This document provides an analysis of the international marketing environment in China. It discusses China's large population and diverse cultural practices. The economic reforms initiated in 1978 led to growth. There are still challenges around imbalances and resource shortages. China maintains friendly foreign relations while asserting territorial integrity. The political system is a centralized unitary government led by the Communist Party. Distribution and logistics systems are improving but e-commerce infrastructure remains immature. Popular global brands use strategies tailored for the Chinese market like localized products and experiential promotions. Leading internet companies like Baidu and Tencent dominate through free services and personalization. Examples of successful Chinese and foreign companies engaging in joint ventures are also provided.

1. International
Marketing
Analysis of China
Group Members-
Jetal Gandhi
Ankit Pathak
Shahbaaz Ahmed
Sundram Sinha
Aanchal

2. Introduction
• Largest business market in the planet.
• 3rd Largest country in the world (Land Area- 9.56 mn sq.km)
• Populataion sparsely inhabited in sections of Northern,
Western Sections and Tibet.
• Population growing at the rate of 0.9% per year.
• Immense diversity, variety, Complexity & Competitive intensity.
• Dominant race- Hans (91.9% of population)
• 55 ethnic minorities.
• Official standard language- Mandarin
• Major religious groups- Daoist & Buddhists.

5. Cultural Environment
• Norms & Aesthetics- ( Chopsticks for eating, Lucky colour-
Red)
• Customs- (Gifts- Coffee table books, ties, pens)
• Languages- (Coca cola renamed as “Ko-kou-ko-Le” which
means “Happiness in mouth”)
• Religion- (Interior decoration according to Fen Shui)
• Diffused Culture
• Ascription Culture
• High Context Culture
• Relationship Focussed culture
• Formal Culture
• Monochronic Culture

6. Economic Policies & Growth
• Economic reforms initiated in 1978 with agricultural reforms
• Aims at minimum boom burst cycle, controlling inflation &
maintaining growth.
• 1981- Industrial products were liberalized & Pvt. Enterprises
were allowed to setup factories in rural areas
• 1984- Formation of Town Village Enterprise (TVE) to absorb
surplus rural labor
• 2004- Wholly owned subsidiaries were allowed
• SEZ to encourage FDI (Shenzhen, Zhuhai, Shantou, Xiamen)

7. Challenges in Economy
• Highest savings rate (40%) channelized to fund SOE via state
owned banks.
• Imbalance with rural agricultural sector due to boom in urban &
industrialised sector
• Rising power shortages, food imports & Income imbalances

8. International Business Relations
• Power Center of Asia who believes in multi polar world.
• Foreign policy dominated by territorial & political integrity
(Cause of Taiwan issue with US)
• Strong military force to avoid domination by US
• Need for Oil is driving relations with Vietnam, Africa, & Middle
East.
• Friendly relations with alternate power centers (India, Japan,
Australia)

9. Political & Legal Environment
• Centralized Unitary Govt. (Not federal)
• Single party with 1 legislative house.
• CCP- Communist party controls law making and parliament.
• All national legislative power is vested with parliament.
• President is the head of CCP, national legislature & Army.

10. Distribution & Logistics
• Traditional Distribution System- (3 tier)-
1. Distributors located in Beijing, Shanghai, Tianjin, and
Guangzhou
2. Wholesalers in the provincial capitals and medium-sized cities
3. Wholesalers in smaller cities and towns
• Current Distribution System-
1. Cluster Model (Eg.- OMRON, Mc Donalds)
2. Non-Chinese 3PL Model (Eg.- UPS, Royal Dutch Shell)
3. Localization Model

11. Distribution & Logistics
• a. Wholly owned Supply chain- (Eg.- Intel, Nokia, Siemens)
• b. Local Outsourcing (Eg.- Sinotrans & COSCO, Motorola)
• Logistics Issues-
1. Booming Economy- (High demand for improvement in
quality & services)
2. Effect of WTO Entrance - (Ease of restrictions, Greater
market access )
3. Advent of E- Commerce - (Immature infrastructure & less
confidence among people for transactions)

12. Distribution & Logistics

13. Promotional Strategies used
• Good products at wholesale prices
• Seasonal promotional products- Varsatile in nature (Umbrellas)
• Elegant & bold look to attract more visitors
• Types-
Outdoor items
Desk & Office items
Eco friendly items
Travel items

14. Overview of Brands in Chinese Markets
• World’s largest luxury consumer market by 2015
• Online shopping market- 18 million Yuan (2.86 trillion $ USD)
• Consumer class represents- 19 % of national population
• Urban household income will double between 2010 & 2020
• Emergence of ‘Buy Now Mentality’
• People travelling overseas to purchase luxury goods
• High energy brand experiences targeted at young consumers
• Personal One to One experiences for Ultra Premium market
• 40% Internet users shop online in tier 1 cities.

16. • Largest internet search engine.
• Offers instant messaging, online music, blogs, gaming etc.
• Global Strategies-
• Target – Younger and higher educated
• Focus on sales & marketing ( Ability to retain customers)
• Core competencies- Software & Brand value
• Superior understanding of Chinese market
• Considerable investor confidence
• Diversification by expanding its mobile internet operations

17. • Most frequently-used internet service portal. ( 400m Chinese
using its WeChat messaging app)
• Its first mobile game, downloaded by 20m people in the first
three days.
• Signed up Argentinian football superstar Lionel Messi to front a
new campaign for WeChat.
• Global Strategies-
1. Free services for users to join the community. (QQ IM)
2. Personalization & value added services ( e- cards, magazines)
3. Emphasis on Interactivity (QQ.com Forums, Virtual currencies)

18. Popular Global Brands in China
• KFC- (owned by Yum Brands) opted to expand by wholly owned outlets.
• Walmart-
1. Slow growth in 1996-2004 (underdeveloped infrastructure & less
adaptability to Chinese markets)
2. Fast Growth after 2004, due to decentralised management & open Govt.
policies
• Starbucks-
1. Ideal 3rd place serving localized foods
2. Lower prices in 2nd tier cities
3. Maintain image of coffee culture (Interactive marketing events)
4. More extensive training
• Porsche- Luxury brand catering to casual motoring fan to hardcore

20. • Chinese MNC computer technology company
headquartered in Beijing, China
• Current CEO- Yang Yuanqing
Marketing Strategies in China- Market Entry Strategies in India-
1. Relationship Model
2. Transactional Model
1. Relationship & Transactional Model
2. China Based Supply Chain Model
3. Picked entry-level SME and mainstream
products from the China stable and launched
them in India.
4. Won the trust of channel partners & increase
exclusive stores

21. • MNC specialized in the production of home appliances
and consumer electronics.
• Founded in 1984 by Zhang Ruimin
Marketing Strategies in China- Market Entry Strategies in India-
1. Known for high quality products &
brand reputation
2. Very good distribution network, with
Haier Logistics
3. Better after-sales service than
competitors
4. Cheaper staff than competitors
Joint Venture with multinational brands
(1990s)
1. In 1999 Joint Venture with Indian
appliance firm (Fedder Lloye Corp.)
2. Established refrigerator and R&D Center
3. 2004 alliance with Whirlpool and Voltas to
produce refrigerator and Air Conditioner

22. Examples of Joint Ventures