Haier's Larry Rinaldi

Ex-Motorola exec expected to turn Haier into next Samsung

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BEIJING--One of China's largest companies, Haier Group, is stepping up its efforts to build a global brand on the scale of Samsung or Sony by appointing an ex-Motorola marketer, Larry Rinaldi, to the new position of global chief brand officer.

Haier, which produces everything from kitchen appliances to flat-screen televisions to computers to mobile phones, already has a global manufacturing presence, including a North American headquarters in New York and a plant in South Carolina.

Products such as washing machines and refrigerators are sold across the U.S. in chains such as Wal-Mart, as well as in Europe. Haier has also created some popular products, such as a mini-fridge sized to fit a six-pack of beer and a pizza box that has became a hit with college students.

A handful of good products and an international distribution network have helped Haier become a top contender in the race among Chinese companies to build global brands--but the company has struggled to break out as a major brand, at home and abroad.

Still lagging rivals
Even in China, where the company is well-known, Haier knows its image suffers compared to foreign manufacturers and sales are made more on price than brand awareness. Mr. Rinaldi's appointment is one of several moves the company is taking to raise its reputation.

Earlier this month, Haier launched Ibiza Rhapsody, the company's first portable media player with built-in Wi-Fi. In September 2007, Haier began rolling out Casarte, a new high-end appliance brand including refrigerators, washing machines, air-conditioners and flat-screen televisions in trendy designs and colors.

It is also setting up production research and development centers in Seoul and Tokyo dedicated to developing "U-home U-life" products that are controlled by a Haier-developed smart-home networking and control system. For example, a mother stuck at work could instruct her microwave oven at home to prepare meals for her family at home using the internet or a mobile phone.
But on the branding front, Haier has lagged behind other Chinese marketers such as Lenovo Group. The Beijing-based computer company adopted IBM's marketing strategy and even hired its ad agency, Ogilvy & Mather, when it took over Big Blue's PC division in 2005. It also retained IBM marketing veteran Deepak Advani as U.S.-based global chief marketing officer and senior VP of e-commerce.

Unlike Lenovo, Haier treats advertising like most other state-run companies do in China. Marketing staffers were tucked into the sales department, dozens of agencies were appointed on a short-term, project basis and campaigns were built around tactical sales promotions rather than corporate branding efforts.

Haier's stuffy corporate hierarchy prevented midlevel marketers from improving the system. They were also hindered by a Confucian culture that promotes harmony and discourages workers from challenging the system or their superiors. As a result the company is known as a "nightmare" client, according to executives at Haier's ad agencies.

Seeking a Samsung-like transformation
Now that its product range is starting to look more like Samsung's showroom, Haier wants to re-create its Korean rival's successful image transformation from cheap Sony knockoff to high-tech powerhouse, achieved in part through the efforts of Samsung's former global marketing chief Eric Kim.

After several months of searching for a global marketing head of its own, Haier chose an American with international marketing and agency experience and a strong Chinese background.

Mr. Rinaldi, 52, has run his own agency, O.N.A., in Beijing since 2005, but he first moved to China in 1998, when he was appointed Ogilvy & Mather's vice chairman for greater China. He joined WPP Group sibling Wunderman in 2000 in Europe, returning to Beijing in 2002 as that agency's president-Asia/Pacific, as well as chairman-greater China at Young & Rubicam. In 2003 he joined Motorola as Beijing-based VP-chief marketing officer, Asia.

Mr. Rinaldi will continue to live in Beijing, in part to be in the Chinese capital ahead of the 2008 Olympic Games, but he will travel frequently to Haier's headquarters in Qingdao, on China's eastern coast when his three-year contract starts Dec. 1.

Haier is a national-level sponsor of  the Beijing-hosted 2008 Olympic Games in Beijing, which kick off on Aug. 8 and played a major role in his appointment. Although Mr. Rinaldi would not comment about his new position, sources familiar with the matter say he has been asked to set up marketing processes and methods now lacking at Haier to help build the company's global image.

"The company is running out of time to turn its image around. Haier is really looking to break out of the box domestically through their sponsorship of the Olympics, and it's trying to find a campaign that will help them to do it," said an executive familiar with the company.

He will also be in charge of the company's relationships with all  its ad agencies. They include Draft/FCB, Young & Rubicam,  Japanese agencies Dentsu and ADK, and WE Marketing Group, which is run by former Grey China executives. In recent years, Haier has churned through other international agency networks, including Ogilvy & Mather, Saatchi & Saatchi, Leo Burnett and RMG Connect.

"They've gone through everyone you can go through, that's an indictment of their system and the reason why Haier has a bad agency reputation," said an executive familiar with the company. "Clearly, there needs to be an agency consolidation."

While Haier sources say Mr. Rinaldi, who is known in China as an opinionated, sometimes difficult personality, has been given full control of the company's global marketing platform, no one believes the transformation will happen smoothly, given the company's lackluster branding history and rigid operating style.
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