7.132009

how to make haier a household name

An open memo…

To: Richard Block, VP Marketing, Haier Americahaier

From: Someone Who Really Wants to See Haier Succeed

Subject: How to Grow Haier Into a Household Name

As Sony‘s former VP/GM Brand & Strategy and current fan of Haier, I read with great interest your interview in Ad Age last week.  I’m excited to hear of your goal to be as successful as Samsung or LG have been in establishing their brands in the U.S. — and wanted to share my thoughts on how you might do so.

Before I get to my recommendations, though, I believe it’s important to acknowledge the current state of the market when it comes to electronics and appliances:

  • it’s highly commoditized — meaning, there is a lack of perceived differentiation among products.  Apple products are a notable exception, but for the most part, most electronics and appliances are perceived to have very similar features and capabilities.  As a result, competition is highly price-based and only companies with strong brands are able to gain market share and charge a price premium.
  • it’s driven by the channel — the two major retailers in your categories, Best Buy and Wal-mart, have built such strong brands for themselves that manufacturers are competing as much with them as they are with other manufacturers.  Online outlets are also problematic, as they tend to reinforce the commoditization referenced above.  Manufacturers must generate enough “pull” with consumers.

Although these point to some difficult challenges to your efforts, I do believe there are some things you can do to combat their effects, break-through, and position Haier to become a real player in the market.

  1. differentiate — I didn’t hear a focus on this in your Ad Age interview and yet it seems the most important, and fundamental, thing for Haier to do.  At Sony we used to talk about the “wall of black” — you know, the back wall display at Best Buy in which the TVs are lined up row upon row, black screen after black screen.  With all the products and brands looking the same, it’s easy to see why consumers usually default to price to determine which one to buy.  Haier must figure out a way to offer something different and to communicate that distinctiveness in a way that consumers understand and appreciate.  Differentiation can come from product design, user interface, product/content integration, applications, added-value services — there are a lot of options.  The important thing is for Haier to adopt a strong point of differentiation and to execute on it consistently.
  2. sync marketing efforts with purchase decision process — most electronics and appliance purchases are considered, not spontaneous.  That means consumers are learning about options, doing research, comparing products/brands/prices among different manufacturers and different retailers, etc. before they purchase.  Haier’s marketing efforts must insert the brand at critical points in that purchase process.  In your Ad Age interview it sounds like you’re using the home tour as a jack of all trades marketing tactic, taking the movable home filled with Haier products to state fairs and food festivals as well as retailers and maybe a few places in between.  I wonder if it would be more effective to use it and/or a virtual version of a home tour to influence qualified buyers at specific points in their purchase process (e.g., drive visits from a product comparison site to a home tour locator).  You’d likely see more direct, immediate results from a more focused, conversion-oriented effort.
  3. focus on a few key products — I counted over 23 product categories in the line-up on your website, with multiple products in each; 15-20 products are featured in your home tour alone.  While I understand showcasing multiple products/categories may seem like a way to position Haier as a big player, it may actually cause consumer confusion and detract from your efforts.  Your brand is more likely to stand out if consumers are clear about what it stands for and what it offers.  Plus, because your categories are so diverse (refrigerators to headphones) and as such they appeal to different customer groups, your marketing efforts may be spread too thin.   I recommend selecting 3-4 key products that you want Haier to be known for and channeling your marketing efforts toward them.

I hope these thoughts are helpful, Richard — and they are taken in the spirit they are meant.  That is, I believe Haier has the potential to become as strong a brand here in the U.S. as it is in China — you’ve got some great products and you’ve already made some significant inroads.  I’m rooting for you!

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  • It’s almost “hidden” in point #2. Delivering exceptional customer experiences at key points in the purchase cycle is so important to do. Like most things important, it’s pretty darn difficult too. But, the company that can consistently deliver excellence to consumers as they progress (and, at times, regress) through their purchase cycles creates differentiation in a much more cost effective manner than a product feature “arms race.”