China's macro-marketing environment

Résumé du document

While the potential of the Chinese consumer industry is huge, the timing and the paths required to develop the best marketing strategy for a brand or a product in this country vary with the complete knowledge of the environment. Because China is not only a market but also a nation, in which cultural, political, and social, as well as economic interactions take place, it is first essential to get an overall view of the whole marketing system in this society. After having read a couple of articles related to this subject, I summarized on this reading memo the main important ideas, comments, examples and different points of view.

Extraits

[...] Companies should focus on controlling manufacturing costs and insuring quality control. Though they have levelled off recently, local costs, for both labor and management, have increased substantially over the last several years. As well, because of the need for allowances, expatriate costs in China are often higher than projected. Reforms to expand and modernize the economy Beginning in the late 1970s, changes in economic policy, including decentralization of control and the creation of “special economic zones” were undertaken to expand, modernize China's economy and attract foreign investment. [...]

[...] And knowing that reliable and capable logistic and national distributing companies were non-existent in China, the main multinational companies made the choices to focus on certain geographical areas (companies usually focus on Beijing, Shanghai, Guangzhou which represent 13% of the country's disposable income) rather than to build up one's one national distribution network. Nevertheless, companies that dismiss these smaller cities and towns could be missing a large growth opportunity over the next decade: the number and above all the income of the households in those cities are expected to grow consequently. Operating environment China is not necessarily a cheap place in which to operate. [...]

[...] The economic reforms began to emerge but a lot of foreign companies constructed their own platform and systems (as Pepsi), the others prefer using local networks. Consequently, foreign companies in China usually have higher logistics and supply chain costs than their Chinese counterparts do. The liberalization of distribution channels The liberalization of distribution channels in China has provided more choices for suppliers, but the distributors' skills vary greatly, thereby making the selection of distributors very critical. Whole new retail formats such as chain stores and hypermarkets are emerging in large coastal cities, although the more traditional "mom and pops" are still much more common. [...]

[...] The country's "economically able" population those with the ability to purchase mass consumer products is expected to grow to about 250 million to 300 million by 2000, and then to double between 2005 and 2010. In the same time, two structural factors age and family add to the potential growth of the Chinese consumer market . intensifies competition Because of the country's huge development potential, the competitive environment intensifies. While multinationals are competing among themselves, many local and overseas Chinese companies, small but dangerous hidden warriors, try to overtake them or match their market share. [...]

[...] Because China is not only a market but also a nation, in which cultural, political, and social, as well as economic interaction are acting, it is first essential to get an overall view of the whole marketing system in this society. After having read a couple of articles relative to this subject, I summarized on this reading memo the main important ideas, comments, examples and points of view especially vital to know in this merciless environment. Comments, examples and points of view China runaway growth China's overall economy has been progressing impressively since it opened up in the late 1970's. This trend has been even more pronounced during the last decade. China's G.D.P. [...]