Marketing Christmas - Essay Example

?Case Study of “Marketing Christmas” Table of Contents Introduction 3 Christmas as the ‘grand celebration of consumption’ 4 Implications of Huang Yimming’s entrepreneurial endeavours in the domestic market 6 Conclusion 10 Reference 11 Bibliography 13 Introduction There are significant differences between the traditional concept and the post-modern concept of managements. The market competitions have intensified dramatically and in this process, globalization has played a very significant role. It has changed the nature of the activities related to trade and business. As a result, international trade and business among the different world economies have become a frequent affair. The management styles and thought processes of the prevailing business organisations has led to major improvements in the business activities and hence, the scope of business opportunities has multiplied. Moreover, the free trade policies have further encouraged the business organisations to enter into new markets with greater opportunities as the regional trade alliances became an integral part of the economic growth oriented strategy (Parker, 2005, p.303). With these developments, many new business concepts, theories and model have evolved and business organisations are using these concepts for better business managements. Business organisations have realized that there is very close relationship between the business activities and various aspects of society and culture. The social and cultural aspects offer major business opportunities and the business organisations are using their strategic moves to identify and cater to these opportunities (Carroll and Buchholtz, 2008, p. 349). For example, Christmas celebration in the Western countries offers greater business opportunities to the Chinese economy as the manufacturers from China produce and export low cost Christmas gifts, cards to the European markets. In this process, the business organisations are also exposed to multiple risk factors that may bring fatal consequences to a business. However, the emergence of the contemporary business and marketing theories has facilitated better techniques to counter these risks. Christmas as the ‘grand celebration of consumption’ Christmas celebrations are today driven by the marketing strategies of the sellers of Christmas products. Business houses aim to create the ‘air of celebration’ and create a festive atmosphere which drives the customer to jump start the festive bandwagon. Marketers consider the festive seasons as an opportunity where they can employ marketing strategies to double and treble their sales as compared to that in a normal year. Very often, New Year and Christmas sales accounts for more than half of the sales in other years. Marketers exploit this opportunity by tempting the customers to buy festive products. As demonstrated by Belk and Bryce (1993), Christmas is nothing but a “grand celebration of consumption” (Belk & Bryce, 1993), where consumers flock to the markets for products which they actually do not need. Based on their observation, it can be said that the trend of shopping has undergone a drastic change over the years. They have also claimed that today ‘Christmas shopping increasingly reflects the search for the disintegrated self while it decreasingly reflects the celebration of home and family” (Belk & Bryce, 1993). Belk and Bryce have explained this in terms of materialism, which is a complex and multifaceted concept and has been popularised through the media. This happened in response to America’s preoccupation with the consumer goods and materialism. Several studies have been undertaken with regard to materialism. Inglehart has put forward that materialism demonstrates itself through the extent to which social groups or nations emphasise on the value involving material things or objects. Influenced by the needs hierarchy presented by Maslow, he proposed that the western world has been able to satisfy majority of human’s needs and requirements involving material well being. They are now concerned with the post materialistic values, like families, friends, or even social welfare (Richins & Dawson, 1990). He has argued that materialism is nothing but the value present within the value system of the nation and has important implications for the same. This is particularly relevant with regard to the case provided. It is seen that Christmas is specially popular, recognised and celebrated in the western world. It is apparent through the sale of Christmas related products in the region during the season. On the other hand, the situation in the Asian nations looks different. This was especially apparent and visible during the economic recession which hit the entire world at large. Moreover, Christmas is geographically and culturally situated. Unlike other industries, the market for Christmas products cannot be shifted to another market on account of a downturn. This is because the demand for Christmas products does not remain the same throughout the world. It is prevalent and predominated in certain specific cultures. This can be elaborated with an example cited in the case. Wang Qiaoling tries to expand and develop its market in Russia, with Snow Maidens and Santa Clauses instead of trying to expand in the Asian market. Other specialists have tried branching into the other festivals. They have tried entering into the new markets with Valentine Hearts, Easter Bunnies or Halloween masks. The value system has been altered gradually in nations. Materialism has gained prominence gradually as material possession has become a symbol of success. This gets reflected by the degree to which people use their possession in order to impress their friends and relatives, or the way in which they interpret possessions as being indicators of achievement and success. This coincides with the fact that people indulge in consuming and buying festive products after they are primarily tempted by their neighbours and friends who buy the same. Moreover, marketers also exploit the common human nature that possessing a particular object gives pleasure to an individual. It acts as a source of pleasure. Materialism also reflects through the degree to which people derive satisfaction and pleasure by owning a commodity and possessing it. Marketers try to explain the use of a particular product to the consumer which he or she may not actually require, but often found to be indulging in buying the product (NOS, 2003, p.1). People are also driven by the belief that more possessions mean more happiness. Marketers try to tempt people on the aspirational aspect of materialism. This fact becomes particularly evident during the sale of festive products during the festive seasons. People are made to believe that their life would actually become better if they had the possession of certain things which they do not have. This consequently drives them to buy certain products which at times go beyond their financial capacity. It is seen that during Christmas, every family, big or small, buys a Christmas tree to decorate their homes. However, every home might not be equally financially powerful to do the same. This is known as asceticism or the hostility towards luxury or the belief on frugality (Richins & Dawson, 1990). All of the above facts combined results into greater consumption and sales during the festive seasons. Implications of Huang Yimming’s entrepreneurial endeavours in the domestic market Chinese business strategies have proved to be very successful in the global business environments. China has become one of the most important exporters to the major economies of the world like U.S. Canada, European nations etc. Its export volumes have increased significantly and it has become “more impressive in level of export sophistication” (Xu, 2007). During 2010 and 2009, the Chinese exports to the world economies were around $1.506 trillion and $1.204 trillion respectively placing it in the 2nd position compared to other leading exporting countries (CIA, 2011). The Chinese manufacturers have captured most of the market share of global manufacturing industries. They have realized the basic essence of gaining competitive advantages i.e. low cost product. China is a country with the largest population in the world i.e. 1,330,141,295 and this country is efficiently using its vast labour force for productivity (U.S. Departments of State, 2010). The manufacturers of this country are able to produce in large quantities, in turn achieving higher economies scale. Moreover, the availability of low cost labours is another major advantage for the economy (Roett and Paz, 2008, p.130). However, low cost strategy of China is now followed by many of the developing countries like India and Korea that makes the global exporting market very competitive. These developing countries are able to obtain low cost materials, labours and are also able to produce in large economies of scale. With these competitive advantages, the Chinese manufacturers entered into Westerns and European markets and they found Christmas to be a great business opportunities. During Christmas, people’s purchasing frequencies increase dramatically and consumer market experiences a rapid boom during this period. Christmas is the most celebrated and the most popular festival in Western countries and it also has great economic importance for the entire economy including the exporting countries like China. Many Chinese manufacturers and exporters heavily rely upon Christmas for better business. However, this higher degree of dependency has also posed greater threat to the Chinese manufacturers. The financial crisis of 2007-2008 is the latest example for this argument. The western countries like U.S. and other European nations were highly affected due to this credit crunch. The purchasing power and income level of people drastically fell, causing huge loss for retail and manufacturing industries. Christmas is supposed to be a major event that boosts the business growth. However, after this global downturn, the consumers’ demand remained lower even during Christmas period. The following graph represented demand retail consumer since 2007. Figure 1: Key Economic Indicators of UK (Source: Davis Langdon, 2010) Usually, the demand of the products due to Christmas increases from mid of November and remains high till mid of January. However, as per the above graph, people’s spending was very lower during 2007 and 2008. As the economy is recovering from the crisis, the consumers’ demand increased slightly during 2009. As a result, this crisis passed to the Chinese manufacturers and exporters, causing negative effect on the entire Chinese economy. The following figure shows the real growth of Chinese exports. Figure 2: Real Growth of Exports (Source: CEIBS, 2010) The figure provides an evidence of drastic fall of Chinese export during 2007, 2008 and 2009. Currently, the European and western economies are recovering from the crisis and the demands in these countries are expected to be higher in the coming years. However, the high dependency on European economies may again bring greater threat to China. In the given case study, Huang Yimming aims to focus on the domestic market rather than depending on the European markets. China has the largest population and this also indicates that China also has the largest base of consumer. The Chinese manufacturers can easily relay upon the domestic demand which is more stable and less risky. Huang has demonstrated his entrepreneurial skill in identifying the potential business opportunities in the local market. However, there are also some major risks associated with this major initiative as China has less Christmas tradition. However, the globalisation factor has also promoted the different diversified culture at the global stage, and gradually, Christmas is becoming an important event for the Chinese consumers as well. On the other hand, Huang also needs to frame an effective set of marketing strategy to promote the Christmas culture among the Chinese consumers. In this process, he should try to develop a healthy relationship between the Christmas culture and Chinese culture. Conclusion The above analysis shows that the Christmas season has emerged as a celebration of consumption. It has evolved as a season of gift exchanging and buying Christmas related products. It is seen that the companies and marketers begin to advertise their products long before the onset of the season. This consequently results in enhanced sales and revenues which are much above then that of the other years. This is in alignment with that proposed by Belk and Bryce who have coined Christmas season as a ‘grand celebration of consumption’. The market for Christmas products might be wide and diverse, but it is suggested by Yimming, that the companies must not rely completely on the foreign market. This is predominantly applicable for the country like China which has a large customer base. Situations like the economic recession may hamper its sales in other markets over which the company might not have strong influence. The suggestion is to rather concentrate and expand operations within the home country. Reference Belk, R. W. & Bryce, W. 1993. Christmas shopping scenes: From modern miracle to postmodern mall. International Journal of Research in Marketing. Carroll, A. B. and Buchholtz, A. K. 2008. Business and Society: Ethics and Stakeholder Management. 7th ed. Cengage Learning. CEIBS. April 07, 2010. Outlook for the Chinese Economy in 2010, and Beyond. [Online]. Available at: http://www.ceibs.edu/knowledge/economics/51226.shtml. [Accessed on March 23, 2011]. CIA. March 16, 2011. The World Factbook: China. [Online]. Available at: https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html. [Accessed on March 23, 2011]. Davis Langdon. 2010. Retail Market Report. [Pdf]. Available at: http://www.davislangdon.com/upload/StaticFiles/EME%20Publications/Brochures/RetailSectorReport_Nov10.pdf. [Accessed on March 23, 2011]. NOS. 2003. Wise Buying. [Pdf]. Available at: http://www.nos.org/Secbuscour/26.pdf. [Accessed on March 23, 2011]. Parker, B. 2005. Introduction to globalization and business: relationships and responsibilities. 2nd ed. SAGE. Richins, M. L. & Dawson, S. 1990. Measuring material values: a preliminary report of scale development. [Online]. Available at: http://www.acrwebsite.org/volumes/display.asp?id=7012. [Accessed on March 23, 2011]. Roett, R. and Paz, G. 2008. China's expansion into the western hemisphere: implications for Latin America and the United States. Brookings Institution Press. U.S. Departments of State. August 5, 2010. Background Note: China. [Online]. Available at: http://www.state.gov/r/pa/ei/bgn/18902.htm. [Accessed on March 23, 2011]. Xu, B. 2007. Measuring China’s Export Sophistication. [Pdf]. Available at: http://www.ceibs.edu/faculty/xubin/Measuring.pdf. [Accessed on March 23, 2011]. Bibliography Nissenbaum, S. 1997. The battle for Christmas. Vintage Books. Perry, J. 2010. Christmas in Germany: a cultural history. UNC Press Books. Purbrick, L. 2007. The wedding present: domestic life beyond consumption. Ashgate Publishing, Ltd. Wearing, S., Stevenson, D. & Young, T. 2009. Tourist Cultures: Identity, Place and the Traveller. SAGE Publications Ltd. Read More