Siemens: Active Expansion of Tier-3 and Tier-4 Markets by Backing on CCTV

Interview to Lin Bin, Marketing Director, Siemens Home Appliances (China)

Special Journalist: Liu Ming, Senior Client Manager, CCTV Advertising Department

Journalist: What is trend of home appliances industry in the future? How can Siemens Home Appliances take the lead in the fashion of home appliances?

Lin Bin: In my opinion, the future home appliances industry will usher in the following main trends: Firstly, environment-friendly and green home appliances. Siemens has released 3D positive or negative washing machine in 2009, electric water heater on X-CELL™ Enjoyment™ technology platform have been highly praised because of outstanding energy-saving and green performance. Secondly, constant upgrading of products and technologies; high tech and people-oriented nature as the general development trend. Siemens has completed its comprehensive technology platform upgrade for product lines in China, including the introduction of high-end home appliances with sophisticated technology, such as vacuum zero refrigerator and a series of digitally-inductive and intelligently-controlled electric appliance in kitchen. Thirdly, the application of new technologies. In recent years, 3C technology integration has become the development trend of home appliances. E-controlled household water heater under remote control of telephone released by Siemens, multimedia refrigerator which can be used to watch TV and get access to U disk and other products are all successful application examples for 3C technology in home appliances.

Siemens Home Appliances always perseveres in product innovation. Our basic principle is outlook on the future and setting foot on user needs as the fundamental starting point. Under the above criteria, Siemens Home Appliances products will continue to present itself by way of products, and create preferred products for Chinese users.

Journalist: Which development goals have been set by Siemens Home Appliances for 2009? What kind of development strategy will be implemented to achieve these objectives?

Lin Bin: Siemens Home Appliances will continue to increase investment in China, make great efforts in an intensive and meticulous manner, and launch an all-round and systematic upgrading of various families of home appliances so as to meet the needs from consumers at different levels.

In 2009, Siemens has further expanded the product lines to accelerate the delivery of high-end products. Siemens is also planning for introduction and sale of small household electrical appliances, as well as operation of imported household electrical appliances business in order to supplement the demand from high-end market at the same time. Meanwhile, based on stable Tier-1 and Tier-2 markets, Siemens has actively expanded Tier-3 and Tier-4 markets, which has further enhanced the competitive power of Siemens Home Appliances as the great brand. Through the project entitled “Home Appliance Going to the Countryside”, Siemens aims to tap into the largest potential market in China. Refrigerators and electric water heaters manufactured by Siemens Home Appliances have been the winning bidders in the project entitled “Home Appliance Going to the Countryside”. And Siemens will also set up after-sale outlets at the county-level, prepare a set of marketing programs for distributors, and establish the distribution network in Tier-3 and Tier-4 markets of China at the fastest speed.

Journalist: In light of current economic situation, what are characteristics of media release strategy for Siemens Home Appliances?

Lin Bin: The current economic situation will not affect development strategy of Siemens in China, Siemens will, as always, attach importance to the Chinese market. One of this year’s key strategies of Siemens is to actively expand Tier-3 and Tier-4 markets based on the stabilization of Tier-1 and Tier-2 markets. At present, TV media boast the greatest influence. Accompanied by the development of new media, TV media have also undergone adjustments and changes on their own. Therefore, TV media is still the foremost release media for Siemens, while print media is mainly used for transmission of detailed product information or information on special events. At the same time, Siemens will take advantage of outdoor media to cooperate with TV media in major cities. Taking into account concerted efforts with the marketing strategy of expansion in Tier-3 and Tier-4 markets, Siemens has made more efforts to release on CCTV this year, and it is expected to rely on the great influence of CCTV for the purpose of broader coverage in more Tier-3 and Tier-4 cities.

Journalist: Which factors are mainly deemed as media measurement indicators when Siemens Home Appliances releases TV ads?

Lin Bin: Siemens Home Appliances is committed to supplying high-quality household appliances for consumers and advocating for a kind of high-end and fashionable lifestyle. With a view to effective dissemination of the above-mentioned appeals, we must not only think over audience ratings performance and price competitiveness as two main factors, but also emphasize the major audience of the media, characteristics of the media and other factors in the choice of television advertising time slots. In addition, Siemens also wishes to find some TV programs which are fashionable and consistent with brand image or lifestyle advocated by Siemens so as to conduct in-depth and tailored cooperation.

Journalist: Which considerations are Siemens Home Appliances based on for ads release on Prime Resource (tendering time slots) CCTV this year?

Lin Bin: Siemens wishes to make win-win cooperation with CCTV to further enhance the brand image and advocate for high-quality and fashion lifestyle to more Chinese consumers. At the same time, in order to act in concert with strategy of consolidating Tier-1 and Tier-2 markets and expanding Tier-3 and Tier-4 markets, Siemens has increased the ads release on CCTV this year in the hope of further upgrading brand reputation and recognition of Siemens by virtue of CCTV’s influence throughout the country. CCTV is the most influential film and television media in China. And tendering time slots of CCTV are characterized by the highest audience rating and the most intense competition. Bidding for tendering time slots of CCTV can not only reinforce public influence power, but also the successful bid is a symbol of brand strength.