Positioning in a Complex Market

Abstract

China’s domestic market is very diverse. The municipality of Beijing has a per capita GDP 4.5 times higher than Gansu, the poorest province. Cultural and climate differences result in different patterns of consumption in different parts of the country. The spectrum of competitors is much different from that in the home market of foreign companies: Chinese companies focused on the low-end market, but many of them are increasing the quality and functionality of their products and start to compete with multinational companies. Foreign companies from third countries, including emerging markets, strive to get a market share in China. These factors require a careful analysis of the Chinese market and well-calculated positioning. In addition, fast development of China requires regular readjustment of companies’ positioning. Some MNCs have decided to adopt a positioning in China very different from their home markets. The huge and highly diverse Chinese market provides ample opportunities for foreign SMEs and private entrepreneurs. A case study shows how a small German medical device manufacturer found its niche market between local low-cost manufacturers and dominant MNCs.