Planning a market entry strategy for China market has the same elements as your domestic marketing strategy, but several key variables make the chances of success of the plan more difficult to predict. Products that are immensely popular in your country do not always meet with the same reception in China. Lack of knowledge of consumer behavior in the China market makes it more difficult to determine the best message to reach target China consumer. Hence the following 6 steps will help you plan a China consumer market entry strategy:
Market Research
Determine your target China consumer groups in China market. Verify the size of the market by conducting customer surveys to determine whether your products or services fit an unmet need in the Chinese marketplace. Find out whether there has been any resistance to foreign companies entering the market and why. Evaluate which China consumer segments have the financial resources to purchase your products or services and are most likely your target China consumer. Determine the pricing structure for your products that will give you the best chance of generating sales while still maintaining profitability.
Competitive Profile
Evaluate the companies you will be competing against in the Chinese market and gauge their strengths and weaknesses relative to your own. Particularly focus on their brand-name strength and customer loyalty. Assess whether it is feasible to draw customers away from key competitors or whether to concentrate on market segments the competitors are not currently serving.
Set Revenue and Unit Sales Goals
Do a conservative projection of unit sales and total revenue. Do not assume that sales growth in the China market will occur at the same pace it would in your domestic market. You are in effect starting over—trying to build a new brand in a new place. Make sure your company can commit the financial resources necessary to see the Chinese marketing development project through until your products gain sales momentum.
Put Together a China Marketing Team
Determine how many staff members will be located in the China market. Add individuals that not only speak Chinese but have experience developing marketing programs here in China and have local contacts that can be used for business development. Develop the organizational structure and reporting relationships between the Chinese division and the marketing team in your country to ensure open communication and accountability.
Develop Marketing Message
Make sure all elements of your communication with China consumer (product packaging, advertising and promotion, local event participation, public relations activities) are designed with sensitivity to the customs, traditions and even the religious beliefs of China. Hire local advertising professionals to advise you if necessary. The advertising humor of your country style may be lost in translation on Chinese audience. Take the time to craft your message correctly so you do not have to undo mistakes later on that have cost you sales and time, and damage your company’s credibility in the China market.
Arrange Distribution Channels
Initiate contact with local distributors and sales reps. Assess their reputation for reliability and the scope of their market presence as well as the financial terms of the distribution arrangement. Consider a licensing arrangement with a local company to market your products under their established brand name.
Related reading: 9 Keys to Successfully Export to China
