Monthly Archives: September 2013

Comment on the blog “How can Chinese Brands Succeed Internationally”

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Original Blog link: http://www.the-cma.org/about/blog/how-can-chinese-brands-succeed-internationally

In Lina’s blog, she talks about the two issues China face in order to market its brand internationally. I complete agree with her on her second point about the “Made in China” reputation. Because of the cheap labor in China, and the small workshops that exist everywhere in the country, made in China is already the meaning of a bad product for the western civilizations. Even the Chinese themselves prefers the “Not made in China” products. Having this bad reputation, even the good companies that produce quality products will be affected and become hard to market themselves in the international market. In addition, since the western market is a fully saturated market, even without the bad reputation, it is already hard enough for a Chines company to compete in this market.

Therefore, a detailed marking planning is essential for a Chinese company to be successful in this market. A brief SWOT analysis can be made on any Chines manufacture company and I believe the Strengths are cheaper labor and a comparative advantage over the well known brands on Cost schedule. The Weaknesses are the unethical workers and other local competitors that provide the bad reputation. The Opportunity is the holes in the western market that the big brand did not cover. The Threat is the “Made in China” reputation that will frighten the customers.

For example Haier used their strength in cheap labor targeted the hole in White Appliances for on campus students, and produced high quality product with strong internal control to improve their Weakness and established a better reputation so the “Made in China” did not hurt them. Eventually, they had a market share of the Western White Appliances market.

As Lina mentioned in her blog, with more Chinese MBA graduate from Ivy League universities returning to China. The concept of Marketing will get much more understood in the Chinese companies. The future of Chinese companies going to Western Market is clear and bright.

The first post about ethical issue in marketing

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When you search on wikipedia, pricing ethics in marketing contains “Dumping”,  “Price fixing”, and “Price war” etc. The definition of Price War in wikipedia is “commercial competition characterized by the repeated cutting of prices below those of competitors”. I believe there are many Pricing wars in our society. Some examples are “Future shop” and “Best Buy” saying “we will match any listed price of other competitors”. On one side that it seems beneficial to the consumers that we can get a better price on the things we buy. But it is not good in the long run for the company. They do not have the incentive to compete on the four criteria of “Customer Excellence”, “Product Excellence”, “Operational Excellence”, and “Locational Excellence”. Other than the product is cheaper, there are no value in the product and company at all.

Take myself as example, I have never went back to buy computer from either Future Shop or Best Buy because I do not see the value in it other than it match any other price, and as soon as I learn how to build up my own PC, which is way better than theirs, of course I would ditch those companies. (Take another thought, that Future Shop and Best Buy are really making big profit on their extended warranties, which I would never get it again once I learned accounting).

On the other hand, a company such as Walmart, always advertise that they sell it cheap. But that is not Price War, it is that they have the comparative advantage of Operating Excellence. No other company can produce as cheap, of course Walmart can stand out of the competitions.

If there is one advice I might think can help Future Shop or Best Buy to add value to their customers. Maybe instead of trying to beat every single price, invest your resources into a better customer service. 1. Maybe stop charging so much for a fix of computer that only requires a reinstall. 2. Work faster with the customer request about the repair and order. If they starting to add those type of value into the company, people who are not so tech-savvy will be willing to pay for a bit more for your products for the service.