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China’s Marketing Environment
Discussion questions
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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?
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?
Features of China Marketing Development
中国营销进程的二大特征
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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
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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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 marketplace
quality and sophistication are increasing, but
prices are declining
The focus changed from production to
sales:
production-oriented firms became customerfocused
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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
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Competitors: domestic, foreign, JVs
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Car Industry
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Joint ventures
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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
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Guangzhou Honda
Chongqing ChangAn
AnHui GiRui
ShenYang HuaChen
Nangjing Fiat
Zhejiang Jieli
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
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Language, culture, practices
Standardization vs. Localization
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Standardization:
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uniform, efficient, low-cost, easy to remember
neglect local conditions, may not be effective,
Language and cultural barriers
Sometimes more costly
Localization
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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.
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.
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Thus, Brand Management needs to adapt to the
Local Preference!
Challenges for Marketing
Professionals
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Size of Territory
 Marketing Practices –Accessible or not?
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Competition
 Price & non-Price
 Fair or Unfair?
Intellectual Property Right
Information released from the Government
Trustworthy?
Challenges for Marketing
Professionals
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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
3) What are the challenges for marketing
professionals, say, those working for Hong
Kong and foreign firms in China?
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Size of Territory
 Marketing Practices –Accessible or not?
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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
4) Are there good examples of successful
marketers among HK and foreign firms in China,
and what are their unique strengths and
characteristics?
1)
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
Examples
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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.,