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China Marketing Proposal

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International Marketing Class-Marketing product to China

  • Hey guys, I am very excited about your proposal. In fact, I have exactly the same idea about selling hand sanitizer in China mainland. If any of you are still interested in your ideas, please contact. My name is Lufang and my email address is Lufang_liu@yahoo.com.
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China Marketing Proposal

  1. 1. Group 5 CHINA 中國 Blia Vue Kory BestulPresented By: Scott Briggs Andrew Singer Curtis Neubauer Zachary Schneider
  2. 2. Purell - A product by
  3. 3. Chinas CultureFood Presented: o Green Tea o Baozi - Steamed bun with pork or chicken fillingsA Brief Look Into ChineseCulture: o Travel Guide o A Guide to Chinas Culture
  4. 4. ARTICLES
  5. 5. "Some International Ads are preceivedas sexist due to different culturalnorms"• 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. 6. "Old rules of Marketing dont apply inChina"• Richard Lee, CMO of PepsiCo o Chinese youths and the internet o Local competitors are most worry-some competitors  "Theyll 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. 7. "Picking brand names in China is abusiness 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. 8. "Chinas One-Child Policy is CripplingIndustry"• 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. 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 workforces very important
  10. 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. 11. "China could game the U.S. inintellectual 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. 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. 13. "How To Do Business in China WithoutSpeaking 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. 14. "Why Americans do not know muchabout 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. 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. 16. "Can P&G make money in placeswhere people earn $2 a day?"• Knowing your target market• Practical vs Cost• Product adaptation
  17. 17. "Chinas Economy at an InflectionPoint"• Growth slow down• Aging work force• Foreign investment• Competitive advantage
  18. 18. "China Signals Credit Easing asOctober Loans Jump to $93 Billion"• World economic concerns• Loosened credit quotas• Economic slowdown• Inflation rates
  19. 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. 20. "Chinas 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
  21. 21. Marketing Plan
  22. 22. Mission Statement "To ensure the health and well-being of our consumersby offering an affordable and convenient way to improve their personal hygiene."
  23. 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. 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. 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. 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. 27. Target Market SizeTotal for introductory period (first 5-8 years) Population of top 4 Cities Class % Target Market 53,561,200 81.40% 43,598,816Total for China Population of China Class % Target Market 1,338,299,500 63.7% 852,496,782
  28. 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. 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
  30. 30. 5-Year Profit forecast (normal) *all figures in USD (6.3328 yuan exchange rate)
  31. 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. 32. High End ForecastAssumptions• Market Share is 25% higher than expected• Avg Purchases is 1 bottle higher than expected• GS&A Remains Constant• all figures in USD
  33. 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. 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. 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 DCs to help cover such land mass
  36. 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. 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. 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. 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. 40. Media Mix• Print-newspapers and posters• Internet-Google (China),news sites• Television-providential and national• Radio• Street vendors
  41. 41. Commercial
  42. 42. Questions or comments?

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