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Haier Group was founded in 1984 and its headquarters is in Qingdao (Zhang, 2006). It mainly deals with electronic products such as mobile phones, microwaves, refrigerators, computers, washing machines and televisions. In 1982, this company faced huge debts due to dilapidated infrastructure and poor management. The government of Qindao appointed Zhang Rumin as the managing director of this factory (Bell, 2008). Zhang Rumin discovered that this company had many faulty refrigerators and that was why it received many complaints from consumers. He then formulated policies that emphasized on quality and this led to the rise of Haier into a global brand (Basu and Wright, 2007).
The proposed research on the marketing strategy of Haier is important to business research since it will enable companies know why Haier has risen to become number one manufacturer of white goods. Furthermore, it will help business researchers determine why Haier still made incremental profits of more than 10 times compared to its incremental business turnover despite the globe experiencing global financial crisis (Saw and Wong, 2009). Moreover, business researchers will find out the benefits that Haier has reaped by concentrating on marketing using the Internet through its zero-distance virtual and practical network combination. The chosen topic is justified since Haier Group is one of the biggest electronics company in the whole world and thus it is necessary to study how they manage to market their products in China (Hitt, Ireland and Hoskisson, 2012). This research is valuable since it will fill the research gap on how Haier Group in China uses e-commerce to market its products
4. Research Questions
1. How has Haier Group in China used consumer bonding to reach new customers?
2. Why did Haier Group in China use inverted triangle management? Has this management model helped it market its products?
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3. What benefits has Haier Group in China reaped after adopting Internet as a tool for marketing its products through e-commerce?
4. Has the Servigistics software that Haier group in China helped it to manage its supply chain?
- To examine how consumer satisfaction has improved after Haier Group in China adopted the inverted triangle management in an attempt of adding value to consumer care
- To determine the extent at which the market share of Haier improved after it started using Internet to market its products.
- To determine if employees support adopting Servigistics software for supply chain management.
According to Hawes (2012) Haier Group in China uses consumer bonding as a marketing strategy to promote its products in China. Yu Tong, a member of the strategic management team in this company argued that bonding with consumers helps this company to promote its brand. It developed a solar water machine for bathing cows in Mongolia. Yeung, Xin, Pfoertsch and Liu( 2011) supported the argument of the above scholar by stating that it helped to stabilize the temperature in Mongolia since cows required stable temperatures to produce milk. Haier also installed a plate under each refrigerator supplied to the rural areas in China. This was to prevent mice from accessing the refrigerators’ wiring system since it may lead to fire.
Yueh (2011) stated that Haier Group in China adopted inverted the triangle management structure that has helped it to market its products. This structure concentrates on the consumer value chain and its main aim is to improve the level of services it offers to consumers in addition to improving consumer satisfaction. This model puts the clients at the top. Reinold (2010) added that this model put line managers, employees and top leaders at the bottom. Every department became an autonomous unit since it handled its own clients (Wang, 2007). In this model, low-level employees have direct contact with consumers and fulfill their market needs. If the low-level employees, level 1, fail to fulfill the needs of the customers, they ask level two employees for resources and transfer these needs to the management.
According to Weihrich and Cannice (2010), this marketing strategy helps to increase the speed of market response since each level in the organization has the authority to make important organization’s decisions. Furthermore, it encouraged employee’s participation and thus employees were motivated to come up with innovative ideas on how to manage its large market (Worm, 2008). However, Paul (2005) argued that this structure was not efficient as a marketing strategy since line managers would neglect new opportunities in the market if they were required to deal directly with clients. He opposed the argument of the above researcher by stating that this problem could be solved by giving each team had a target that it had to attain.
It adopted Servigistics software that has helped it manage its vast distribution network in China (Tan, 2012). Worm (2008) stated that this software helps it to manage its supply chain on all electrical appliances in China. Weihrich and Cannice (2010) argued that this software has advanced forecasting techniques that has helped it to forecast the consumer demands accurately thus avoiding shortages in supply. Furthermore, it has multi-echelon optimization capabilities and thus this has helped Haier to determine the optimum amount of electrical appliances to supply to China’s market. Song Xuewu, the director of Oversees Customer Service Centre stated that this software would support the service lifecycle of this company since it would improve future customer service (Wang, 2007).
Haier Group in China has adopted the Internet as a tool for conducting its marketing activities. Reinold (2010) argued that it has achieved this by using zero-distance virtual and practical network combination. Through virtual networks, consumers are able to make their demands online. Worm (2008) supported the argument of the above theorist by stating that it has enabled it to make 24 hours sales since consumers can order for electrical appliances at any time. In addition to this, Internet has enabled it to communicate to its consumers on new products that it aims to launch (Zhang and Alon, 2011). It recently launched real networks that aimed at improving logistics and sales services in the rural areas. This is because it discovered that most companies did not concentrate in distribution networks found in rural areas. It introduced Home Appliances for Rural Families that aimed at achieving this goal.
Haier Group in China also started zero inventories with on demand manufacturing delivery in order to improve its marketing. This model helps to ensure that it produces its goods according to customers demands and specifications (Zhang and Allon, 2011). This has helped it reduce its inventory levels and cost of inventory. Furthermore, it has reduced its lead-time and this has improved consumers satisfaction. This strategy has also helped it reduce its stock turnover rate. My research questions and objectives came from views of the above scholars on the effectiveness of different marketing strategies that this company has adopted in order to improve its market share.
The philosophy of this research is epistemology. This is because this research addresses questions such as what is knowledge, how knowledge is acquired and to what extent is it possible for a given entity or subject to be known (Paul, 2005). The knowledge in this research is the marketing strategy of Haier Group in China. This knowledge was acquired through empiricism through observation from the market trends (Rogelberg, 2002). It is important for people to know the knowledge from this research since it will help them know what has made Haier to be a global brand.
The strategy for this research is to find background information on the marketing strategy of Haier Groups in China by researching from my library catalogue and internet sources (Kindon and Pain, 2007). This will help me to be familiar with the marketing options that this company has been adopting in the previous years. After getting background information, I will visit the head office of this company. I will interview the employees in the marketing department of this company in order to get first hand information about the marketing activities of this company (Collins, 2010). After getting this data, I will evaluate my findings in order to determine whether the data that I have collected is credible and reliable.
The approach for this research is quantitative approach. This approach is mainly associated with positivist or post-positivist paradigm (Creswell, 2009). In this approach, the researcher collects and converts data in numeric form for easier statistical analysis and inferences. In this approach, I will concentrate on collecting data on the growth of the market share of Haier Group in China in order to determine whether it has positive trends in acquiring market share (Monsen and Horn, 2007). Furthermore, I will collect data on the number of people who think that Haier bonds with the community or if they feel that it responds to their complaints. Using quantitative research, I will be able to plot statistical graphs and charts for better analysis.
The time horizon for this research is longitudinal. In this horizon, a researcher collects data at several points of time (Walsh and Wigens, 2003). I will be collecting data after Haier Group in China implements several marketing strategies in certain intervals of time. This is in order to determine the gradual effect of these strategies so that I am able to know whether the strategies help Haier to improve its market share in China (Staw, 2006).
2. Data collection
I will visit the head office Haier Group in order to interview the employees on how the effective marketing through the Internet has been to their company. Furthermore, I will interview them on whether implementing the inverted triangle structure, as a marketing strategy has been a challenge to them. The interviews will last about 12 minutes and the interview questions will consist of both open ended and close-ended questions. I will record the interview sessions using a tape recorder for easier retrieval of the data in future.
Advantages of interview
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- It will help me to get detailed information on the marketing strategies of this company (Seidman, 2006)
- Interviews have a high response rate
- Using interviews, I will have an opportunity of seeking clarification on ambiguous responses (Gubrium, 2005)
- From the interviews, I will have an opportunity of gauging the accuracy of the responses of the interviews by observing their body language (Besike, 2007).
Disadvantages of interviews
- It is very time consuming to set up the interview process. This is because I will need to obtain approval from the management of this company in order to begin the interviewing process (Gallin, 2002).
- The process of interviewing will cost me a lot of money. This is because I will need to travel to the head-office of this company in order to collect data from the employees. Furthermore, I will need to purchase recorders for storing information from the interviews (Seidman, 2006).
- I may receive biased information from the respondents leading to wrong conclusions.
I will mail questionnaires to the employees working in the marketing department in order to determine how effective the marketing strategy of Haier Group has been in China. I will also use face-to-face questionnaire administration to the consumers in order to get their opinion on the level of service and the quality of products that they receive from this company. The questionnaires will contain 75 close-ended questions and 25 open ended questions.
Advantages of questionnaires
- Using questionnaires, I will be able to gather information in a standardized way and thus this information will be reliable (Brace, 2004)
- It is quick to collect information using questionnaires (Saris and Gallhofer, 2007)
- It is cheap to obtain information using questionnaires
Disadvantages of questionnaires
- It is not possible to obtain clarification using questionnaires (Besike, 2007)
- Respondents may give dishonest responses especially where the questionnaire is long
- It is difficult to design the questionnaire
My chosen method for data collection is interviews. This is because I will be able to obtain first hand information from the respondents while at the same time seeking clarification on ambiguous responses.
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