Download Brief Analysis of Marketing Innovation in Photovoltaic Industry of Xinyu City

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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,
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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.
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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.
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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.
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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).
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