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EASTERN ACADEMIC FORUM Brief Analysis of Marketing Innovation in Photovoltaic Industry of Xinyu City LIU Dong Xinyu University, PR China, 338000 Abstract: This article sums up some difficulties what photovoltaic industry of XINYU faced by analyzing. Some predicament exist in photovoltaic industry are discussed such as industry chain is not complete, level of dependency on international markets is high, market competition is fiercer and international trade protection threat continually increases. Meanwhile, the author gives some thoughts and proposes some solutions from the perspective of marketing innovation by researching of marketing innovation theories and practice application. Keywords: Xinyu city, Photovoltaic industry, Marketing innovation 1 Introduction Xinyu city, located in the center part of west of Jiangxi province, which municipality directly under Jiangxi province, gross area 3,178 square kilometer and 1.11million population, dominate fenyi country, yushui district, fairy lakes famous scenery district and xinyu economic development district. Xinyu city, established on account of steel, is the highest industrialization degree city in Jiangxi. It is the largest steel production base and iron alloy production base in Jiangxi province, which produce 80% steels in whole Jiangxi province and 40% ferrous manganese ore in whole nation. In the September 2005, LDK solar energy technology limited company and polycrystalline silicon project settled in xinyu economic development district, that mark photovoltaic new energy industry has been officially started in xinyu city thus open a new emerging industry chain. With the rapidly development of leading enterprise representative -LDK company, the photovoltaic new energy industry has become the first leading industry around whole city even the whole province. Up to nowadays, there are 106 photovoltaic enterprises have been registered, Silicon material capacity 17,000 tons, silicon slice capacity 3,500 megawatt, solar cell type capacity 1500 megawatt, module capacity 250 megawatt, 200,000 Quartz ceramics crucible capacity, 20,000 Quartz glass crucible capacity. In 2011, the annual sales of photovoltaic industry is 40.94 billion in whole xinyu city, year-on-year growth up to 28.3%; the gross electricity consumption of photovoltaic industry 2.26 billion kwh, year-on-year growth up to 40.6%, monocrystalline silicon output 3,068 tons, year-on-year growth up to 372%, polycrystalline silicon output(including Silicon Material and silicon ingot) 21,515 tons, year-on-year growth up to 27%, achieve recession expansion in the face of fierce fluctuation of international photovoltaic market. However, in the face of debt crisis in Europe, international trade barrier and the aggravation of the market competition, the development of xinyu photovoltaic industry still has many difficulties. This article analyze the problems exist in the xinyu photovoltaic industry and explore solutions from the view of marketing innovation. 2 The Difficulties in the Development of Photovoltaic Industry in Xinyu City 2.1 Industry chains is not complete, upstream products has been weighed too heavy, down-stream products are less The gross capacities of xinyu photovoltaic industry are high relatively, but mainly rely on upstream products such as silicon material, silicon slice, solar cell type and battery pack (occupied 70% of total), down stream products are only occupied about 20%, and the types are less, the complete industry chains are not formed. Upstream products are low technological quality, high capital and manpower investments, heavily polluted and the competitive are fierce because of the low threshold, in comparison, 99 EASTERN ACADEMIC FORUM the down-stream products are high technological quality, low capital and manpower investments, basically no polluted and high profit. If the situation of xinyu photovoltaic industry can not be improved, the development of xinyu photovoltaic industry will be affected definitely. 2.2 The development of domestic market are slow, the international market dependency are high Under the influence of technology and insufficient support of domestic policy and some other factors, either technology or markets of downstream of photovoltaic industry chains are controlled by Europe and America countries. With the addition of the needs of domestics markets are less make xinyu photovoltaic products are mainly rely on international markets. According to statistics, 90% of xinyu photovoltaic products are rely on export, they are passiveness with highly external dependency and restrained by Europe and America countries in a long times. In recently two years, enterprise suffered Europe debt crisis and American against-dumping lawsuits, the stable and development are influenced seriously. 2.3 Markets competitive are fiercer, supply and demand lose balance, and pressures of enterprises are constantly increased As the sunrise industry, the future markets of photovoltaic industry will be exponential increased. However in short term, the industry will bear huge supply pressures. According to the 2011-2015 market demand forecast data from EPIB in June 2011, the photovoltaic market demands are about 30GW in 2012 and 2013. Therefore, only the current capacity of china can fulfill future global photovoltaic market demands for 2-3 years. The increasing speed of photovoltaic market is far from to follow the capacity expansion speed. The international photovoltaic market will suffer price and integration pressures this year; a series of photovoltaic enterprise, such as with no competitive power or enterprises which enter into photovoltaic fields hastily, will be integrated or eliminated. What’s need to concern is that, in the fierce non-balance supply and demand situation, the stock price of oversea listing photovoltaic enterprises in our countries may constantly drop and will be sing empty by foreign rating agencies. The foreign capital may take opportunity of industry integration and trade war to manipulate the dominant right of competitive enterprise of our countries, even to make our photovoltaic industry hollowed gradually. 2.4 The prices of products are still dropped, the operation pressures of enterprise increases In the early 2011, photovoltaic products’ supplies are increase substantially, but photovoltaic markets are influenced by some factors such as Europe debt crisis and unstable policies, the demands shrink and wait-and-see mood, there are excessive inventory of photovoltaic enterprises’ products, the price has dramatic slump and approach to cost price. The rate of gross profit quarter-on-quarter and year-on-year constantly down, enterprise has come to low-profit phrase; which bring large pressures to those enterprises. 2.5 Photovoltaic industry face severe challenge of trade protection On Oct.19th 2011, as representative enterprise of Germany Solar world and other seven enterprises together submit application of antidumping and anti-subsidy researches about china export solar battery to American and US Department of Commerce launched an investigation on November 8th, 2011. It is reported that solar world are trying to persuade the largest Europe market in the world to investigate anti-monopoly, antidumping and anti-subsidy to China. Once China responses to American on the wrong end of lawsuits, it is very likely European Union seize the chance to win, the photovoltaic industry in china will suffer destructive blow on the occasion. 100 EASTERN ACADEMIC FORUM 3 The Connotation of Marketing Innovation 3.1 The implication of marketing innovation The traditional marketing theory consider that the marketing activities of enterprise should be aimed at customers’ needs, make sure enterprises can provide the target markets with best services, design suitable product, service, pricing, channel, promotion strategy to fulfill the target market’ need and make a profits. Under the traditional marketing models, marketing staff decides products’ future and enterprises’ success and failure. However, the marketing nowadays are not only about one department’ business, but the whole enterprises’ marketing. All departments in enterprise must be pay close attention and involve in it, which is the essential factors in all processes of management and transmission activities from the inside out enterprise. The advertising and popularization of enterprise and product are only the external form; the connotation is to provide satisfying solution that better than competitor. Without comprehensive customers-oriented and entire personnel’s service consciousness, double-win cooperation and value added sharing scientific management; enterprise can not form durable competition advantages. The authors argue that enterprise’ marketing innovation is creative activities to develop potential, enhance competitive force of enterprise by transforming, creating and reorganizing some factors including capital, land, material, equipment, human resource, market, customer, technology knowledge and property right also enterprise culture and organization system in enterprise for the sake of acquiring more and long-term economic benefit. The marketing innovation activities make enterprise can be ahead of others to form own core competitiveness, and to be the leading enterprise in entire industry. And enterprise can better create new production organization pattern, improve efficiency of resource allocation, accordingly, lower production costs and enhance enterprises’ competitiveness. This also allows enterprise create opportunity to give surprise attack to competitor and promote the development. 3.2 The effective execution of marketing innovation in enterprise need to take measures in four aspects 3.2.1 To establish correct innovation ideas Innovation ideas are the soul of marketing innovation, which dominate the processes of innovation formation. Without the direction of innovation ideas, marketing innovation will be neglected and still pursuit for traditional models which are not adapt to new environment. Only if enterprise makes innovation up on the agenda, enterprise can grow up and survive in competition, marketing innovation can also play a full part in enterprise. 3.2.2 To cultivate marketing thought Thought is the advanced stage of cognitive activity, is indirect and general reflection to things ‘general characteristics and internal relation. Enterprise want to accomplish marketing activity better, the marketing thought is available. Actually, the hitting-point of marketing innovation is in life, or round the customers, just about the objects marketer focus on. If lack of marketing thought, the marketer can not seize those hitting-points, marketing innovation will lose the root of the foundation. The cultivation of marketing innovation is building a kind of marketing thought in the marketing staffs’ mind, it is also called working condition. Firstly, proficient in theory knowledge and make use of those knowledge to observe a lot of things in life, cultivating capability to use marketing in life so that staffs can form marketing thought naturally. In addition, to be the careful people in life and pay attention to customers’ behaviors all around, digging down the starting point of marketing innovation. 3.2.3 To have indomitable spirit Facing complex marketing environment, the risk of marketing innovation is everywhere. Verification might pay a lot of economic price. Therefore, innovation is easy to suffer a setback or cast aside or be not performed. This will stroke the enthusiasm and exploring spirit of marketing innovation. As a result, the indomitable spirit needs to be having as support. Actually as a marketer should own this kind of indomitable spirit, that coming from own character and temper of life. 101 EASTERN ACADEMIC FORUM 3.2.4 To have strict institutional guarantee Making the marketing innovation thoughts become the behavior rules of market staffs or other staffs or deep cultural core, the strict institutional guarantee are definitely needed to regulate thereby guarantee the operation regularly. After institutionalize of marketing innovation, innovation ideas, thoughts and spirits have fundamental guarantee. These motivate marketing staffs’ enthusiasm and initiative in innovation, impel enterprise to choose the right way to do marketing activities in complex environment and adapt to change. 4 The Measures About Marketing Innovation of Photovoltaic Industry in Xinyu Aim at the difficulties what photovoltaic industry in xinyu city has faced, the author explored the solutions in the perspective of marketing innovation. 4.1 To perfect photovoltaic industry chain structures in xinyu The gross scale of photovoltaic industry in xinyu is large, but it only focusing upstream products, the industry chain is not complete. This needs more efforts to create conditions to develop to the down-stream photovoltaic industry chain. Although the development of down-stream products in photovoltaic industry face some difficulties of technology, market and national polity, perfecting xinyu photovoltaic industry chain structure and building sustainable mechanism can fulfill by government’ guide which either integrating related enterprises’ resources in xinyu city and releasing related policy or supporting in aspects of capital and market. 4.2 To building a strong entrepreneurs team Entrepreneurs are the subject of innovation who engage in operation innovation, take risk and manage enterprise. Enterprise needs to cultivate entrepreneur consciousness to staffs especially senior executives. If there are large numbers of entrepreneurs in enterprise, the larger the scale of this group, the stronger the enterprise strength naturally. 4.3 To improving enterprise’ organization structure According to coordination system of marketing innovation in small and medium size enterprise, enterprise’ organization structure should form a circular system. Every department connects to each other, and reflected and controlled by normative management policy, in favor of establishing durable marketing innovation system. For example, enterprise can set up benchmarking develop team and determine a series of outside benchmark enterprise according to the condition of other enterprise during industry. To collect those enterprises’ information through different channels and in different methods, enterprise can reorganize those information on the basis of related benchmarking index and compare with own condition so that improving enterprises’ marketing capabilities, channel power and brand impact .etc. 5 Conclusion According to the analysis of current situation marketing environment and current development situation of photovoltaic industry, the author consider that, although development of photovoltaic industry in xinyu city face a lot of difficulties coming from worse macro-environment, fiercer market competitive and imperfect industry chain, as long as the industry chain get perfected, a strong photovoltaic enterpriser team established and the organization structure of photovoltaic industry improved, photovoltaic industry can revive and these measures will land a solid foundation for long-term development of photovoltaic industry in Xinyu city. 102 EASTERN ACADEMIC FORUM References [1]. Zhou feng, The Marketing Innovation Research in Condition of Knowledge Economy. Master Thesis of Wuhan University, 2005. 5 (in Chinese). [2]. Zhu Yinghua, Accelerate Independent Innovation, Increase Brand Constriction and Promote Industrial Upgrading. Economic Review, 2011. 2 (in Chinese). [3]. Electronic Ministry in Ministry of Industry and Information Technology. Twelfth Five-year Development Plan of Photovoltaic Industry, 2011. 8 (in Chinese). 103