Особенности ведения бизнеса в Китае (The peculiarities of marketing strategy development in China)

    Дисциплина: Экономика
    Тип работы: Реферат
    Тема: Особенности ведения бизнеса в Китае (The peculiarities of marketing strategy development in China)

    Эстоно-американский

    бизнес колледж

    кафедра менеджмента и маркетинга

    «THE PECULIARITIES OF MARKETING

    STRATEGY DEVELOPMENT IN CHINA»

    Исполнил

    Торп

    Андрей

    Группа ЕТ 402

    Проверил:Шпилёв Андрей

    Т А Л Л И Н Н 2003

    ONTENTS

    1.Introducing…………………………………………………………………………3

    2.Lobbyng……………………………………………………………………………5

    3.Budget offer………………………………………………………………………..8

    4.Technical discussions……………………………………………………………...9

    5.Final offer…………………………………………………………………………10

    6.Formal negotiations……………………………………………………………….11

    7.Managerial implications…………………………………………………………..13

    8.Conclusions……………………………………………………………………….15

    INTRODUCING

    Since the 1970s,when China’s foreign trade policy was liberalized ,many Western firms have been very enthusiastic about capturing this market of over

    one billion consumers.

    On average ,throughout the 1980’s ,China was visited by one Western government ad-

    visor every week.This interest of Western authorities and businesses can be compared

    with Western interests in Japan,a far more important trading partner.Western busines-

    ses’

    interest in China decreased somewhat after the Tiananmen Square incident in 1989.

    However,interest from trade and industry continued ,and increased even more in the

    1990s.Lately,West European governments and businesses have also shown the interests

    in China.The picture is not much different where American interests in this market are

    concerned.In 1980s the trade between USA and China rose to more than US $ 5 billion

    In these years,there was great demand in American goods.The trade relations between

    the USA and China received a serious set-back after the 1989 incident.But the interest in China,both from the authorities and the business sector in the USA revived again

    when

    it was given the ranking of most-favoured nation (MFN) in the mid-1990s.

    Since 1979,when the new regulating joint ventures was introduced by the Chinese government ,there has been a tremendous increase in joint-venture agreements with

    agreements with foreign investors.In 1984,China signed 741 equity joint-venture agreements with foreign investors.By the end of 1987,the number of enterprises with

    foreign investment in China exceeded 10,000 with a total coctract value of almost

    US $ 22billion and paid-in value in excess of US $8.5 billion.In October 1984,the government declared that central planning would no longer be used and that a system

    of interfirm contracts would be utilized to facilitate the distribution of raw materials and goods.During the same period four special zones

    Economic Zones (SEZs) were established to encourage foreign investment.As a result,foreign direct investment

    increased and attained real momentum in 199-1991.By 1995,it had reached more than

    $ 30 billion.

    In spite of this revived interest and fact that the Western companies have been dealing

    with Chinese for almost two decades,these firms are now facing difficulties in negotiating

    business deals with China.We believe that, basically,the problem is one of understanding

    Chinese culture and perculiarities in behaviour .Such an understanding Chinese culture

    is essential to do business in China and to maintain business relationships in the long

    run.

    We all know that negotiation process is considered as an interaction process of reaching agreements to provide terms and conditions for the future actions of the parties

    involved.

    Being a process,it can be divided into distinct stages.For the purpose of this study

    and consistent with earlier studies the process of negotiations between Western firms

    and their Chinese counterparts is divided into six stages: lobbying ,budget offer, technical discussions,final offer,face-to-face negotiations and implementation.

    LOBBYNG

    The negotiation process starts with early contacts with the Chinese authorities,in which

    customer is trying to establish whether or not the selling firm has the technology or

    capabilities to deliver the particular project.The Western firms are normally expected to

    China

    and present their technology and products.The firm has to conduct presentation

    session for the number of people and groups.In these sessions the firm has to convince

    the Chinese that it has a technology they want and that it is competitive as regards

    technology recources and realibility.At this stage,the firms should realize following:

    Contents of deal:

    The first point to consider consists of identifying the implications of project

    ;i.e,that the contents and objectives of the deal match of the firm.Questions such as

    „what can the firm gain or lose in both tangible and intangible terms?“ or „what is at stake?“ should be answered.

    The preparation and planning of negotiations takes a lot of time and the more information

    a firm can gather at this stage,the better the of success it will the later stages.

    The firm should gather information on both customer and the competitors,and on which

    other alternatives are available to the customer.And the firm has to compare its strengths

    and weaknesses,for the particular project,with that of its competitiors..If the competitors

    are stronger,in one way or the other,the firm has to develop arguments to expose their

    weakness.If the firm knows that a Japanese firm is also competing for the same project

    and that the Japanese offer is cheaper than the firm is own,it has to develop arguments

    explaining why the offer more expensive.For example,in one of the projects this was actually the case and the Swedish firm was also able to convince the Chinese

    negotiators

    that althogh its price was higher,the capacity of its machines and that the technology

    was better in terms of quality as well as its technolgy which would facilitate future

    expansion.This argument was accepted by the Chinese as they do always rely upon

    the best technology.If the company is able to convince that its technology is the best

    one and up-to-date as regards precision and future development,negotiations become

    easier.

    In larger scope, the counter trades are quite common in China.The reason for this demand

    is that the Chinese tend to save on the foreign exchange.Thus it is quite common for Chinese to demand that a percentage of the products to be produced by the project in

    question by the selling firm into its home market or into the third market.This is one of the objectives behind free zone policy.Despite the difficulty it also is considered as

    important .This step also helps to evaluate the effect of buy-back in monetary terms

    and its effects on the firm’s own production and marketing activites.It is quite possible

    that the buy-back or counter trade demand is just a bluff ,so that the seller,seeking to avoid the expenses of buy-back,may offer a major cut-back in the price.

    Find the costumer

    :In China ,foreign firms have to present themselves and their technology to several authorities.One has to endlessly repeat the same things to

    different negotiators who suddenly,without any explanation,are replaced by another team....

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