Marketing of Changhong in China
Section 1. Customer Analysis
1. Color TV
Pure flat serial
Super flat serial
Flat square serial
Comments: Largest segment, dairy products, segmented by regional needs/functional Offerings/entertainment, accelerating growth
2. Projection TV
Comments: Second largest segment, technical offerings, Middle-class's favourites, high growth rate in urban areas.
3. LCDS & PDP TV
Comments: Potential, high technical supports and luxury appliance, growing dramatically.
B. Customer Motivations
1. Color TV Basic appliance for families, affordable, entertaining
needs, internet access
2. Projection TV Entertainment, enjoyable, business purposes (KTV e.g.), replace CRT-TV for an update.
3. LCD & PDP TV Fashion, objectification.
C. Unmet Needs
Lack of intercommunication and interaction:
It does not respond like a personal computer.
Section 2. Competitor Analysis
A. Competitor Identification
Most directly competitive: TCL corp, Konda, Xiahua, Haier Group, Chuanwei, Sony corp, Panasonic, LG, SAMSUNG.
Group Co, Skyworth, Xiahua, Panasonic, LG, Samsung, Tomson, JVC
B. Strategic Groups
Strategic Group Major Competitors Share
(1) Domestic well-known TCL corp 14.09%
brands from national huge
producers Konka corp 12.86%
Haixing corp 9.84%
Xiahua corp 8.88%
Haier Group 6 .88%
Chuanwei corp 7.89%
(2) Import premium products Sony 10.49%
Mainly from Japan
South Korea LG 9.8%
(3) Joint-venture products (mainly
Chinese with other countries 8.67%
Strategic Group Characteristics/ strengths
(1) Domestic well-known National famous brands
brands from national huge widely porefolio of product
producers Heavy use of advertising
The newest advanced products
Emphas on new technological
sell begin at supermarkets
Production scale economies High-fixed cost investment increase
Lower pressure on local competitive pressure because of
responsiweness price war frequently.
Huge presence in supermarkets Spending more on building/
Get enough financial supports maintaining a strong, long term
From local government by good relationship with every agents and
Lack of efficient management on
Each selling branch
(2) Import premium products International brands
Focus on new trends with higher
High-presence in non-supermarket
Channels, such as specialty store
Provide the newest high quality goods High price is lack of competitive for customers who are interested in capability in the consumer group high-tech product and have more who have no high salaries.
demands on products. Customers can't change current
Strong competitive advantages are products very frequently due to
beneficial to attain the best cooperation the prices.
partners and employees like advertisement lack of the understanding of
companies, excellent selling agents and local cultures.
Sell and advertisement through many
Channels such as international competition
C. Major competitors
Main market leader, share 23% over 25ench color TV set
Massive advertising in multiple channels
High good financial capital that is accumulated over ten years.
Start to launch new product to EU from base on Turkey
High quality of after-selling services
Economies of scale low costs difficult to maintain unique
Strong and effective supply-chain comparative advantages on
in all main cities. CRI product due to similar
market situation for each
Attractive brand name stimulates purchase.
Quickly technology renew with forever good quality
Develop new markets also through other digital products like DVD, digital camera, and laptop.
Deep financial resources Less developed in non
Loyalty lack of localized customer
Product quality reputation after-selling services
Top technologies in some areas
Innovation breeds strong competitiveness
Leader in the field of digital TV, PDP TV.
Fast innovation Less developed in nonsupermaket
Deep financial recourses Higher ingredient and production
Section 3. Market Analysis
A. Market Identification: The TV sets Market of China
B. Market Size
Sales (100 million Yuan)
1998 1999 2000 2001 2002 2003
773.71 945.93 1016.56 1089.98 1469.1 1770.2
Low- bargain products
Supermarket -- Growing at 7 percent
Specialty - growing at 10 percent annually
Mass merchandisers - growing at 13 percent
Factors Affecting Sales Levels
The large population means huge demands on products
Growth of needs for up-date
Segments with High Potential
It seems that China will emerge as the world's largest digital TV market by 2015, there could be potential for growth.
C. Market profitability Analysis
In 2001 there were 190 enterprises above designated size ( all the state-owned enterprises , and non state-owned enterprises with the annual sales revenue of over 5 million yuan) in TV set manufacturing in China.
In the past three years, the hot price war in the Chinese TV market dramatically injured the vitality of the domestic TV manufacturers.
Some oversea big firms target the biggest market in the world as well.
Threats of Substitutes
Internet and PC products
Bargaining Power of Customers
Specialty stores have moderate bargaining power.
Mass merchandisers have strong bargaining power.
D. Cost structure
Diversified companies have lower cost because of economies in advertising, manufacturing, promotion, and distribution.
Specialized firms have higher costs.
D. Distribution system
Supermarkets are dominant in terms of quantity they deal with
Retailer handle about 30 percent of marker and are increasing
Specialty stores sales have increased very rapidly.
Online sales become more important in major areas.
E. Market Trends and Developments
Superpremium and premium brands from overseas have grown
TV sets will be gradually replaced by high definition digital TV sets in the near future.
F. Key Success Factors
Access to major channels
Introduction of new products
Breadth of product line
Capture the trends of consumers
Follow the trends of distributors
Section 4. Environmental Analysis
A. Technology trends and events
There are two important trends in the TV set market today. CRTs are
Being replaced with flat panels and microdisplays in direct view and
View and rear projection TVs. Digital tuners are being integrated al-
-ongside analog tuners in large TV set markets.
These two trends are opportunities for many companies that are not
Traditional suppliers of TV sets, like PC manufacturers, to enter the market. They are also creating opportunities for traditional TV set manufacturers to expand and target new markets.
B. Scenario Analysis
Little growth in traditional color TV sets and increase in superpremium segments, such as Projection TV, LCD & PDP TV.
C. Key strategic Uncertainties
Foreign producers are entering the price war to grab an increased share of China's high-end TV market, ratcheting up competition. Domestic TV makers are facing great challenges, will they lose their share of market?
Will the high-end TV sets substitute CRT TV sets in five years?
Section 5. Internal Analysis
A. Performance analysis
Chanhong Company raised a clear development plan which had been drafted in 40 Billion Project on TV sets manufacturer by the end of 2005.
CRT TV: output goal is 20 million units, and sales income goal is 20 billion yuan.
Projection TV: the company manufactures all kinds of models from 38 inch to 70 inch, and yield goal is 1 million units, earnings goal is 15 billion yuan.
LCD: the company manufactures all kind of models from 15 inch to 32 inch now, and will realize earnings 5 billion yuan.
We have 60 million faithful customers. One of reason is our products have good national reputation. We currently has annual manufacturing capacity for 17 million color TVs, 1 million rear projection TVs, so far, we share 23% TV sets market.
High-fixed cost investment increase competitive pressure because of price war frequently. The final dumping duties which will be imposed on products made.
As the fastest-growing segment of domestic TV industry, for example, sales of LCD televisions in China is expected to increase sharply, Changhong still have chance to win the market with technology advantages.
Section 6. Strategic Development
The overseas marketing strategy should fit our strengths, our objectives, and our organization, which is to increase the sales of Changhong products in overseas markets through a variety of market promoting activities, such as strategic allies with other companies, capital operation and brand management.
Seek a practical entrance of changhong products into the overseas markets.
Establish contacts with local clients and governments in order to obtain prompt and accurate business information.
Seek proper business partners at proper places in order to set up changhong global sales network.
Develop products appealing to different overseas markets.
Increase our overseas market share through the export components, sets of products parts, complete products, technology, and production equipment .
Establish after-sales services network in accordance with local situation.
David A. Aaker. (2005). Strategic Market Management. (7th ed.). New Caledonia: Leyh Publishing LLC.
Changhong color TV sales rank the second in the globe. Chang Hong Ltd. Retrieved 26 August, 2004. From
About the size of TV industry in China
The analysis of TV sets sale in 2003. Huichong home appliance survey.
Retrieved 27 August, 2004. From