ACKNOWLEDGEMENT

All praise for Almighty ALLAH whose uniqueness, oneness and wholeness are unchallengeable. Who is the ultimate guiding force behind everyone and guides everyone in intricate circumstances. We would like to take this opportunity to express our sincerest gratitude to Mrs. Lalarukh for his support and supervision throughout this project.

We are indebted to them for their sincere help and guidance that allowed us to study the business processes of Packages Ltd. in detail and facilitated in the development and presentation of this project.

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EXECUTIVE SUMMARY

Allah almighty has gifted Pakistan with four wonderful seasons. Autumn, spring,

winter, and summer are beauty of topology of this country. These four seasons

operate in different spells. Autumn and spring lasts for 2 months each, winter for 3

months whereas duration of the summer season is larger than the other seasons. This

almost lasts for 5 / 6 months. Mercury starts rising from the month of March, it

reaches at peak in June and July and later in august and September conditions of

humid weather exists. The mercury rises to 50 degree in May June and July.

Although the people get cool relief through electric fans but people with high stream

income enjoy the luxury of air conditioners. The prices of air conditioner have

substantially decreased in the recent years. This due to the fact that more compact

models have been introduced in the market as compared to conventional large size

units. This price phenomenon has facilitated the lower income groups of the society

to enjoy the chill of the air conditioners. As the prices decreased the demand of air

conditioners also increased the manufacturers of air conditioners exploited this

situation which resulted in increase of productions of existing brands. Furthermore

investment was inducted in this sector and new brands introduced. The current total

market of air conditioner units in the country is approximately 8, 50,000 units

annually. There are 34 companies operating in Pakistan. They are producing the

entire demand of 8,50,000 units. Due to high cost of production these companies are

importing all parts from China and final assembling is being done in Pakistan.

Smuggling also captures a minor portion which is approximately 2 % of annual

production.

The dealer network of each company comprises of 200 / 250 shops, companies have

also opened customer care centers in different areas where repair maintenance

facilities are provided. Companies have also adopted different types of marketing and

sales strategies. There appears a tough competition among the different players in this

sector. Due to this reason companies are also spending huge amounts on advertising

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and using different tactics to attract the customers. Through this project efforts have

been made to explore different.

Introduction to Organization

History of Haier:

Haier was incorporated in 1984 producing house hold refrigerators Qingdao with 800

employees and only one product line, Haier has grown to become a globally recognized

name brand.

Over the past 20 years, it has grown and prospered as a world’s 2nd Largest Home

Appliances Company.

It is only Chinese brand that has been nominated in the list of top 100 companies

of the world; Haier was ranked 95th number in the list.

On the list of the most respected global companies 2002 issued by the Financial

Times, Haier was placed first.

MISSION STATEMENT

To provide quality products & services to the complete satisfaction of our customers

and maximize returns for all stakeholders through optimal use of resources.

To focus on personal development of our Human Resource to meet future

challenges.

To promote good governance, corporate values and a safe working environment with

a strong sense of social responsibility.

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VISION

To be a leading home Appliances business with strong brand and a team of exceptional people

SWOT Analysis

SWOT analysis is a simple framework for generating strategic alternatives from a

situation analysis. It is applicable to either the corporate level or the business unit

level and frequently appears in marketing plans. SWOT (some referred to as TOWS)

stands for strengths, weaknesses, opportunities, and threats.

The following diagram shows how a SWOT analysis fits into a strategic situation

analysis.

Strengths :

Our product price is normal according its features. It will be the market leader as it’s a new product Financially strong very strong. It will provide high quality as compare to competitor so it will be a strong

edge for the business to flourish.

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High tech production plant will be installed that will produce high quality

product on a large scale

Weakness:

Weak delivery chain. We will import few raw material items from other countries so dependence on

imported raw material would be a hurdle in producing theca.

People might misunderstand its operating functions.

Opportunities:

In Pakistan AC industry is growing at a high rate so there is an opportunity

for the business to avail and become successful.A large market which can be

captured.

Operational efficiency can be attained once we start . Our capital resources are good.

Threats:

There is an expected rising competition in the market can occur. Load shading can effect our business. Economics crises can also a threat for us. As split AC is going to introduce a new type of AC so there is chance that people

will show reluctance in the beginning.

In future there is a possibility of shortage of raw material.

Marketing strategy:

Our marketing strategy is based on delivering a strong customer value positioning in a differentiate market. We have built a very strong relationship with the concerns. We will visit all the related areas. We will make our product and services to every home. We are building our public relationship so that we can reach additional cities with same offering. Our main focus is to meet our customer satisfaction.

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SEGMENTATION

GEOGRAPHICAL SEGMENTATION

World region or country PAKISTAN

Country region PUNJAB

City MORE THAN 40 CITIES INCLUDING LAHORE, GUJRANAWALA,Multan,Sibi

Climate hot weather

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DEMOGRAPHICAL SEGMENTATION

Age UNDER 30-50

Gender MALES, female

Family life cycle YOUNG SINGLES, MARRIED

WITH CHILDERNS

PSYCHOGRAPHICAL SEGMENTATION

Social class Middle CLASS, Upper class

Lifestyle Every type of lifestyle

BEHAVIORAL SEGMENTATION

Benefits CONVENIENCE,

User status POTENTIAL USERS, 1sT TIME USERS,

Loyalty status NONE

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Readiness stage AWARE & TENDING TO BUY

Attitude toward product INDIFFERENT

TARGET MARKETING

Target market is a set of buyers sharing common needs or characteristics that the company decides to serve.There are several target market segments including undifferentiated marketing, differentiated marketing, concentrated marketing, and micro marketing.

The target marketing for the AC is DIFFERENTIATED MARKETING.

Because the segmented marketing is a market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each.This is also the case in AC target marketing.This target marketing is very apt for the AC because the product is one and dealing with several segments existed in the market.

POSITIONING

Haier has a very sound positioning of their products in the minds and hearts of the consumers. We will position our AC with quality and class. It is a premium product and that’s why is charged a premium price. On the other hand, the split AC has been positioned with economy and hygiene.

MARKETING MIX

Marketing mix include the following

1. Product

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2. Price

3. Promotion

4. Place

PRODUCT

Business will be producing its product that is AC on a large scale. The different sizes

mentioned above will differentiate our produced bread from other breads. Haier will

produce the bread in different shapes and in different sizes.

1. Small 13000 btu2. Medium 19000 btu3. Lager 25000 btu

Product pictures:

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Product attributes:

Core benefit:

The core benefit of our product is cooling.

Actual product:

Product features:

Powerful cooling under T3 Standard Fresh air by Negative ions Energy Saver LED Display Double Condenser International Brand Compressor Auto Restart Intelligent Air Flow It tells filter cleaning time Operating by telephone line

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Product attribute

Branding

Packaging

Labeling

Product support system

Saves from dust for maximum time

Augmented product:

Warranty:

We are giving 1 year parts warranty.

We are giving 5 year compressor warranty.

Installation

We will giving a best installation by expert technicians which will give a higher result in cooling

After sale service:

The service function in Haier isn’t only to provide repair work .It’s the last stage of

marketing, and also is the first stage of R&D. It’ll impenetrate in product R&D,

manufacture, marketing, after-sales and other enterprise activities. We provide 1 year

after sale services.

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Packaging

The a packaging breakthrough significantly improving portability, convenience, and product protection and consumer information while lowering environmental impact in comparison to existing solutions. Its unique design combining primary and secondary packaging provides optimum product protection as well as a quick and easy access.

Branding :Recognition days almost every product is known by its brand name Brand name helps consumer to identify the product. Brand name also tells the buyer something about product quality in Haier AC the world Haier reflect the elegant feature of the product .

The brand name is Haier. And it is well known by all peoples.

Labeling :

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The logo of the Haier and the company Haier is embossed on the AC box. They change the color of their AC logo according to the occasion like on the Independence Day they changed the color of the AC logo in to green and white .The is well labeled. And it tells about the product and company.

PRICE

Price of Haier AC products would be charged according to the category of AC. Price is

given according to its feature and quality. The profit margin is low to increase the sale

and to introduce the new product. Our price is less as compared to our competitors.

Below a table is given which shows the price.

product price

Small 13000 btu 24495

Medium 19000 btu 34495

Lager 25000 btu 43495

Price elasticity and customer sensitivity

Price elasticity is the variation of the price to the quantity demanded to the various in price. This is a cheap product and the variation in price would obviously affect the customer demand. Making the price too less will give the customers think that the product is a cheap one and its quality is inferior. If the price is too high then the customers will not by it.

PLACE

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At initial stage split AC will produce the products for Lahore and its surroundings. As

the business flourishes and brand gets its place in the market AC will start producing

other major cities oh the country like Islamabad, Faisalabad, Sargodha, etc.

With the passage of time business will start focusing to place the product in all the cities.

The distribution network of HAIER AC Flows as follows:

Producer

Distributor

Whole Seller

Retailer

Promotion:

We have a new product and it is in the stage of where we need to create awareness in of the product in the people. We will be launching a mass promotion campaign so that we can make the maximum of people aware of our product.

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Promotion Strategy

HAIER promotion budget is around 1.75% of their turnover. 40% spending of their

budget is Print Media, 20% goes on TV, 20% on Outdoor activity and balance 20%

on Sales Promotion activity. They believe that print media and outdoor activity help

them to reach to their target customer. Due to satellite transmission and having

multi-channels, it does not pay one unless you have very huge budget to spend on

this media. On promotion, their spending is more on consumer incentive schemes.

Since it pays them and there is direct relationship between sales and consumer.

Further, it gives customer a direct benefit in shape of price reduction.

Company can use these tools for promotion purpose

Advertising

Sales promotion

Personal Selling

Direct Marketing

Product Advertising

In product advertising, advertisers are informed or stimulating the market about their

products and services. This type of advertising is often adopted by HAIER Sale

Corporation on various occasions. For instance when HAIER introduces a new

article in the market, information is given to customers and through magazines and

newspapers.

Daily Newspapers

Life has become so faster that no one can spare time to watch T.V. or listen to radio

regularly. For such type of people daily newspaper is an important media which HAIER

has adopted. Advertising messages of HAIER appear in a newspaper more frequently

because it’s much cheaper the T.V.

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Magazines

Pak electron ltd presents beautiful ads of its home appliance in well reputed weekly or

monthly magazines. These magazines include both general and special types. Special

types mean executive magazines, business magazines etc.

Sales promotion

We will be giving incentives to the middle men. These middle men are actually the channel members. By doing so, these sales people will promote our product over the other products. These sales men will be given commission on the number of split AC sold.

Personal selling:

We will introduce our product , we will also promote it by personal selling.

We will go to the customer for personal selling and will introduce our new product.

Direct marketing:

We will also use direct marketing to introduce our new product. We will send sms we

will send mail to our existing and new customers.

HAIER Advertisement Boards in Lahore

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Haier AC advertisement in Multan

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Customer Services

HAIER has 27 areas sales offices in all the major cities of Pakistan. They are selling

direct into those cities and giving the right information about that market. HAIER

has also its service center in 24 cities and the authorized service center numbers are

now reaching to 500 all over Pakistan. Customer services vans are now giving fast

and reliable services to HAIER customers. HAIER has a UAN number for its

customer complaints i.e. 111-102-103 and also having the toll free number 0800-

00735(HAIER) which was recently added for the customer’s value.

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Brand equity

This is a not new product but features are new that is being introduced in Pakistan so Brand equity needs to be established. When developing a new product, branding is an important decision. The brand can add significant value when it is well recognized and

has positive associations in the mind of the consumer. This concept is referred to as brand equity.

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Brand Equity Determination Factors:

The scientific data collection for an existing brand is very important in calculating the brand equity. The brand equity of a product lines at four levels:

Awareness Level Top of Mind (TOP) Brand Ever Used

Product Life Cycle Management and New Product Development Process:

Product Life Cycle Management:

Market introduction stage

The is not the new product it is existing product but it become with new features.

Sales may be low because the product features are new and people do not have much awareness about this product features.

Demand is to be created. Customers will be prompted to buy the new product. Awareness

will be created by advertising.

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Growth stage

Costs will be reduced to increase the sales of the product. Profits will increase. There will be danger of competition with some new players

in establishing market. Prices to maximize market share will be created by

advertising.

Mature stage

Costs will become low the market will be well established and there will be no need for publicity.

Sales volume will rise. There will be increase in competitive offerings. Prices will tend to drop due to the proliferation of competing products.

Saturation and decline stage

Costs become counter-optimal. Sales volume decline or stabilize. Prices, profitability diminish. Profit becomes more a challenge of production/distribution

efficiency than increased sales.

New Product Development Process:

Idea Generation:

Ideas for new products can be obtained from basic research using a SWOT analysis (OPPORTUNITY ANALYSIS), Market and consumer trends, company's R&D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or Ethnographic discovery methods . The idea about such a Split AC is innovative and it will more facilitate to the use of customer.

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Idea Screening:

The following questions are to be kept in mind during idea screening:

Is the customer in the target market having benefit from the product?

This split AC will be introduced in Pakistani market for the first time. The numbers of AC users are increasing every year and is a cause of increasing demand of such AC. People are becoming aware and are interested such a split AC which can provide them the features which they are vigorous to find for a long time and finally the sum of all these features they can find in this split AC.

Is it technically feasible to manufacture the product?

It is feasible to manufacture the products because the techniques of production are available.

Will the product be profitable when manufactured and delivered to the customer at the target price?

The product will be profitable due to its uniqueness and benefits.

Concept Development and Testing:

The target market is detected. The benefits are analyzed. The reaction of the consumers is kept in mind. The costs for the manufacture of the product are known. Testing the Concept by asking a sample of prospective customers what they

think of the idea.

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Marketing Strategy Development:

- The target market is mostly comprised of men and a few women.. Middle class and lower class people are mostly dependant upon AC while upper class people use it more.

- The product planned price is determined for split AC.

- The budgeting, sales and profit goals are determined.

Business Analysis:

The prices of currently sold ACs in Pakistan would be compared. Estimation of sales and profit will be done.

Product Development:

The concept of the product is converted into the final “product”. After going through all the previous stages Split AC with different features are launched.

Test marketing:

The product before getting introduced in the market is firstly tested. Initially produt is sold at the cost price for test in market. The effects and results are analyzed by test marketing.

Commercialization:

Launch the product: The new product is introduced in the market.Product advertisements and other promotions: Product advertisement and promotion is done in order to enhance the sales.

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CONCLUSION

We have concluded that it is a difficult job but we have used all the marketing strategies to become success in the market and our product is innovative we are initially sucessing and InshAllah we will find a great success in future.

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Reference : www.haier.com.pk

MR.Imran Yousafzai (country marketing manager of Haier company)

MR.Khadim Hussain (regional manager Multan)

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