Markeing of Changhong in China
...y agents and reputation supermarkets Lack of efficient management on Each selling branch (2) Import premium products International brands Focus on new trends with higher technical offerings High-presence in non-supermarket Channels, such as specialty store Strengths Weakness Provide the newest high quality goods High price is lack of competitive for customers who are interested in capability in the consumer group high-tech product and have more who have no high salaries. demands on products. Customers cant change current Strong competitive advantages are products very frequently due to beneficial to attain the best cooperation the prices. partners and employees like advertisement lack of the understanding of companies, excellent selling agents and local cultures. good location. Sell and advertisement through many Channels such as international competition exhibitions. C. Major competitors Competitor Kokna Characteristics/strategies Main market leader, share 23% over 25ench color TV set Massive advertising in multiple channels High good financial capital that is accumulated over ten years. Start to launch new product to EU from base on Turkey High quality of after-selling services Strengths Weakness Economies of scale low costs difficult to maintain unique Strong and effective supply-chain comparative advantages on in all main cities. CRI product due to similar market situation for each producers. Competitors Sony Characteristics/strategies . Attractive brand name stimulates purchase. Quickly technology renew with forever good quality Develop new markets also through other digital products like DVD, digital camera, and laptop. Strengths weakness Deep financial resources Less developed in non Supermarket channels Loyalty lack of localized customer Product quality reputation after-selling services Top technologies in some areas competitor LG Characteristics/strategies Innovation breeds strong competitiveness Leader in the field of digital TV, PDP TV. Strengths Weakness Fast innovation Less developed in nonsupermaket channels Deep financial recourses Higher ingredient and production Costs Section 3. Market Analysis A. Market Identification: The TV sets Market of China B. Market Size Sales (100 million Yuan) 1998 1999 2000 2001 2002 2003 773.71 945.93 1016.56 1089.98 1469.1 1770.2 Emerging submarkets High-end products Low- bargain products Market Growth Supermarket -- Growing at 7 percent Specialty growing at 10 percent annually Mass merchandisers growing at 13 percent Factors Affecting Sales Levels The large population means huge demands on products Growth of needs for up-date Segments with High Potential It seems that China will emerge as the world's largest digital TV market by 2015, there could be potential for growth. C. Market profitability Analysis Existing Competitors In 2001 there were 190 enterprises above designated size ( all the state-owned enterprises , and non state-owned enterprises with the annual sales revenue of over 5 million yuan) in TV set manufacturing in China. In the past three years, the hot price war in the Chinese TV market dramatically injured the vitality of the domestic TV manufacturers. Potential Entrants Some oversea big firms target the biggest market in the world as well. Threats of Substitutes Film industry Internet and PC products Bargaining Power of Customers Specialty stores have moderate bargaining power. Mass merchandisers have strong bargaining power. D. Cost structure Diversified companies have lower cost because of economies in advertising, manufacturing, promotion, and distribution. Specialized firms have higher costs. D. Distribution system Major Channels Supermarkets are dominant in terms of quantity they deal with Retailer handle about 30 percent of marker and are increasing rapidly. Observations/Major Trends Specialty stores sales have increased very rapidly. Online sales become more important in major areas. E. Market Trends and Developments Superpremium and premium brands from overseas have grown TV sets will be gradually replaced by high definition digital TV sets in the near future. F. Key Success Factors Present Brand recognition Product quality Access to major channels Introduction of new products Breadth of product line Marketing program Future Capture the trends of consumers Follow the trends of distributors Section 4. Environmental Analysis A. Technology trends and events There are two important trends in the TV set market today. CRTs are Being replaced with flat panels and microdisplays in direct view and View and rear projection TVs. Digital tuners are being integrated al- -ongside analog tuners in large TV set markets. These two trends are opportunities for many companies that are not Traditional suppliers of TV sets, like PC manufacturers, to enter the market. They are also creating opportunities for traditional TV set manufacturers to expand and target new markets. B. Scenario Analysis Little growth in traditional color TV sets and increase in superpremium segments, such as Projection TV, LCD & PDP TV. C. Key strategic Uncertainties Foreign producers are entering the price war to grab an increased share of China's high-end TV market, ratcheting up competition. Domestic T...