Professional Documents
Culture Documents
NAME
INSTITUTE AFFILIATION
REPORT 2
Contents
INTRODUCTION .......................................................................................................................... 3
CHALLENGES FACED BY HAIER ............................................................................................ 4
IMPACT OF POLITIAL AND ECONOMIC FACTORS ............................................................. 6
RECOMMENDATIONS ................................................................................................................ 7
CONCLUSION ............................................................................................................................... 7
REFERENCES ............................................................................................................................... 9
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INTRODUCTION
Goldman Sachs’ chief economist Jim O’Neill coined the term BRICS in 2011. The
BRICS grouping the five emerging economies- Brazil, Russia, India, China and South
identified the “Next 11” (N-11) growth markets in 2005. N-11 includes the countries that
over the coming decades are most likely to rise quickly economically. The emerging markets
are challenging developed countries by producing innovative products for less cost than
western more developed countries. However there are number of challenges that marketers
from developing countries face and these countries must overcome those challenges in order
The path to globalization does not run smooth. There are many Chinese brands that are
widely known but are still at their infant phase in tapping markets of developed countries.
Haier is the company that we will be discussing in this report. Haier group of China initially
used to manufacture refrigerator later expanded rapidly into other sectors. In few years Haier
became appliances giant. It has a global network of marketing and sales offices. It provides a
wide range of consumer electronics and home appliances. It has competitive edge due to
Haier products are sold in markets of Europe, Asia, Middle East and The United States. With
the expectation of entering the higher end market abroad, Haier made a bid on Maytag
Corporation which is US based, but unfortunately Whirlpool made a winning bid. This was a
major obstacle for Haier, they lost the golden chance to enter the high end market of The
United States.
understand current potential customers, marketing research is the only way. Companies must
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know how international market research differs than that conducted in domestic markets.
Marketers who engage in global market research studies must consider several factors. There
are number of challenges that researcher face while conducting research across national
Marketers will be better suited to design and implement projects who are well aware of the
There are few challenges faced by Haier despite being the appliances giant. Unlike
developed economies it lacks transparency about its governance structure. The ownership
status of the Haier Group is not clearly defined. This was one of many reasons why
Whirlpool bought Maytag Corporation. Most brands prefer the developing countries while
entering the international market. The main reason why Chinese brands are finding it difficult
to have loyal customers because of the reputation of products made in China, and mainly
because Chinese firms ignore the importance of the purpose-based marketing. According to
economies. The movement towards freer markets has led to great interest in unique issues
and the marketing challenges to these economies. Multinational corporations show interest in
these emerging markets, as the see growth and leadership potential. China selling more
refrigerators every year than The United States proves this point. Organization or individuals
who wish to promote market and commercial success of domestic enterprises in emerging
economies, operating in their own or in export markets are another reason for this interest.
Five key characteristics are radically different in emerging and developed markets. Those
market orientation, and differential advantage. Similarly issues of marketing practices and
A wide range of products of Haier are sold in The US, but China is still unable to make their
brands well known and widely acceptable. It takes more than Olympic sponsorships, English
websites and services to achieve the transformation from local to global brands. Literature
dealing with skills of marketing managers is limited, whereas much attention is devoted to
the development of marketing strategy. There are many marketing theories that acknowledges
the need for marketing skills, but fails to identify these skills. It has become very important in
today’s world to value human capital more than anything and to value emotional intelligence
as well. It is important for companies to retain individuals who possess competencies and key
skills. Employers are looking for individuals who can apply sound marketing principles in the
field, lowering staff turnover. Combination of managerial and technological capabilities are
needed to survive in today’s market. There are three important factors that needs to be keep
in mind in order to survive in any environment, most important being the individuals having
technical, human and conceptual skills, secondly the focus of organization must be on
strategic outcomes and corporate competence (Melaia, Abratt and Bick, 2008). There are few
companies that have successfully transformed, like Samsung has totally transformed itself
from A South Korean brand to a global one. It’s because of its design different from all
others, and amazing features. There is more of a home based marketing, Chinese firms are
In China businesses are facing many political challenges. In China regulation are not
as transparent or absolute as they are in western economies. There is a form of social network
in China called guanxiwang in local language; it is the relationship between the entities of the
network and the individuals. In China links with communist party help international
businesses avoid red tape and bureaucracy. Businesses find it hard to survive due to lack of
transparency. China is one of the fastest growing economies in the world. Due to changes in
policies companies investing in China have to consider the stability of political and economic
environment and have to prepare themselves from various risks. China has tried to maintain
Yuan against US dollar. The demand for labor has also increased due to high economic
growth. The minimum wage level has been increased by the government in past five years.
The operating cost has been increased with such decision and it is a risk factor that companies
have to keep in mind (Jayaraman, 2009). The research proves that on average emerging
markets experience less political risk. The political risk impact on both markets however is
statistically significant. During the last ten years political risk has increased in emerging
markets. During the decade developed markets have become politically riskier whereas
emerging markets have become politically safer (Diamonte, Liew and Stenvens, 1996).
very challenging task to MNCs due to difference in many aspects including cultural, political
and economy. Emerging economies are playing a major role in the performance of the global
economy. Initially trade between developed and developing countries was of very much
importance, but now trade between developing countries have become more important.
Developing countries are now focusing on developing their own market first and then are
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making efforts to pursue regional economic integration. By doing this developing countries
are diversifying their products away from their export markets in North America and Europe.
Economic growth of any country depends on its factors of production, an environment that is
stable both economically and politically, and major return on investment by businesses and
individuals. There are some major barriers in developing markets which restricts the growth
of consumer demand and make it difficult for them to access international markets. Those
barriers include a coordination failure that affects the operation of markets, bad condition for
investment in private sector, and less financial services (Ganapavarapu and Chary, 2015).
RECOMMENDATIONS
In order to become an acceptable brand in developed countries there are few options
to go with. First is to convert the competition into a kind of cooperation. Haier can also work
with Whirlpool with Mutual Corporation. One example is corporation of Haier with Japan
Sanyo. Both companies make use of mutual distribution channel to sell their products. Japan
Sanyo sell their appliances and batteries in China, and on the other hand Haier sell washing
machines and wine coolers in Japan. The other way is to convert conflicts into connections.
Many international competitors are interested in making use of Haier’s logistics system, in
CONCLUSION
China is world’s fastest emerging economy with rapid industrial development. After The
United States and Germany, China is the world’s third largest trading nation. It will always
be an important business partner of The US. The United States consumers and businesses
need to understand the difference in the cultural, political and economic environment of
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China and The US. Most importantly the political and economic differences and their impact
REFERENCES
Diamonte, R., Liew, J., & Stenvens, R. (1996). Political Risk in Emerging and Developed
Melaia, S., Abratt, R., & Bick, G. (2008). Competencies of Marketing Managers in South