In Western countries where internet and social media marketing is the hot topic, some marketers have called a time of death for the traditional 4Ps. And while marketers in Western countries debate whether the 4Ps are pertinent in their markets, Chinese retailers are discovering that the traditional 4Ps are as relevant and applicable as ever.
In the United States, many shoppers dread the Christmas holiday season. Stores are packed with merchandise, the parking lot is full of autos, and shoppers bump elbows and carts on a regular basis. The panic and pandemonium are palpable.
In China, a Westerner walking into a Carrefour or Lianhua superstore might feel the same way as shoppers jostle for position around tanks of live crabs, clams and eels. Managing down store aisles, shoppers are often accosted by aggressive vendors pitching the latest skin care or food product. And the meat section may contain some surprises as well–to ensure freshness, many Chinese like to "touch and feel" before they buy!
While the Chinese retail market is still dominated by domestic giants such as Lianhua, Gome, Suning and Vanguard, some multi-national companies such as IKEA (Denmark), B&Q (UK), Tesco (UK) and Carrefour (France) are discovering they must, to borrow a phrase from Apple, "think different". And this includes a back to basics approach for marketing. Everything from products, channels, partners, suppliers, market conditions, consumer mindsets, messaging–must be considered and reconsidered in China.
For marketers tackling the Chinese retail market, the marketing mix is as relevant as ever. Pricing is dictated by tough competitive conditions, market segments, location and tight consumer wallets. Promotion strategies might skew more towards in-store displays and merchandising tactics to capture impulse buys rather than broad based advertising or circulars. Placement strategies must consider myriad supplier networks and their proximity to stores, local customs, demographics, government regulations and possibly utilization of local partners. And stocking the right products (sizes, quantities, locations in the store etc–) to meet changing needs of the Chinese consumer is definitely a science.
Localization–or adapting the marketing mix to meet regional or customer segment needs–is a key strategy to success in Chinese retail markets. Urban stores in larger cities may carry a completely different product mix than rural locations to accommodate different tastes and incomes. Pricing strategies must consider the wide discrepancies in incomes (urban dwellers usually make 3X the income of rural denizens). Promotions might include more personal selling in urban vs. rural locations, and placement strategies must reflect that it's more difficult to get goods distributed to rural locations at a reasonable cost.
New Marketing Ps vs. the traditional 4Ps–is an argument that can be left to others to debate. What is clear, however, is that the traditional marketing 4Ps are alive and well in the Chinese retail market–and more relevant than ever for marketing decision making in the middle kingdom.
* One marketer and author suggests that the traditional 4Ps should be supplanted with, "Preference, Premium Price, Portion of budget, and Permanence of relationship." Are these suggested new 4Ps applicable to emerging markets? If so, are they applicable now, or in the future for Chinese marketers?
* In China, online communities are forming around B2B and B2C products. What online (social media) tactics might you suggest for Chinese retailers to share, engage and communicate with consumers?
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