Thirst for Wine - Inside China's Wine Industry: The Success Factors of Marketing Wine in China
Masterarbeit
(Sprache: Englisch)
China is turning into one of the world's largest, most lucrative food and beverage markets. Especially wine is in demand and has become fashionable as a symbol of social status. This trend is very likely to continue as wine consumption is closely related to...
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China is turning into one of the world's largest, most lucrative food and beverage markets. Especially wine is in demand and has become fashionable as a symbol of social status. This trend is very likely to continue as wine consumption is closely related to income and China's emerging middle class offers tremendous potential.The market's healthy value growth will further encourage newcomers from outside China. But how can a market entrance be successfully managed and what are the main challenges when bringing wine to China?
This book is an insiders' guide to efficiently planning a market entry by taking a thorough look at the wine market of China. It surveys the typical behavior of the Chinese wine consumer and examines the relevant factors for a successful market entry. Distribution channels (off- and online), pricing models and marketing activities are scrutinized. Further, the reader gets insights into the challenges of this dynamic market, such as fierce domestic and foreign competition, policies and regulations as well as entry barriers.
The thirst for wine prevails, and this book will leverage your momentum.
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Text Sample:Chapter 4, Market Entry Strategies:
This chapter focuses on possible marketing strategies for new entrants to China's wine market, foreign as well as domestic entrants but with a focus on foreign ones. It is structured as follows: First, there will be a short overview of the current market environment and second, the well-known marketing variables will be examined closely in order to give a framework for the marketing management.
4.1. The Driving Forces of the Market:
As in every emerging market, there are many opportunities for new entrants in the wine market. The following discusses the five driving forces that shape the Chinese wine market.
4.1.1. Competition:
'If every Chinese person was to drink half a bottle per year, the European wine industry would dry in the blink of an eye,' market analyst Jeannie Cho Lee observes , 'But that's unlikely to happen because, as demand increases, so does domestic production.'
New entrants to the Chinese wine market have to face fierce competition from domestic wineries. Not only has China become one of the leading wine producers in the world quantity-wise, but also the majority of Chinese consumers prefers domestic wines: According to a recent survey, in 2009 Chinese wine consumers drank 1,2 billion bottles of wine, of which only 8,5 % was imported bottled wine .
Although there are only a few top players in the domestic market, consumers have a wide variety of different wines and brands to choose from. Due to the considerably low level of wine knowledge, consumers tend to be overwhelmed about the wide range. Consumer orientation is key, hence domestic wineries have began to introduce brand management and POS marketing by launching bold brands, label designs and marketing campaigns to increase their brands' identification . For example, in retail stores domestic wine bottles are offered in wooden boxes including necessary equipment such as cork screws or fancy bottle caps.
But are domestic wines really a
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serious competition to imported wines? Despite their inconsistency in quality due to a varying blending of locally produced wine, wine from other Chinese regions as well as low-grade imported bulk wine, consumers keep buying domestic wines because they are not well versed with the differences in taste and quality that distinguish a premium wine from a low-quality one.
All in all it can be said that competition is moderate. Considering the fast growing potential of the wine market and the increasing demand of Chinese consumers, domestic as well as foreign wineries have good chances for their operations in this country of almost 1,4 billion people.
4.1.2. Entry Barriers:
A possible entry to the Chinese wine industry may be achieved by starting up a new company, by diversifying an existing company's operations into winemaking or, for foreign producers, by beginning to export to China. Among the biggest entry barriers for new entrants are the retail chains. Another entry obstacle, especially for importers, is the Chinese government.
The high buyer power of supermarket chains forces large wine producers to sell their mass-market products at low prices in order to have a wide distribution. This enhances barriers to entry, such as high capital investments on large-scale production plants or the need to establish reliable supplies from multiple third-party vineyards. Small-scale producers of premium wine or importers are not affected by this circumstance. With high quality wines it is possible to enter the market at premium prices. The good margin to the product's price recoups the investment in vines, production equipment and logistics.
All in all it can be said that competition is moderate. Considering the fast growing potential of the wine market and the increasing demand of Chinese consumers, domestic as well as foreign wineries have good chances for their operations in this country of almost 1,4 billion people.
4.1.2. Entry Barriers:
A possible entry to the Chinese wine industry may be achieved by starting up a new company, by diversifying an existing company's operations into winemaking or, for foreign producers, by beginning to export to China. Among the biggest entry barriers for new entrants are the retail chains. Another entry obstacle, especially for importers, is the Chinese government.
The high buyer power of supermarket chains forces large wine producers to sell their mass-market products at low prices in order to have a wide distribution. This enhances barriers to entry, such as high capital investments on large-scale production plants or the need to establish reliable supplies from multiple third-party vineyards. Small-scale producers of premium wine or importers are not affected by this circumstance. With high quality wines it is possible to enter the market at premium prices. The good margin to the product's price recoups the investment in vines, production equipment and logistics.
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Autoren-Porträt von Melanie Bobik
Melanie Bobik, MBA, M.A., is an awarded PR- and Marketing expert with comprehensive work experience in the consumer sector. Born in Salzburg, Austria, the author studied International Management and Communications in Berlin, Hong Kong and Vienna. With her expertise as well as proven intercultural competence she successfully works for international clients in Europe and Asia, mainly Germany and China. Further, she guest-lectured at various universities, i.a. Berlin and Zhuhai.
Bibliographische Angaben
- Autor: Melanie Bobik
- 2014, 64 Seiten, Maße: 15,5 x 22 cm, Kartoniert (TB), Englisch
- Verlag: Anchor Academic Publishing
- ISBN-10: 3954892715
- ISBN-13: 9783954892716
Sprache:
Englisch
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