_Pyramid_Shaped__省略_veforChineseSmes_Liu.docx

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1、 Scientific Research International Conference on Engineering and Business Management (EBM 2010) Pyramid-Shaped 4ps: A New International Marketing Mix Perspective for Chinese Smes Liu Cang Department of Marketing, Xian University of Finance and Economics,UFE, Xian, P. R. China firstliucang 126. com A

2、bstract: Lacking of international marketing experiences of Chinese small and medium sized enterprises (SMEs) makes them face difficulties in their international marketing activities. To deal with it and better arrange their product, price,place, promotion decisions (4 Ps) in more efficient arrangeme

3、nt according to their relative advantages as fast adjustment speed etc., this paper suggests an integrative 4 Ps, as pyramid-shaped 4Ps, i.e., a 4P combination that includes a narrow and clear pyramid spire (product); a flexible pyramid body (a promotion and price combination); and a solid pyramid b

4、ase (channel). This pyramid-shaped marketing mix explains the coherent cooperation and relations of 4Ps, which will benefit Chinese SMEs international marketing bunsiness in an operative way. Keywords: small and medium-sized enterprises, pyramid-shaped marketing mix, international marketing 1 Introd

5、uction Chinese SMEs have faced increasing competitive pressures in domestic markets. While improving their domestic growing abilities, they try to uGo out?, (as Chinese national policy has called for) to pursue international opportunities to develop overseas markets. Chinese SMEs need to avoid curre

6、nt fierce domestic competition. On one hand, through internationalization, Chinese SMEs not only raise their operative skills by learning their foreign counterparts, but also introduce some management talents with international backgrounds and perspectives; on the other hand, SMEs are more flexible

7、and effective compared to large Chinese enterprises, therefore they are easier to meet individualized foreign markets demands. Future market participators will divert attention from large groups to small appropriate groups, because this segment brings better return. The attractiveness of entering in

8、ternational market is observable, how SMEs initiate their internationalization process and not just relying on agencies to export becomes an urgent issue to deal with. With limited human resource and capital, it is impractical for them to research the target markets and to practice marketing mix wit

9、h huge capital investment. Prof. McCarthy classified marketing tools into four broad groups that he called the 4Ps of marketing: product, price, place and promotion. It particularly calls for the integrative power of the marketing mix. Therefore this paper designs a marketing mix especially for thei

10、r characteristics, which is considered the relative advantages of SMEs. 2 Constructing a pyramid-shaped marketing mix 2.1 Pyramid-shaped 4Ps construction base Table 1. Pyramid-shaped* 4Ps5 construction base SMEs5 com- parative advantages to large enterprises Relative advantages to Bases for construc

11、ting the Construction large enterprises pyramid-shaped 4Ps hint Technology capabilities Positioned small empty space (niche) between large enterprises markets, with character- Unique pyramid istics of low cost, shorter time to adopt and less input spire Low cost Labor intensive industries transferre

12、d to developing countries, as textile, garment and toys etc. Pyramid body (Price and promotion combination) and strong pyramid base Dynamics for Less government intervention, pyramid Fast adjustment speed consumer-oriented decisions shaped and quick reactions marketing mix There is no real factor di

13、fferences when SMEs operate cross-border to pursue international marketing mix compared with those of domestic market. However SMEs should base their business on the host countries, characteristics and special requirements and should not run as larger long term business investment like large enterpr

14、ises (As shown in Table 1). 2.2 Pyramid-shaped 4Ps The new construction of 4 Ps should be a niche like one, being different from larger enterprises and fully utilize their own advantages. The basic framework is: 978-1-935068-05-1 2010 SciRes. 2444 International Conference on Engineering and Business

15、 Management (EBM 2010) Scientific Research Figure 1. SMEs5 Pyramid-shaped marketing mix Part A, B and C in the figure stand respectively for: A. Spire (product), which focuses on the products obvious characteristics; B. Pyramid body, combining price and promotion strategies to support spire; C. Pyra

16、mid base, a channel providing a solid and reliable base for other 3 Ps. Specifically designed from the SMEs point of view, it constructs the Pyramid-shaped” international market- ing mix. Spire As a pyramid, the customers evaluate SMEs general strength by its spire, i.e., the top important strength

17、of 4 Ps shown by the products specialized characteristics. The lower parts as pricing, channel and promotion parts are foundations to support the spire, to enhance competitive strength in the international market by its integrated height. The spire is to ensure that SMEs concentrate their limited re

18、sources on one specific segment or segments for their marketing activities to show their height. Spire is the key to their international business. SMEs should focus on how to form one unique business proposal. Due to the limited size of SMEs, it is unable to achieve economies of scale. One solution

19、is to operate with characteristics, such as the image of products to enhance the spire position. A good spire should be a sharp and obvious one to retain certain customers. In this regard, the practices of SMEs in the United States are worth considering to copy. Their decision-making is centered on

20、some popular innovations and product to avoid direct competing with large enterprises. They are with new, cool or deep and narrow product lines to fill the market gaps of large enterprises. Because of their lacking of conditions new product development, it is important for SMEs to take full advantag

21、e of their suitable technology to follow this pattern, with efforts of restructuring and imitating some new products just to the target markets. They try to occupy some market share with their own products, such as the use of new (innovative) designs, through fully playing their adaptability to face

22、 complex and changing international market environment. Pyramid body Pyramid body jointly advances promotion and price. It demonstrates more directly to the customers of this integrated marketing mix compared with other Ps. On one hand, the design of body provides a foundation for the spire and high

23、lights the spire; on the other hand, it links tightly with the pyramid base. Table 2. Pyramid body: three promotion and price combinations Mix cate- gory Relative centered promotion + low price Service centered promotion+ High price Daily centered promotion + Relatively low price Key targets Promoti

24、on Pricing level Approaches and phi- losophy Centered Establish twin-win, long-term business relations to make sure to obtain stable market Developing new customers as well as mentioning old ones Low price with customers, to mention good relations is an important way to keep enterprise position grow

25、 4 Prominent Forming competitive advantages Fully utilizing their fast speed advantage to provide more individual oriented services High price and profit ， playing a leading role in a certain part of product service, Differentiated service meets customers individualized demand Not only Adjusting to

26、profit Not only some extent maximum caring about Relative according to in the area customers, low price the demands but also the demand but with flexi- of different general also the ble ad- area, cus- profit of competitors justment tomers, the enter- act tastes and prise competitors Traditional mean

27、s of promotion mix is the combination of personal selling, advertising, sales promotion, and public relations to achieve marketing objectives. SMEs could not promote all the four ones well as large enterprises do. First, their strength have restricted them to act as companies as Global Top 500, such

28、 as investing huge on overseas advertising; SMEs are hard to suffer the long waiting time for public relations estblishment; personnel selling is restricted by cost, education, communication constraints and other obstacles, and it is difficult to guarantee positive results; sales promotion is able t

29、o bring some short-term benefits, but in the remote overseas market, SMEs are difficult to take effective activi 2445 978-1-935068-05-1 2010 SciRes. Scientific Research International Conference on Engineering and Business Management (EBM 2010) ties. In contrast, price is commonly used means of compe

30、tition by SMEs, the level of product price not only directly influence the economic efficiency of enterprises but also corporate marketing decision-making and consumer decision-making. Pricing is a decisive factor for the international marketing activities. Combining promotion and price activities c

31、an provide a strong support to pyramid spire, there are 3 modes for its practices (as shown in Table 2): Pyramid base Pyramid base international marketing channel is an important component to support SMEs international marketing activities and is with highest difficulty. The main function of SMEs ch

32、annel is to provide fast service. The product, price and promotion parts are relatively easy to imitate other enterprises. In view of this, channel is base for marketing. The base shows exactly that it is the foundation for the marketing mix. Under general circumstances, choosing a self-constructed

33、pyramid base is most reliable to support the whole pyramid, however for SMEs, it is difficult to afford the relevant investment and to find suitable staff. A reasonable choice is to design a pyramid base by considering 3 Cs comprehensively, i.e., cost, control, and coverage. Some short and narrow on

34、es are preferable. 3 Conclusion Chinese SMEs could arrange their international marketing mix based on pyramid-shaped orientation to pursue their suitable relations of 4Ps to compete with large enterprises. This is the requirement of their necessary niche strategic position and fully utilizing their

35、abilities. This one helps SMEs5 expansion to international market by introducing their integrative 4 Ps power. References 1 Keegan J. Warran Globel Marketing ManagementM. Beijing: Tsinghua University Press, 2007. P 329-428. 2 Mosad Zineldin, Sarah Philipson, Kotler and Borden are not dead: myth of relationship marketing and truth of the 4Ps, Journal of Consumer Marketing, 2007, 24 (4), P 229- 241. 3 Acs, ZJ., Morck, R.K., Yeung, B., Entrepreneurship, globalisation, and public policy, Journal of International Management, 2001,7 ,P 235-51. 978-1-935068-05-1 2010 SciRes. 2446