Is your organization set up to capture your true potential in China?

One country, one political system, one market, uniform tariffs and transportation system. Addressing the market with a unified product or services portfolio, value proposition, marketing messaging and single sales approach should be a no-brainer – and it reduces internal complexity.

22 provinces, 4 municipalities, 5 autonomous regions, 2 Special Administrative Regions, 660 cities, of which 10 with populations of more than 4 million, 8 primary dialects – equally communalities and vast differences in requirements, needs and purchasing behaviors, concentrated/over-crowded markets in the coastal line, vast distances and incomplete transportation infrastructure between economic centers in Central/West China. Urbanization, burgeoning middle-class and the highest number of ultra-rich in the world. Modern financial instruments and transactions in economic hubs, still highly cash-based economies in less developed areas.

Is your organization set up to capture your true potential in China, or are you missing out by approaching the market merely as a singular form?

Are you under-invested in potential markets, or actually over-invested in some areas, whereas missing potential in others?

Many companies – no matter whether they are large multinationals with close to 30 years history of doing business in China, medium-sized companies or small firms – have still not adopted an effective China market approach – offering too generic, unfitting products & services, organizing their sales according to overseas company standards rather than according to China’s reality, under-serving potential markets or cannibalizing internally, or utilizing standardized value propositions and marketing messaging – missing to make the mark with local buyers and decision-makers.

Few companies however have realized that the true potential of selling successfully in China lies in the adoption of products and services catering to real local requirements, flavors and designs, in the development of a product mix that Chinese customers really need – not what company’s headquarters wants to sell – and by effectively organizing their sales force according to the differences between regions, markets and personalities in the country.

Beginning the journey to customize product/services portfolio, value proposition and marketing & sales approach to China thereby is neither overly costly nor overly time-intensive, taking a targeted, structured approach:

  • Structure China according to prevalent regions that make sense according to your product & services portfolio – e.g. geographically, economically or according to industry concentrations,
  • Weigh these regions according to their potential customer concentration, products & services requirements, propensity to purchase your products or services, purchasing power, competitive landscape,
  • Overlay weighting of logistical reach and cost, eliminate markets that cannot be feasibly served
  • Identify focus markets and your optimal products & services offering for these markets,
  • Develop value propositions and marketing messaging according to the individual focus markets and your customized products & services offering in these markets,
  • Restructure and build up your sales force according to the individual focus markets, their potential customer concentration, propensity to buy and purchasing power,
  • Plan and implement marketing & sales channels accordingly.

Truly capturing the full potential of the Chinese market will require you, your organization and – not the least – your overseas Headquarters to think out of the box, but the success of some companies that have already begun to lead the way – such as Volkswagen, Unilever, Procter & Gamble, and others – in customizing their product & services offerings as well as marketing & sales approaches based on the regional differences in China may be motivation enough to begin the journey at your organization, as well.

Michael Adick

Managing Director, Articulate Ltd.

By | 2017-01-17T14:56:30+00:00 March 10th, 2014|Articles|0 Comments