When in China, Do As the Chinese Do

PEPSICO - When in China, Do As the Chinese Do

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It should no longer be a surprise to any foreign firm that what works for their products in their own country will not necessarily work in China. True, the overwhelming inherent of the Chinese market entices companies worldwide to make the leap into the market. What's more, recent attempts by the Chinese government to encourage their citizen to spend more and save less in an effort to prop up compound quiz, are more suitable than the shaken and cautious consumer currently favored in the United States. consumer spending levels in the Us will not likely return to former levels seen in the years before the meltdown, at least in any time soon.

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PEPSICO

The tapestry of the world consumer market is changing, and Asian countries will hold a greater stake going forward. China has recovered quicker from the global slump than the United States, and Chinese consumers. Who save between 30% to 50% of their annual income, have more cash to spend than Us consumers. So if you are a foreign firm trying to make inroads into China, regardless of whether you are a small, medium or large enterprise, does this give you a green light to throw your shampoo or sports drink on the shelves in Chinese big cities? The rejoinder is... Maybe.

PepsiCo's Frito-Lays now sells Peking duck potato chips in China. In 2003, they introduced "cool lemon" flavored chips for the summer months that boasted mouth freshening qualities. The containers has pastel colors and blue skies to account for the "cool" feeling of these potato chips. This is an involving if not confusing way to market such a stock from a Western perspective. Why would Frito-Lays do this?

Unfortunately for Frito-Lays, they like many others had to learn what it takes to be prosperous in China the hard way. The firm could not move potato chips off the shelves in the summer months. In the other seasons, sales were good enough; however, come the summer months, the shelves would be overflowing with an excess of unwanted product. Frito-Lays accordingly conducted market research, and it was only after they had investigated the preferences of the Chinese consumer that they realized that motivations in the country are a lot deeper than they had expected. Primary Chinese rehabilitation declares that fried foods originate heat. Potatoes, fried food, would cause their body to get hotter. The last thing the Chinese wanted in the blistering summer heat was to eat something that made it worse. Frito-Lays accordingly advanced the cool lemon flavor, which have come to be its biggest selling line in the region. They have also since advanced a cucumber potato chip.

What this example illustrates is not only that foreign companies have to adapt their products to Chinese tastes, but that they need to gather a deep knowledge of Chinese tastes before going to market. An comprehension of yin and yang, equilibrium of food and body and Primary corrective techniques goes a long way to make a stock such as potato chips more palatable to the Chinese. Due diligence is required to learn more about what lies below the ancient civilization's psyche. This is a pressing matter especially now, as the increasingly competitive local companies already have a head start on their comprehension of what Chinese consumers want and what they don't want. Foreign companies are now faced with a formidable local enemy like never before.

Another stunning example of learning the hard way is the renowned marketing master Coca Cola. Coca Cola's sales surged only when it advanced "Coke Light" for the Chinese market, a much less sweet stock than Diet Coke, which had failed to gain the traction Coca Cola hoped for in China. Coca Cola found that Chinese consumers favorite less sweet tastes, which led to Coke Light's development. Unilever realized this singular facet of the Chinese consumer and it lightened the sugar level in its Lipton tea drinks before it entered China.

Many Us companies mistakenly believe that their products will be perceived as "premium" foreign products for the upwardly mobile Chinese person to aspire to, and this in itself is grounds for market entry. They believe that due to this prestige, it can market products as is. This is a huge miscalculation. Maybe this approach would have worked a whole of years ago, but local brands are now competitive for the superior space economy and with equal quality. In fact, agreeing to the China consumer town - Core annual eye (Dec. 2006), consumers trust Chinese brands more than foreign ones.

The Chinese market is surely profitable - over 60% of 150 companies surveyed in 2007 by the AmCham China market eye boasted profitable results in the region, and a added 11% boasted that they were "very profitable". But foreign companies need to be patient, cautious, and not gloss over the complexities of a unique consumer market.

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