China-home for Apple or Samsung - Research Paper Example

?China-home for Apple or Samsung Table of Contents China-home for Apple or Samsung Table of Contents 2 Executive Summary 3 Introduction 3 Market and Literature Review 4 Research Methods 6 Analysis and Discussion 7 Conclusions 9 Recommendations 10 References 12 Bibliography 14 Appendix 15 Annexure 1: Questionnaire 15 Executive Summary The age of consumerism has accentuated the need for business organizations to ensure distinction between products and services so as to emerge successful in the competitive and turbulent business market. The present study would analyse the marketing communication strategy for Apple especially for the Chinese consumer market. The choice of the market assumes significance considering the fact that it is one of the fastest growing economies of the world and has a considerable potential. The study would include an analysis of the market that would also include a comparison of the marketing mix of Apple with Samsung that is a core competitor for the company. The study would further include an analysis of the existing academic literature on the aspect of marketing communication. A section would also be devoted towards analysing the ethical aspects in marketing communication. Thereafter a primary study would also be conducted to analyse the consumer behaviour of the target market audience so as to finally conclude the study and suggest a set of plausible recommendations for the company so as to ensure sustainable competitive advantage in the lucrative Chinese consumer market. Introduction The era of globalisation has opened up a plethora of opportunities for business organizations. The emergence of new markets like Russia and China has opened up opportunities in a market where the traditional markets like Europe and USA are getting saturated beyond limits. However in order to make a successful international expansion it is very necessary to have a well knit business plan so as to effectively capture the market. Marketing communication plays a very significant role in this regard. This is because of the fact that marketing communications are the only source where the company conveys its intended message to the target market audience. In case of new markets this assumes even more significance as the positioning and image of the brand is largely developed as a result of marketing communication strategy used by the company. The present study would analyse the integrated marketing communication strategy for Apple for its proposed expansion into the Chinese market. The choice of the organization and the market assumes significance considering the fact that Apple is one of the most dominant brands and China is the fastest growing market in the world. Market and Literature Review Apple is one of the most repute brands and has been constantly rated among the top brands by leading agencies like Forbes and Fortune (Forbes, 2011). The company’s USP in the market is focussed on its innovative abilities to design new products. The company heavily relies on both internal as well as external communications to drive its products in the market (O'Grady, 2008, p.42). Apple is known to have a communications strategy that involves creation of a buzz while launching a new product or entering a market. The company strives on creating a ‘wow’ factor around the launch of a product. This was evident from the fact that long queues where observed during launch of iPods (ICMR, 2008). Apple’s competitor Samsung on the other hand relies on sponsorships and advertisements on print and electronic media to communicate its message to the target market audience. The pricing of its products are also more competitive as compared to Apple. The product strategy of Apple is largely based on the aspect of innovation and uniqueness in design and features. Apple relies on cult based marketing in which the customers constitute a loyal lot and undertake measures to protect the brand and company. The company believes in turning customers into followers so as to generate loyalty and promote the brand in the market. Most of Apple’s products are priced on a premium basis and the company believes that the high pricing comes with greater value additions. The promotional strategy of Apple involves using media sources to create hype and buzz among the consumers while focussing on the innovations aspect of the new product (Schneiders, 2011, p.12-18). Samsung’s marketing mix is slightly contrasting with the company relying more on quality and pricing strategy. Their prices are highly competitive and use traditional promotional techniques to attract and retain new and existing customers. Its target audience also comprises a wider scale and rely on volumes to push up profitability (Michell, 2010, p.98-102). The Chinese consumers are quite conscious abut the culture hence an effective communication strategy for Apple must specifically include and respect the local culture and traditions of the target market audience. The Chinese consumers look for greater trust, value and personal service in a product offering before making a purchase decision (Yau & You, 1994, p.39). In order to effectively reach out to the target market a mix of various channels must be used. Advertising and use of billboards and hoardings could be used to attract the new consumers. In addition sponsoring local sport events and college fests can also help in reaching out to a large section of the target market audience. A brand ambassador preferably a local celebrity or a sports person can also be selected so as to promote the company’s products and to create a linkage between the customers and the company. Apart from the traditional channels the online channel would also be used extensively using social networking sites to reach out to a large audience. The content of the promotional campaigns would be innovative in nature highlighting the innovative nature of the products to the consumers. The research on marketing communications has shown multiple aspects of the same. Some of the contemporary theories of communications in marketing normally focus upon the psychological aspects and beliefs of the consumers. Certain other theories have also pointed out the aspect of attitude and cognitive behaviour of the target audience (Weitz & Wensley, 2002, p.282). The marketing communication mix proposed by Apple is largely based on the above underlying dimensions that also includes the aspect of ‘glocalisation’ that implies thinking globally and acting locally (Culpan, 2002, p.60). Marketing communication programmes should also take into account the ethical aspects into consideration. An ethical marketing communication plan must essentially include the aspects of honour, integrity, virtue and honesty and self belief. These aspects in a marketing communication program can not only help in bringing about ethics but can also help in fostering a positive positioning of the product and the brand in the minds of the target market audience and bring about competitive advantage to the firm in the market (Shimp, 2008, p.606). Research Methods The research study would be conducted using a mix of primary and secondary research techniques. The primary research study would include collecting data from the market (Czinkota & Ronkainen, 2007, p.244). The main objective of the research would be to analyse the consumer behaviour of the Chinese consumers with regards to their purchase decisions and the factors influencing them in making a decision. A probability based sampling technique would be used to select the chosen set of respondents (Smith, 2004, pp.1-2). The research would use simple random sampling technique that involves a selection form in which the every individual in the population has an equal opportunity of getting selected for the study (Babbie, 2010, p.211). The sample size for the study would be fixed at 20 respondents who would essentially include individuals from both genders and in the age group of 18-40 years of age justifying the target market audience for Apple in China. The data collection method would essentially include a questionnaire survey. The questionnaire (refer annexure 1) would have open ended questions that would help in conducting an in-depth analysis of the topic of research (Weth, 2007, p.37). The data would be collected by using observation techniques and in-depth interviews as well as focus group discussions with the respondents (Greenbaum, 2000, p.15). The data would be analysed using qualitative research methods so as to provide a cause and affect analysis of the research question. Use of an open ended questionnaire would be advantageous as it would not limit the respondent with regards to his/her views on the particular topic of research and provide a better analysis for the research question (Kumar, 2010, p.153-154). In spite of efforts to maintain quality of research certain limitations can also be associated with the primary study. These would account on the aspect of respondent errors that may creep in as a result of error in interpreting the question by the respondents (Malhotra, 2008, p.94-95). Moreover the limited budget of the study limits the reach of the research to one city and hence cannot be used to arrive at a generalised solution for the research questions. Analysis and Discussion The data collected from the primary research reveals that the Chinese consumers give considerable importance to advertisement and the message communicated through them. Most of the respondents shared a belief that advertisements provide them with considerable information about a new product offering. However most of the respondents also stated that they would rather tray to evaluate the claims on their own before making a final purchase decision and would not rely blindly on the advertisements of companies. The analysis of the data also reveals that most of the consumers came to know about new products and offering though advertisements and other promotional campaigns. However the aspect of peer reviews and information gathered from friends and relatives also meant considerable importance to the consumers. In addition to this individuals also come to know about new products through events like sponsorships and other programs. Media plays a critical role in this regard with consumers taking media feedbacks significantly while making a purchase decision. In response to the perception about Western brands respondents stated that most of them had a positive opinion about Western brands. The most important aspect revealed was that they normally viewed Western brands as high on quality but expensive in their pricing. However a deeper analysis also revealed that consumers were willing to pay a premium if offered better quality that satisfies their needs. During the course of the primary study it was also revealed that consumers rated those Western brands better that shared a local touch in their communications. This includes packaging in local language that makes them easier to interpret the information to be interpreted by the consumers. The Chinese consumers of late have been relying on information available from the internet while making a purchase decision. Although the percentage of such consumers is comparatively lower, but the number of such consumers using the internet as a source of collecting the information is consistently on the rise with the growing popularity of web forums, blogs and social networking sites like Facebook and Twitter among the Chinese consumer audience. Most of the respondents interviewed stated that they paid much importance to their reviews and views of friends and other peer groups while making a purchase decision. It was also clearly revealed that the Chinese consumers consulted their friends and relatives to not only give their views on products but also evaluate the claims made by the companies in the marketing communication program. Respondents also stated that they gave considerable importance towards the views of existing users of the products before making a final call on the purchase decision to be taken up for purchasing a consumer durable item. It was also found that items like consumer electronic goods are reviewed very critically by consumer before they make a final say on the product to purchase. In response to the question of innovations in communications, most of the consumers stated that innovations in the way of communicating gave them an urge to view the entire advertisement. Innovations created an attraction for the consumers to view the advertisements. The respondents also stated that innovative advertisements normally created a distinction with the other numerous advertisements made by marketers. The response generated from the surveys also clearly stated that consumers paid considerable importance to the aspect of product packaging and felt that innovative packaging improves the positioning of the products. Use of local language in packaging is very important in this regard as revealed by almost all the respondents interviewed during the course of the study. Finally, the results of the analysis of the data collected from the primary study also reveal that most of the Chinese consumer preferred local personalities as brand ambassadors rather than globally recognised persons. They felt that they were able to make a better connect with local individuals as cultural aspects and traditions are considered to be very important by the Chinese consumers and companies and that they are able to make a better connect with local personalities and make a stronger appeal about a particular product or brand available in the market. Conclusions The analysis of the topic of study reveals considerable importance towards the aspect of marketing communications in the Chinese consumer market. The study also reveals the growing popularity of Western brands among the members of the target market audience that can help generate considerable opportunities for Apple in the Chinese consumer market. However it should be noted that Chinese consumers have a very strong cultural linkage and hence ay marketing communication plan must essentially include the local culture and sentiments of the individuals in order to make a suitable positioning of the brand in the consumer market. Recommendations The analysis of the Chinese market shows considerable opportunities. However care must be exercised to include a ‘glocalised’ approach in strategy formulation so as to make a better connect with the target market audience. Apple must focus on innovative ways in advertisement in order to convey its message to the target audience. Use of a local personality as a brand ambassador can largely help in this approach. In addition to this packaging and other aspects must be done in local language as that would help the customers make a better connect with the company. Sponsoring local cultural events and sporting events can also help Apple convey its message to the target market audience. The growing popularity of the internet also shows that use of this channel using social networking sites can help generate a formidable positioning of Apple in the minds of the target market audience. Apple must also devote some of its resources towards taking care of the needs of the society that would help project a sociable image of the organization in the minds of the consumers. Finally last but not the least there should be a mechanism for monitoring and control for the strategies and objectives of the organization. Use of a Balanced Scorecard Mechanism can help Apple to evaluate its financial as well as non financial strategies (Balanced Scorecard Institute, 2011). This would also help the firm to review the rate of accomplishment of the objectives in the market. Such feedbacks would help the company to devise strategies so as to ensure continuous monitoring and feedbacks that can not only help generate a suitable positioning for the company but would also help it in generating long term sustainable competitive advantage for the organization in the long run in the lucrative Chinese consumer market. References Babbie, E.R. (2010). The Practice of Social Research. Cengage Learning. Balanced Scorecard Institute. (2011). What is the Balanced Scorecard? [Online]. Available at: http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx. [Accessed on November 30, 2011]. Czinkota, M.R. & Ronkainen, I.A. (2007). International marketing. Cengage Learning. Culpan, R. (2002). Global business alliances: theory and practice. Greenwood Publishing Group. Forbes. (2011). Facebook, Apple, Netflix Top 2011 Breakaway Brands List – Forbes. [Online]. 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Cult Marketing. Diplomica Verlag. Smith, M.J. (2004). Program Evaluation in Human Services. Springer Publishing Company. Weitz, B.A. & Wensley, R. (2002). Handbook of Marketing. SAGE. Weth, A. (2007). Supply Chain Management Software Requirements and MySAP SCM. GRIN Verlag. Yau, O.H.M & You, H. (1994). Consumer behaviour in China: customer satisfaction and cultural values. Taylor & Francis. Bibliography Chaffey, D. et al. (2008). Internet Marketing: Strategy, Implementation And Practice. 3rd ed. Pearson Education India. Gurton, A. (2003). How to get into marketing and PR. Cengage Learning EMEA Kumar, V. & Reinartz, W.J. (2009). Customer Relationship Management: A Databased Approach. Wiley-India. Morgan, M. (2001). Making innovation happen. Kogan Page Publishers. Nankervis, A. R. (2005). Managing services. Cambridge University Press. Rai, A.K. (2008). Customer Relationship Management: Concepts And Cases. PHI Learning Pvt. Ltd. Samli, A. C. (2011). From Imagination to Innovation: New Product Development for Quality of Life. Springer. Griffin, R.W. (2008). Management. Cengage Learning. Appendix Annexure 1: Questionnaire Name: Gender: Occupation: 1. How much importance to you give to the aspect of advertising while making a purchase decision 2. How do you come to know about various new offerings in consumer electronics products 3. What is your opinion about Western brands 4. Do you rely on information available on the web for gathering information about products 5. Do you consult friends and relatives while making a purchase decision 6. What is your opinion is the importance of innovations in advertisement 7. Comment of the aspect of packaging and its importance to you 8. Do you prefer local brand ambassadors or global persons as brand ambassadors? Read More