Strategic marketing based on case study Maytag Corporation - Research Paper Example

?Introduction Situation Analysis Problem SWOT Analysis Strengths Weaknesses Opportunities Threats Marketing Issues and Strategies Advertising Manufacturing and Distribution Product Innovation Critical Evaluation Recommendation Conclusion References INTRODUCTION Qingdao Haier Ltd. and Maytag Corporation are both stable companies with regards to producing home appliances. In fact, both can be considered as one of the pioneers in home appliance manufacturing, having been established in 1984 and 1893 respectively. And for a company to go a very long way until now, it is needless to say that they have already given an impact to the minds of every consumer. But just like everything else, nothing can stay forever. Time will come that a company can be said to have already run its course. And that’s what happened to Maytag Corporation. Due to the changing needs of people, the demand for their product has declined, thus bringing in losses for the company. This calls for the company to make a decision in selling the firm. SITUATION ANALYSIS Problem The main problem in this case is the decision of buying the Maytag Corporation. The deadline regarding the offer is getting near and Qingdao Haier was still undecided whether or not to acquire the other company. Alongside with the main problem is the issue of what would Maytag bring to Qingdao in case it has made its decision to finally acquire it – whether it will be beneficial to the company or would just be a burden to the firm. Moreover, the changes that the acquisition would bring to the company such as the structure, the operations and even the policies are also the things that Qingdao should consider. All these should be evaluated in order to come up with a sound decision of Qingdao’s acquisition of Maytag. SWOT Analysis Strengths Qingdao Haier Ltd. is a very powerful company operating for more than two decades already. With this, the company has become one of the top 50 corporations in developing countries. Its ability to manufacture appliances at a wide range is also a strength that the company has, not to mention its diversified marketing strategy. Being able to conquer even the foreign lands is a proof of how well the company is going. The strength of going in for a difficult market, just like what the company did shows how strong the company is and reaching those markets is another strength for the company since this would mean that they are able to influence more people, thus bringing in higher income to themselves. As for Maytag Corporation, its edge on advertising is a big strength for the company. The quality of their appliances is also well-known. Maytag has as well made a mark in the home appliance industry by selling their appliances on the large retailers and numerous independent distributors. Conquering the United States, the company is said to be at large in this country. Maytag Corporation can also be said as a diversified corporation when it comes to their products. They are able to compete with other companies by producing appliances that meet the needs of different people. Weaknesses The Qingdao Haier Ltd. is weak at its advertising campaigns. Though this could not be seen as much of a hindrance to the company’s success, still, it can be viewed as its weakness, as advertisements make a huge impact on everything especially when you are selling something. Another weakness that Qingdao possesses is the pricing. Qingdao prices its products lower than any other brands like Whirlpool, General Electric and Maytag. This can be viewed as a weakness since by pricing your product on a lower level; consumers can have the mentality that your product is a sub-standard one as well. On the other hand, Maytag Corporation’s main weakness is its lack of innovation. The needs of people changes as time passes by and Maytag failed to deliver these needs, unlike what the other brands did. This has caused for the decline in sales and revenues for Maytag Corporation for the past years. With this, distributors as well stopped selling the brands thus giving Maytag a bigger amount of loss. Opportunities The choice of Maytag’s acquisition is a big opportunity for the Qingdao Haier Ltd. since with this the company can grow and bring more diversity to the firm. Also, even though the company has gone global already, the company can still manage to go even more global by considering the acquisition. And while Qingdao can benefit from the said acquisition, Maytag also could have its own advantages. With the acquisition, the opportunity for Maytag to continue with its business operations is visible. But it still depends on what the negotiation will be when the decision has finally been made. Bottom line is, Maytag Corporation may survive. Threats The threat that the Qingdao Haier Ltd. is facing now is the chance of failing when the decision for the acquisition is made. However, whether or not Haier decides to purchase the Maytag Corporation, the threat for the other competitors is still present. Every now and then, these companies will generate an innovation which Haier must level with. They should not be left behind or else, they will also incur losses or worse, fail at all. Maytag Corporation faces an even bigger threat when it comes to their offer for acquisition. Yes, they are for sale out in the open, but who knows what would happen to them after acquisition has been made? Will the company still survive or will they just dissolve like they did not exist at all? It all boils down to negotiation now. The company must not go to the highest bidder only, but the one with the best marketing plan as well. MARKETING ISSUES AND STRATEGIES Advertising According to Hiles, the bigger the investment in advertising, the bigger is the payback. Studies have shown that this is true. And even if there’s no studies presented at all, it is very visible nowadays. It is in advertising that we first see the value of a product and it is in advertising that we receive the idea of what product we will choose from the pool of other products competing for the customer’s desire. As per Qingdao and Maytag, they had their own ways of advertising. Their existing strategies differ from each other, as their territories also differ. Maytag is focused on the United States only, while Qingdao is trying to reach as many possible markets as possible. Maytag’s advertisement for the “Lonely Maytag Repairman” really did the trick for them, since it helped them earn the position of one of the most recognizable and respected brands in the United States. Qingdao, promotes their product as a global brand and not just a Chinese or American one. But unlike Maytag, Qingdao Haier Ltd. limits its fund for media advertising. Most of these funds are focused on retailer-directed campaigns, such as printed advertisements in magazines concerning appliance trade. Manufacturing and Distribution Qingdao Haier Ltd. is catering for a more numerous number of customers. Therefore, they need to manufacture more in order to supply the needed amount of products. With this, Qingdao has distributed factories, design institutes, after-sales service centers and industrial complexes both in and out of China. Also, as per their strategy, even though Haier is a Chinese brand, they made their consumers feel that it is not an imported brand but one that which is localized in the U.S. With Maytag, they have their own retailer stores which are being run independently. They also let their consumers utilize the products in the store. They are inviting shoppers by merely letting them bake cookies and do their laundry. They term it as “showcasing their products”. Distribution is really important in a firm. As Ferrell and Hartline stated it, with great distribution, a firm can overcome weaknesses in pricing, product and promotion. And even though costly of time and money, a solid distribution system will surely generate great profit. Product Innovation This is the most important strategy when it comes to marketing. Innovation creates a big deal when it comes to your products. If a product can dance through the changing world and through the changing needs of people, then it does not have any problem succeeding on from generations to generations. It is with the help of technology that this innovation can be achieved. And according to Johne, it is definitely challenging for the firms to apply the latest technologies just to attain product innovation. Innovation has not been a problem with Haier. They produced different types of home appliances, in lieu of their belief that if one did like their particular appliance, then the consumer might have the mentality that their other appliances were as good as well. Maytag has also been innovative, but not until the latter years. They have grouped their products based on pricing. But this did not seem to be enough for the consumers. During the later years, when competition has become more rigid when foreign suppliers also try to rule the US land, Maytag has not been able to compete with the style and innovation the other brands are offering. The result therefore is consumers choosing the more stylish brands than what Maytag has to offer. CRITICAL EVALUATION The marketing strategies presented have both their positive and negative effects on both companies. This section of the case study will now evaluate these strategies. The evaluation may be positive or negative which would be relevant to the conclusions and recommendations that will be presented in the later part of this paper. With regards to advertising, both companies have their original style on attracting customers. Maytag’s Lonely Repairman can be said to be effective since with this, Maytag has become one of the most recognizable brand in the US. Imagine a brand that has a guarantee of not being able to call a repairman due to its durability. Wouldn’t you buy that one? People are tight with money and we don’t want to spend it for nothing. That’s why it can be concluded that Maytag’s advertising is an effective technique for the company. As per Haier, they also have an efficient way in advertising their product. Their style of dominating native lands and the more difficult markets has helped them a lot in marketing their products. The “Made in the U.S.A.” tags are really magnets to customers. Their ads on the appliance magazines are also an effective one, proving just how much competent their products are. And the amount of sales for the company has only proven how much impact their advertisements have made for them. For the manufacturing and distribution part, it can be stated that Qingdao Haier Ltd. has a more favorable strategy. By conquering other lands, sales can be increased and the desire of the company to reach more customers is a very significant move to reach this goal. The effectivity of this strategy can be seen from the rates of sales that the company is putting. Getting behind other big brands, such as Whirlpool is a very distinguishable mark that the company has a very effective marketing strategy. While Qingdao has been eyeing for the other lands, Maytag has suit itself in setting sales in the United States. Majority of the sales that Maytag is putting up is dedicated to US and they also distribute their products in retailers and leading distributors just like what Haier has done. But their style for the manufacturing and distribution has been done by other companies over and over. There is nothing new to putting your products in the retailing world. What made them different maybe is the part where they showcase their products. Although this can be effective to some, many consumers still eye for the stylish and more modern products. And this is where Maytag lacked. Innovation for Maytag has not been good as compared with Haier. Though Maytag has been able to group their products based on the price level, which is a very good technique in letting the customers choose their desired product, it is not very effective. It has been said that only the high-end or the low-end are having a growth on the market share. Those in the middle level are thinning. It is due to the mentality of the consumers that high-ends have the best quality while the low-end consumers are just after the affordable price. However, even if Maytag has the best approach regarding the prices for their products, the consumers are still looking for more. Consumers are not at all after what is affordable, but also what is worth spending their money with. So purchasing comes with the style and the efficiency of the product. And this is where Maytag has been defeated by other brands. The stylish products from foreign suppliers have moved the spotlight away from the Maytag brands. And their inability to level up with these foreign suppliers has as well made them lose even more. With this, we can see how important innovation really is. If we don’t go out there and put our best foot forward, surely others will and so we have to move even before others can. If others have done it before us, then we should do the best we can in order to tie up with them. RECOMMENDATION In light with the analysis and evaluations presented, it can be formulated that the Qingdao Haier Ltd. should purchase the Maytag Corporation. It is due to the more positive critics attained from the marketing strategies present in both companies. Although there are some drawbacks, still, the positive evaluation outweighs the negatives. The theory of Marketing Myopia can be used to support this decision. This theory is proposed by Theodre Levitt, which reflects how old concepts can contribute to marketing practice in a classic way. This theory focuses on products rather than customers. According to Kumar, Levitt explained that a business should be more definitive about its business without being short-sighted about its markets. And this should be applied to both Qingdao and Maytag Corporation. Both are more focused on getting more customers when in truth, it should be the products that they are more concerned with. With Haier purchasing Maytag, this can be improved as Maytag is already an established brand as well as Haier. And the combination of the two would only make their brands even more highlighted. Also, the techniques for the product developments for the both brands can be combined and the shortcomings for either of the technique could be fixed. Another idea with regards to the acquisition to be made by Haier is the concept of digital marketing. The only problem that the Maytag Corporation has, as far as this case study is concerned, is the innovation and the competition with the foreign suppliers. But all these could be solved, with the help of the company. Qingdao has already established its brand name not only in China, but in the USA and the Australasia as well. Maytag has lost its touch to modern styling and this is where the Haier Ltd. can come in. Digital marketing is the use of the digital tools and strategies or in other words, the modernized techniques.. According to Ferrell, digital marketing allows companies to reach the market segments that are hard to reach with traditional media. And that even though problems arise with different marketing strategies, digital marketing leads the way in building a stronger relationship between the consumers and the suppliers. The use of digital tools is not enough to achieving success. The balance between the traditional and modern marketing must be maintained in order to reach the customers. Moreover, collaboration and harmony between the organizations itself should be given much attention as this would help break down any walls between the customers and the suppliers. In as much as there is the need for the focus on the products as what the Marketing Myopia theory has stated, the need to focus on the customers must also be present. Maintaining a balance for both of these concepts could pave a great way in dealing with the obstacles that line up along the way. Purchasing the Maytag Corporation would be a great idea for the Qingdao Haier Ltd. This brand has been in the business for the longest time and it can be very helpful in achieving success. Through the application of the Marketing Myopia and the digital marketing, this purchase could be a very great investment for the company. It is not only that we have bought another company, but we have also earned ourselves another strategy in order to market our products. With the acquisition, strengthened distribution and selling power for the public can be achieved. Maytag Corporation can be at its losing end, but given the chance and the proper guidance that the Qingdao Haier Ltd. can offer, there is no way that this acquisition can be a failure. With the acquisition, strengthened distribution and selling power for the public can be achieved. It is therefore strongly recommended that Maytag Corporation be purchased. CONCLUSION Purchasing a company is not an easy decision to make since it can make or break a company. It is for the reason that this decision should not be made drastically. One must think about it and study the effects real hard so as not to arrive at a wrong decision. With this, many factors are affecting one’s decision in purchasing another company or not. In this case, Qingdao has to make a decision of buying the Maytag Corporation as the deadline is getting near. Odds are presented and the stands for both companies were evaluated in order to give this case study a decision. Moreover, marketing strategies were being presented as well to give justifications on why the company should choose that option. There are a lot of marketing strategies out there and it is very important for a company to come up with a strategic one. Advertisements, the distribution process, and the modernization of the techniques are all very important for the product’s effectivity to be sold. Thus, these should all be planned and tested in order to achieve success. References: Ferrell, O. C., and Hartline, Michael D. Marketing Strategy, Fifth Edition. USA: Cengage Learning, 2011. Hiles, Andrew. The Definitive Handbook of Business Continuity Management. United Kingdom: John Wiley and Sons, Ltd., 2011. Johne, F. A. Industrial product innovation: organization and management. New York: Nichols Publishing Company, 1985. Kumar, Ramesh S. Consumer Behaviour and Branding: Concepts, Readings and Cases-The Indian Context. India: Dorling Kindersley, 2009. Pride, William M., and Ferrell, O. C. Marketing, 16th Edition. USA: Cengage Learning, 2010. Read More