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syedzunair
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Supply Network Guru
Promoting brands in China
syedzunair   3/23/2012 3:06:50 AM
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@Barbara: 

China is emerging to be the biggest consumer market for electronics. What concerns me is that how will marketers build their brand image in China? Predominantly, the market in China is not focused on brand loyalty apart from a few niche items. One can find numerous local brands for say single item like a smartphone, all with more or less the same features the only difference being the price tag. Since, majority of Chinese consumers consider cost over brands it will be interesting to see how enterprises place themselves in China to reach out to the mainstream and the low level consumer segments. 

Himanshugupta
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India is no different for manufacturing
Himanshugupta   3/23/2012 10:53:36 AM
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"companies that have located manufacturing in China have done so for two main reasons: first, low-cost labor; and second, to reach China's vast consumer market..." 

Well India is no different in that sense. But you already know that and we are reading the McKinsey report from different perspective i.e. possibility of local market. Western consumers and Asian consumers think quite differently as far as the spending is concerned. Even though the per capita income and the middle class will grow in India and China, we should not expect much increase in spending per person. But surely the sheer number (of people) will help the demand. As the saying go, you will not buy a Ferrari until you do not have a road to drive on, the local government have huge responsibility to both attract manufacturing by building infrastructure and give incentive for people to spend.

FLYINGSCOT
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bang on
FLYINGSCOT   3/23/2012 11:27:49 AM
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Great article Barb.  From my travels in China and talking to many folks I heartily agree that branding is the key.  I was amazed how drawn to Western brands the Chinese people are.  They told me they would rather pay 3x for a Western brand as they see Chinese products as very poor quality, carrying little kudos.  I watch eagerly for the first major Chinese brand to be truly competitive in the eyes of the Chinese consumer.

Wale Bakare
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Re: India is no different for manufacturing
Wale Bakare   3/23/2012 12:29:19 PM
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Do you still carry the mindset of China being low-cost labour place? I think, that stereotypical attribute for cheap labour is being fading off gradually.

syedzunair
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Supply Network Guru
Re: India is no different for manufacturing
syedzunair   3/23/2012 1:31:16 PM
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Wale, 

I think China still has low cost labour as compared to other regions.

On the other hand, China still has the ability to produce different qualities of products depending upon the price consumers are willing to offer. So during my visit there I found different qualities A,B,C etc of the same product each fetching different price tag. 

Mr. Roques
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Supply Network Guru
Re: India is no different for manufacturing
Mr. Roques   3/23/2012 4:37:50 PM
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Do you think Apple will continue their high-end device only approach? What about the low-end iPhone I heard about a few months ago? I know 200US$ is not much, but maybe they could create really inexpensive smartphone that can compete with the other brands. 

I also think the iPad will have a smaller brother, at least eventually. A smaller screen tablet.

What do you think?

nimantha.d
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Supply Network Guru
Re: India is no different for manufacturing
nimantha.d   3/24/2012 1:34:52 AM
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It was before but I dont see it ight now becasue China is much more developed and financially stonger than before.

syedzunair
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Supply Network Guru
Re: India is no different for manufacturing
syedzunair   3/24/2012 3:25:53 AM
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"Even though the per capita income and the middle class will grow in India and China, we should not expect much increase in spending per person"

I agree with you Himanshugupta, even if the income increases the buying pattern of the people in India and China is different from that of the West. I don't see middle class people in India buying expensive cellphones especially with a high rate of mugging. Instead, I believe that the low cost smartphones will prove to be a success.


WaqasAltaf
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Supply Network Guru
Far-sight
WaqasAltaf   3/24/2012 11:19:29 AM
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To add on to your blog's idea Barb, I think as the incomes of the Chinese people will increase, not only the demand for consumer electronics will increase but also the wage demands, which will in the long run, wipe out the low-cost labour advantages the Chinese economy benefits from. Also I have read on many places the ongoing debate about who will take the lead after Chinese and Indian markets saturate. The far-sighted manufacturers are already trying to explore opportunities in Africa so that they become the pioneers of the revolution.

TaimoorZ
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Supply Network Guru
Re: Far-sight
TaimoorZ   3/24/2012 3:36:30 PM
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The cost advantage from China will decline (if not disappear completely) in the coming years because of the growing wages. However, the increased income levels in the economy, as Barbara pointed out, will be a key attraction for companies to launch their new products in China and tailor them to suit the Chinese consumers.

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