think Convenience matters the most, 8 people think Appearance plays a vital role in the selection of washing machine, 7 each think energy saving and function respectively matters the most and 1 person think there are some other measures related to product which matters the most.

So, we can say that quality is first preference of most of the people and Pune people also find convenience and appearance as a vital part.

[pic]

DATA ANALYSIS

This graph shows what people think apart from the product.

8 peoples think Brand name is the only thing in the selection of the product, 9 people think if Service is good then no problem ever occurs, 12 people think Price matters the most, 7 people think if promotion is good then definitely product will be good, 6 people think if manufacturing is done in foreign it will be better in quality, so they buy product by knowing the manufacturing location whereas 3 peoples think there are other reasons to care about out of product.

This shows that majority of people think of less price earlier, then comes the brand name and service. Rest comes later.

COMMON DATA

[pic]

DATA ANALYSIS

This data shows how much customers know Haier.

Out of 50 people surveyed 42 knew Haier whereas 8 of them didn’t even heard of it.

Thus, Haier needs to make a brand image in the mind of the people through effective promotional activities as promotional activities play a vital role in knowing the strength of the company.

[pic]

DATA ANALYSIS

This graph shows that from 42 persons knowing Haier, how did they really came to know?

20 people got to know Haier from Shops displays, 8 people came to know it through friends, 6 of those knew it through Print Ads, 5 got information of Haier from TV ads. and 3 of them knew it from Other sources such as internets or from elsewhere.

This shows that lack of promotional activities of Haier is not making it popular among public.

| |
|DATA PRESENTATION AND ANALYSIS |
|FROM DEALERS POINT OF VIEW |
| |
| |
| |

| |

DEALERS SURVEYED: 30

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DATA ANALYSIS

This graph shows the presence of refrigerator brands in the stores surveyed. There were total of 30 stores surveyed in which Samsung refrigerators were available in all 30 stores, LG was available in 29 stores, Whirlpool in 28 stores, Godrej in 22 stores, Haier in 18 stores, Videocon in 15 stores and Other brands such as Siemens, Electrolux, Koryo etc. were totally present in 15 stores.

Thus, it is seen that the In Shop Displays of Haier is far much behind than its competitor’s products.

[pic]

DATA ANALYSIS

This graph shows the presence of washing machine brands in the stores surveyed. There were total of 30 stores surveyed in which Whirlpool refrigerators were available in all 29 stores, LG was available in 28 stores, Samsung in 26 stores, Godrej in 15 stores, IFB in 28 stores, Haier in 18 stores, Onida in 24 stores, Videocon in 12 stores and other brands such as Siemens, Hitachi etc. were totally present in 15 stores.

Thus, it is seen that the In Shop Displays of Haier is far much behind than its competitor’s products.

[pic]

DATA ANALYSIS

This graph shows the highest demanded refrigerator brand in all the 30 stores surveyed.

Whirlpool refrigerator is highest demanded in 9 stores.

LG refrigerator is highest demanded in 8 stores.

Samsung refrigerator is highest demanded in 8 stores.

Godrej refrigerator is highest demanded in 3 stores.

Haier refrigerator is highest demanded in 2 stores.

Videocon refrigerators were not in highest demanded refrigerator brand in any of the stores.

[pic]

DATA ANALYSIS

This graph shows the highest demanded washing machines brand in all the 30 stores surveyed.

IFB washing machines are highest demanded in 8 stores.

LG washing machines are highest demanded in 4 stores.

Samsung washing machines are highest demanded in 6 stores.

Onida washing machines are highest demanded in 2 stores.

Haier washing machines are highest demanded in 1 store.

Whirlpool washing machines are highest in demand in 7 stores.

Videocon washing machines are highest demanded in 1 store.

Godrej washing machines were not in highest demanded washing machine brand in any of the stores.

[pic]

DATA ANALYSIS

This graph shows dealer’s favorite brand.

Whirlpool refrigerators are favorite brand of 7 dealers.

Samsung refrigerators are favorite brand of 7 dealers.

LG refrigerators are favorite brand of 6 dealers.

Haier refrigerators are favorite brand of 5 dealers.

Godrej refrigerators are favorite brand of 4 dealers.

Videocon refrigerators are favorite brand of 1 dealer.

[pic]

DATA ANALYSIS

This graph shows dealer’s favorite brand. Whirlpool washing machines are favorite brand of 3 dealers. Samsung washing machines are favorite brand of 6 dealers. LG washing machines are favorite brand of 3 dealers. Haier washing machines are favorite brand of 2 dealers. Onida refrigerators are favorite brand of 5 dealers. Videocon refrigerators are favorite brand of 1 dealer. IFB washing machines are favorite of 10 dealers.

Thus, we can see that IFB is the market leader in washing machine segment.

[pic]

DATA ANALYSIS

The graph shows that out of 30 dealers surveyed 21 dealers keep Haier refrigerators and 9 didn’t. At the time of survey only 17 had Haier products for display but rest 4 didn’t had it.

This shows that In Shop displays of Haier’s product is a bit less than its competitor’s products.

[pic]

DATA ANALYSIS

The graph shows that out of 30 dealers’ surveyed 17 dealers keep Haier refrigerators and 13 didn’t. At the time of survey only 15 had Haier products for display but rest 2 didn’t had it.

This shows that In Shop displays of Haier’s product is a bit less than its competitor’s products.

[pic]

DATA ANALYSIS

The graph shows the overall rating given 30 dealers surveyed of the Haier refrigerators.

8 of them found Haier refrigerators excellent.

13 of them found it good.

8 of them found it satisfactory or average, and

1 of them did find Haier refrigerators of any good.

[pic]

DATA ANALYSIS

The graph shows the overall rating given 30 dealers surveyed of the Haier washing machines.

Just 2 of them found Haier washing machines excellent.

8 of them found it good.

14 of them found it satisfactory or average, and

6 of them did find Haier washing machines of any good.

| |
|FINDINGS AND CONCLUSION |
| |
| |
| |
| |

| |

FINDINGS

As the survey was totally dependent on competition point of view. Thus after surveying the home appliances retail outlets, following are the findings that I came to know

• The promotional activities done by Haier are very less.

• The in shop displays of Haier products are very less in number as compared to its competitors.

• As survey stated the Haier customer never switches over to any other company’s product.

• Haier is still lagging behind of many competitors in Indian consumer durables market.

• Haier, being a Chinese company is disliked by people.

CONCLUSION

After being a part of Haier (India) Pvt. Ltd. For two months as summer trainee, I came to following conclusions

• Haier being placed as 4th best consumer durable company globally has to still work harder to sustain in the Indian consumer durables market.

• The biggest positive point of Haier is their innovativeness in the products and it is highly liked by Indian public.

• Haier products are limited to few numbers of customers who are brand loyal.

| |
|SUGGESTIONS AND RECOMMENDATIONS |
| |
| |
| |
| |

| |

SUGGESTION AND RECOMMENDATIONS

On the basis of Findings and Conclusion, my suggestions and recommendations to Haier are as follows

• Promotional activities should be increased and should be more efficient.

• Production capacity should be increased for more in shop displays.

• High margin should be offered to the dealers so that they can promote Haier products in place of competitors.(push strategy)

• Company should arrange more demonstration.

• Sales promotional schemes should be given in regular intervals to both customers & dealers.

• Products of Haier should be made available in at least all major stores.

• New innovative products should be launched in the market with effective promotions so that it could be made popular in common public.

| |
|ANNEXURE |
| |
| |
| |
| |

| |

DEALER QUESTIONNAIRE

Dealer Name: _______________________________________________________

Store Name & Address: _______________________________________________

_______________________________________________

1. What all brands you keep in your store?

In Refrigerators

( Haier ( LG ( Samsung ( Whirlpool ( Godrej

( Videocon ( Others.

In Washing Machines

( Haier ( LG ( Samsung ( Whirlpool ( Godrej

( Videocon ( IFB ( Onida ( Others.

2. Rank the brands in order of its demand?

In Refrigerators

( Haier ( LG ( Samsung ( Whirlpool ( Godrej

( Videocon ( Others.

In Washing Machines

( Haier ( LG ( Samsung ( Whirlpool ( Godrej

( Videocon ( IFB ( Onida ( Others.

3. Why do you think the brand ranked 1 is highest in demand?

In Refrigerators

( Function ( Brand Name ( Service ( Convenience

( Appearance ( Energy Saving ( Others.

In Washing Machines

( Function ( Brand Name ( Service ( Convenience

( Appearance ( Energy Saving ( Others.

4. Which is your favorite brand?

In Refrigerators

( Haier ( LG ( Samsung ( Whirlpool ( Godrej

( Videocon ( Others.

In Washing Machines

( Haier ( LG ( Samsung ( Whirlpool ( Godrej

( Videocon ( IFB ( Onida ( Others.

5. Why do you like this brand?

In Refrigerators

( Function ( Quality ( Service ( Convenience ( Appearance

( Energy Saving ( Others.

In Washing Machines

( Function ( Quality ( Service ( Convenience ( Appearance

( Energy Saving ( Others.

6. Do you keep Haier product in your shop?

Refrigerators

( Yes ( No.

Washing Machines

( Yes ( No.

7. How would you rate Haier’s product sales in your store?

Refrigerators

( Excellent ( Good ( Average ( Bad

Washing Machines

( Excellent ( Good ( Average ( Bad.

THANK YOU

CERTIFICATES AND ACHEIVEMENTS OF HAIER

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