Opportunities - Chinese Child Market


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Opportunities - Chinese Child Market

  1. 1. London Metropolitan University Course: International Marketing Referees: Marina Lindl International Marketing in China
  2. 2. C A S E <ul><li>A recent survey in China of 4000 urban children aged 7-12 showed: </li></ul><ul><li>90 % wanted to be more intelligent </li></ul><ul><li>81.3 % dreamed of international travel </li></ul><ul><li>61 % wanted space travel </li></ul><ul><li>60.2 % wanted to be more beautiful </li></ul><ul><li>MARKET OPPORTUNITIES FOR WESTERN COMPANIES THAT TARGET CHINA’S CHILD POPULATION? </li></ul><ul><li>Source: Module Booklet International Marketing 2009 Autumn Semester </li></ul>
  3. 3. <ul><li>I. Social Cultural Environment </li></ul><ul><li>II. Target Group </li></ul><ul><li>II. Country Brief </li></ul><ul><li>Cultural Environment </li></ul><ul><li>IV. Opportunities </li></ul><ul><li>Conclusion </li></ul>A G E N D A
  4. 4. <ul><li>S O C I A L C U L T U R A L: </li></ul><ul><li>Culture is the sum of total of the learned behaviour of a group of people that </li></ul><ul><li>are generally considered to be the tradition of that people and are transmitted </li></ul><ul><li>from generation to generation. Culture refers to the cumulative deposit of </li></ul><ul><li>knowledge, experience, beliefs, values, attitudes, meanings, hierarchies, </li></ul><ul><li>religion, notions of time, roles, spatial relations, concepts of the universe, and </li></ul><ul><li>material objects and possessions acquired by a group of people in the course </li></ul><ul><li>of generations through individual and group striving.(Hofstede, G. 1997) </li></ul>COUNTRY BRIEF CULTURAL ENVIRONMENT OPPORTUNITIES SOCIAL CULTURAL TARGET GROUP
  5. 5. C H I N E S E C U L T U R E : <ul><li>GUANXI: </li></ul><ul><li>In literal terms, this central concept in Chinese culture means ‘relationships’ or ‘connections’. </li></ul><ul><li>CONFUCIANISM : </li></ul><ul><li>Emphasis is placed on the concept of relationships and the elements of </li></ul><ul><li>responsibility and obligation. This Chinese philosophy remains a vital cultural factor in the development of Chinese society and is still effective in Chinese business culture today in the preservation of surface harmony and collective good. </li></ul><ul><li>Source: Wellings (2007) </li></ul><ul><li>FAMILY VALUE: </li></ul><ul><li>The family remains as a very important centre of every Chinese. Moreover the family is always taken into account when a decision is made. </li></ul>COUNTRY BRIEF CULTURAL ENVIRONMENT OPPORTUNITIES SOCIAL CULTURAL TARGET GROUP
  6. 6. <ul><li>CHILDREN AGED BETWEEN 7-12 LIVING IN AN URBAN AREAS : </li></ul><ul><li>SPENDING POWER </li></ul><ul><ul><li>average pocket money of a 12 year child: 21.1 Yuan = £ 1.88 per week </li></ul></ul><ul><li>PESTER POWER </li></ul><ul><ul><li>Def.: “Children's ability to make their parents buy something or do something for them by continual asking until the parents agree to do it” Source: AllWords.COM (2009) </li></ul></ul><ul><li>CHANGE AGENTS </li></ul><ul><ul><li>children are the first one to try new products </li></ul></ul><ul><li>ACCESS to better healthcare, education, a wider choice of careers aspire to than their parents </li></ul><ul><li>However, they have MORE PRESSURE due to the fact that they are the “only child” </li></ul><ul><li>Source: MarketResearch.com (2007), Kotabe/Helsen (2004), McNeal /Yeh (2003) </li></ul><ul><li>Source: Kotabe/ Helsen (2004) Global Marketing Management </li></ul>COUNTRY BRIEF CULTURAL ENVIRONMENT OPPORTUNITIES SOCIAL CULTURAL TARGET GROUP
  7. 7. C O N S U M E R M A R K E T : - World largest population with over 1.3 billion people Source: Globalegde.com (2009) - In 2006, approx. 312 million Chinese under the age of 15 Source: MarketResearch.com (2007) - Fast growing economy - Growing middle class Source: Uno Wider (2006) COUNTRY BRIEF CULTURAL ENVIRONMENT OPPORTUNITIES SOCIAL CULTURAL TARGET GROUP
  8. 8. <ul><li>I N F R A S T R U C T U R E : </li></ul><ul><li>In 2008 a £354bn stimulus plan involving spending on infrastructure </li></ul><ul><li>Source: BBC News online (2008) </li></ul><ul><li>B A R R I E R S F O R I N T E R N A T I O N A L T R A D E : </li></ul><ul><li>Corruption, protectionism and red tape </li></ul><ul><li>Example: Government controls the media, therefore also controls advertising </li></ul><ul><li> rates. Therefore the cost of reaching consumers is higher than in </li></ul><ul><li> Western Countries Source: Economist.com (2009) </li></ul><ul><li>CHINA CAN BE CATEGORIZED AS AN EMERGING MARKET: </li></ul><ul><li>Source (Waldhauser 2007) </li></ul><ul><li>- According to Russel/Miller (1998) there are following advantages available to a company: reduced effects of market saturation </li></ul>COUNTRY BRIEF CULTURAL ENVIRONMENT OPPORTUNITIES SOCIAL CULTURAL TARGET GROUP
  10. 10. From “Geert Hofstede Cultural Dimensions,” by G. Hofstede, 2006, Copyright 1967-2003 by Geert Hofstede. HOFSTEDE’S 4+1 DIMENSIONS for Analyse of China’s Culture: COUNTRY BRIEF CULTURAL ENVIRONMENT OPPORTUNITIES SOCIAL CULTURAL TARGET GROUP INDEX WORLD AVARAGE CHINA ANALAYZE Power distance (PDI) 55 80 (high) Authority play an important role , consumer will follow the adaption behavior of their leaders and will adopt products by their superiors Individualism (IDV) 24 15 (low) Collectivist society, emphasize on Qualities such as loyalty, interdependence, conflict avoidance and identification with the group Decision will be made in consensus with the group, Network Marketing is important, Group consensus and conformity to family preference rather than to individual choice Masculinity (MAS) 50 55 (high) Statues, Success, Money, achievement values are prevailed, demonstrating achievement is by having the latest and most novel product, hoping that new products bring success and ultimately higher status in society Uncertainty Avoidance (UAI) 64 40 (low) Chinese People are innovative, entrepreneurial , easygoing & risk taking , responsive in coping with future changes and new product Long-Term Orientation (LTO) 45 118 (LTO) Tend to have values that centre around future thrifty , perseverance & Persistence, Ordering relationships by status and observing this order,
  11. 11. <ul><li>HALL’S LOW AND HIGH CONTEXT Theory for Analyse of China’s Culture: </li></ul><ul><li>Communication is Implicit, indirect </li></ul><ul><li>Business and work habit is Relationship oriented, rewards based on seniority </li></ul><ul><li>Loyalty and responsibility, Group conformity, harmony </li></ul><ul><li>Hierarchical, respect for authority, gender roles </li></ul><ul><li>Logical, sequential, Problem Solving </li></ul><ul><li>Source: de Mooij (2005), Hollensen (2004) </li></ul>China is a High Context Society COUNTRY BRIEF CULTURAL ENVIRONMENT OPPORTUNITIES SOCIAL CULTURAL TARGET GROUP
  12. 12. <ul><li>LIMITATIONS OF HOFSTEDE AND HALL’S THEORIES: </li></ul><ul><li>China is a huge country in size and population and differs in his traditions and </li></ul><ul><li>values from region to region. This theory is not able to indicate regional </li></ul><ul><li>differences. </li></ul><ul><li>The culture of country changes over time, either by internal or external influences </li></ul><ul><li>and i t is not possible to capture changing trends by these theories. </li></ul><ul><li>Five Dimension and scores were not determined in a consumption context and </li></ul><ul><li>not able to make meaningful predictions about consumption pattern </li></ul><ul><li>Hofstede collected data through questionnaires, which have their own limitations </li></ul><ul><li>and accuracy. </li></ul>COUNTRY BRIEF CULTURAL ENVIRONMENT OPPORTUNITIES SOCIAL CULTURAL TARGET GROUP
  13. 13. <ul><li>C H I N A A N D E D U C A T I O N </li></ul><ul><li>Education in china is a very large-scale enterprise </li></ul><ul><li>The world’s largest school system with 1.1 million schools,13 million </li></ul><ul><li>teachers and 204 million full time students </li></ul><ul><li>Of the 204 million students, 146 million are in grade 1-5 </li></ul><ul><li>School and the quality of instruction vary enormously, though the overall </li></ul><ul><li>quality is rather low, some students receive an excellent education </li></ul><ul><li>China has approximately 900,000 primary schools </li></ul><ul><li>Children enter the first grade at age six and one-half must attend school </li></ul><ul><li>for five years(Thomas,F,1982) </li></ul>COUNTRY BRIEF CULTURAL ENVIRONMENT OPPORTUNITIES SOCIAL CULTURAL TARGET GROUP
  14. 14. <ul><li>C H I N A A N D E D U C A T I O N </li></ul><ul><li>Since 1980’s ,with peoples living standard improved remarkably and the </li></ul><ul><li>number of families with only one child increasing thanks to the </li></ul><ul><li>implementation of a family planning policy, young parents in china have been </li></ul><ul><li>paying ever greater attention to the early education of their </li></ul><ul><li>children.(Xihaohuan, 2002) </li></ul><ul><li>The system of education in China is demanding and often begins at a </li></ul><ul><li>young age. Chinese culture is a collectivist one and often depends upon informal chains of communication. </li></ul><ul><li>Levy (2003) explains that learning in China takes place in classrooms. </li></ul><ul><li>Even where technology such as television or software is used it tends to be </li></ul><ul><li>heavily instructor lead. </li></ul>COUNTRY BRIEF CULTURAL ENVIRONMENT OPPORTUNITIES SOCIAL CULTURAL TARGET GROUP
  15. 15. <ul><li>R I S I N G O P P O R T U N I T Y </li></ul><ul><li>Great potential for income generation for Western organisations by providing </li></ul><ul><li>e-Learning for China. </li></ul><ul><li>The Chinese manufacturing economy is booming and education is a highly </li></ul><ul><li>regarded commodity. </li></ul><ul><li>There is a shortage of quality education provision in China, and a shortage of </li></ul><ul><li>trained teachers. </li></ul><ul><li>It is anticipated that Western universities and training companies are already </li></ul><ul><li>in the process of creating such services.(Friesner T.) </li></ul>COUNTRY BRIEF CULTURAL ENVIRONMENT OPPORTUNITIES SOCIAL CULTURAL TARGET GROUP
  16. 16. <ul><li>Growing economy – growing customer base – growing spending power </li></ul><ul><li>This is the opportunity for Western companies to expand their business </li></ul><ul><li>However, they have to consider the Cultural dimensions of China </li></ul><ul><li>before introducing new services or product to Chinese customers </li></ul>C O N C L U S I O N
  17. 17. R E F E R E N C E S <ul><li>Adler, N.J. and Graham, J.L. (1989) Cross cultural interaction: The international comparison fallacy ? Journal of International Business Studies Vol 20, pp 505-537 </li></ul><ul><li>Barker, S. and Hartel C.E.J. (2004) Intercultural service encounters: An exploratory study of customer experiences Cross Cultural Management Vol 11 (1) pp. 3-14. </li></ul><ul><li>BBC NEWS online (2009) China economic growth accelerates . [online] Available at http://news.bbc.co.uk/1/hi/business/8319706.stm (28.10.2009) </li></ul><ul><li>BBC NEWS online (2009) Country profile: China [online] Available at http://news.bbc.co.uk/1/hi/world/asia-pacific/country_profiles/1287798.stm#leaders (28.10.2009) </li></ul><ul><li>Figar, T. (1982) An introduction to education in the people’s republic of China and US. Reed, revised edition. </li></ul><ul><li>Friesner, T. A Cultural Analysis of e-Learning for China [online] Available at h ttp://www.ejel.org/volume-2/vol2-issue1/issue1-art24.htm (01.11.2009) </li></ul><ul><li>Geddie, M.W., DeFranco, A.L. and Geddie, M.F. (2005) A comparison of relationship marketing and Guanxi: its implications for the hospitality industry. International Journal of Contemporary Hospitality Management Vol 17 (7), pp 614-632. </li></ul><ul><li>Globaledge (2009) Country profile China [online] Available at http://globaledge.msu.edu/countries/China/ (2710.2009) </li></ul><ul><li>Graff, R. (2009) The Chinese Outbound Tourism Industry [online] Available at: http://www.bfchina.de/index.php?option=com_content&task=view&id=209&Itemid=53&contentid=271 (01.11.2009) </li></ul><ul><li>Harris, P.R. (2004) Success in the European Union depends upon culture and business . European Business Review vol 16 (6) pp. 556-563 </li></ul><ul><li>Hofstede, G. and Jan Hofstede (2005) Cultures and organizations: software of the mind , 2 nd ed. McGraw-Hill, NY London </li></ul><ul><li>Hofstede, G. (1980) Culture’s consequences: International differences in work-related values. Newbury Park, CA: Sage </li></ul>
  18. 18. R E F E R E N C E S <ul><li>Knowledge@Wharton The New Global Middle Class: Potentially Profitable -- but Also Unpredictable [online] Available at http://knowledge.wharton.upenn.edu/article.cfm?articleid=2011 (28.10.2009) </li></ul><ul><li>Kotabe, M. and Kristiaan Hollensen (2004) Global marketing management 3th ed , John Wiley and Sons </li></ul><ul><li>Llyod’s of London, Market Intelligence (2009) China Watch [online] Available at </li></ul><ul><li>http://www.lloyds.com/Lloyds_Worldwide/WMID/WMID.htm#regional_watch?cid=minipromregwatch2201&rfr=117 (27.10.2009) </li></ul><ul><li>MarketResearch.com (2007) Kids in China 2007: Children As Consumers & Lifestyle Trends [online] Available at http://www.marketresearch.com/product/display.asp?productid=1552677 (27.10.2009) </li></ul><ul><li>McNeal, J.U. and Chyon-Hwa Yeh (1996) Consumer Behaviour Patterns among Chinese Children. Asia Pacific Journal of Marketing and Logistics Year:1996 Volume: 8 Issue: 1Page: 3 - 20 </li></ul><ul><li>Miller, R. (1998) Newly emerging markets. Quorom Books, Westport </li></ul><ul><li>Mooij de, M. (2005) Global Marketing and Advertising: understanding cultural paradoxes.Thousand Oaks, California </li></ul><ul><li>PATA, How the Travel Trade Sees the Market of Mainland China, presented by Peter de Jong, CEO, at the Tourism Forum 2007, Hong Kong, June 15, 2007 (pata.org/patasite/fileadmin/docs/speeches_presentations/2007/070615_de_Jong_Tourism_Forum_HKG.pdf). </li></ul><ul><li>Sandhusen R. (2002) Marketing Barron’s Educational Series. Inc 3 rd edition </li></ul><ul><li>Roll, M. (2006) Asian Brand Strategy: How Asia Builds Strong Brands , Cromwell Press, Trowbridge </li></ul><ul><li>UNU-WIDER (2006) The World Distribution of Household Wealth: 5 December 2006 [online] Available at http://sup.kathimerini.gr/xtra/media/files/meletes/estate/unu220509.pdf 928.10.2009 ) </li></ul><ul><li>Waldhauser, T. (2007) Business Development in Emerging Markets. Deutscher Universitaetsverlag, Wiesbaden </li></ul><ul><li>Chinese Culture. Available at http://www.simple-chinese.com/chinese-culture/index.html (Accessed on 26 October 2009) </li></ul><ul><li>Hofstede, G. (1997). Cultures and Organizations: Software of the mind. New York: McGraw Hill, Available at http://www.tamu.edu/classes/cosc/choudhury/culture.html (Accessed on 27th October 2009) </li></ul>