Three manufacturing bases in South America

Chinese home appliance maker Skyworth Group plans to build three manufacturing bases in South America, North Africa and the Middle East regions in the coming two to three years as it strives to expand its global footprint amid growing saturation in the domestic market. Internationalization is an important part of Skyworth’s overall strategy, Liu Tangzhi, its chief executive officer, said. “We aim to further expand our global network in the coming years in order to improve our supply chain. “We haven’t established our supply chain in South America, North Africa and the Middle East so far. These three regions are where we are going to march into in the coming two to three years. “At the current time, the company has four overseas manufacturing bases – in Germany, South Africa, India and Indonesia. It has also set up research and development centres and subsidiaries in a number of countries and regions, including Austria, the United Kingdom and South Africa. Liu said the company plans to increase the number of its overseas organizations from the current 22 to 30 in the coming two to three years. Skyworth’s push in international markets comes at a time when the company is grappling with an increasingly saturated market in China. The situation is even bleaker amid the country’s economic growth slowdown as Chinese consumers cut their spending on home appliances. According to a report jointly published by China Household Electric Appliance Research Institute and National Electrical Appliance Industry Information Centre, home appliance sales in the Chinese market dropped

billion) in the third quarter of 2019. Home appliance exports totalled 73 billion yuan over the same period, growing
percent year-on-year, the report said. To diversify its products, the company unveiled a smart tea table. The product, with a smart system, serves as a “central brain” of home appliances in an apartment, with the ability to control them through voice recognition. While stressing the importance of developing international markets, Liu also noted that it could be a difficult path. “With China’s development, geopolitics has been put on a high place by some countries. This has increased our difficulty in exploring overseas markets,” Liu said. But he said the Belt and Road Initiative will offset the impact and bring new opportunities for Chinese companies in their “going global” process. “Following the initiative, Skyworth has already set its foot in Europe. I believe Chinese companies including us will become more mature in their overseas exploration under the initiative. “Liang Zhenpeng, a senior industry analyst, said that China’s highly saturated home appliance market had already stagnated this year, therefore international markets are of significance to Skyworth. The home appliance market in many countries in Asia, Africa and Latin American is far from saturated and has a huge room for growth, which can be a new driver of growth for the company, he said. In developed countries and regions like Europe and the United States, meanwhile, there is also high demand for high-end products. “The company needs to enhance its branding and reputation in order to gain a bigger market globally,” Liang said. QUESTION 1 (20 Marks) According to the case study the home appliance market in many countries in Asia, Africa and Latin American is far from saturated and has a huge room for growth, which can be a new driver of growth for the company. Identify and discuss five (5) demographic trends in South Africa. QUESTION 2 (20 Marks) Cultural, social, personal, and psychological characteristics have a strong influence on consumer purchases. Examine the above in the context of the case study. QUESTION 3 (20 Marks) Skyworth’s brands positioning must serve the needs and preferences of well-defined target markets. Discuss three steps that should be followed in the differentiation and positioning task. QUESTION 4 (20 Marks) Products may be classified according to the types of consumers that use them. Consumer products and industrial products. Distinguish between consumer products and industrial products and examine their categories QUESTION 5 (20 Marks) Assume that Skyworth has launched an Android 10 television in South Africa. Discuss the stages of this television through the product life cycle.

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