Marketing in Asia

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Marketing in Asia

• O.C. Ferrell
• University of New Mexico

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About ChinaGlobal Edge

• About China

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China is still a relatively poor country

• GDP per head in 2005 was 1,700 compared to
  42,000 in the U.S.
• Urban labor market exceeded new jobs created by
  20
• Corruption is endemic and growing
• Protests and riots by rural workers are measured
  in the tens of thousands each year

4
Chinese Optimism

• Most Chinese believe that Chinas global
  influence will match that of the U.S. within 10
  years
• Right now, 87 of the citizens think China should
  be taking a greater role in world affairs

5
Chinese Infrastructure

• Chinas military spending has increased 300 in
  the past 10 years
• China is a one-party state, not a democracy
• Predictions are as the wealth in China increases,
  there will be movement toward more democratic
  freedoms

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Chinas Growth Changing How Companies Do Business

• AstraZeneca AstraZeneco is conducting clinical
  trials in China, has added research staff
  opened a purchasing operation
• Right now, 320 million in revenue or less than
  2 of the companys global revenue of 26.5
  billion
• Expect sales in China to grow 25 this year
  that it will become the 3rd largest marketing
  partner in 5 years.
• Caterpillar, Inc. Caterpillar has created a
  China Council of top mgt. to act quickly on
  investment other important decisions
• Right now, sales are only 2.5 of its 41.5
  billion in global revenue
• Expect sales in China to triple by 2010 providing
  1/5 of global revenue

7
China Leads in Air Safety

• Despite double digit growth in the number of
  flight hours, accident fatalities are below the
  U.S. and Europe
• Transformed from worst to first
• Compliance (strong central agency with rules)
  attitude, slow down the growth, learn from other
  aviation accidents, aggressive enforcement,
  seeking the best expert advise systems
• Use of sophisticated satellite-based navigation
  systems
• No Chinese jetliner has crashed since 2004

8
Indias Factories

• Industrial production jumped 12.5 this year in
  India
• Manufacturing everything from sneakers to SUVs
• India generates less than 1 million new
  manufacturing jobs annually, but needs to create
  5x that many jobs to lift hundreds of millions
  out of poverty
• VW, Hyundai, GM and a joint venture of Fiat and
  Tata are all building new factories for a total
  investment over 4 billion
• Korean steelmaker Posco is planning a 12 billion
  plant
• 40 of top multinationals plan to start
  manufacturing in India by 2010

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Samsung Electronics

• Samsung, Seoul, was the worlds top seller of
  televisions and the third largest manufacturer of
  cell-phones (also making key components for
  competitors)
• Today, Samsungs stock is down 10 this year
• Digital products are showing slower growth
• Waiting longer to upgrade products focusing on
  price
• Semiconductors, used in every digital product,
  are selling more slowly
• Factory relocations job cuts are planned in
  South Korea
• Real problem because of the perception that
  Samsung has failed its corporate responsibility
  to society
• Putting a push on printers to compete directly
  with HP