How did CAV Warner Home  Entertainment  Co.  cope with DVD piracy in China?   BMAN20152  Susannah Jones, Sophie Smith, Dio...
THE PROBLEM?   95% in 2005 USD $2.7 billion loss per year
Why do DVD pirates in China do so well?  <ul><li>Low prices  </li></ul><ul><li>Quick release </li></ul><ul><li>Wide sales ...
What moves did Warner make to combat DVD piracy in China?   <ul><li>Flexible pricing strategy </li></ul>Original DVD 120RM...
FLEXIBLE PRICING STRATEGY...   BASIC VCD 10RMB SILVER DVD 20-30RMB GOLD DELUXE VERSION + Bonus features >30RMB
CUSTOMER VALUE HIERARCHY
What moves did Warner make to combat DVD piracy in China?   <ul><li>Flexible pricing strategy </li></ul><ul><li>Reducing t...
Similar moves made by Fox entertainment  http://articles.latimes.com/2006/nov/14/business/fi-news14
What moves did Warner make to combat DVD piracy in China?   <ul><li>Flexible pricing strategy </li></ul><ul><li>Reducing t...
SALES OUTLET http://www.slate.com/id/2115921/
<ul><li>Microsoft Windows faced similar difficulties in China concerning the distribution of  </li></ul><ul><li>pirated so...
However, a survey conducted on Chinese consumers found that 60% were hostile towards the new strategy. Consumers complaine...
THE FUTURE FOR PIRACY IN CHINA?  Although DVD piracy is still rapant in China, increasing moves are being made to protect ...
QUESTIONS?
REFERENCES Kotler, P., Keller, K. and Lu, T.H. (2009) Marketing Management in China, Singapore:  Prentice Hall, pp. 106-10...
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Business ppt

  1. 1. How did CAV Warner Home Entertainment Co. cope with DVD piracy in China? BMAN20152 Susannah Jones, Sophie Smith, Dionne Woodward
  2. 2. THE PROBLEM? 95% in 2005 USD $2.7 billion loss per year
  3. 3. Why do DVD pirates in China do so well? <ul><li>Low prices </li></ul><ul><li>Quick release </li></ul><ul><li>Wide sales network </li></ul><ul><li>Wide network of movie sources </li></ul>
  4. 4. What moves did Warner make to combat DVD piracy in China? <ul><li>Flexible pricing strategy </li></ul>Original DVD 120RMB VS. Pirate DVD 50RMB
  5. 5. FLEXIBLE PRICING STRATEGY... BASIC VCD 10RMB SILVER DVD 20-30RMB GOLD DELUXE VERSION + Bonus features >30RMB
  6. 6. CUSTOMER VALUE HIERARCHY
  7. 7. What moves did Warner make to combat DVD piracy in China? <ul><li>Flexible pricing strategy </li></ul><ul><li>Reducing time lag </li></ul>
  8. 8. Similar moves made by Fox entertainment http://articles.latimes.com/2006/nov/14/business/fi-news14
  9. 9. What moves did Warner make to combat DVD piracy in China? <ul><li>Flexible pricing strategy </li></ul><ul><li>Reducing time lag </li></ul><ul><li>Greater convenience </li></ul>
  10. 10. SALES OUTLET http://www.slate.com/id/2115921/
  11. 11. <ul><li>Microsoft Windows faced similar difficulties in China concerning the distribution of </li></ul><ul><li>pirated software </li></ul><ul><li>However, instead of directly targeting the pirates themselves (those that produced and distributed the pirate software), Microsoft decided to focus attention on consumers </li></ul><ul><li>In 2008, Microsoft introduced Genuine Advantage software to China, which identified pirate copies of Microsoft Windows and Office. After 60 minutes of use, a notification would pop-up in the corner of the screen and a black screen would appear. This would persist until a genuine version of the software was bought. </li></ul><ul><li>Rather than raising lawsuits, as Microsoft normally would in the West, the company tried to crack down on the problem by moral persuasion of consumers, rather than directly competiting with DVD pirates themselves </li></ul>
  12. 12. However, a survey conducted on Chinese consumers found that 60% were hostile towards the new strategy. Consumers complained that the problem was more deeprooted in the pricing strategy of Microsoft, and that setting the same prices as the West was unrealistica and unreasonable, considering the economic situation in China.
  13. 13. THE FUTURE FOR PIRACY IN CHINA? Although DVD piracy is still rapant in China, increasing moves are being made to protect intellectual property rights (IPR). e.g July 2006 – 100 Day Campaign Against Piracy launched, backed by 10 different government ministries and departments. It not only raised general awareness of the issue, but 58 million illegal publications were also seized during the 3 month campaign Reform of the legal system on IPR protection in China and strengthened cooperation with foreign organisations are also good signs for the future.
  14. 14. QUESTIONS?
  15. 15. REFERENCES Kotler, P., Keller, K. and Lu, T.H. (2009) Marketing Management in China, Singapore: Prentice Hall, pp. 106-108. http://english.peopledaily.com.cn/200703/29/eng20070329_362038.html http://www.china.org.cn/english/China/174728.htm http://english.peopledaily.com.cn/200610/25/eng20061025_314817.html http://english.peopledaily.com.cn/200703/20/eng20070320_359247.html http://english.peopledaily.com.cn/200611/27/eng20061127_325640.html http://english.peopledaily.com.cn/200703/29/eng20070329_362038.html http://www.wired.com/epicenter/2008/10/microsoft-peeve/ http://www.china.org.cn/china/national/2008-10/17/content_16630207.htm
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