mkt3850 l03 - the chinese environment revised 2013 [相容模式]

7/29/2019 MKT3850 L03 - The Chinese Environment revised 2013 [ ]

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MKT3850

Chinese Marketing Environment

Dr. Danny T. Wang

WLB511A3411 8049

[email protected]


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Course Outline1. What are the key dimensions in

understanding the Chinese environment?

2. Understanding the Demographic

Environment of China

3. Understanding the Political-Legal

Environment of China


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Find Market

OpportunitiesMarketers find many opportunities by

identifying megatrends (major

social, economic, political, and technologicalchanges that have long-lasting influence)

identifying market trends by tracking

changes in market demand


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Environmental Forces

Demographic

EconomicPolitical-Legal

Socio-CulturalTechnological

Natural


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Natural Environment

Shortage of

raw materials

Increased

energy costs

Anti-pollution

pressures

Governmental

protections


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While environmental challenges create demand for green

products and services, they dont guarantee profits. Forexample, 2012 saw a boom in solar installationsabout 5,000

megawatts of new solar capacity. But it proved to be a terrible

year for solar-module manufacturers, given lower selling

prices, weakening European demand, industry overcapacity, and

rising trade barriers.

Manufacturers who become more efficient can help reduce

emissions while boosting their own bottom lines. To convey the

seriousness of an energy-efficiency drive, one companys CEO

paid a secret midnight visit to his flagship factory. He was

dismayed to find no one working in a key unit where employees

should have been making energy-saving temperature

adjustments. A week later, the CEO announced a wholesalereplacement of the plants leadership. The company also created

a new organization, headed by a group vice

president, responsible for reducing energy consumption, which

has since fallen by 12 percent.

Seizing Chinas energy-efficiency

opportunity: A case study


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Demographic Environment

Decline of growth rate

Inter-provincial migration

Acceleratedurbanization

Emerging middleclass

/ Inequality of

income Aging problem


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1949 5.42 1978 9.62 2004 13.00 ; 2012 13.5

80000

90000

100000

110000

120000

130000

140000

150000

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

(10000 persons)


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1978 1.2%2004 0.59%; 20070.52%

2007 (1.13%) (0.88%) (1%) (1.18%)

2007 0.30% 0.34%

0

2

4

6

8

10

12

14

16

18

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

()


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40000

45000

50000

55000

60000

65000

70000

75000

80000

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

(10000 persons) (10000 persons)

2011 690,680,00051.3% 656,670,00048.7%


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13 great potential convenience goods

2002


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(2009)


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%2009 62186 (46.59%), 71288 (53.41%)

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

(10000 persons) (10000 persons)


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The largest migration in history:

China's migrant workers (EIU)

Since 1978, China has experienced the

largest internal migration in human history.

Nearly a 160 million people thats almost

12% of today's population have left rural

areas to seek work in the cities.

Migration from inland villages to coastal

cities has transformed China. Now that is

changing, as regional cities inland become

the new focus of migration patterns.


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Chinas urbanization

imperative


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2002


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Mainstream consumers driving income growth


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Income inequality among

Chinese cities


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(2007)

23622 17255

21988 15330

20573 14091

17699 14336

16378 10715

16357 12028

15506 11055

14264 9666

12590 9890

12377 9281

11130 7532

11098 8691

10996 8292 10859 7817

10763 8010

10678 7758

10313 7826

10276 7512 10276 7519

10012 7875

10 10

13785


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The Emerging Middle Class in China

According to the national bureau of statistics (NBS),

middle class refers to those with annual income

between 60,000 and 500,000 yuan (approximately

USD 7,792 and 65,790).

Education: higher education, bachelor degree

Occupation: most of them are professionals,managers, high-rank government officers, private

firm owners

Income and properties: higher and stable income

than average, have bought houses or apartment,

have cars Life style: have affordable income to buy stuffs

rather than necessities. Want to meet different

level needs and enjoy the life


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Prediction of Chinas social classes


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Discretionary spending is expected

to grow considerably by 2020


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2007


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, 200765 (9.35%), 15-64(72.77%), 0-14 (17.88%).

36.3 40.7 33.6 26.8 22.9 21.5

59.3 55.7 61.3 66.9 70.2 70.9

4.4 3.6 5.1 6.3 7.0 7.6

0.0

20.0

40.0

60.0

80.0

100.0

120.0

1953 1964 1982 1994 2000 2004

65 15-64

0-14


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2015

2025 60 2.8 19.2%

2040 25.5%

2002

Kotler et al. 2009


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Aging problems comparison of China,

Japan and Korea

Philip Kotler, Kevin Lane Keller, and Taihong Lu, Marketing Management in China, Pearson Education South Asia, 2009.


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2002

Nursing house/old people house

20022002


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Philip Kotler, Kevin Lane Keller, and Taihong Lu,

Marketing Management in China, Pearson

Education South Asia, 2009.

McKinsey & Company, 2013, Chinas Next

Chapter, Mckinsey Quarterly 2013 Number 3.McKinsey & Company, 2013, Meet the 2020

Chinese Consumer, March 2012, McKinsey

Consumer & Shopper Insights.

1996

2002

mkt3850 l03 - the chinese environment revised 2013 [相容模式]

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