China Marketing Proposal

Group 5 

CHINA中國

Blia VueKory BestulScott Briggs

Andrew SingerCurtis Neubauer

Zachary Schneider

Presented By:

Purell - A product by                       

China's Culture

    Food Presented: 

o Green Tea

o Baozi - Steamed bun with pork or chicken fillings

    A Brief Look Into Chinese    Culture: 

o Travel Guide

o A Guide to China's Culture

ARTICLES

"Some International Ads are preceived as sexist due to different cultural norms"  

• What works for one country, does not work for another

• Two marketing mistakeso cultural-specifico gender-specific

 • Different countries - Different laws

o cultural norms prevent ads from being seeno avoided by research or hiring experts

"Old rules of Marketing don't apply in China"

• Richard Lee, CMO of PepsiCoo Chinese youths and the interneto Local competitors are most worry-some competitors

"They'll 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!

"Picking brand names in China is a business itself"

• One must consider how the name is to be portrayed:o Foreign brand - translating the nameo Chinese brand - say things about the brand

• Brand name success depends on cultural differences and Chinese characters for wordso "Each character is a collection of drawings that can carry

meanings all on their own" (Wines, Michael)

"China's One-Child Policy is Crippling Industry"

• Shows the effect the One-Child policy is having on Chinese workforce

• Unskilled and young labor to fall by 27%, to 164 million by 2025o Losing over 62 million in the next 15 years

• Growing wages increasing the price of productso Leading to competitors like India and Mexico

"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 marketingo Cohesive and team oriented workforce's very important

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

"China could game the U.S. in intellectual 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

"Can China Produce A Luxury Brand?"

• 'Made in China' stigmatism

• Copyright and IP laws

• Southern Chinao Mass-produced low-cost center evolving into higher-end

manufacturing

• Show off status with brand nameo China must trust China firsto Will help propel into world market

"How To Do Business in China Without Speaking Chinese"

• Translator you can trusto Allows you to talk and wait for feedback

• Be patiento Break into discussion groupso Wait for them to finish

• Be confident in producto Know everything you can about your product and get

feedback after meeting

"Why Americans do not know much about Chinese brands"

• According to Xinhua Reporto Summarized 2010s top 500 Chinese enterprices

• Top 10o 7 of 10 were all or semi-owned by the Peoples Republic

of Chinao Limited foreign investment

"Six Keys to Profiting in China"

• Flexibilityo Trust experienced Chinese professionals

• Clarityo Paint a clear picture of the final outcome

• Patienceo Things just take longer

• Employee Developmento Highly focused on development of careers

• Relationshipso Long lasting relationships of respect and knowledge

• Experienceo Industry and culturally savvy

"Can P&G make money in places where people earn $2 a day?"

• Knowing your target market

 • Practical vs Cost 

  • Product adaptation

"China's Economy at an Inflection Point"

• Growth slow down • Aging work force

 • Foreign investment

 • Competitive advantage

"China Signals Credit Easing as October Loans Jump to $93 Billion"

• World economic concerns  • Loosened credit quotas 

 • Economic slowdown

 • Inflation rates

"Marketing to Rural China"

• Vast difference between urban and rural China

• Suggestions to market in rural Chinao Franchisingo Take advantage of Government subsidieso 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

"China's 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 whyo One reason could be Wal-Mart has substantially

surpassed some local companies in business

Marketing Plan

Mission Statement

"To ensure the health and well-being of our consumers by offering an affordable and convenient way to

improve their personal hygiene."

Product - Purell

• Invented by GOJO Company in 1988

• Was sold mostly to businesseso Hospitals, Food Service, etc…

• Moved to individual consumer market in 1997

• Presence in China is mostly in Business Market o Larger Purell sizes used

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 populationrural: 52% of populationtotal: 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 populationrural: 48% of populationtotal: 45% of population (2008)      

• Goal:o Meet the needs to prevent the spread of germs to

promote a healthier lifestyle

PRODUCT (cont.)

• Products Key Features and Necessary Modificationso Kills 99.99% germso 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)

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

Target Market Size

Population of top 4 Cities Class % Target Market53,561,200  81.40% 43,598,816

Population of China Class % Target Market1,338,299,500 63.7% 852,496,782

Total for introductory period (first 5-8 years)

Total for China

Marketing Objectives

• Year 1o Gain 5% market Share and 20% Market Awareness in Shanghai

• Year 2o Expand to Beijing marketo Increase market share and awareness in both markets

• Year 3o Expand into two additional marketso Do a complete analysis of further expansion

Market Share

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

• Year 1 -   5%• Year 2 -   7%• Year 3 - 10%• Year 4 - 15%• Year 5 - 23%

5-Year Profit forecast (normal)

*all figures in USD  (6.3328 yuan exchange rate)

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

High End Forecast

Assumptions

• Market Share is 25% higher than expected• Avg Purchases is 1 bottle higher than expected• GS&A Remains Constant • all figures in USD

Positioning Strategy

• Affordable to most Chinese citizens

• Necessity for healthy living and public safety

• Superior to other hand sanitizing optionso Washing, sanitation stations, etc

• Superior to similar productso Kills 99.9% of Germs

Major Competitors

• Direct Competitorso CKB Industries, Ningbo Jianbei, Zhejiang Changdi Medical Co

All offer home and public products, but no pocket size version

• Broad Competitoro Public wash and sanitation stations

DISTRIBUTION

• Manufacturing Plant: Philippineso China in year 2 on

• 3PL Intermodal Transportation to Shanghaio Port near mouth of Yangtze River

• Distribution Center: North-West Shanghai to allow for growth along coast in years 2-5o Additional DC's to help cover such land mass

Retailers

• Big Box RetaileroWal-Mart (Supercenter)oMetro

• Local RetailersoNong Gong ShangoLotus Supermarkets

 • Gas stations/convenience stores

Price

• Marginal Cost Methodo Price is set in relation to the variable costs of productiono Do not consider:

Domestic overhead Research & Development Marketing Plants

o Ability to leverage costs in futureo Selling Price of 6.64 yuan ($1.05)o Distribution pricing - Delivered Duty Paid

Promotion Strategy

• Establish brand awarenesso High repetition advertisements o Large ad reach with multiple media platforms

• Informative approacho Benefits of using Purello High quality vs competition o Customer sampling

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

Media Mix

• Print-newspapers and posters • Internet-Google (China),news sites

 • Television-providential and national

 • Radio

 • Street vendors

Commercial

Questions or comments?