Marketing Case Of Haier

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1) Why did Haier succeed in the US market initially? Haier’s relationship with Welbilt granted them access to established distribution channels. This ensured that the target consumers were made aware and given access to Haier products. Not needing to develop their own distribution channels saved resources, which could be focused on other areas in the company such as research and development for product differentiation. Haier’s focus on niche markets facilitated their differentiation from other competitors in the industry. Working with big national retail chains gave Haier access to a large amount of consumer data. This enabled them to accurately predict consumer patterns and, as a result, develop novel products that matched the specific demands…show more content…
The compact refrigerators were sold at a lower price. This meant that the profit margin on each product was lower, however, Haier was able to sell these products in a large quantity. Haier adopted the concept of targeting the bottom of the pyramid, initially, and generated profits by selling in large volumes. This, however, later changed as Haier focused more on higher quality products. As indicated in Exhibit 2, Haier sells 21% of all compact refrigerators in the market. This high volume in sales generated the profit that high margins would have…show more content…
The acquisitions meant that Electrolux could avoid the first mover disadvantages by adapting the local expertise, having access to established distribution channels and consumer base of the acquired company. However, they became too globalised. They started to experience certain diseconomies of scale, such as poor communication and operational complexity. This complexity resulted in a lack of company focus. They were average players in many appliance markets but they could not dominate any particular market. Electrolux should have focused on a fewer range of products so that they would be able to effectively target, and potentially dominate a particular

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