Strategic Issues In Chinese Marketing
http://www.emkt.com.cn/article/47/4723.html(英文)
http://www.emkt.com.cn/article/46/4649.html( 中文)
There are 3 million millionaires in China and 1,000 billionaires (8.2RMB=$1)
·China leads the world in the production of motorcycles
·Shanghai will train 1.37 million technicians and manager over the next five years for the financial and internet sectors alone
·China is Asia’s largest advertising market after Japan
·China cellular customers will number 155 million by 2002
Introduction:
Market reform and market anxiety go hand in hand. Who will profit from reform? Domestic producers or foreign brands? Market reform creates a strong impulse for domestic companies to cling to traditional advantages, like local market knowledge and distribution know-how, but it also necessitates re-thinking of business and marketing strategy. If Chinese producers are to benefit from market reform, strategic marketing innovation must be a priority.
Chinese business and government leaders believe that local market knowledge will continue to lend competitive advantage to Chinese businesses in many industries, like retail banking. But leveraging these advantages, and profiting from them, is another matter. Today, China needs to practice a marketing discipline, a discipline based around systematic knowledge of customers, in order to bring latent advantages to life. China will need more than low price and mastery of labyrinthine distribution channels. It will need brand leadership and price discipline to capture the profits that fuel the R&D and marketing innovation found in the world’s leading “built to last” companies.
The Marketing Environment in China:
In present day China, market research and marketing information systems are in their infancy. Brand awareness and brand preference are in their adolescence, but growing quickly. Product quality must be improved and improved product innovation capabilities are needed. Distribution management needs investment and stronger legal enforcement to lower costs and improve efficiency. Price wars must cease to be a national passion. There are many areas for marketing improvement.
As the Chinese economy grows and diversifies, customer preferences and behaviors will inevitably change. Already, in the more wealthy cities, the levels of brand awareness are beginning to approach the levels we see in the United States. US consumers can typically name seven brands in a given category without any aid. In the pharmaceutical category, for example, Beijing consumers can name almost five brands without aid, while in trendy Guangzhou, consumers can name almost nine (TC Market Research).
In the key barometers of market change, young people, we can see both hopeful and troubling signs for Chinese companies. Foreign brands have captured much of the “aspirational” purchase intention of the young, with brands like Sony, KFC, Nike and Levi’s believed to be the best for those who have the money to spend on occasional luxuries. Chinese brands like Lining and Spring Zhang Lumei have good reputations with young people, but loyalties are weak and price, “look,” and quality considerations are still the strongest motivators of purchase. As brand preferences emerge, Chinese brands should represent more than just acceptable quality at a good price.
The remarkable fact is that the Chinese market for domestic and foreign companies is growing internally and externally at 8%, and has reached a GDP of $1 trillion. While that is one-tenth the U.S. market today, the next decade will see a narrowing of the difference. Today the U.S. economy has the strongest marketing engine in the world. China is building its marketing engine. If Chinese producers follow the science of modern marketing management they will get their share of the market’s $10 trillion destiny.