Every MBA student or anyone familiar with marketing basics has at least heard about the concept of 4Ps of marketing which are:
- Product;
- Price;
- Promotion;
- Place;
Western companies typically run their marketing based on those four principles as an integrated effort. Since Chinese economy started to truly open up to the West only from the mid 80s, not surprisingly, the vast majority of Chinese companies haven’t reached the same level of sophistication and still view marketing only as a single P – Promotion. Traditionally, Product is considered to be the domain of R&D and the engineers, Price is the area of the sales people and Place is something to be decided by the boss.
The traditional Chinese view of a salesman as the most respected and the most important company employee, a true key person that everything and everyone hinges upon.
Although, things are slowly evolving towards more modern approach, most traditional Chinese businesses still view their Marketing department (if they have one) as more of a cost center, mainly in charge of generating brochures, presentations and other material for the sales to use.
Perhaps, one of the reasons that could account for this situation is the traditional Chinese view of a salesman as the most respected and the most important company employee, a true key person that everything and everyone hinges upon.
Another reason is the natural aversion and distrust many Chinese feel towards aggressive over the top advertisement that has been associated with fraud and numerous scams. This is why a personal connection is viewed as the only reliable way to establish trust and maintain good company-client relationship.
A good salesman is expected not only to entertain the customers but also forge a true and long lasting friendship with them, the only perceived guarantee of getting the business.
Does it mean that the famous 4Ps principle of marketing is not applicable in China? No, the theory still holds but the adjustments must be made in order to adapt the theory to unique conditions Western companies encounter in China.
In fact, I believe that better understanding of the 4Ps and their role in the integrated marketing plan may even give an advantage to Westerners as long as they are willing to tailor their methods to account for the local ways of doing things.
Moreover, China continues to constantly evolve and learn faster than anyone could have expected. Fresh MBA graduates and overseas educated returnees take more prominent roles in Chinese companies slowly replacing traditional approaches with moderns and scientifically based concepts.
In the subsequent posts I will discuss the specific strategy adjustments and methods Western companies should consider to their 4P marketing mix that fits best to the Chinese market.
