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How to make proper strategy for entering into China market

Bon-wine Culture Consulting Company by 04/07/2008  


It is critical to find a qualified imported wine with good package, suitable price and good sales for Chinese agent. It will be useful to promote in the market and get profits at last.


i. Strategies and design include, as follows:


1.        
Positioning and analysis


2.        
Decide stages and styles


3.        
Make marketing outline


4.        
Make distribution strategy


5.        
Strategy on channels


6.        
Strategy on promotion


7.        
Strategy on propaganda


8.        
Compile plans

 

ii. Set up institutions in China and choose operators


According to enterprise's scale and product's quantity and production, there are several kinds of cooperation, as follows:

 

1. Use the original institutions and personnel, do not set up another institution any more


This style is suitable for the little wineries whose production and varieties are not large. They can agent professional consulting companies in China to attract investment and find corresponding cooperator, meanwhile they can also get some business consultation from them.

 

2. Use the original institution, but dispatch professional representatives to be responsible for businesses in China


This style is suitable for the ones with certain large production and production quantity. Most of them are middle and little scale wineries whose exported proportion to China is comparatively large.

 

3. Set up commercial institutions in China, and dispatch representatives to deal in business here


This style is suitable for the large-scale wineries or wine distribution companies or the united bodies, which are combined by large-scale regional wine organizations. Institution's sale's manager is the one who is familiar to the products and has commercial knowledge, other officers can invite in China.

 

4. Set up exclusively foreign-owned or joint venture companies in China, and operate market distribution. 


This style is suitable for the large-scale winery and united bodies with a large quantity of production and a complete series of variety. Usually, the principal can be the ones dispatched to China or the professional handlers who are invited in China. Generally, this kind of institution will set up branches in the main market’s area, they can decide whether to invite branches' principal according to its scale.

 

There are some wrong thoughts on how to choose operators in Chins, for example, they like to invite the Chinese who resident or study there to work for them. Meanwhile as for the institutions' representatives, they like to invite the ones who own high standard diplomas but have none experience on distribution and marketing, they trust them for the reason that they have advantages on language and know much about Chinese culture. But, factually, most of them only have the superficial acknowledgement to China wine market, even worse, some ones not only lack the basic knowledge on wine and international trade, but also lack distribution experiences. So that, when there is no business, they may work out all kinds of excuses to go through. At last, it will result in the waste of time and money; even it may give some wrong information to the decision-makers and may incur the error of the whole plan or final failure.

 

iii. Division of distribution regions


With a large number of population and large scale of land, (details you can refer to
http://www.wines-info.com/en/china.aspx), it is important for you to choose suitable sales regions here according to your own product positioning. On one hand, it is useful to concentrate strength on market promotion and decrease sales' cost finally. On the other hand, it is convenient for the middle and small-scale wineries to choose suitable agent here.

 

iv. Decision on distribution channels and objects


There are multi-channel and sole-channel distribution in China, as for the foreign wineries who deal in by means of agent, decision on sales channel (details in Chapter Nine Second sector)  is the precondition of choosing agents there.

 

v. Decision on distribution style


There are at least 50,000 wine's distribution companies in China, but most of them are regional distributors and regional agents there. National (multi-provincial) wine's sale companies are not over 5000; of them about 80% mainly deal in domestic wine. There are only about 100 companies who deal in foreign wine's general agent, of them over 90% companies enter into this field with a time of not over five years, deal in less than 10 kinds of varieties, annual sales are not below 50,ooo bottles, they only agent only one or two foreign brands or promote a foreign united bodies’ wine. With a low market popularity, their main promotion areas are only the own and close provinces. The other 10% companies agent over 10 varieties' products, have an annual sales of over 50,000 bottles. They mainly agent multi-brands or several united bodies’ wine. With a high market coverage rate, their products can be seen all over the main provinces and cities in domestic China.

 

In order to ensure your negotiation can succeed, you should also be very careful to choose talent cooperators when you have decided sales channel, sales areas and agent style. Now, you can choose the ones who own sufficient market experiences or consult professional consulting companies.

 

vi. Decide steps of plan


It is important to make a plan which will be completed by steps. Then you can do it step by step. It will decrease your blindness and help you to grasp opportunities more easily when you are attracting investment and do market promotion. You can consult market experts in China and your experienced corresponding ones.

 

vii. Strategy of pricing


Your providing prices have large influences on the final retail's prices. So, it is key to make reasonable FOB prices, even it may be seriously relative to your future success or failure. As for different agents, you can make different strategies. It is not reasonable to use a united naked prices, which have not left margin to all kinds of costs, such as investment attraction cost, products' promotion cost, privilege encouragement cost, and business cooperation cost, and so on. As for the large famous agents here, left margin can be little , or even neglected. But as for the little scale wine companies and those that intend to deal in wine importing business, you should give appropriate margins for all kinds of costs. You can decide left costs' proportion according to market positioning. We suggest that disparities between the same variety wine's different year's wine should not be too large.

 

viii. Make privilege policy


Privilege policies, including


1. Discount for the first time importing


In this way, you can make agents import much more goods at one time. It may make  agents be more active to exploit markets to avoid goods and capital’s overstock for the heavy pressure of finance circulation. The discount proportion can e decided according to total quantity. Generally, a container
8000-1000 bottles 750mlas a counting unit.

 

2. Annual sales encouragement


It is also a good way to encourage agents by discounting annual turnover or giving other profits. Both sides can contract that wineries give certain discount or benefits whenever agents get a contracted turnover. Generally, the discount or given benefits will be counted as goods at the following year' importing.

 

3. Flexible promotion plan


 
You can leave a price margin to your Chinese cooperators for brand propaganda and market promotion. According to activity budget, you can consider to give certain proportion' privilege( you can count it by goods). This kind of activity includes tasting wine meeting, exhibition, propaganda, and so on.

 

4. Goods for promotion


 
In order to support your agents' promotion activity, you can provide certain quantity of goods to develop this kind of activity. Promotion goods include articles related to wine and wineries’ area, adornments, and so on.  You can also trust your agents to purchase or order in China, for the reason that Chinese products of presents, hardware, and light industry are vary cheap, capered to that of Western countries.

 

5. Training plan


 
Encouragement support also includes training on wine knowledge. You can dispatch representatives to train them here or invite the main salesmen who have completed a certain quantity of sales to study in your original country. You can make decision according to your specific situations.

 

6. Tour and survey for free as an award


As for most Chinese, they have not gone aboard to tour. It will be very attractive for them to invite them to tour and survey for free as an award. You can make a sale goal as a certain standard, according to which you can decide how many persons you will invite to tour for free as an award. This award style is useful to make relatives between Chinese agents and foreign wineries closer. It is beneficial to future cooperation.

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