Page 329 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes In fact, most studies show that American products lag behind those from Japan in the
Chinese market, even though Marlboro is the single biggest advertiser.
Never assume that the Chinese public will know the name of your company or brand.
Even the name Coca-Cola had to be introduced to China while McDonald’s had to explain
what a hamburger is.
There are good reasons to emphasise that you are a multinational corporation, because of
the quality perception. There is a hierarchy of quality in China. Imported is best, second
best is a joint venture product, third is a product that is the result of technology transfer,
and a poor fourth are the locally produced goods. They are almost always regarded as
poorly made and liable to breakdown.
You should never assume anything when it comes to China. People have assumed it was
OK to talk publicly about a deal, only to find the Chinese government angry at them for
going public too early.
You may assume you have got a contract, and then you find that it was just the beginning
of negotiations.
If your company is thinking of registering its brands and properties in China, then register
now. One large company came to us because one of their franchises had registered its title.
The Chinese didn’t recognise the difference. As a result, the company had to have an
internal battle and incur significant loss in recovering its title.
Media relations in China are just as important as they are anywhere else. Yes, there is
controlled media but less so than in the past. Foreign investment and business coverage
tend to be positive so take advantage of it.
Personal relationships are absolutely a key factor. There are old friends and new friends.
The second time, even if there is a one year gap in between, you are old friends. The result
that interviews produce is better than a news release because if a journalist looks at a piece
of paper, they simply don’t have a personal sense of that company.
A lot of the Chinese media firms require their journalists to go for four types of verifications
before concluding that this particular piece of news is real.
Ceremonies are extremely important in China. Especially when you are entering the
market, you need to take advantage of every opportunity you can to get your company
known in China and make its commitment to China known. So a signing ceremony is an
opening, and all of these are important.
Banquets are also a strong tradition; they often form the final step in negotiations and can
serve as a “thank you.” Failure to host one can be misconstrued, for example leading to
questioning of the importance of your company in the Chinese market.
Relationships with media are also facilitated over meals. Often the media is included in a
banquet following an opening or signing ceremony. Alternatively, your company may
opt for a private, smaller banquet with its new partner and appropriate officials, and have
media entertained by your PR firm and/or the company’s public relations staff. This is
generally more appropriate for business-to-business or industrial marketers.
Finally, don’t refuse a Chinese host’s request to taste each and every banquet dish. And
don’t forget to give a small personal memento (nothing lavish) to your Chinese hosts.
Question
After going through this case, do you think China is a viable destination for doing
international business? Give proper justification.

Source: Dian Terry and Rachel DeWoskin, A & M, April 30, 2000.

322 LOVELY PROFESSIONAL UNIVERSITY