News & Reports News Year 2010 July , 2010 5th of July 2010

5th of July 2010

Marketing strategies for growth in China

English.news.cn   2010-07-05 08:50:12
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BEIJING, July 5 (Xinhaunet) -- As China's economy recovers from the global downturn, the most recent retail sales figures show strong and steady growth over the last year. It's clear that higher incomes continue to fuel consumer thirst in China for a wide range of goods and services - from basics to luxury products.
Indeed, China's continued role as a valued member of the international community and a driver of global economic growth means the Chinese consumer is an increasingly important target for domestic and international brands looking to tap into a vast and - in many parts of the country - untapped, market.
Marketing has an important role to play in the success of these brands and in the development of the Chinese market. It will be an economic accelerant, informing consumers about new products, facilitating the market penetration of many brands and sparking innovation as consumers look for next-generation goods.
Marketing will also play a role as a social accelerant, embedding values of trust and reliability into the market with every successful transaction between seller and buyer.
With each brand promise met, the social contract between brands and consumers is strengthened.
In an increasingly crowded market, however, brands seeking to reach Chinese consumers will need sophisticated approaches to get results.
In September, Harvard Business School and the School of Management at Fudan University will offer a program in Shanghai designed to provide senior executives, entrepreneurs, and marketing professionals who are responsible for developing and implementing marketing strategies a new perspective on analyzing and assessing marketing activities that bolster organizational performance.
Whether developing strategies for Chinese domestic companies, Chinese companies looking to expand regionally and globally, or multinationals seeking to penetrate further into Chinese and other Asian markets, there are five areas of focus that are vital to long-term marketing and brand success.
Clearly identify your target customers.
Successful marketing recognizes the very diverse needs and values of various customer segments.
In China, for instance, consumer choices vary greatly by age, income and where they live.
By taking the time to carefully and strategically evaluate and select target markets, brands can identify the drivers of consumer choices among groups most likely to respond to their products.
Consider multi-channel campaigns.
While traditional television and print outlets remain important marketing channels for companies seeking to build their brands in China, the expansion of online advertising and social media forums is providing consumers with more brand information than ever before.
To reach customer segments, marketers in China should follow consumer eyeballs, matching channels and media with where target consumers are spending their time.
Think value, as well as price.
Compared to other Asian economies, China's economy is fiercely competitive and value-conscious.
Price matters, and Chinese consumers' loyalties are not embedded.
But consumers are open to strong value-propositions from competitors seeking to peel away customers.
So it's crucial that marketers consider pricing strategies that can both generate profits, but also deliver high-value.
Develop new distribution methods.
China presents unique distribution channels for marketers, particularly outside the largest cities, where there are more local vendors and fewer Western-style retail outlets.
Whether through collaboration with local competitors or smaller-scale distribution, developing distribution channels that meet the reality on the ground will be central to success.
Luxury branding.
As in many markets across Asia, Chinese consumers are increasingly responsive to luxury brands.
While Western luxury brands such as Hermes and Louis Vuitton have already made inroads in China, there remains room for Chinese brands that can meet the needs of a more discerning Chinese consumer.
Identifying and delivering on the attributes that will see Chinese consumers accept the luxury status of a brand will be a key challenge for marketers moving forward.
The development of marketing as a core corporate function and the implementation of informed, smart marketing insights in the Chinese marketplace are not only important to companies seeking to succeed in China, they can also play a role in the development of China's economy.
Together, HBS and Fudan want to ensure that the development of those marketing skills is grounded in practice, recognizes the unique circumstances of operating in the complex Chinese context, and can be sustainable over time, helping companies and markets grow for the long-term.
John Quelch is the Lincoln Filene Professor of Business Administration at Harvard Business School.
(Source: China Daily)




China's yuan central parity rate weakens agaist USD

English.news.cn   2010-07-05 10:50:02
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BEIJING, July 5 (Xinhua) -- The central parity of the Renminbi(RMB), or China's currency yuan, weakened to 6.7733 per U.S. dollar on Monday from Friday's 6.7720, according to the data released by the China Foreign Exchange Trading System.
Last Friday, the central parity of RMB against the U.S. dollar rose to 6.7720, the strongest since China announced to unpeg the yuan from the U.S. dollar in July 2005.
China's central bank announced on June 19 that it would further the reform of the formation mechanism of the yuan exchange rate to improve its flexibility.
Special Report: Global Financial Crisis

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Wen says China faces economic ‘dilemmas’

BEIJING (The WSJ) —Chinese Premier Wen Jiabao said Sunday that the country’s economic policies “face increasing dilemmas” as the impact of the global financial crisis is more serious than expected, but he reiterated that China won’t hold back its steps to restructure the economy for long-term growth.
The remarks were made after two purchasing managers’ indexes issued last week showed China’s manufacturing economy slowed in June and China on Friday revised upward its gross domestic product growth for 2009. The GDP revision means China’s year-to-year growth will have a higher comparison base for the second and following quarters, so the growth may be lower than economists’ expectations.

Despite the widely expected slowdown, Mr. Wen reiterated that China will keep continuity and stability of its economic policies while increasing their flexibility, to “solve current significant and urgent problems” while “laying foundations for stable and relatively fast economic growth of 2011 and in a longer term,” when speaking at a economic forum held Saturday in the central Chinese city of Changsha, according to a statement posted on the central government’s website.

“China’s current economic situation is sound, but the domestic and global economic environment is extremely complicated,” Mr. Wen said. He reiterated that Beijing will try to maintain stable and relatively fast economic development while restructuring the economy and managing inflation expectations.

The statistics bureau on Friday revised upward economic growth for 2009 to 9.1% from 8.7%. The revision was due to higher contributions from secondary and tertiary industries. Secondary industries include the mining, manufacturing and power sectors, while tertiary industries cover services. Primary industries cover farming, forestry and fishing.

In 2008, China’s economy expanded 9.6%.

The bureau said China’s nominal GDP, evaluated at current market prices without adjustment for inflation, reached 34 trillion yuan($5.02 trillion) in 2009. At last year’s average exchange rate, China remained the world’s third-largest economy, behind Japan with a 2009 GDP of just over $5 trillion.

Fast-growing China still is expected to surpass Japan as the world’s second-largest national economy after the U.S.—in terms of annual output measured in U.S. dollars at market exchange rates—but it will likely have to wait until the end of 2010 to pass that milestone.

There are other ways of ranking economies that would produce different results: In terms of purchasing power parity, China has been the second-largest economy for a long time. And if the European Union is counted as a single economy, it is the world’s largest already, pushing the U.S. to second place.

China is due to release its second-quarter GDP data July 15. Some economists expected the growth had slowed to just over 10% from the first quarter’s 11.9% year-to-year growth due to Beijing’s tightening measures this year.

Beijing has this year gradually withdrawn stimulus policies adopted last year amid the global financial crisis. In particular, China decided last month to loosen the yuan’s peg to the dollar and allowed the currency to rise and adopted restrictive policies on the housing market that have been crimping sales since being put in place in mid-April.