Research On Marketing Channels Of New Consumptive Information Industry In China

As information technology has provided a tremendous driving force for the growth of national economy and globalization, the need of information processing for ordinary families and individuals has rapidly increased as well. People hope that their career, entertainment, and even all the aspects of their life can become informative and modernized; the burgeoning consumptive information industry meets such demand. Meanwhile, the phenomenon of similar products and severe competition has become more and more obvious on the market of new consumptive information industry in China. It has been well demonstrated that the proper ways of construction and management of marketing channels play a significant role in helping the enterprises gain competition advantages from the difference in the marketing channels. Indeed, the marketing channel has become a crucial factor in determining the success of a firm in the new consumptive information industry. Consequently, this thesis will discuss the marketing channel in the new consumptive information industry in the following four chapters:1. The theoretical definition of the marketing channel of the new consumptive information industryBased on information technology, the new consumptive information industry is an industry that specializes in producing household goods for the production, acquisition, processing, storing, distribution, and transmission of information. The major products include consumptive computers (PCs and laptops), cell phones, digital cameras, digital videos, mp3, mp4, removable disks, PDA, and so on. Besides high intellectual input, high extra value, and low consumption, this industry also possesses the characteristic of fashion.The marketing channel is defined as the commercial path of commodity leading from the producer to the terminal consumer. It has an inter-dependent and well-organized system composed of producers, middlemen, and final consumers. There are some features of the marketing channel of new consumptive information industry. The components of the channel are independent, but they rely on each other for profits. Among different members in the channel, the relationship of controlling or being controlled is not absolute but varied. The operation mechanism for controlling the members in this channel is somehow between marketing and organizational. Furthermore, the new consumptive information industry affords the following eight functions: the collection and transmission of information, the execution of sale promotion, consultation, organization and allocation, negotiation, logistics, financing, and risk taking.2. The current situation and characteristics of the new consumptive information industry in ChinaThrough researches, the author believes the new consumptive information industry in China has the following features:The market is very concentrated, and the competition is abnormal and brutal. In 2004, there were 184 computer manufacturers, and the top four manufacturers'market share was 56.25%. There were 62 brands of mobile phones in China during 2006, but the top four companies took the account of 70% of the total market share. Under such circumstance, although few large companies occupy overwhelming market share, they are not able to monopolize the market completely yet due to so many competitors. Similarly, many of the small enterprises have to survive under great pressure, so they must constantly strive to improve technology, increase their product differentiation, and through various efforts to increase its market share and profitability.Although there are many segments of market, the core products show little differentiation. Since the market of new consumptive information industry in China is highly competitive, manufacturers are actively motivated to segment the market for greater market share. As a result, the segmentation of market has achieved its limit. However, because the core products of this new industry have little difference, or the methods of differentiation between companies is not distinct enough, the low degree of overall product differentiation in the industry is soon resulted by simple imitation among manufactures. It is worthwhile to note that the differentiation in marketing channels may become an effective way to create differentiation among manufactures in this new consumptive information industry because the elimination of such differentiation can not be readily by imitation in a short period of time.The new consumptive information industry in China has entered channel-determining stage. The construction and management of channels is a systematic project. The marketing channel is a super-organization, and its structure, especially the way it is managed, is difficult to successfully copy by other competitors. Also, the same channel can be applied to different products for distinct effects. Therefore, the difference in marketing channels can satisfy the six principles of effective difference. Marketing channel difference has become a very important method to differ enterprises in the new consumptive information industry in China, and it is not exaggerated to say that marketing channel difference is the inevitable choice for modern enterprise differentiation. Through researches, the author has found that the performance of many companies is greatly different in the new consumptive information industry of China, which can prove that marketing channel in China's new consumptive information industry is very important.3. The development of marketing channels of China's new consumptive information industryThere are six basic types of marketing channels. The six patterns are: The first pattern is national distributor and multi-level channel. A manufacturer looks for a distributor or several national distributors to distributing. It is the most appropriate pattern for the manufacturer who just enters the market and has no channel himself. Most foreign companies use this pattern when they enter China's market.The second pattern is provincial distributor and multi-level channel. A manufacturer directly looks for provincial distributors, or divides the national market into several regions. He finds a distributor or some in each region. The distributor distributes within the province or region. Most new consumptive information enterprises have also used or continued to use this mode of marketing channels.The third pattern is direct marketing. A manufacturer will direct sale product to final consumers, which does not pass to any intermediate channel. The world's most famous direct model is the Dell's direct-marketing. However, Chinese consumers accustom to store shopping, and lack a sense of trust of those who have no stores. Therefore, the direct marketing model does not develop in China smoothly.The fourth pattern is manufacturer's own channel. A manufacturer sets up its own marketing network through the establishment of branches and offices. The branches and offices contribute to the construction and management of the regional marketing channels. In China's new consumptive information industry, many state-owned companies use this mode.The fifth pattern is directly supplying. A manufacturer supplies directly to the retailers, instead of intermediate agents. This mode has become the favorite mode for those enterprises in the new consumptive information industry, especially foreign ones of mobile phone brands.The sixth pattern is fulfillment distribution (FD). A manufacturer in the region looks for one or two FDs, as funds and logistics platform for the manufacturer, while the manufacturer is in charge of other sales and management.With the evolution of the market, the strategy of new consumptive information industry marketing channel is also undergoing changes. It shows the diversified pattern of channels and integration of channel.4. Suggestions to the construction of marketing channels of Chinese new consumptive information industry.At present, the marketing channel of China's new consumptive information industry still needs improvement and development. It needs improving the capability of sales channels and operation constantly, expands capacity, growth and ability to increase value. The following is the recommendations to China's new consumptive information industry.Deepen integration and improve management inside the organization. Wholesalers and manufacturers search for common goals and common interests through effective communications, so that they can cooperate closely.Increase the capability of additional value channel and transfer the traditional sale channels to additional value channel. New consumptive information products should try to add value of the logistics distribution and technical services.Refine reverse channel management. Reverse channel is the transmission pathway consumers towards producers. A perfect reverse channel service system will enable manufacturers to grasp the information of products, customers and markets faster and more accurate.Enhance the efficiency of upstream supply chain. The efficiency and cooperation of upstream supply chain, manufacturers and suppliers directly decide the cost of Regular Qualified Products and whether manufacturers can produce them on time.