Business Models and Marketing Strategies for theItalian Companies Entering the Chinese Market

Tiziano VescoviTiziano VescoviDepartment of Business Economics andDepartment of Business Economics and

ManagementManagementUniversità CaUniversità Ca’’ Foscari Venezia Foscari Venezia

Literature analysis Interviews

3 universities▪ East China Normal University Shanghai▪ Tongji University Shanghai▪ Zejiang University di Hangzhou

14 Italian managers and officers in China 4 international experts in China 5 Chinese entrepreneurs 5 international scholars (Belgium, France, UK,

USA) 150 consumers

several very different submarkets andsubcultures

Inefficient market, very few externaleconomies

Chinese people big bargainers

Confucius Influence Harmonic relationship Group orientation Saving Long term orientation Influence of the Concept of centralized planning

Key components- QCG Focus on Quality (reliability and duration) Cultural Similitude Global Accessibility

Ostentatious Use of Top brands morethan in the West

Customer service should be really high In Chinese society life styles are still

very descriptive Group is dominant on the individual

therefore social reference brands arepreferred

Expatriates with deep knowledge of localculture

High hierarchy Need of relational skills, not only technical

and managerial skills

There is a perception of Italian Style,but it is still confused

Economic ranking and internationalvalue as nation are important for thebrand perception

Life style should be known andappreciated (identity) to give value tothe brands/products

Rotated Component Matrixa

Component

1 2 3

Punctuality .807 .144 .035

Precision .768 .034 -.027

Industriousness .644 .114 -.019

Safeness .627 .059 .292

Economic Strength .589 .269 .113

Elegance/Refinement .260 .735 .054

Attracting Lifestyle -.036 .701 .197

Creativity .159 .681 .092

Perfection .229 .626 .102

Tasty food -.118 .487 .389

Quality .383 .472 .371

Beauty -.046 .173 .811

Friendly .198 .251 .718

Reliability .510 -.048 .585

Sun .036 .405 .436

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 5 iterations.

Westerns (mainly Italian companies) use inChina a presumptuous attitude

The linguistic-cultural barrier is oftenunderestimate

They should be adapted to the Chinesemarket (colours, sizes etc.)

They should be explained to thecustomers

The value components should bedescribed and understood by theconsumer

Problems in translating the brand name Cultural-historical reference is really

important to build the brand value Number 1 syndrome

valuesvalues

cultureculture historyhistory

Sound similarity Audi

Meaning creation Heineken

Cultural similarity Red Bull - Insead

Integration Ikea

Classic media are stillstrong

Flagship stores reallyimportant

Sales Promotions anddiscounts reallyimportant

Frequent use of themobile (sms)

Local Partnership aredifficult

Sales people training Franchising is at the

starting point Concept “dreaming Italy”?

Point of Sales Location (symbolic ecommercial)

Arrogance attitude Low end products thinking

of a primitive market Short term investment Be alone

Cultural knowledge Long term strategy Manager knowing China Partnership Be able to adapt to the differnt

(changing) markets of theCountry

educationeducation

marketingmarketing

designdesign

serviceservice