Refer to the Baseball 2016 data, which reports information on the 2016 Major League Baseball season. Let attendance be the dependent variable and total team salary be the independent variable. Determine the regression equation and answer the following questions.

Draw a scatter diagram. From the diagram, does there seem to be a direct relationship between the two variables?

What is the expected attendance for a team with a salary of $100.0 million?

If the owners pay an additional $30 million, how many more people could they expect to attend?

At the .05 significance level, can we conclude that the slope of the regression line is positive? Conduct the appropriate test of hypothesis.

What percentage of the variation in attendance is accounted for by salary?

Determine the correlation between attendance and team batting average and between attendance and team ERA. Which is stronger? Conduct an appropriate test of hypothesis for each set of variables.

Show all work in Excel

Jamie and Cecilia Reyes are husband and wife and file a joint return. They live at 5677 Apple Cove Road, Boise ID 83722. Jaime’s social security number is 412-34-5670 (date of birth 6/15/1969) and Cecilia’s is 412-34-5671 (date of birth 4/12/1971). They provide more than half of the support of their daughter, Carmen (age 23). Social security number 412-34-5672. (date of birth 9/1/1995), who is a full-time veterinarian school student. Carmen received a $3,200 scholarship covering her room and board at college. She was not required to perform any services to receive the scholarship. Jaime and Cecilia furnish all of the support of Maria (Jamie’s grandmother), Social Security number 412-34-5673 (date of birth 11/6/1948), who is age 70 and lives in a nursing home. They also have a son, Gustavo (age 4), social security number 412-34-5674 (date of birth 3/14/2014). The Reyes and all of their dependents had qualifying health care coverage at all time during the tax year.

Jaime’s W-2 contained the following information:

Federal Wages (box 1) = $145,625.00

Federal W/H (box 2) = $ 16,112.25

Social Security wages (box 3) = $128,400.00

Social Security W/H (box 4) = $7,960.80

Medicare Wages (box 5) = $145,625.00

Medicare W/H (box 6) = $2,111.56

State Wages (box 16) = $145,625.00

State W/H (box 17) = $5.435.00

Other receipts for the couple were as follows:

Dividends (all qualified dividends) $2,500

Interest Income:

Union Bank $ 220

State of Idaho – Interest on tax refund $22

City of Boise School bonds $1,250

Interest from U.S savings bonds $410 (not used for educational purposes)

2017 federal income tax refund received in 2018 $2,007

2017 state income tax refund received in 2018 $218

Idaho lottery winnings $1,100

Casino slot machine winnings $2,250

Gambling losses at casino $6,500

Other information that the Reyeses provided for the 2018 tax year:

Mortgage interest on personal residence $11,081

Loan interest on fully equipped motor home $3,010

Doctor’s fee for a face lift for Mr. Reyes $8,800

Dentist’s fee for a new dental bridge for Mr. Reyes $3,500

Vitamins for the entire family $110

Real estate property taxes paid $5,025

DMV fees on motor home (tax portion) $1,044

DMV fees on family autos (tax portion) $436

Doctor’s bills for grandmother $2,960

Nursing Home for grandmother $10,200

Wheelchair for grandmother $1,030

Property Taxes on boat $134

Interest on personal credit card $550

Interest on loan to buy public school district bonds $270

Cash contributions to church (all contributions)    $6,100

Were in cash and none more than $250 at any one time)

Cash contribution to man at bottom of freeway off-ramp    $25

Contribution of furniture to Goodwill -cost basis    $4,000

Contribution of same furniture to listed above Goodwill -Fair market Value $410

Tax Return preparation fee for 2017 taxes $625

Required

Prepare a Form 1040 and appropriates schedules, Schedule A and Schedule B for the completion of the Reyes’s tax return. They do not want to contribute to the Presidential election campaign and do not want anyone to be a third-party designee. For any missing information, make reasonable assumptions. They had qualifying health coverage at all times during the year.

WG is one of the world’s leading makers of mobile phones, with market share of approximately 20%.Unlike any of its major competitors, it is based in Narnia, a high-cost, developed country. Narnia has very limited natural resources, but has developed significant expertise over the decades in high-end precision engineering and efficient use of materials. WG is quoted on the Narnian stock exchange, where it is the largest company by market capitalisation. It has a wide shareholder base including most Narnian

institutional investors and private individuals. Its largest three shareholders are institutions who each own around 2% of the company.WG was founded in the 1960s to make telephone equipment and in the 1990s managers made a strategic decision to focus on the then-tiny mobile phone market. This was partly attributable to the Narnian government being among the first to fully deregulate their telecoms market, which lead to lower call costs. Narnia and its neighbouring countries are also fairly rural, and its populations were enthusiastic early adopters of mobile phones. WG was given a particular boost in 1995 when the transmission standard they had pioneered was adopted as the basis for calls by the government in Narnia and many other governments around the world.

Serving a rapidly growing market, WG quickly gained economies of scale that allowed cheaper production than competitors emerging later. WG then exploited these to open up export markets all over the world,enhancing their advantage further.

Unlike many of its competitors, who subcontract their manufacturing to others, WG assembles most of its own handsets. Its factories are mostly in Narnia, where it benefits from the highly educated population and the presence of high-quality local suppliers to carry out increasingly high-tech manufacturing processes. Narnia has very good communication links, which helps suppliers to deliver rapidly.

Technology is advancing all the time and WG regularly launches new, more sophisticated devices, most recently a suite of smartphones. However, the fastest-growing demand is for cheaper, basic models which just carry out voice calls and text messaging. This demand is driven by users in developing countries, who are concerned to keep costs down, but also want the status of using a well-known brand such as WG. WG has invested significant resources in building up a local sales presence in these markets, which allows it to spot trends and produce phones tailored to local tastes and languages.

Competition in the industry is intense, and has become more so due to a recent global economic downturn. The Narnian government has also announced new anti-pollution measures that will result in large-scale manufacturers having to pay more than previously to dispose of their waste products. Shortly afterwards, WG announced that they will increase the proportion of handsets manufactured in lower-cost countries from 15% to 40% over the next three years. Component manufacturers announced plans to follow them to the new locations. This will involve cutting over 1,000 jobs in Narnia. A spokesman for the

Narnian government called the decision “disappointing”. A trade union official said,

“WG has increasingly been putting pressure on its suppliers to lower costs and respond more quickly to market fluctuations. This has made it unprofitable for them to operate in Narnia and lead to decisions like this”.

Required: (a) Analyse WG’s environment using two appropriate models SWOT , 5 forces of Porter

(b) Discuss the main stakeholders in WG and how management could try to retain their support as it seeks to reduce costs.

The Boys of Summer

Which baseball league has had the best hitters? Many of us have heard of baseball greats like Stan Musial, Hank Aaron, Roberto Clemente, and Pete Rose of the National League and Ty Cobb, Babe Ruth, Ted Williams, Rod Carew, and Wade Boggs of the American League. But have you ever heard of Willie Keeler, who batted .432 for the Baltimore Orioles, or Nap Lajoie, who batted .422 for the Philadelphia A’s? The batting averages for the batting champions of the National and American Leagues are given on the CourseMate Web site.

The batting averages for the National League begin in 1876 with Roscoe Barnes, whose batting average was .403 when he played with the Chicago Cubs. The last entry for the National League is for the year 2010, when Carlos Gonzalez of the Colorado Rockies averaged .336. The American League records begin in 1901 with Nap Lajoie of the Philadelphia A’s, who batted .422, and end in 2010 with Josh Hamilton of the Texas Rangers, who batted .359. How can we summarize the information in this data set?

Questions to be answered in your report –

1. Use MS Excel, MINITAB, or another statistical software package to describe the bat- ting averages for the American and National League batting champions. Generate any graphics that may help you in interpreting these data sets.
2. Does one league appear to have a higher percentage of hits than the other? Do the batting averages of one league appear to be more variable than the other?
3. Are there any outliers in either league?
4. Summarize your comparison of the two baseball leagues.

Case Study I

HAIER’s foray into International Markets :

In the late 1990s, the Haier group (Haier) was the leader in the Chinese consumer appliances market (with a 39.7%, 50% and 37.1% market share in refrigerators, air-conditioners and washing machines respectively in December 1998). But deflation in the Chinese economy slowed sales.

ut deflation in the Chinese economy slowed sales growth from 50% in 1998 to around 30% in 1999. Haier decided to look for new markets. Since the US had a large demand for consumer appliances, Haier entered the US market in 1999. Analysts were doubtful about Haier's acceptability to American consumers, as there was a general perception in the US that Chinese goods were of low quality. Haier, however, was confident that with its product differentiation strategy it would be able to create a positive image for its products among the American public. In the early 2000s, the consumer appliances market in the US started hotting up as Haier entered the market. By 2009, Haier products were sold in 9 of the 10 top retail chains in the US.

With Wal-Mart agreeing to stock Haier products, many analysts believed that Haier would be able to shake up the US consumer appliances market. In 2009, Haier had a 6% market share in the US refrigerator market; it stated that it was aiming for a 15% market share by 2015.

The history of Haier dates back to 1984 when Ruimin Zhang (Zhang), a bureaucrat with the local government was asked to take charge of Qingdao General Refrigerator Factory, a state-owned enterprise that is manufacturing refrigerators for sale in China. When Zhang took over the management, the company was on the brink of bankruptcy, with no funds to pay the salaries of its employees or to invest in new product development. When Zhang took charge of the company, he realized that the company did not look after the quality of its products; nor did it bother about customer satisfaction. In 1985, Zhang started importing technology from a German firm and began manufacturing technically sophisticated refrigerators.

Zhang emphasized the elements of customer satisfaction and quality control in the company. In 1985, when a customer complained about the poor performance of his refrigerator, Zhang conducted a quality check and found that out of 400 refrigerators inspected, 76 were defective.

He had all the defective refrigerators destroyed with a sledge-hammer. According to Zhang, this made the workers realize that quality is of only two types - acceptable and unacceptable. In 1989, the company changed its name to Qindao Refrigerator Co. Ltd., and it was restructured with funds raised from banks and government agencies. In 1991, the company once again changed its name to Qindao Haier Group Co. and in the same year it merged with Qingdao Air-conditioner Plant and Qingdao Freezer General Plant. In 1992, the company set up Qingdao Freezing Equipment Co. In the same year, it merged with another previously state-owned enterprise Qingdao Condenser Factory, which manufactured refrigerator condensers.

In the same year it became the first company in China to get ISO 9001 certification, and the company's name was changed to the Haier Group. In 1993, Haier went in for an IPO of RMB 50 million and got listed on the Shanghai Stock Exchange (SSE).

During the mid-1990s, Haier began to grow through mergers and acquisitions. In 1995, it merged with Red Star Electric Appliance Company (and five of its subsidiaries). This company manufactured washing machines. It also acquired Wuhan Elec-appliance Co., which manufactured freezers and air conditioners. Between 1995 and 1997, Haier acquired seven companies and started exporting its goods to foreign markets.

By 1997, Haier was the number one consumer appliances brand in China and the market leader in all its product segments, which included refrigerators, washing machines, microwave ovens and freezers and its revenues were reported at $1.15 billion (10 billion Yuan)...

Haier's Competitors in the US Market

USA was the world's largest and most competitive market for consumer appliances. The consumer appliances market can be segmented on the basis of products into kitchen appliances and home comfort products. Included in kitchen appliances are products such as dishwashers, disposers, compactors, food preservation appliances, refrigerators, freezers etc.

In the home comfort segment are included products such as room air-conditioners and dehumidifiers. The home appliances market in the US was dominated by American companies, namely GE Appliances (a subsidiary of General Electricals), Whirlpool and Maytag. The only strong foreign player in this market was Sweden's Electrolux. GE Appliances, Whirlpool, Maytag and Electrolux together accounted for around 98% of the 9 million standard refrigerators sales in the US every year. In the 1990s, many Asian players such as LG Electronics and Samsung entered the US market in a big way. The big four companies in the US market concentrated on the high- end market comprising full-size refrigerators and washing machines, since the margins in this segment were high...

Strategies in the US Market

Haier decided to compete with the US brands on the quality plank rather than on price. However, analysts felt that it would be very difficult for the company to win over American consumers who associated Chinese goods with low quality. To strengthen its presence in the US market, Haier adopted a localization strategy.

It opened a design center in the Los Angeles and employed US designers for designing its products for the US market. Haier also opened a marketing center in New York. The company focused on enhancing consumer awareness about the company and its products. Commenting on Haier's strategy, Zhang said, "We want consumers to feel that Haier is the one company that comes closest to satisfying their needs." For instance, none of the consumer appliances companies in the US offered a compact refrigerator to satisfy demand from college students who could not afford normal size refrigerators...

Going High-End

Most analysts felt that Haier would feel the real competition only when it entered the high-end market. In the compact refrigerator segment, Haier did not face much competition from established players in the US, who did not focus on the low margin segment.

However, the major US players were keeping track of Haier's activities. Commenting on the competition from Haier, GE Appliances Chief Executive, Jim Campbell said, "I take it very seriously. They may be producing only 200,000 refrigerators per year now, but that's going to get bigger."

On the negative side, some analysts felt that Haier lacked the brand image to make a dent in the high-end segment. They pointed out that in general US consumers were brand-conscious, and this was especially true in the case of high-end products. The lack of a positive brand image in this consumer segment would probably make it difficult for Haier to succeed in the high-end markets. Analysts felt that Haier had an additional weakness in its distribution and service centers...

Future Prospects

Despite a few reservations, analysts too were, by and large, upbeat about the company because of its strong performance in breaking into the American market in a short time.

Said Nicholas Heymann of Prudential Securities, "Over five years, it could become a force." With quality products and lower prices, it was felt that Haier would be able to garner a sizeable market share in the US. Haier's experience in the geographically vast and diversified Chinese market would serve it well in catering to the US market.

However, a major worry for Haier is how to fund its expansion plans. Increasing competition in the domestic markets is bringing Haier's finances under pressure.

Questions 4:

What should be the marketing strategies that Haier should employ in Emerging Markets, Maturing Markets and Declining Markets ? Explain the reasons behind it.

Case Study I

HAIER’s foray into International Markets :

In the late 1990s, the Haier group (Haier) was the leader in the Chinese consumer appliances market (with a 39.7%, 50% and 37.1% market share in refrigerators, air-conditioners and washing machines respectively in December 1998). But deflation in the Chinese economy slowed sales.

ut deflation in the Chinese economy slowed sales growth from 50% in 1998 to around 30% in 1999. Haier decided to look for new markets. Since the US had a large demand for consumer appliances, Haier entered the US market in 1999. Analysts were doubtful about Haier's acceptability to American consumers, as there was a general perception in the US that Chinese goods were of low quality. Haier, however, was confident that with its product differentiation strategy it would be able to create a positive image for its products among the American public. In the early 2000s, the consumer appliances market in the US started hotting up as Haier entered the market. By 2009, Haier products were sold in 9 of the 10 top retail chains in the US.

With Wal-Mart agreeing to stock Haier products, many analysts believed that Haier would be able to shake up the US consumer appliances market. In 2009, Haier had a 6% market share in the US refrigerator market; it stated that it was aiming for a 15% market share by 2015.

The history of Haier dates back to 1984 when Ruimin Zhang (Zhang), a bureaucrat with the local government was asked to take charge of Qingdao General Refrigerator Factory, a state-owned enterprise that is manufacturing refrigerators for sale in China. When Zhang took over the management, the company was on the brink of bankruptcy, with no funds to pay the salaries of its employees or to invest in new product development. When Zhang took charge of the company, he realized that the company did not look after the quality of its products; nor did it bother about customer satisfaction. In 1985, Zhang started importing technology from a German firm and began manufacturing technically sophisticated refrigerators.

Zhang emphasized the elements of customer satisfaction and quality control in the company. In 1985, when a customer complained about the poor performance of his refrigerator, Zhang conducted a quality check and found that out of 400 refrigerators inspected, 76 were defective.

He had all the defective refrigerators destroyed with a sledge-hammer. According to Zhang, this made the workers realize that quality is of only two types - acceptable and unacceptable. In 1989, the company changed its name to Qindao Refrigerator Co. Ltd., and it was restructured with funds raised from banks and government agencies. In 1991, the company once again changed its name to Qindao Haier Group Co. and in the same year it merged with Qingdao Air-conditioner Plant and Qingdao Freezer General Plant. In 1992, the company set up Qingdao Freezing Equipment Co. In the same year, it merged with another previously state-owned enterprise Qingdao Condenser Factory, which manufactured refrigerator condensers.

In the same year it became the first company in China to get ISO 9001 certification, and the company's name was changed to the Haier Group. In 1993, Haier went in for an IPO of RMB 50 million and got listed on the Shanghai Stock Exchange (SSE).

During the mid-1990s, Haier began to grow through mergers and acquisitions. In 1995, it merged with Red Star Electric Appliance Company (and five of its subsidiaries). This company manufactured washing machines. It also acquired Wuhan Elec-appliance Co., which manufactured freezers and air conditioners. Between 1995 and 1997, Haier acquired seven companies and started exporting its goods to foreign markets.

By 1997, Haier was the number one consumer appliances brand in China and the market leader in all its product segments, which included refrigerators, washing machines, microwave ovens and freezers and its revenues were reported at $1.15 billion (10 billion Yuan)...

Haier's Competitors in the US Market

USA was the world's largest and most competitive market for consumer appliances. The consumer appliances market can be segmented on the basis of products into kitchen appliances and home comfort products. Included in kitchen appliances are products such as dishwashers, disposers, compactors, food preservation appliances, refrigerators, freezers etc.

In the home comfort segment are included products such as room air-conditioners and dehumidifiers. The home appliances market in the US was dominated by American companies, namely GE Appliances (a subsidiary of General Electricals), Whirlpool and Maytag. The only strong foreign player in this market was Sweden's Electrolux. GE Appliances, Whirlpool, Maytag and Electrolux together accounted for around 98% of the 9 million standard refrigerators sales in the US every year. In the 1990s, many Asian players such as LG Electronics and Samsung entered the US market in a big way. The big four companies in the US market concentrated on the high- end market comprising full-size refrigerators and washing machines, since the margins in this segment were high...

Strategies in the US Market

Haier decided to compete with the US brands on the quality plank rather than on price. However, analysts felt that it would be very difficult for the company to win over American consumers who associated Chinese goods with low quality. To strengthen its presence in the US market, Haier adopted a localization strategy.

It opened a design center in the Los Angeles and employed US designers for designing its products for the US market. Haier also opened a marketing center in New York. The company focused on enhancing consumer awareness about the company and its products. Commenting on Haier's strategy, Zhang said, "We want consumers to feel that Haier is the one company that comes closest to satisfying their needs." For instance, none of the consumer appliances companies in the US offered a compact refrigerator to satisfy demand from college students who could not afford normal size refrigerators...

Going High-End

Most analysts felt that Haier would feel the real competition only when it entered the high-end market. In the compact refrigerator segment, Haier did not face much competition from established players in the US, who did not focus on the low margin segment.

However, the major US players were keeping track of Haier's activities. Commenting on the competition from Haier, GE Appliances Chief Executive, Jim Campbell said, "I take it very seriously. They may be producing only 200,000 refrigerators per year now, but that's going to get bigger."

On the negative side, some analysts felt that Haier lacked the brand image to make a dent in the high-end segment. They pointed out that in general US consumers were brand-conscious, and this was especially true in the case of high-end products. The lack of a positive brand image in this consumer segment would probably make it difficult for Haier to succeed in the high-end markets. Analysts felt that Haier had an additional weakness in its distribution and service centers...

Future Prospects

Despite a few reservations, analysts too were, by and large, upbeat about the company because of its strong performance in breaking into the American market in a short time.

Said Nicholas Heymann of Prudential Securities, "Over five years, it could become a force." With quality products and lower prices, it was felt that Haier would be able to garner a sizeable market share in the US. Haier's experience in the geographically vast and diversified Chinese market would serve it well in catering to the US market.

However, a major worry for Haier is how to fund its expansion plans. Increasing competition in the domestic markets is bringing Haier's finances under pressure.

Questions 2:

Is it possible for an organization like Haier to sustain its competition in brand conscious and quality conscious markets such as US and other countries?

Questions 3:

What are the countries that you would suggest Haier should concentrate upon? Why?

Read the case below and answer the questions that follow. P&G's Joy Makes an Unlikely Splash in Japan Anyone who thinks Japan doesn't offer opportunities for U.S consumer products should look at how quickly Procter & Gamble Co. has cleaned up in the country's dish-soap market. Until 1995, P&G, didn't sell dish soap in Japan at all. A few years later, it had Japans best-selling brand, Joy, which commanded a fifth of the nation's $400 million dish- soap market. That's astounding progress, given that the market had appeared to be classically "mature"-both shrinking and dominated by giant Japanese companies. "Joy surprised us all," says Tatsuo Ishii, dish-soap brand manager for one of those giants, Kao Corp. "It was brilliant." How the Cincinnati company executed its coup provides lessons that transcend the kitchen sink. One big lesson: "Mature" Japanese markets can be surprisingly complacent. P&G offered new technology, something the two incumbents hadn't bothered to do for years. It developed packaging that let stores make more money. And it spent heavily on oddball commercials that created a buzz among consumers. Joy offers "potent lessons" for foreign companies, says Hiroshi Tanaka, a marketing professor at Tokyo's Josai University. "At the least, Joy should tell you that Japan's got a lot more good opportunities for foreign companies than they might assume," he says. "Those opportunities are often disguised as unattractive markets suffering from saturation and oligopoly." Just two years ago, two powerful consumer-product concerns, Kao and Lion Corp., each controlled nearly 40% of the kitchen-soap market with several brands and had essentially declared a truce. The rest of the market was cornered by private brands at chain stores. Meanwhile, the Japanese were cooking less at home and thus buying less dish soap every year. P&G actually washed out of the Japanese kitchen detergent market during an earlier attempt. It withdrew in the late 1970s after failing to make a dent with Orange Joy, a product that it transplanted from the U.S. But by 1992, it had succeeded in marketing other products, such as Pampers, in Japan. The home office told its Japanese unit to find new markets for products in which P&G was strong elsewhere in the world. So that year P&G sent out researchers to study Japanese dish-washing rituals. They discovered one odd habit: Japanese homemakers, one after another, squirted out more detergent than needed. It was "a clear sign of frustration" with existing Japanese products, says Robert A. McDonald, head of P&G's Japanese operations. He saw the research as a sign that an "unarticulated consumer need" was more powerful soap. "We knew we had something to go after," he says.' Some P&G executives wert: concerned about entering such a mature market, says Mr. McDonald. But P&G's lab in Kobe went to work to create a highly concentrated soap formula, based on a new technology developed by the company's scientists in Europe, specifically for Japan. The first hint that Joy was a hit carne in March 1995 in the region around Hiroshima, 400 miles west of Tokyo, where P&G started test-marketing it. Four weeks into the test, Joy had become the most popular dish soap in the region with a 30% market share. P&G's marketing pitch was deceptively simple: A little bit of Joy cleans better, yet it's easier on the hands. The message hit a chord, says Ayumi Osaki, a 31-year-old homemaker who rushed off to buy Joy after seeing pilot commercials. "Grease on Tupperware, that's the toughest thing to wash off," says Ms. Osaki, a mother of three in Hiroshima. "I had to try it." Emboldened, P&G finished a nationwide introduction in March 1996, when Joy had attained a 10% market share, Three months later it had a 15% share. A year later it had 18%, and now its share is up to 20%, according to industry statistics, The results astounded even P&G. "Everybody in Japan wanted it," says P&G's Mr, McDonald. "Every retailer in Japan wanted to get his hands on Joy." Retailers clamored for Joy because P&G had built in "fat margins," explains Masaharu Kubo, a buyer for Daiei Inc" which operates 383 supermarkets in Japan, P&G had exploited a weakness in the Japanese giants' products. Their long-necked bottles wasted space, P&G's containers were compact cylinders that took less space in stores, warehouses and delivery trucks, Joy improved the efficiency of Daiei's distribution by about 40%, Kubo estimates, "Before Joy, dish soap was a sleepy category; [the containers] were bulky and took up a lot of shelf space, and their unit prices were falling every year," he says, "Joy freed up a lot of space for other products, pushed up prices of dish soaps as a whole, and gave us bigger margins, It was revolutionary." P&G's advertising binge also delighted retailers, Kubo says. To look for ideas, P&G marketers had watched more than a hundred commercials from around the world from P&G and its rivals. They settled on a documentary-style TV ad used in Britain by P&G for a laundry soap called Daz. P&G's advertising agency, Dentsu Inc. created commercials in which a famous comedian dropped in on homemakers, unannounced, with a camera crew to test Joy on the household's dirty dishes. The camera homed in on a patch of oil in a pan full If water, Then, after a drop of Joy, the oil dramatically disappeared. Japanese soap makers were alarmed by the campaign. Kao's Mr. Ishii says he ordered up research into Joy and concluded that more than 70% of Joy users began using it because of the commercials. "We had mistakenly assumed Japanese didn’t care much about grease-fighting power In dish soaps.” Mr. Ishii says. “The reality was people are eating more meat and fried food and are frustrated about grease stains on their plastic dishes and storage containers." Kao and Lion are now playing catch-up, turning out products that unabashedly mimic Joy, from its package and color (green) to its grease-fighting Technology. Successes like Joy have given P&G a change of heart about Japan, "For a long time, P&,G's approach was to dump in Japan what sells in the U.S.,” says a P&G manager who declined to be named. Now, he says, P&G generates ideas in Japan that it uses in other markets. It has begun selling Joy, for example, in the Philippines and is considering it for other Asian markets, It has also started to use a leak-free cap in the U. S. that it designed for Joy in Japan. The Japanese consumer is “among the world’s most educated and the most perceptive and articulate evaluators,: says P&G’s Mr. McDonald. “I’ve worked in a lot of countries but never been anywhere else where I can have a scientific discussion with the consumer like I can do here about dish soap.

Case Questions

1. What lessons can international marketers learn from Procter & Gamble’s experiences in Japan?

2. Identify and describe the roles of product policy, pricing, promotion and distribution in marketing Joy in Japan.

3. What lessons from Japan might benefit Procter & Gamble in other markets?

Answer all

Case Study I

HAIER’s foray into International Markets :

In the late 1990s, the Haier group (Haier) was the leader in the Chinese consumer appliances market (with a 39.7%, 50% and 37.1% market share in refrigerators, air-conditioners and washing machines respectively in December 1998). But deflation in the Chinese economy slowed sales.

ut deflation in the Chinese economy slowed sales growth from 50% in 1998 to around 30% in 1999. Haier decided to look for new markets. Since the US had a large demand for consumer appliances, Haier entered the US market in 1999. Analysts were doubtful about Haier's acceptability to American consumers, as there was a general perception in the US that Chinese goods were of low quality. Haier, however, was confident that with its product differentiation strategy it would be able to create a positive image for its products among the American public. In the early 2000s, the consumer appliances market in the US started hotting up as Haier entered the market. By 2009, Haier products were sold in 9 of the 10 top retail chains in the US.

With Wal-Mart agreeing to stock Haier products, many analysts believed that Haier would be able to shake up the US consumer appliances market. In 2009, Haier had a 6% market share in the US refrigerator market; it stated that it was aiming for a 15% market share by 2015.

The history of Haier dates back to 1984 when Ruimin Zhang (Zhang), a bureaucrat with the local government was asked to take charge of Qingdao General Refrigerator Factory, a state-owned enterprise that is manufacturing refrigerators for sale in China. When Zhang took over the management, the company was on the brink of bankruptcy, with no funds to pay the salaries of its employees or to invest in new product development. When Zhang took charge of the company, he realized that the company did not look after the quality of its products; nor did it bother about customer satisfaction. In 1985, Zhang started importing technology from a German firm and began manufacturing technically sophisticated refrigerators.

Zhang emphasized the elements of customer satisfaction and quality control in the company. In 1985, when a customer complained about the poor performance of his refrigerator, Zhang conducted a quality check and found that out of 400 refrigerators inspected, 76 were defective.

He had all the defective refrigerators destroyed with a sledge-hammer. According to Zhang, this made the workers realize that quality is of only two types - acceptable and unacceptable. In 1989, the company changed its name to Qindao Refrigerator Co. Ltd., and it was restructured with funds raised from banks and government agencies. In 1991, the company once again changed its name to Qindao Haier Group Co. and in the same year it merged with Qingdao Air-conditioner Plant and Qingdao Freezer General Plant. In 1992, the company set up Qingdao Freezing Equipment Co. In the same year, it merged with another previously state-owned enterprise Qingdao Condenser Factory, which manufactured refrigerator condensers.

In the same year it became the first company in China to get ISO 9001 certification, and the company's name was changed to the Haier Group. In 1993, Haier went in for an IPO of RMB 50 million and got listed on the Shanghai Stock Exchange (SSE).

During the mid-1990s, Haier began to grow through mergers and acquisitions. In 1995, it merged with Red Star Electric Appliance Company (and five of its subsidiaries). This company manufactured washing machines. It also acquired Wuhan Elec-appliance Co., which manufactured freezers and air conditioners. Between 1995 and 1997, Haier acquired seven companies and started exporting its goods to foreign markets.

By 1997, Haier was the number one consumer appliances brand in China and the market leader in all its product segments, which included refrigerators, washing machines, microwave ovens and freezers and its revenues were reported at $1.15 billion (10 billion Yuan)...

Haier's Competitors in the US Market

USA was the world's largest and most competitive market for consumer appliances. The consumer appliances market can be segmented on the basis of products into kitchen appliances and home comfort products. Included in kitchen appliances are products such as dishwashers, disposers, compactors, food preservation appliances, refrigerators, freezers etc.

In the home comfort segment are included products such as room air-conditioners and dehumidifiers. The home appliances market in the US was dominated by American companies, namely GE Appliances (a subsidiary of General Electricals), Whirlpool and Maytag. The only strong foreign player in this market was Sweden's Electrolux. GE Appliances, Whirlpool, Maytag and Electrolux together accounted for around 98% of the 9 million standard refrigerators sales in the US every year. In the 1990s, many Asian players such as LG Electronics and Samsung entered the US market in a big way. The big four companies in the US market concentrated on the high- end market comprising full-size refrigerators and washing machines, since the margins in this segment were high...

Strategies in the US Market

Haier decided to compete with the US brands on the quality plank rather than on price. However, analysts felt that it would be very difficult for the company to win over American consumers who associated Chinese goods with low quality. To strengthen its presence in the US market, Haier adopted a localization strategy.

It opened a design center in the Los Angeles and employed US designers for designing its products for the US market. Haier also opened a marketing center in New York. The company focused on enhancing consumer awareness about the company and its products. Commenting on Haier's strategy, Zhang said, "We want consumers to feel that Haier is the one company that comes closest to satisfying their needs." For instance, none of the consumer appliances companies in the US offered a compact refrigerator to satisfy demand from college students who could not afford normal size refrigerators...

Going High-End

Most analysts felt that Haier would feel the real competition only when it entered the high-end market. In the compact refrigerator segment, Haier did not face much competition from established players in the US, who did not focus on the low margin segment.

However, the major US players were keeping track of Haier's activities. Commenting on the competition from Haier, GE Appliances Chief Executive, Jim Campbell said, "I take it very seriously. They may be producing only 200,000 refrigerators per year now, but that's going to get bigger."

On the negative side, some analysts felt that Haier lacked the brand image to make a dent in the high-end segment. They pointed out that in general US consumers were brand-conscious, and this was especially true in the case of high-end products. The lack of a positive brand image in this consumer segment would probably make it difficult for Haier to succeed in the high-end markets. Analysts felt that Haier had an additional weakness in its distribution and service centers...

Future Prospects

Despite a few reservations, analysts too were, by and large, upbeat about the company because of its strong performance in breaking into the American market in a short time.

Said Nicholas Heymann of Prudential Securities, "Over five years, it could become a force." With quality products and lower prices, it was felt that Haier would be able to garner a sizeable market share in the US. Haier's experience in the geographically vast and diversified Chinese market would serve it well in catering to the US market.

However, a major worry for Haier is how to fund its expansion plans. Increasing competition in the domestic markets is bringing Haier's finances under pressure.

Questions 1:

What in your opinion is the significance of an organization entering into International Markets for business? Is it advantageous or disadvantageous?

Case Study I

HAIER’s foray into International Markets :

In the late 1990s, the Haier group (Haier) was the leader in the Chinese consumer appliances market (with a 39.7%, 50% and 37.1% market share in refrigerators, air-conditioners and washing machines respectively in December 1998). But deflation in the Chinese economy slowed sales.

ut deflation in the Chinese economy slowed sales growth from 50% in 1998 to around 30% in 1999. Haier decided to look for new markets. Since the US had a large demand for consumer appliances, Haier entered the US market in 1999. Analysts were doubtful about Haier's acceptability to American consumers, as there was a general perception in the US that Chinese goods were of low quality. Haier, however, was confident that with its product differentiation strategy it would be able to create a positive image for its products among the American public. In the early 2000s, the consumer appliances market in the US started hotting up as Haier entered the market. By 2009, Haier products were sold in 9 of the 10 top retail chains in the US.

With Wal-Mart agreeing to stock Haier products, many analysts believed that Haier would be able to shake up the US consumer appliances market. In 2009, Haier had a 6% market share in the US refrigerator market; it stated that it was aiming for a 15% market share by 2015.

The history of Haier dates back to 1984 when Ruimin Zhang (Zhang), a bureaucrat with the local government was asked to take charge of Qingdao General Refrigerator Factory, a state-owned enterprise that is manufacturing refrigerators for sale in China. When Zhang took over the management, the company was on the brink of bankruptcy, with no funds to pay the salaries of its employees or to invest in new product development. When Zhang took charge of the company, he realized that the company did not look after the quality of its products; nor did it bother about customer satisfaction. In 1985, Zhang started importing technology from a German firm and began manufacturing technically sophisticated refrigerators.

Zhang emphasized the elements of customer satisfaction and quality control in the company. In 1985, when a customer complained about the poor performance of his refrigerator, Zhang conducted a quality check and found that out of 400 refrigerators inspected, 76 were defective.

He had all the defective refrigerators destroyed with a sledge-hammer. According to Zhang, this made the workers realize that quality is of only two types - acceptable and unacceptable. In 1989, the company changed its name to Qindao Refrigerator Co. Ltd., and it was restructured with funds raised from banks and government agencies. In 1991, the company once again changed its name to Qindao Haier Group Co. and in the same year it merged with Qingdao Air-conditioner Plant and Qingdao Freezer General Plant. In 1992, the company set up Qingdao Freezing Equipment Co. In the same year, it merged with another previously state-owned enterprise Qingdao Condenser Factory, which manufactured refrigerator condensers.

In the same year it became the first company in China to get ISO 9001 certification, and the company's name was changed to the Haier Group. In 1993, Haier went in for an IPO of RMB 50 million and got listed on the Shanghai Stock Exchange (SSE).

During the mid-1990s, Haier began to grow through mergers and acquisitions. In 1995, it merged with Red Star Electric Appliance Company (and five of its subsidiaries). This company manufactured washing machines. It also acquired Wuhan Elec-appliance Co., which manufactured freezers and air conditioners. Between 1995 and 1997, Haier acquired seven companies and started exporting its goods to foreign markets.

By 1997, Haier was the number one consumer appliances brand in China and the market leader in all its product segments, which included refrigerators, washing machines, microwave ovens and freezers and its revenues were reported at $1.15 billion (10 billion Yuan)...

Haier's Competitors in the US Market

USA was the world's largest and most competitive market for consumer appliances. The consumer appliances market can be segmented on the basis of products into kitchen appliances and home comfort products. Included in kitchen appliances are products such as dishwashers, disposers, compactors, food preservation appliances, refrigerators, freezers etc.

In the home comfort segment are included products such as room air-conditioners and dehumidifiers. The home appliances market in the US was dominated by American companies, namely GE Appliances (a subsidiary of General Electricals), Whirlpool and Maytag. The only strong foreign player in this market was Sweden's Electrolux. GE Appliances, Whirlpool, Maytag and Electrolux together accounted for around 98% of the 9 million standard refrigerators sales in the US every year. In the 1990s, many Asian players such as LG Electronics and Samsung entered the US market in a big way. The big four companies in the US market concentrated on the high- end market comprising full-size refrigerators and washing machines, since the margins in this segment were high...

Strategies in the US Market

Haier decided to compete with the US brands on the quality plank rather than on price. However, analysts felt that it would be very difficult for the company to win over American consumers who associated Chinese goods with low quality. To strengthen its presence in the US market, Haier adopted a localization strategy.

It opened a design center in the Los Angeles and employed US designers for designing its products for the US market. Haier also opened a marketing center in New York. The company focused on enhancing consumer awareness about the company and its products. Commenting on Haier's strategy, Zhang said, "We want consumers to feel that Haier is the one company that comes closest to satisfying their needs." For instance, none of the consumer appliances companies in the US offered a compact refrigerator to satisfy demand from college students who could not afford normal size refrigerators...

Going High-End

Most analysts felt that Haier would feel the real competition only when it entered the high-end market. In the compact refrigerator segment, Haier did not face much competition from established players in the US, who did not focus on the low margin segment.

However, the major US players were keeping track of Haier's activities. Commenting on the competition from Haier, GE Appliances Chief Executive, Jim Campbell said, "I take it very seriously. They may be producing only 200,000 refrigerators per year now, but that's going to get bigger."

On the negative side, some analysts felt that Haier lacked the brand image to make a dent in the high-end segment. They pointed out that in general US consumers were brand-conscious, and this was especially true in the case of high-end products. The lack of a positive brand image in this consumer segment would probably make it difficult for Haier to succeed in the high-end markets. Analysts felt that Haier had an additional weakness in its distribution and service centers...

Future Prospects

Despite a few reservations, analysts too were, by and large, upbeat about the company because of its strong performance in breaking into the American market in a short time.

Said Nicholas Heymann of Prudential Securities, "Over five years, it could become a force." With quality products and lower prices, it was felt that Haier would be able to garner a sizeable market share in the US. Haier's experience in the geographically vast and diversified Chinese market would serve it well in catering to the US market.

However, a major worry for Haier is how to fund its expansion plans. Increasing competition in the domestic markets is bringing Haier's finances under pressure.

Questions 3:

What are the countries that you would suggest Haier should concentrate upon? Why?