Strategic Marketing in China

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Today's lesson was from Professor Jeonwn Chiang and focused on strategic marketing. Interestingly enough he earned his Ph.D. at the University of Minnesota. He and found that we had a lot in common to talk about living in the Minneapolis area. In fact his brother-in-law used to work at the same firm that I work for. Such a small world....

What was so interesting about his lecture was that the basic tenets of marekting (according to him) apply in China: 3 C's, 4 P's etc. What was interesting was his discussion of consumer goods consumption in China and what a voracious appetite the Chinese are developing for these goods as the wealth of the population explodes. Furthermore, affluent Chinese consumers are definitely brand conscious but at the moment are not brand loyal. Therefore, the implications for a western company entering the Chinese market with an "unknown" brand is that brand building and generating not just awareness, but affinity are extremely important. There is also a huge emerging middle class in China. By 2025, the sum of the middle class hosueholds in China will annually spend at a level equal to the annual consumption of Japan today. Additionally, the Chinese "one child" policy is creating a whole new class of consumers that will start to emerge in the next 10 - 15 years.

The challenge for MNC's entering China will be how to segment and target markets that are constantly changing as the population grows and consumers move up from one class level to a more affluent one. Additionally, there are 800 million people in China that live in pverty today. As the wealth effect moves across all strata of Chinese society will the emergin middle class gravitate towards foreign brands or an emergence of Chinese brands? The future is unclear.

We had a Chinese lesson in the early afternoon and had the remainder of the day free. We but our negotiating skills to work in the Silk Market, which was like nothing we had ever enountered. One of my classmates is originally from Beijing and she served as our chief negotiator as we bargained for all sorts of goods.

We decided we needed some western food today and found pizza for lunch and for dinner (gasp) Outback Steakhouse. Surprisingly the experience at Outback nearly replicated the dinner I had an Outback on the PCH a few weeks earlier. It turns out that mediocre food can be exported anywhere around the world :-)

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