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China’s Marketing Environment. Discussion questions. 1) How would you assess the development of the marketing environment in China and how different is it from that in Hong Kong and other countries?

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China’s Marketing Environment

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China s marketing environment l.jpg

China’s Marketing Environment


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Discussion questions

  • 1) How would you assess the development of the marketing environment in China and how different is it from that in Hong Kong and other countries?

  • 2) Are concepts and practices developed in the West applicable to China? Do they need to be adapted to the Chinese environment?

  • 3) What are the challenges for marketing professionals, say, those working for Hong Kong and foreign firms in China?

  • 4) Are there good examples of successful marketers among HK and foreign firms in China, and what are their unique strengths and characteristics?


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Features of China Marketing Development中国营销进程的二大特征

  • Feature One: The development is dramatic and fast, and it is a compressively accelerating process.特征一,变化大而快,是一个压缩式的加速进程

  • Feature Two: The development of China marketing occurs in a special environment, an environment of transition.特征二,中国营销的进程发生在特殊的环境——转型环境中


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1) How would you assess the development of the marketing environment in China and how different is it from that in Hong Kong and other countries?

  • Two driving forces of the improvement of the competitive power of Chinese firms.

  • First, the floating of international corporations and global knowledge.第一,跨国公司和国际知识流动

  • Second, the spirit of continuous studying and innovations of the Chinese entrepreneurs, marketers, and researchers.第二,中国企业家,营销人和研究者结合本土环境不断学习和创新的精神


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  • Demand & Supply of Consumer product

    – Shortage or Surplus?

  • Marketplace

    -- Planned or Free?

    -- Production-oriented or Customer-oriented?

  • Communication network

  • Technology standards

  • Business practices and cultural norms

  • Legal framework

  • Political risk


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  • China is in a unique situation:from marketplace of consumer product shortages to surplus

  • Selling-intensive marketplacequality and sophistication are increasing, but prices are declining

  • The focus changed from production to sales:production-oriented firms became customer-focused


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  • Communication:from a few telephone lines to cellular mobile, with satellites and digital transmission technology – even more advanced than the USA

  • Many manufacturing firms are operating in production mode:move to marketing-focused system

  • Hyper-competitive market

    • Competitors: domestic, foreign, JVs


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  • Car Industry

    • Joint ventures

      • Shanghai Automobile with VW and General Motors

      • First Automobile with VW and Toyota

      • DongFeng with Peugeot and Citron

    • In addition to the three large groups of Shanghai, First Auto and DongFeng

      • Guangzhou Honda

      • Chongqing ChangAn

      • AnHui GiRui

      • ShenYang HuaChen

      • Nangjing Fiat

      • Zhejiang Jieli


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2) Are concepts and practices developed in the West applicable to China? Do they need to be adapted to the Chinese environment?

  • In theory, yes

  • Concepts and Practices:

    Market research,

    Global marketing,

    Internet marketing,

    and Customer relationship management.

  • In reality, they need to be adapted

    • Language, culture, practices


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Standardization vs. Localization

  • Standardization:

    • uniform, efficient, low-cost, easy to remember

    • neglect local conditions, may not be effective,

    • Language and cultural barriers

    • Sometimes more costly

  • Localization

    • Closer to the local knowledge

    • Consumers and market more responsive

    • More effective,

    • Lower cost


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  • Applicable!

  • China has implemented 85 years of Western marketing thoughts in less than 20 years.

  • From the Article China may leapfrog the West in Marketing, it is said that China is “leapfrogging” traditional Western cycles, i.e. a big jump.

  • Absorbing anything from the west in order to grow!

  • With the aid of technology development:

  • e.g. China went straight from having few telephone lines to millions of mobile phone users.


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  • Adaptation is necessary

  • For example, the Brand Loyalty:

  • Fact 1 : Chinese people frequently switch brands.

    - Intense marketing for a parent company rather than products is more suitable.

    - Trust needs to be gained by the company as a whole for higher retention of products.


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Fact 2: The Chinese are more focused on brands

And they Believe: Luxury goods represent success (Businessweek.com).

  • Whatever brand is fashionable at the moment is more important than price competition.

  • Marketing needs to focus on the high class and Quality of the product instead of a Discounted Price.

  • Thus, Brand Management needs to adapt to the Local Preference!


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Challenges for Marketing Professionals

  • Size of Territory

     Marketing Practices –Accessible or not?

  • Competition

     Price & non-Price

     Fair or Unfair?

  • Intellectual Property Right

  • Information released from the Government

    Trustworthy?


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Challenges for Marketing Professionals

  • Vast Territory

     Difficulty in distribution

  • Keen Competition

     Price Competition

     Product and service competition

     Concept competition

  • Fake Product

  • Fake and Unreliable Statistics

  • Unfair Competition


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3) What are the challenges for marketing professionals, say, those working for Hong Kong and foreign firms in China?

  • Size of Territory

     Marketing Practices –Accessible or not?

  • Competition

     Price & non-Price

     Fair or Unfair?

  • Intellectual Property Right

  • Information released from the Government

    Trustworthy?


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  • Vast Territory

     Difficulty in distribution

  • Keen Competition

     Price Competition

     Product and service competition

     Concept competition

  • Fake Product

  • Fake and Unreliable Statistics

  • Unfair Competition


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4) Are there good examples of successful marketers among HK and foreign firms in China, and what are their unique strengths and characteristics?

  • Focused

    know your strengths and weaknesses

    2) Upholding Principles

    “Quality is first. Technology comes second, then the production cost.”

    3) Far-sighted

    Everything takes time.Understanding Quality should come first in order to maintain long-term relationship

    4) Seeking for Cooperation, not Competition

    Other home manufacturers such as Chery and the First Automobile

    Group joined together to develop Car Manufacturing Technology


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Examples

  • Volkswagon: early entry, good government relationship

  • GM Buick: superior technology

  • Chow Tat-fook: low profile, focus on quality

  • Lacoste: brand power, persistence

  • McDonalds, etc., etc., etc.,


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