how enter the Chinese market with western brands and products

1. Business Models and Marketing Strategies for the
Italian Companies Entering the Chinese Market
Tiziano Vescovi
Department of Business Economics and
Management
Università Ca’ Foscari Venezia
Ca’

2.  Literature analysis
 Interviews
 3 universities
▪ East China Normal University Shanghai
▪ Tongji University Shanghai
▪ Zejiang University di Hangzhou
 14 Italian managers and officers in China
 4 international experts in China
 5 Chinese entrepreneurs
 5 international scholars (Belgium, France, UK,
USA)
 150 consumers

4.  several very different submarkets and
subcultures
 Inefficient market, very few external
economies
 Chinese people big bargainers

5.  Confucius Influence
 Harmonic relationship
 Group orientation
 Saving
 Long term orientation
 Influence of the Concept of centralized planning
 Key components- QCG
 Focus on Quality (reliability and duration)
 Cultural Similitude
 Global Accessibility

6.  Ostentatious Use of Top brands more
than in the West
 Customer service should be really high
 In Chinese society life styles are still
very descriptive
 Group is dominant on the individual
therefore social reference brands are
preferred

7.  Expatriates with deep knowledge of local
culture
 High hierarchy
 Need of relational skills, not only technical
and managerial skills

8.  There is a perception of Italian Style,
but it is still confused
 Economic ranking and international
value as nation are important for the
brand perception
 Life style should be known and
appreciated (identity) to give value to
the brands/products

9. Rotated Component Matrixa
Component
1 2 3
Punctuality .807 .144 .035
Precision .768 .034 -.027
Industriousness .644 .114 -.019
Safeness .627 .059 .292
Economic Strength .589 .269 .113
Elegance/Refinement .260 .735 .054
Attracting Lifestyle -.036 .701 .197
Creativity .159 .681 .092
Perfection .229 .626 .102
Tasty food -.118 .487 .389
Quality .383 .472 .371
Beauty -.046 .173 .811
Friendly .198 .251 .718
Reliability .510 -.048 .585
Sun .036 .405 .436
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 5 iterations.

10.  Westerns (mainly Italian companies) use in
China a presumptuous attitude
 The linguistic-cultural barrier is often
underestimate

11.  They should be adapted to the Chinese
market (colours, sizes etc.)
 They should be explained to the
customers
 The value components should be
described and understood by the
consumer

12.  Problems in translating the brand name
 Cultural-historical reference is really
values
important to build the brand value
 Number 1 syndrome
culture history

13.  Sound similarity
 Audi
 Meaning creation
 Heineken
 Cultural similarity
 Red Bull - Insead
 Integration
 Ikea

14.  Classic media are still
strong
 Flagship stores really
important
 Sales Promotions and
discounts really
important
 Frequent use of the
mobile (sms)

15.  Point of Sales Location (symbolic e
commercial)
 Local Partnership are
difficult
 Sales people training
 Franchising is at the
starting point
 Concept “dreaming Italy”?

16.  Arrogance attitude
 Low end products thinking
of a primitive market
 Short term investment
 Be alone

17.  Cultural knowledge
 Long term strategy
 Manager knowing China
 Partnership
 Be able to adapt to the differnt
(changing) markets of the
Country

18. ign
des
education
service
marketing