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dx.doi.org/10.1108/20450621111201284
(2011),"Twiga Hosting Ltd providing affordable information and communication technologies services to small and medium enterprises",
Emerald Emerging Markets Case Studies, Vol. 1 Iss 4 pp. 1-16 http://dx.doi.org/10.1108/20450621111197163
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Ian Michael is Professor of Aamer Khan, Managing Director Hafet Electrical LLC, the sole distributor for of Haier in UAE was
Marketing, Zayed reviewing their half yearly results. Among the more unconventional strategies they had adopted
University, Dubai, was one where they used community engagement to get an insight into the local market and
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United Arab Emirates. develop brand awareness as a caring top quality brand. The CEO of Haier, Zhang Ruimin stressed
Meerah Ketait, Sarah Al that quality is and will remain the essence of business sustainable, whether in the past, present or
Qassimi and Azza Al future. Aamer was evaluating the effectiveness of the strategy and considering its impact. Should
Nuaimi are all graduates of he use a similar strategy next year?
Zayed University, Dubai,
United Arab Emirates.
DOI 10.1108/20450621111192799 VOL. 1 NO. 4 2011, pp. 1-12, Q Emerald Group Publishing Limited, ISSN 2045-0621 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 1
assets) may be viewed as a pair of scissors, one reinforcing and/or substituting for the other
over time (Jennewei et al., 2010).
In overseas markets, Haier products are sold in KESA, Media Market, Carrefour, Expert and
other major European retailers. The company first entered Europe through Germany in 1990,
and in addition to a trading coming it now has Research & Development (R&D) centers in Italy,
Holland, Germany and Denmark[1]. Though Haier is a global firm, its strategy is to be local
in foreign markets. In the USA and European markets, it does this by using localized design,
manufacturing and sales processes. The company has set up production facilities and plants
in the USA, Italy, Pakistan, Jordan and Nigeria. This did not stop Haier from continuing its
expansion into other international markets, and they are working hard to strengthen their
position in the Middle East market. The companys 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[2].
The brand has been successful in distributing and placing its range of products in many
European retail chains. According to a Euromonitor report (www.haierksa.com/global.php),
the Haier brand has surpassed its rival Whirlpool as the worlds top refrigerator producer in
terms of sales. A communication from the company stated that it had sold 12 million
refrigerators worldwide in 2010; an increase of 20 per cent over the previous year, its market
share reached 6.3 per cent globally. The companys mission statements states that It is to
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maximize the performance margin profit, it believes that maximizing profit is one of its
business objectives but definitely not the ultimate goal. In addition, Haiers management has
progressively established a concept of development and business over the last 25 years that
revolves around people; at the heart of Haiers scale of values is customer satisfaction and the
greatest aspiration for the company is to win the customers heart. Its corporate
communications state that the company aims to provide what consumers need in their
daily life, and this has made Haier to become the second largest manufacturer of large
domestic appliances in the world.
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PAGE 2 EMERALD EMERGING MARKETS CASE STUDIES VOL. 1 NO. 4 2011
In this the twenty-first century, consumers in the UAE market are found to be more
sophisticated and educated in their buying behavior; as they study the brand, and research
about it rather than blindly buying it (www.portal.euromonitor.com.alpha2). Within the
electronics industry, intangible dimensions matters for products and brands. These include
brand name, reputation and accumulated consumer information. For many products and
brands, UAE is considered an emerging market with great opportunities. It is imperative for a
marketers to know and understand new markets like the UAE before entering, especially
issues pertaining to consumers needs and wants, and detailed information about
competition. Being able to understand the potential market and knowing the preferences
and choices of consumers, their culture and values, and behaviors; aids immensely in
serving and succeeding in a market. Such questions and issues were top-of-mind for Aamer
Khan when he discussed engaging with Zayed University to get students involved in a
research project for Haier and Hafet. For both the companies, this was seen as part of their
corporate social responsibility (CSR) in building relationships between the industry and the
educational sector.
The company (Haier) has an impressive CSR record especially in China. It built and donated
51 primary schools in China for the 51 Olympic gold medals won by Chinese athletes. Of
these, 15 schools were to be built in Beichuan, the Sichuan County that was devastated by the
May 12, 2008 earthquake. The company announced its One Gold Medal, One Olympic
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Hope School program in 2007. This venture was in partnership with Project Hope, a
non-governmental organization sponsored by the China Youth Development Foundation.
Haier has been a long time partner of Project Hope and contributed more than USD3 million in
funds and USD19.56 million in materials for the Hope Project (www.chinacsr.com/en/2008/
09/02/2995-haier-will-build-51-olympic-hope-schools/). By the end of 2007, Haier had built
77 primary schools in 24 provinces, allowing 40,000 students to return to school. The
research on CSR and the impact it has on marketing, has found that consumers are likely to
buy more or pay a higher price for products from a socially responsible company (Trudel and
Cotte, 2009). Similarly, recent research in the USA suggests that CSR actions can give a
company an inimitable upper hand in the war for talent (Bhattacharya et al., 2009). Haier CSR
activities support charitable causes in other countries around the world too, the company
donated money and its products like refrigerators, TVs and computers to the Cuban people
when the country experienced hurricanes Gustav and Ike. It supported the Sydney Breast
Cancer Foundation and donated towards the ASEAN Tsunami relief in 2005[1].
At a meeting between Hafet, Haier, and the faculty and students of Zayed, it was decided that
three marketing students from the College of Business Sciences of Zayed Universitys Dubai
campus would do a primary research about the buying behavior of Emirati consumers as part
of their final year capstone project. Some key research objectives were to find out:
B What white-goods products and brands do Emiratis buy?
B Their decision-making process when buying.
B Whether and what type of effect does the brands country-of-origin have on the Emirati
consumer?
The latter issue was considered very relevant to a brand like Haier, which is a Chinese brand;
furthermore various studies (as discussed in the literature below) show that Asian brands
struggle with the country-of-origin effect especially when introduced as new brands to new
markets like the UAE. The three students were extremely enthusiastic with this research
project and they did not want to stop with a pure primary research study, but considered
creating a unique event to create brand awareness for Haier. This is highlighted and
discussed in the case.
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VOL. 1 NO. 4 2011 EMERALD EMERGING MARKETS CASE STUDIES PAGE 3
is adequate research in the field of marketing to suggest that consumers form a perception
towards a product or a brand, and these perceptions play an important role in consumers
buying behavior. Research into branding has found that attitudes toward a product or brand
depend on both its tangible and intangible characteristics, such as quality, price, function,
service, image and awareness (Zhuang et al., 2007). Other research has found that the
Made in Label affects consumers in many ways, including product evaluation, quality
perception and purchase intention, and customers focus on the country in which a product
is manufactured and they treat it as a signal of quality (Zhuang et al., 2007).
One other purpose of this research study was to provide and recommend a marketing,
(specifically a communication) strategy to Haier to positively position the brand in consumers
mind. If the research discovered that Chinese brands like Haier have a poor perception in
Emirati consumers minds, due to the country-of-origin effect, then an outcome or question
would be How could a brand like Haier position itself in the UAE and Middle East and North
Africa (MENA) markets?
The research project utilized both quantitative and qualitative methods of data collection. Two
common tools namely the survey (over a 100 questionnaires were filled) and in-depth
interviews techniques were used to collect the data. A convenient sample of respondents
mainly among family, friends and others who were decision makers of consumer durable
products. Students used secondary sources to build a knowledge base about brands,
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especially how country-of-origin affects branding, and its further role in consumer
decision-making.
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PAGE 4 EMERALD EMERGING MARKETS CASE STUDIES VOL. 1 NO. 4 2011
with a name for the product that describes it. The brand name performs a number of key roles.
First, it identifies the product or service, and allows the consumer to specify, reject or
recommend brands to their family and friends. Second, it delivers messages to the consumer.
Third, it functions as a particular piece of legal property in which a manufacturer can sensibly
invest and which, through law, is protected from competitive attack or trespass. Therefore,
the brand name becomes a valuable asset with an important legal role (Blackett, 2007).
Consumers minds are inundated with advertisements and promotions of brands throughout
the day, brands that work the best are the ones that are able to position themselves in the
customers minds according to the personality they are adopting. Usually high-end luxurious
brands position themselves with prestige and price premiums to express their exclusivity and
their choice of target market. While the reasonable prices brands that tend to attract the
middle to low-income customers position themselves by being affordable and approachable
brands. The way a customer appeals to those brands depends on the inner wants and needs
as well as the way the brand displays itself.
Not only are females the decision makers when it comes to buying appliances for the
household, they also decide the product and brand based on recommendations by
neighbors and other family member. Though the respondents for the research belonged to
different ages, the focus was on young Emiratis, since this demographic group are a great
potential market for electronic products, they are at a time in life when they marry and move
into their own homes and begin to live independent lives. This group is ready to explore
the market and try new brands that are technologically advanced and have greater offers.
The youth is the major potential target market and because the UAE is newly formed and
established country, most of its nationals and citizens are young adults range, it is imperative
therefor for a marketer to understand and then target them.
The size of an average Emirati local family is about six to nine members. For Haier, this is good
news as the larger the family size, the more need for consumer electronics. This insight was
important as most Chinese families often only have three members in the family. Another
important consumer insight was that most Emirati households had a minimum of two kitchens
and two laundry rooms suggesting that they would buy in doubles two fridges, two dish
washers, two microwaves, two washing machines and twice as many air conditioners.
In addition, most rooms have televisions and DVD players. Hence, Haier has a great opportunity
to market its products and brands to the Emirati household consumer. Another interesting
finding was that many Emirati families own more than one home; many have holiday homes at
the Palm, apartments in Jumeirah Beach Residence (JBR), or beach houses in Fujairah and
other emirates. Though the scope of this research included only the Emiratis, our background
readings found that even expatriates that live in the UAE have recently been shifting from
apartments to villas for more space convenience. This means that this group would need larger
and more electronic gadgets. According to Jude, It was getting too noisy to live near the JBR
Figure 1
Gender Division
80
Female Male
60
40
20
0
Female Male
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VOL. 1 NO. 4 2011 EMERALD EMERGING MARKETS CASE STUDIES PAGE 5
Walk, with the young crowd partying all night long. We were seeking a quiet lifestyle with a good
community feel. In addition, today, villa prices are slightly lower than what was quoted a few
years ago. It made sense to own a villa rather than put our money into someone elses pocket.
80 per cent of people in the survey mentioned that they prefer to buy their electronics from
electronic specialists like Sharaf DJ, Jumbo Electronics and Plug-Ins, rather than super,
hypermarkets and directly from dealers. The reason behind this was that the level of trust
increases when it is a specialized store and people perceive the electronic specialist as one
that provides guarantees and warrantees and has a greater variety of choice in comparison to
hypermarkets. Most respondents stated that employees at electronic specialty stores know
more about their products and the brands and they cannot only explain all the functions of a
washing machine but also demonstrate how to use it. This suits the Emirati female who is the
target market, as this makes her feel secure about being able to use the appliance.
The research found that 70 per cent of those surveyed do not have a specific time of the year
to buy electronics. Most often people buy appliances when they need them. They can be
classified as essential products in every household; hence people buy them based on a need
and not a specific time. This fact is very important to Haier as sales are not seasonal but
ongoing throughout the year. Some respondents mentioned that they bought appliances and
white-goods during a sale period like Dubai Shopping Festival, Summer Surprises and Eid in
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Dubai as they get more promotions and even a chance to be part of sweep stakes to win free
gifts. When asked about the price, they are willing to pay for electronic goods, it was found
that close to 60 per cent are willing to around Dhs. 10,000, further around 25 per cent are
willing to pay around the Dhs. 20,000. Those figures indicate that Emirati people of the UAE
are not looking necessarily for cheap and low-cost products and brands.
One of the more important research questions was whether advertisements and promotions
built trust into a brand. Around 60 per cent of respondents stated that Yes they
(advertisements and promotions) make them trust a brand more. It is a psychological
process that the more you see of something and the more you hear about something, the
more you will get used to it and probably end up buying it. Consumers tend to think that a
brand that is displayed more and has many promotions can be is trusted because it has
confidence in its products and wants people to try it and buy it. Further, consumers prefer to
buy something that is well known and that people are familiar with and constantly hear about
it, the brand be seen in different places rather than being an unknown brand which is viewed
by consumers seen as an untrustworthy brand. On the other hand, around 40 per cent were
not interested in promotions and excessive products display, and they felt that trusting the
brand and seeing it on advertisements are two irrelevant topics.
Most people that formed part of the survey group for this research were 35 years and below, and
more than 50 per cent of them use Social Media like FB, Twitter and YouTube. The level of
technological advancement in the UAE is high and people are up to date with the latest ways and
means to communicate online with each other. The education in the UAE and the growth of
English as a language in schools, universities, in business and socially helped people learn
more, and get used to these new tools of communication. Social networking is the new marketing
tool of the twenty-first century, it is being used to target the younger generation. The younger
generation can access these social network sites via their mobile phones and I-Pads, it makes it
convenient for them to stay tuned to news and updates. These days, it is quite popular for UAE
Emiratis to log into their Twitter or FB account and access product and brand information. Online
communication is an easier method for people to share ideas and communicate; this reflects the
influence the internet has got on society. Marketers should know that to target this demographic
group communicating via the internet by using social media could be more valuable than the
traditional way of placing advertisements in newspaper and television.
A key question for this research project for the Haier brand was what role did the
country-of-origin have on the Emirati consumer. Around 60 per cent of respondents
mentioned that they were negative about the idea of buying an electronic product that was
made in China, and they preferred products produced in other countries (Figure 2). On
further questioning to investigate, we found that Emirati consumers maintained a negative
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PAGE 6 EMERALD EMERGING MARKETS CASE STUDIES VOL. 1 NO. 4 2011
Figure 2
42%
Yes
No
58%
stereotype about products made in China, that such products were cheap, low in quality,
did not last long and had no warranty. Respondents stated that if a label said it was Made in
Italy, that to them is proof of quality and superiority. Past research has found that Made in
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label affects consumers in many ways, including product evaluation, quality perception and
purchase intention (Zhuang et al., 2007). Other respondents were not very extreme in their
views and said they do not mind buying a product from China so as long as they trust the
brand name. This viewpoint is interesting and should be noted by a brand like Haier, since
consumers are saying their decision depends on the brand name. It shows that if a brand can
build credibility and reliability it can overcome the negative country-of-origin effects.
The perception of Chinese products as being cheap is no longer applicable if Nokia was
made in China or some parts of Mercedes cars are made in China as well. What customers
care about are the outcomes and reputation of the brand. To start by promoting a brand as
made from China might get negative connotation attached to it but considering people trust
Haier and are loyal to it and they are aware of the level of technology and high quality their
products acquire then the fact that it is a Chinese product would not matter. A total of
66 per cent of respondents said that they would still buy a brand like Nokia if they knew it was
made in China, since the brand was popular and the brands country-of-origin was not China
but Finland. The conclusion is that consumers are insensitive to the country-of-origin when
the brand is well established and popular as well as if it has trust in the marketplace.
Although Haier is present in many popular shopping malls and electronic retail outlets in Dubai
such as Sharaf DJ in the Mall of the Emirates and Dubai Mall, consumers are still not yet aware of
the existence of the brand in the UAE market (Figure 3). The research found that consumers did
not know that Haier is an electronics brand. Being placed in a shop is never enough for a new
brand to penetrate and sell in a market, there needs to be more effort via marketing
communication to build the brand and encourage consumers to try it and then buy it.
Figure 3
Yes
Yes
No
No
0 20 40 60 80 100
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VOL. 1 NO. 4 2011 EMERALD EMERGING MARKETS CASE STUDIES PAGE 7
1.4. Beat the Heat campaign for Yes the Young Eager Steps
After the student group analyzed the results from the primary and secondary research, they
proposed to Hafet and Haier a marketing communication campaign to create awareness for
the Haier brand in Dubai. Since philanthropy and CSR was never explored by any electronics
company in the UAE, the group thought it would be a unique and a good way to create
awareness for the brand. They came up with an idea to collaborate between a non-profit
(www.hamdaalhashimi.wordpress.com/young-eager-steps/) organization called Young
Eager Steps (of which the students are members of) and Haier. Young Eager Steps (YES)
is a group of dynamic and young Emiratis working together to contribute to society. Their
immediate goal is to educate orphans and provide them financial and emotional support as
well. They create events that involve interaction of the members of YES and the orphans. As
their motto suggests we play together, work together and learn from each other. The people
involved in the YES project are students from different universities who come together with the
aim of giving back to their community through focusing on the needs of a certain unprivileged
group in the society.
The students brain-stormed and created the Beat the Heat Walkathon campaign at Dubais
Safa Park. The preparation for the event was very exciting as the students wanted some kind
of entertainment and attractive factors so people would be motivated to get involved and join
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the walk for charity. They created a twitter account called @Beat__heat and started to spread
the word through Twitter and FB. The tweets revolved around motivating people and
convincing them emotionally reasons to be part of the event. They included quotes about
helping orphans, verses from the Quran and these were tweeted in Arabic and English. The
tweet messages also included information about Haier and the title tweet was Beat the Heat
with Haier.
As reported by Amna Al Hadad in The National newspaper, the walkathon was organized by
three young Emirati women Meerah Ketait, Sarah al Qassimi and Azza al Nuaimi (Al Hadad,
2011). They are studying for their Bachelors in Marketing at Zayed Universitys Business
College and were to create a promotions campaign for Haier, an electronics company.
Instead, the students pitched the idea of using a charity event to raise awareness. The Beat
the Heat walkathon took place on June 7, 2011; the event raised Dh 11,000 in donations, and
was enough to buy 32 appliances, including 12 air-conditioning units, ten fridges and ten
washing machines. The money raised went to support the Judran initiative by Sharjah Social
Empowerment Foundation, a project that ensures families with orphans have everything they
need in their homes.
On June 28, 2011, 18 families received refrigerators and washing machines, and two more
families received much-needed appliances, air-conditioning units were also installed for
those who needed them. One of those who benefited from the walkathon funds was a mother
of 11 children, who has lived in the UAE for 45 years and whose husband died two years ago.
She is a Bidoon, or Arab without citizenship. Its very helpful, said the woman who received
a refrigerator, a washing machine and an air-conditioning unit. I want to thank the young girls
and I hope Allah rewards them with goodness. Ms Meerah Ketait said the campaign, which
was carried out as their final year project for a class in marketing, could not have happened
without the support they received from Young Eager Steps, Sharjah Social Empowerment
Foundation and Haier Electronics Company. Aamer Khan, the Managing Director of Hafet
that represents Haier (Al Hadad, 2011) products in the UAE, said their efforts had been a
success. These young ladies carried out a real-life project that benefited the company and
the community, he said (Al Hadad, 2011).
Keywords:
Haier,
Country of origin, Notes
Corporate social
1. Haier Presentation 2011 provided by Aamer Khan, Managing Director, Hafet Electrical LLC, Dubai,
responsibility (CSR),
UAE, September 12.
Promotion and marketing,
Brand management 2. Haier. International Expansion, available at: www.en.wikipedia.org/wiki/Haier.
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PAGE 8 EMERALD EMERGING MARKETS CASE STUDIES VOL. 1 NO. 4 2011
References
Al Hadad, A. (2011), The National, July 1, available at: www.thenational.ae/news/uae-news/families-in-
need-given-home-appliances-from-walkathon-funds
Bhattacharya, C., Korschun, D. and Sen, S. (2009), Strengthening stakeholder-company relationships
through mutually beneficial corporate social responsibility initiatives, Journal of Business Ethics, Vol. 85,
pp. 257-72.
Blackett, T. (2007), Researching Brand Names, Novamark International, London, available at: www.
hamdaalhashimi.wordpress.com/young-eager-steps/
Cai, Y. (1994), Country-of-origin effects on consumers willingness to buy foreign products: an
experiment in consumer decision making, available at: www.fcs.uga.edu/ss/docs/cai_yi_200208_ms.
pdf
Trudel, R. and Cotte, J. (2009), Does it pay to be good?, MIT Sloan Management Review, Vol. 50 No. 2,
pp. 61-8.
Zhuang, G., Wang, X., Zhou, L. and Zhou, N. (2007), Asymmetric effects of brand origin confusion,
available at: wwwemeraldinsightcom/0265-1335.htm
Further reading
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Alexander, J. and Assaf, A. (2010), Country-of-origin contingencies: their joint influence on consumer
behavior, Asia Pacific Journal of Marketing and Logistics, Vol. 22 No. 3, p. 20.
Klaus, J., Thomas, D. and Alexander, G. (2010), When brands complement patents in securing the
returns from technological innovation: the case of Bayer Aspirin, International Management, Vol. 14
No. 3, pp. 73-85.
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VOL. 1 NO. 4 2011 EMERALD EMERGING MARKETS CASE STUDIES PAGE 9