3. China's Culture
Food Presented:
o Green Tea
o Baozi - Steamed bun with pork or chicken fillings
A Brief Look Into Chinese
Culture:
o Travel Guide
o A Guide to China's Culture
5. "Some International Ads are preceived
as sexist due to different cultural
norms"
• What works for one country, does not work for another
• Two marketing mistakes
o cultural-specific
o gender-specific
• Different countries - Different laws
o cultural norms prevent ads from being seen
o avoided by research or hiring experts
6. "Old rules of Marketing don't apply in
China"
• Richard Lee, CMO of PepsiCo
o Chinese youths and the internet
o Local competitors are most worry-some competitors
"They'll do crazy things, and they are faster to get new
products on the market"
o Multinational Companies (MNC)
Past experienced and risk adverse
• SUCCESS REQUIRES TAKING RISKS!
7. "Picking brand names in China is a
business itself"
• One must consider how the name is to be portrayed:
o Foreign brand - translating the name
o Chinese brand - say things about the brand
• Brand name success depends on cultural differences and
Chinese characters for words
o "Each character is a collection of drawings that can carry
meanings all on their own" (Wines, Michael)
8. "China's One-Child Policy is Crippling
Industry"
• Shows the effect the One-Child policy is having on Chinese
workforce
• Unskilled and young labor to fall by 27%, to 164 million by
2025
o Losing over 62 million in the next 15 years
• Growing wages increasing the price of products
o Leading to competitors like India and Mexico
9. "Hitting your growth target in Asia"
• Issues Asian Executive Officers when working within a
Chinese Company
• Lots of competition between companies to steal talented
employees
o Especially salespeople
• Current trends point to double digit increases in sales and
marketing
o Cohesive and team oriented workforce's very important
10. growth target (cont.)
• Ways of keeping talented employees
o Helping an employee buy a car
o Create visibility for performance of workers
Led to healthy internal competition between workers
o Establish team approach to promote team unity, company
loyalty, promoted group problem solving and build
relationships inside team
11. "China could game the U.S. in
intellectual property"
• China needs to improve the number of patents they submit
• Pre-1985 there was no patent system in China
o If company does not submit a patent to China, it does
recognize the patent as valid
Especially worrisome for tech companies
• Patents are being approved bordering on negligence
• China wants to overtake the U.S. in applications of patents
o To be successful they need to have a better way to
enforce patents
o Currently judges and juries are enforced even if they are
not understood
12. "Can China Produce A Luxury Brand?"
• 'Made in China' stigmatism
• Copyright and IP laws
• Southern China
o Mass-produced low-cost center evolving into higher-end
manufacturing
• Show off status with brand name
o China must trust China first
o Will help propel into world market
13. "How To Do Business in China Without
Speaking Chinese"
• Translator you can trust
o Allows you to talk and wait for feedback
• Be patient
o Break into discussion groups
o Wait for them to finish
• Be confident in product
o Know everything you can about your product and get
feedback after meeting
14. "Why Americans do not know much
about Chinese brands"
• According to Xinhua Report
o Summarized 2010s top 500 Chinese enterprices
• Top 10
o 7 of 10 were all or semi-owned by the Peoples Republic
of China
o Limited foreign investment
15. "Six Keys to Profiting in China"
• Flexibility
o Trust experienced Chinese professionals
• Clarity
o Paint a clear picture of the final outcome
• Patience
o Things just take longer
• Employee Development
o Highly focused on development of careers
• Relationships
o Long lasting relationships of respect and knowledge
• Experience
o Industry and culturally savvy
16. "Can P&G make money in places
where people earn $2 a day?"
• Knowing your target market
• Practical vs Cost
• Product adaptation
17. "China's Economy at an Inflection
Point"
• Growth slow down
• Aging work force
• Foreign investment
• Competitive advantage
18. "China Signals Credit Easing as
October Loans Jump to $93 Billion"
• World economic concerns
• Loosened credit quotas
• Economic slowdown
• Inflation rates
19. "Marketing to Rural China"
• Vast difference between urban and rural China
• Suggestions to market in rural China
o Franchising
o Take advantage of Government subsidies
o Develop strong relationships with your market
• Shine light on the fact that in the future, companies will have
to market to rural China if they want to grow
20. "China's New Protectionism"
• China known for having strict marketing regulations
o Foreign companies seem to get picked on more than
domestic companies
• Wal-Mart, Gucci, KFC and others
• Occuring since joining WTO in 2001
• Unknown to exactly why
o One reason could be Wal-Mart has substantially
surpassed some local companies in business
22. Mission Statement
"To ensure the health and well-being of our consumers
by offering an affordable and convenient way to improve
their personal hygiene."
23. Product - Purell
• Invented by GOJO Company in 1988
• Was sold mostly to businesses
o Hospitals, Food Service, etc…
• Moved to individual consumer market in 1997
• Presence in China is mostly in Business Market
o Larger Purell sizes used
24. PRODUCT
• Selected per the health needs of the Chinese people
o Improved sanitation - use of any of the following facilities: flush or pour-flush to a piped sewer
system, septic tank or pit latrine; ventilated improved pit (VIP) latrine; pit latrine with slab; or a
composting toilet.
urban: 58% of population
rural: 52% of population
total: 55% of population
o Unimproved sanitation - use of any of the following facilities: flush or pour-flush not piped to a
sewer system, septic tank or pit latrine; pit latrine without a slab or open pit; bucket; hanging toilet
or hanging latrine; shared facilities of any type; no facilities; or bush or field.
urban: 42% of population
rural: 48% of population
total: 45% of population (2008)
• Goal:
o Meet the needs to prevent the spread of germs to
promote a healthier lifestyle
25. PRODUCT (cont.)
• Products Key Features and Necessary Modifications
o Kills 99.99% germs
o Ingredients/chemicals will remain the same. No need to
translate the name "Purell"
no good way to make translation
any translation means nothing in Chinese language
change in basic product information into Chinese
o Brand Name will remain intact
Many businesses already use Purell
(We are marketing a small personal product)
26. Target Market
• Chinese urbanites living above the poverty line
• Health Conscious individuals as well as their
families
• Men and women above the age of 20
27. Target Market Size
Total for introductory period (first 5-8 years)
Population of top 4 Cities Class % Target Market
53,561,200 81.40% 43,598,816
Total for China
Population of China Class % Target Market
1,338,299,500 63.7% 852,496,782
28. Marketing Objectives
• Year 1
o Gain 5% market Share and 20% Market Awareness in Shanghai
• Year 2
o Expand to Beijing market
o Increase market share and awareness in both markets
• Year 3
o Expand into two additional markets
o Do a complete analysis of further expansion
29. Market Share
• Year 1 - 5%
• Year 2 - 7%
• Year 3 - 10%
• Year 4 - 15%
• Year 5 - 23%
Yea Tgt Mkt Mkt Share Mkt Share % (weighted)
1 18,722,000 936,100 5.00
2 34,676,400 2,108,260 6.08
3 53,561,200 3,933,248 7.34
4 53,561,200 5,725,676 10.69
5 53,561,200 9,864,052 18.42
Year 1 -Shanghai
Year 2 - Beijing and Shanghai
Years 3, 4, and 5 - Beijing, Shanghai, Shenzhen and Guangzhou
31. Low-End Forecast
Assumptions
• Market Share is 1/3 of expected
• Purchases per year are down 1 bottle
• GS&A Remains constant
• all figures in USD
32. High End Forecast
Assumptions
• Market Share is 25% higher than expected
• Avg Purchases is 1 bottle higher than expected
• GS&A Remains Constant
• all figures in USD
33. Positioning Strategy
• Affordable to most Chinese citizens
• Necessity for healthy living and public safety
• Superior to other hand sanitizing options
o Washing, sanitation stations, etc
• Superior to similar products
o Kills 99.9% of Germs
34. Major Competitors
• Direct Competitors
o CKB Industries, Ningbo Jianbei, Zhejiang Changdi Medical Co
All offer home and public products, but no pocket size version
• Broad Competitor
o Public wash and sanitation stations
35. DISTRIBUTION
• Manufacturing Plant: Philippines
o China in year 2 on
• 3PL Intermodal Transportation to Shanghai
o Port near mouth of Yangtze River
• Distribution Center: North-West Shanghai to allow for growth
along coast in years 2-5
o Additional DC's to help cover such land mass
36. Retailers
• Big Box Retailer
o Wal-Mart (Supercenter)
o Metro
• Local Retailers
o Nong Gong Shang
o Lotus Supermarkets
• Gas stations/convenience stores
37. Price
• Marginal Cost Method
o Price is set in relation to the variable costs of production
o Do not consider:
Domestic overhead
Research & Development
Marketing
Plants
o Ability to leverage costs in future
o Selling Price of 6.64 yuan ($1.05)
o Distribution pricing - Delivered Duty Paid
38. Promotion Strategy
• Establish brand awareness
o High repetition advertisements
o Large ad reach with multiple media platforms
• Informative approach
o Benefits of using Purell
o High quality vs competition
o Customer sampling
39. Promotion Budget
• Total promotional expenses by year
Year Total Sales Promotion Budget
1 $ 3,931,620 $ 589,743
2 $ 8,854,692 $ 1,328,204
3 $ 16,519,642 $ 2,477,946
4 $ 24,047,839 $ 3,607,176
5 $ 41,429,018 $ 6,214,353
40. Media Mix
• Print-newspapers and posters
• Internet-Google (China),news sites
• Television-providential and national
• Radio
• Street vendors
