Haier wants customers to greet summer not with a frown but a wide grin, courtesy Remotu kaka in the brand’s new campaign for its ‘Smart Eye’ air conditioner. Eric Braganza, President, Haier India tells us how Haier aims to go about reaching the No 5 position in India by 2018
By Neeta Nair
Q] Tell us a little bit about the new ad for Haier ‘Smart Eye’ air conditioner.
There is a lot of advertising that happens in the air conditioner business during this season, most of which is filled with technical jargon, confusing the consumer. We had a unique product in our ‘Smart Eye’ air conditioner but wanted to put across its features in a way which the consumer will understand. I strongly believe when you make an ad, the film should be such that a viewer wouldn’t mind watching it again and again, so we took a different route to promote the new AC—comedy. The TVC has been well received.
Q] What is the target audience for this AC?
It’s a consumer who is already using an AC but wants to upgrade to a better one. Not that we are ruling out the first time buyers who are looking for a good quality product. This is one of the expensive ACs in the market place. It costs around Rs 50,000. What’s interesting is that even though this AC is priced so high, it has done extremely well in B and C class markets and not in the metros alone. It has got a great response in smaller towns like Jabalpur, Kota, Indore, Coimbatore, Vizag, Vijaywada and Jaipur.
Q] So the ad was not given a partly rural and royal feel because you were consciously targeting people beyond metros?
Not really, the typical maharaja setting was only used to make it funny. Remotu kaka in the ad only has the task of adjusting the air of the ACs across the palace. The dialogues and the styling of the characters bring a smile to your face. In fact our earlier ads for bottom mounted refrigerators (BMR) have had a very different urban set-up which focuses on the dialogue between the husband and the wife. After that several other brands brought out ads with a similar husband-wife theme. We felt people weren’t too pleased with such ads where the husband who has little knowledge of the appliance looks like a joker all the time while the wife comes across as the smart one. So, when the agency which conceptualized the ads for our bottom mounted refrigerators suggested that we carry forward the same theme for the ‘Smart Eye’ air conditioner, we said no. So while we didn’t change the theme for the BMR, we ensured we have a different one for the ACs.
Q] What is the marketing mix for the campaign and give us a rough estimate of your spends?
We are looking at a 360 degree marketing campaign with focus on TV, Print and Digital. On the BTL front you will find our salespersons very aggressive on the shop-floor across our 6000 stores in the country. For this summer we are focusing on two product categories, one is the ‘Smart Eye’ air conditioner, and second is BMR. So, both put together we are spending approximately 30 crores on our advertising, just for this summer.
Q] You brought BMR to India in 2009, but didn’t publicize it much then. Now many brands are following suit, any regrets?
In 2009 we were doing a lot of setting up in terms of strengthening the products and brand. We didn’t have too much money to make a big hue and cry about the product like we are doing now. We went a little aggressive only from Diwali last year. We had launched BMR abroad long ago and brought it to India much later. The only change we made was that we made the refrigerator section bigger and freezer smaller. This was because India is predominantly vegetarian and doesn’t need huge freezers to store meet. Now Godrej and LG are following suit. Many brands are importing such products but the problem is the fridge-freezer ratios will not be suitable to the Indian needs in such a case.
Q] Haier has topped Euromonitor's major appliances global brand rankings for the 8th consecutive year... but you are still not amongst the top five brands in India, why?
No, not yet. See, this brand was launched in 2004, and till 2009, it hardly did much business in India. One of the challenges for us was to build confidence about a brand that came out of China. Prior to Haier, there was no Chinese brand that did well in India. All the brands that launched products in our categories closed down and went away like TCL and Skyworth, which is still struggling in India etc. So we had to get rid of the negative rub-off that sticks to a product from China, about questionable quality and cheap prices. Our biggest achievement is not our turnover but that we have been accepted as a mid to high price brand. Dealers and the consumers accept that our quality is good, and are willing to pay for it. The very fact that I have got one of the most expensive 1 ton air conditioners in the marketplace and it’s selling means that the customer is willing to pay. If you go by the type of product mixes that we sell alongside refrigerators, going by numbers we are on the third position. The rate at which we are growing is greater than that by which the top two brands are growing.
Q] What percentage of Haier’s sale does e-commerce contribute to? And how are you engaging with your audiences on the Digital medium?
At present it contributes to about 7%-8% of Haier’s total business. We use the e-commerce platform to enlighten people about the product, quality, features and the price points. And we also engage with them directly through our digital marketing efforts, our website, and interactions on our Facebook page to give them a better understanding of the product they are already interested in.
Q] How big are you on the discounts front?
Discounting is not as important as what people make it out to be. A product priced correctly is much better than one priced wrong and offered with discount. So, we ensure whatever product we are offering in a marketplace is aptly priced based on its features and benefits, that’s the way we have been operating all along.
Q] While you have products to suit a wide budget range, your advertising focuses only on high end ones, why?
Yes, Haier’s advertising has always concentrated on our high-end products. We have the entire range of products to take care of our numbers like direct cool refrigerators, small size panels and semi-automatic washing machines. But as a brand we focus on mid and high range products, and it’s paying off because people are understanding the value of the product. We have always priced our products in the mid level. So in some cases we would may be 3%-4% cheaper than LG and Samsung, but yet not be the lowest offering in the category. The fact that there are lots of brands which are selling cheaper than us but still not selling with the kind of volumes we do is an achievement for us.
Q] What has been the year on year growth for Haier?
My monthly turnover in March, which is the highest ever for us was equal to my annual turnover in 2009 and the April turnover is going to be 35% more than March, which will be another record. We are a 2100 crore company today and we will end the calendar year at 2700 crore and by 2018 we are targeting the number five position. We are aiming to be a one billion dollar brand by 2020 i.e. we will make us number three in India. We have invested 530 crores on the expansion of our factory in Pune. We should be able to inaugurate this new factory by November this year. It will have an in-built capacity of 1.8 million refrigerators, 0.5 million washing machines, 0.5 million air conditioners, 0.5 million TVs and 0.5 million water heaters.
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