* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download Central planning (Command economy)
Survey
Document related concepts
Street marketing wikipedia , lookup
Target audience wikipedia , lookup
First-mover advantage wikipedia , lookup
Neuromarketing wikipedia , lookup
Marketing plan wikipedia , lookup
Perfect competition wikipedia , lookup
Dumping (pricing policy) wikipedia , lookup
Darknet market wikipedia , lookup
Grey market wikipedia , lookup
Advertising campaign wikipedia , lookup
Market analysis wikipedia , lookup
Multicultural marketing wikipedia , lookup
Green marketing wikipedia , lookup
Product planning wikipedia , lookup
Marketing channel wikipedia , lookup
Market penetration wikipedia , lookup
Target market wikipedia , lookup
Global marketing wikipedia , lookup
Transcript
Lecture 2 The Transition of China’s Market Environment 中国市场转型环境 Central planning (Command economy) • Planning at several levels • Walder: investment capital given as a grant, • Administered prices that did not reflect relative scarcities • Insulated from foreign competition and world prices, • Lack of competition on product markets • Poor distribution networks • Lying about output, low productivity, product scarcity, etc.. 1 How about consumers and marketing? • • • • Shortage and limited variety of goods. Shoddy products with poor quality Rationing system Through state-controlled channels of distribution • For everything you needs • Marketing – what is that? It did not exist! The Follies of Central Planning-Chinese Heating System • March 14, 2006 WSJ has an article ("China's Winter of Discontent," p. B1; sorry no link) that demonstrates the folly of using central planning to produce and allocate goods and services. An excerpt: – Heating systems are one of the last areas that remain under China's former centrally planned economy, with government regulators still setting the thermostat for homes, classrooms and offices across the country. Under the policy, which dates back to Mao Zedong in the 1950s, the government provides heat in the northern half of China, and, to save money, it provides no heat in the southern half. As a result, northerners often wilt in steaming apartments, while those in southern provinces shiver through the winter. – http://divisionoflabour.com/archives/002391.php • The Collapse of Soviet Union: winter in Russia 2 The Greatest Transition in History 有史以来的最大变革 The Reform of economic system: From planning to market: 经济体制改革:从计划到市场 • Marketing development is the reform process of the continuously increasing effect of marketing structure in economic resource allocation. • Central planning permeated every aspect of the economy, from the types of products, quantities, channels to pricing. • Two periods for the innovation: – In the 1980’s, the domestic adjustment and innovations are the key concerns; – After the 1990’s, the opening policy drives the innovation, the coastal cities set exemples for the inner ones, leading to innovations in policies and theories, and the economic activities stimulate the social and political changes. 3 Shift to market-based systems • Economic Reforms since 1979 • Focus on the improvement of corporate governance, the promotion of the non-state sector and the protection of property rights. • Building up further a market oriented behavior by regulation and law. • The growth of foreign direct investment, import of equipment, technologies, management know-how, and new business concepts as well as ideas and lifestyles. • Private ownership will be or is becoming a fundamental building block of the economy. • Now 60%-70% market economy, p.21. – Greater reliance on market factors and consumer trends, Reforms of State Owned Enterprises (SOEs)国有企业的改革 • The stage of decentralizing authority and reducing profit (1978~1982)“放权让利”阶段(1978~1982年) – Break the big rice bowl, • • • • • The stage of changing taxation of profits (1983~1986) “利改税”阶段(1983~1986年) The stage of contract system (1987~1992) “承包制”阶段(1987~1992年) The stage of operation system transition (1992~1993)“转换 经营机制”阶段(1992~1993年) • The stage of modern corporation system. • “现代企业制度”阶段(1993年以后) 4 The results …. • Ingenuity and energy of people released! • Rapid economic growth: in output, brands, and distribution outlets. • Unprecedented improvement in productivity and creactivity! • Rise of standards of living and quality of life: consumption waves and upgrade • Under-developed legal systems, thus many loop-holes for the opportunitist and corruption! • Policy swings and over-corrections, and constant adjustment! Market Types: From the Seller’s Market to the Buyer’s Market 市场类型:从卖方市场到买方市场 • Stage one, 1978~1989, typical seller’s market.第一阶段,典型的卖方市场 • Stage two, 1990~1996, the seller’s market and the buyer’s market coexist.第二阶段, 卖方市场与买方市场并存 • Stage three, 1997~present, gradually becomes the buyer’s market. 第三阶段, 1997年至今,整体上进入买方市场阶段 5 Market Structure: Fluctuating Concentration Levels: 市场结构:集中度降中有升 • The decrease of the concentration (monopoly) levels indicates the fierce market competition and resource waste (duplication), and causes the drop of the profit rate and the deficit of corporations. 产业集中度的下降表明市场竞 争越来越激烈,使资源浪费,导致企业利 润率下降和许多企业亏损 • Only until recently, there has been signs of reconsolidation by mergers of firms. Still in transition • From central planning to market forces (70%) • From an economy of scarcity to oversupply (seller’s market to buyer’s market) • From the dominance by SOEs to the coexistence of several modes of ownerships with an increasing proportion of private businesses 6 Market economy with Chinese (socialistic) characteristics? • The Walder article • Gradualism: gradual reforms over time across regions and industries (unlike the shock therapy in Russia) • Dualism: a mix of market forces and government planning depending on industry (capitalism + socialism), thus mixed forms of enterprises (SOEs, collective, private, stock, FDI), with government playing a major role, but more flexible and decentralized • Constant changes in laws and policies due to the gradual reforms, creating instability as well as windows of opportunity and boom-bust cycles caused by the switching between laissez-faire and austerity programs • Incomplete or partial reforms: political reforms and legal development still lagging behind, only recently recognized private ownership of assets Unique Features of the Transition Environment 转型环境的奇异特征 7 Typical Features of the Transition 转型的典型特征 • The broad geographic areas and potential. • 大:地域辽阔, • Dramatic changes of development, policies, and laws.前景巨 大变:发展快,变化快,政策多变,法规不健全 • Chaos market, infringement, and poor reputation.乱:市场秩 序混乱,假冒侵权严重,信誉缺乏 • Short term orientation, and excessive competition.躁:短期导 向,多度竞争 • Variations across regions, systems, industries, marketing levels, and generations differences. 异:区域差异,体制差 异,行业差异,营销水平差异,世代差异 The Disadvantages of Government Control 有形之手的巨大阴影 • After 25 years innovation, Chinese market changes from the pure planning economic to the mixture economic of resource allocation by both market and government. • Government can directly interfere the market economic activity • Some disadvantages of government interference: Negative influence on stock market and taxation, some authorities are reluctant to give up their powers for the sake of benefit, and the local protectionism. • Example: the recent real estate market ups and downs, sometimes leads to vicious cycle. But government still exerts a high degree of influence, which leads to inefficiency, corruption, and poor investment. • But a necessary evil! 8 Unequal Financing Environment 不平等的融资环境 • Because of the local protectionism, the financial market treats corporations differently.由于所有制情节和地方保护主义, 金融市场对各类企业的支持力度有很大差异 • The financial market only offers low cost fund to state owned enterprises.金融市场为国有企业提供成本相对低廉的资金, 却往往不愿意为非国有企业提供资金 • The splitting of financial market is mainly caused by the government interference of taxation and resource allocation.金 融市场的分割主要是政府对利率,资源配置的直接或间接 控制所导致的 • China is attempting to break the splitting of areas, politics, industries, and management中国正试图打破地区,政治,行 业或管理方面的分割,从而推动经济的持续增长. Poor Reputation 缺失的诚信 • • • • • • • Lack of information Lack of transparency Lack of accountability Fake products假冒产品 Fake financial report 财务造假 Fake government statistics 政府统计造假 Unfair competition 不正当竞争 9 Significant Difference among Sub-Markets 细分市场非常差异 • There are tremendous regional differences and market segmentation due to the local economic, political and cultural factors. • 中国不同地区的经济文化民俗差别明显,各地方政府执行 政策有差异,造成中国市场的分割 • Difference between rural and city markets • 中国农村市场与城市市场的差别很大 – The three worlds of China • Different behaviors of old and young generations of consumers年轻一代消费群和年老一代消费群差别巨大. The Limited Effects of Marketing Data 市场数据的有限作用 • Local corporations neglect marketing data and local managers make decisions according to the experience本土企业淡漠市 场数据,很多企业老总凭经验和感觉做出决策. • It is extremely difficult to collect marketing data in China. • 市场数据在中国不易获得市场 • Low validity and reliability of Chinese marketing data.数据的 有效性和可信度也不如国外成熟市场 • Thus, making it difficult to make informed decisions 10 The Poor Logistics System 难防的通道陷阱 • It is difficult to make logistics and distribution in such a broad area in China.中国地域辽阔,进行物流和分销很困难 • The logistics and distribution systems are not reliable配送系 统不可靠. • International corporations begin to set up their own logistics system, but fail to compete with local logistics corporations due to the local protectionism跨国公司建立自己的配送系统, 但“强龙斗不过地头蛇”. • Corruptions, discrimination, extortion, and unfair competition in the channel system, p.38 Problems of Consumption Environment 消费环境的问题 • Consumers have no conscious of intelligent property消费者漠 视知识产权 • Shopping discrimination消费购物歧视 • Consumers have no conscious of self protection.消费者自我 保护意识差 – But things are changing slowly, with the advent of consumerism groups and NGOs – Growing need for compliance, crisis management, and public relations • Many discriminatory practices in marketing – fees 11 Chinese Special GUANXI Marketing 关系营销的中国特色 • The Chinese GUANXI marketing is based on the Chinese cultures.中国关系营销建立在中国的文化基础之上 • Foreign relation marketing emphasizes on the relationship with customers.国外关系营销强化顾客关系 • Because of government interference, in China, the Guanxi between corporations and government is more important than the relation between corporations and customers.中国的企业 受制于政府,官商关系比顾客关系更重要 – Lack of trust of strangers – Wine and dine, wheel and deal – Source of corruption: make use of your power before it expires. Corruptions in Marketing 营销腐败比较普遍 • Kickback吃回扣 – Salespeople, doctors • Taking advantages of price differences from areas获取通路差 价和区域差价 • Promotion resource cutoff促销资源截流 • High traveling expenses过高的差旅费支出 • Translate into higher costs of doing business and waste of resources 12 Some Thoughts • A mixture of old and new, East and West, good & bad, pretty & ugly, “under-developed,” • Lots of confidence and optimism, and lots of problems which may mean opportunities (e.g., IPR vs. investigation business). • Rapid urbanization, urban centers perhaps saturated, more opportunities in small towns and countryside (appliances go there家电下乡). • Firms need to be bold, innovative, introduce something new, flexible, adaptive, and sometimes creative, to stay ahead. Oldfashions go out of style really fast. People and firms are both learning fast to catch up with the West. • Rapid changes, continue to upgrade and moving up the value chain, keep up with policies and changes. • Both short-term and long-term planning, and continue to revise. Seize the time and opportunity, grow, and consolidate! • http://www.yogiyoga.cn/ More Updates • The transition is on-going to central planning to a more rule-based economy • Where local firms have learned well and become very competitive, aspiring to be world market leaders. • The environment is increasing transparent, competitive, sophisticated although still inconsistent. • China is already the 2nd largest economy that is redhot and has increasingly affluent consumers. • In some areas, China has become a huge viable market such as e-commerce, mobile phones, automobiles, green energy, and a must-win game for multinationals. • 13 Summary of the Video case • • • • • • • • Rapid growth Rapid urbanization Cheap labor and huge migration Hardworking, aspiring, & confident High volume of trade Domestic market: goods & brands The biggest market but no democracy Hong Kong, the freest but no democratic Discussion questions: • Discussion questions: • 1) Aside from what we discussed in the classroom, what are some other characteristics of a market in transition like China? • 2) How does the transitional nature affect businesses and marketing, say, differently from those operating in typical market economy? • 3) Given the above, how should businesses develop plans and strategies in China? In other words, what factors should firms take into consideration when formulating their business and marketing strategies? 14 Group Project • Market Research and Marketing Plan • One product (goods & services), one market/segment • From the perspective of a Hong Kong firm or that of a multinational • Environment analysis (socio-cultural, etc.) • Market research: trend, demand and forecast • Marketing strategies and planning – Entry strategies – Marketing mix strategies – Implementation and contingency Examples of Topics • Selling Australian Beef to Chinese Consumers • Setting up a diving club in Shanghai • Fund-raising for a social enterprise in China (raise fund to educate school-age girls in the country/city) • Promote clean energy sources in China • Promote crisis management and PR services to multinational clients • Set up a NBA franchise in China 15