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Single Office Plan Review China 2009

`. Single Office Plan Review China 2009. MARKET OVERVIEW. Market Snapshot 3 regions lead the market. Shanghai (17.5m). Beijing (15m). Language: Mandarin Population: over 1.3 billion Unemployment Level: 4% in 2008 GDP: around 9% in 2008 Capital City: Beijing

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Single Office Plan Review China 2009

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  1. ` Single Office Plan Review China 2009

  2. MARKET OVERVIEW Market Snapshot 3 regions lead the market Shanghai (17.5m) Beijing (15m) • Language: Mandarin • Population: over 1.3 billion • Unemployment Level: 4% in 2008 • GDP: around 9% in 2008 • Capital City: Beijing • Beijing (cultural); Shanghai (practical) ; • Guangzhou (excitement) = 42 million • Number of middle-class families will rise • to 100 million by 2016 in the regions • Internet savvy: world’s #1, surpassed • the US • Mobile communications: world #1 • Open-door policy: allows cross-culture • exchange Guangzhou (10m)

  3. MARKET OVERVIEW Chinese Economy New China = Super China? • China’s economy: • grew by 52.9% over the past five years; • Exchange rate: • US$1 = RMB 6.5 • 4th largest economy • World’s largest foreign exchange reserves standing at USD 1.8 trillion Source: China National Bureau of Statistics Source: The World Bank

  4. MARKET OVERVIEW • Chinese Economy • Coping with global recession • Encourage domestic tourism • Incentive travel expense counted as business cost • Encourage student tours and retiree tours • Extend National Day to 8-day holiday • Chinese Premier Wen Jiabao 1/9/2009 “Some of the measures launched by the central government to expand domestic demand and maintain growth have yielded results. We are seeing increase in sales, decrease in inventory (50.8%44.7% in January) and increase in electricity consumption. Economic indicators are improving.”

  5. Number of travelers Growth rate CHINA TOURISM MARKET World’s Largest Outbound Source Can California win the 100 million? • China Outbound Tourists in 2007: 40.95 million; • WTO projection for China by 2020: 100 million (world’s largest source of outbound tourism) •  Around 36.34 million) traveled to destinations within Asia. 80% of Asia travel goes to Hong Kong, Macau and Taiwan. In 2007, US visitors just under 1 m; Europe received around 2.2m, Oceania - 0.5 m

  6. CHINA TOURISM MARKET China’s Corporate Travel Market MICE or Corporate or Leisure • MICE = Meeting Incentive Convention & Exhibition • MICE is Corporate travel in the China market MICE Invitation CorporateTravel Leisure component

  7. NEW RESEARCH DATA • China Market Survey 2009 Finding 1 Chinese Web site is key to the market All (100%) Chinese view a Chinese Web site as the most important way for them to learn about California. CTTC China will develop an informational yet marketing-focused Web site that also facilitates B2B.

  8. NEW RESEARCH DATA • China Market Survey 2009 Finding 2 Focus on first-timers for leisure travel for growth Only 1% Chinese consumers and a handful of tour operators and media reps have been to California. It is a first-timer market for California. CTTC China office will focus on branding, market education and information. Finding 3 Develop group tours and corporate travel packages Most Chinese prefer to travel in group packages due to language barrier and high importance on safety during travel. Corporate travel (30%) represents the potential in high-spending luxury tours. Travel plans are made 2-12 months in advance. CTTC China will suggest and train industry players on new and best packages in order to influence leading tour operators to increase length of stay in California.

  9. NEW RESEARCH DATA • China Market Survey 2009 Finding 4 Promote gateway cities and theme travel Most Chinese know of Los Angeles (100%) and San Francisco (95.5%). They also have special ties to China as sister cities to Guangzhou and Shanghai. San Diego (34.8%) comes third in recognition. CTTC China office will focus on promoting the gateway cities while showcasing theme travel destinations. Finding 5 Nature, theme parks + sunshine drive Chinese to CA Across the board, Chinese see theme parks and national parks & world heritage the top drive for them to come to California. The “sunshine California” idea particularly works with Chinese media. CTTC China will use nature, theme parks and sunshine as a secondary branding next to “window to America.”

  10. NEW RESEARCH DATA • China Market Survey 2009 Finding 6 Finding 7 Competition is from other US states What drives tourists to California?

  11. NEW RESEARCH DATA • China Market Survey 2009 Finding 8 Be aware of bad practices Tour operators say that the average price of group tour packages to California are USD$650 (26.6%), USD$500 (33.3%) USD$450 (40%). The common itineraries are 14 days/ 5 nights in CA - East & West coast and 7 days West coast including SF, LA & San Diego. CTTC China is aware of the black market when Australia first received ADS. CTTC China will work to launch training programs in China and California to ensure quality tour services, and develop appropriate branding that does not cheapen our destination. Finding 9 Media are hungry about California Most of the media did not write a story about CA because they did not see any promotion in China nor can they obtain information in China. CTTC China will launch an aggressive PR campaign to increase California’s publicity.

  12. CASE FOR CALIFORNIA • Who’s who? • New China & New Chinese • Steady increase of no. of Chinese to CA. 2007: 227,000 visitors. • Spend $1,440 per visitor which is more than all overseas visitors to California ($1,166 per visitor) (2007) • Big on gifts/souvenirs and transportation in US, while spend a lower percentage on lodging and food/beverages

  13. CASE FOR CALIFORNIA • Who’s who? • New China & New Chinese • Gateway magic: Increasing airlift: 51 direct flights per week from China; 56 direct flights per week from Hong Kong; around 150 flights via Korea and Japan • Chinese visitors stay 12.2 nights on average in California VS all overseas visitors (10.5 nights) • Make use of travel package and choose the airline with the non-stop flight option • Most of the Chinese visitors travel to California for business purpose • A decidedly shorter trip planning and advance airline booking horizon

  14. CASE FOR CALIFORNIA Long haul High-end travelers (MICE, gov, business) Middle class travelers (FIT, white collars) Mass consumers (Family visitors) Short haul Determining factor: affordability

  15. CHIINA MARKET STRATEGY • Window to America • Experience all America in one state Strategy Message Primary California is the window to America Secondary 1) California offers a mix of tourism experience; 2) Sunshine California; 3) California treasures friendship with China Phase 1 brand building and milestone events + double up publicity effort with support of government relations Phase 2 promote gateway cities and iconic products + increase training effort to industry players Phase 3 promote beyond the gateway cities and theme travel

  16. 2009-2010 KEY PROGRAMS 2009 Office Set-Up: Beijing, Shanghai & Guangzhou FAM: TT & media fam from China Technology: Chinese Web site & launch Office Premier: Bus promo /Shanghai, Chinese opera/Beijing, California Night/Guangzhou + MOU Travel Trade Shows: GITF, WTF & BITE Government Relations: Golf tournament for earthquake relief + LIVE auction 1st 6 months goals: CALIFORNIA brand establishment Government relations Travel trade presence Proactive publicity campaign Travel Trade: Corporate travel convention Co-op: Mini road shows in Beijing, Shanghai & Guangzhou with regional tourism bureaus Sales Mission: Multi-cities TT & PR mission Travel Trade Show: CITM/ Kuming & training 2nd 12 months goals: CALIFORNIA brand recognition Deepened travel trade penetration Enhanced publicity campaign Introduction to consumer 2010

  17. 2009/6-Mo. KEY PROGRAMS Building A California Network Get it right from the start Program 1

  18. 2009/6-Mo. KEY PROGRAMS China office soft launch Chinese press release a hit Program 2 A Chinese press release was sent out to Chinese media in the mainland on Jan. 9, 2009, to announce the opening of new CTTC China office. There are over 80 media coverage, ranging from electronic media to print and online portals. National influencers e.g. Sohu, CCTV, China News Services carried the news. ROI: US$192,120 in ad value

  19. 2009/6-Mo. KEY PROGRAMS • Office Premiere • The grand entry • Shanghai 4/6/2009 • Bus wrap 1 month promo • Ribbon cutting • Office launch luncheon • Beijing 4/7/2009 • Beijing opera dinner launch • Guangzhou 3/26/2009 • California Night • *** Friendship MOU signing at 3 events Program 3 Ground work for Golf tournament quake relief

  20. 2009/6-Mo. KEY PROGRAMS • Technology • The interactive Chinese Web site • Phase 1: Consumer • Generic info about CA • New itineraries/products • Chinese press center • Photo upload & ring tones • Localized Chinese content • Sohu Online Launch Feb 22 • Phase 2: B2B in 12-mos plan • Member login • B2B online meet place • Business calendar Program 4

  21. 2009/6-Mo. KEY PROGRAMS • Travel Trade Shows • Presence of an alliance Program 5 • Guangzhou International Travel Fair/ 3/26-29 • World Travel Fair 4/9-11 • Beijing International Tourism Exhibition 6/21-23 • California booths, co-op with partners • California Night in Guangzhou • Sales visits & media opportunities • Goals: • Have a presence in prominent trade shows in China • Meet small-medium tour agencies and consumers

  22. 2009/6-Mo. KEY PROGRAMS • Communications: • Golf Tournament for Quake Relief Program 6 • Social marketing; best way to develop relations with Chinese government departments; continuation of friendship MOUs; • Week of May 12 – 3 days event; 1 day fundraising for relief work + 1 day quake management exchange visit; • Chinese Radio AM1430 to host live auction + Sohu to host web cast; • Tour operators to fam golfing/luxury products; media fam to coincide

  23. 2009/6 Mo. KEY PROGRAMS • Publications • Presenting California in Chinese light • Chinese map • Chinese flyers for leisure/corporate travel • Chinese posters • Chinese media kit • Chinese folder • Guiding principles • Localized content for China market • Graphic and content push appealing to Chinese • Distribute at trade shows, events and for tour operators Program 7

  24. 2009/2010 KEY PROGRAMS • Consumer Promotion • California Promo Song & MTV • August-December 2009; • Use the well-known music of Hotel California to promote California; a lyric contest will be organized through radio stations in China • A Chinese pop artist will be asked to sing the song; a MTV program will be filmed in California; the program will be distributed to TV channels in China • Co-op opportunities for industry partners Program 1

  25. 2009/2010 KEY PROGRAMS • Consumer Promotion • California summers mini show • Month of July and August; • Co-op events that continue the relationship being built upon the friendship MOUs; partnership with tourism bureaus in Beijing, Shanghai and Guangzhou • Outdoor mini display in high-traffic locations in the cities to showcase California tourism products, California lifestyle and culture (music, art, etc); Strengthen California image: sunshine, golden state, one-stop sees America • Co-op opportunities for industry partners Program 2

  26. 2009/2010 KEY PROGRAMS Travel Trade Sales Mission & CITM 2009 Program 3 • A sales mission with industry partners, media and key attractions will go to China in November 2009 • A multi-cities mission to Beijing, Shanghai, Guangzhou and ending up in Kuming for CITM • B2B & training sessions, and media blitz in each stop • At CITM: Large exhibition area, outside B2B session, media sessions, press conference, training and California Night 4 cities trade mission/ 10 days

  27. 2009/2010 KEY PROGRAMS • Travel Trade • California Ambassador training • Co-op training with tour • operators; • Certified education; • Training on • leisure and • corporate • travel. Program 4 China California • training with tourism industry, ie. Hotels, attractions, etc • Cultural dos and don’ts when receive Chinese • Quality control

  28. 2009/2010 KEY PROGRAMS • Communications • Tell California Stories to China • From October 2009 to January 2010: a leading Chinese TV station will film 10 segments of California stories to showcase the golden state to a Chinese audience. • The TV series will be broadcasted nationally to 1.3 billion population • The segments will showcase a dynamic California, from tourism resources to economic development to Chinese immigration to the state. • The goal is to build the California brand on a solid approach Program 5

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