Bending the Ties and Winning the Battle for Chinas Good Enough Market by O Gadiesh P Leung T Vestring

First Last NUMBER Bending the Ties and Winning the Battle for China’s Good Enough Market:. Markets where there is a lack of established consumer relationships, create a unique opportunity for start-up corporate ventures to compete on a near equal footing with dominate multinational corporations. Consumer markets that are growing and changing as dramatically as they are in China demand a nimble and aggressive marketing plan from each market producer to capture market share as it evolves literally overnight. The dynamics of the Chinese market demands the development of a “Good Enough” market strategy. According to Gadiesh, Leung, and Vestring (2007, p. 83) “Good Enough” products offer decent quality goods for a rapidly expanding group of value-seeking consumers with mid-level incomes. Any market producer that wishes to enter the Chinese market place must consider the evolving middle class demographic as the battle ground for the future of emerging markets not only in China but across the globe.
According to the authors, the Chineses market is divided into three different segments: the premium segment, the low-end segment, and the exponentially expanding middle market or “Good-Enough” segment. The Chinese middle market has a thirst for gadgets and utility products such as LCD Televisions, DVD Players and MP3 players.(Gadiesh et.al. 2007, p. 83) The Chinese consumer is seeking product function without all the features that can be purchased for a rock bottom price. The key point for start-up companies in the Chinese market is an understanding that the Consumer in these markets is not driven by the products esthetics. Market producers do not need to deliver perfect products to engage the market. they need to deliver good products at a reasonable price.
For international companies to establish, sustain or expand their presence in Chineses market, they must focus all efforts on their products’ value. There are three approaches to entering the “Good –Enough” market which are: attacking from above, burrowing up from below and mergers and acquisitions into the “Good-Enough” space.(Gadiesh et.al. 2007, p. 83) Burrowing-up is most often over-looked by multi-national corporations. The method is most commonly employed by local market producers who over the course of decades upscale their products from low-end regional products to “Good-Enough” national brands. Attacking from above is a not so inviting multinational tactic that can sometimes backfire and result in their premium product and market share being cannibalized by their marketing push into the “Good Enough” segments. The third method is mergers and acquisitions. This method is effectively buying your way into the market by purchasing an existing “Good-Enough” producer and expanding their market share through foreign capitalization.
The balance within the Chinese consumer market is evolving vertically in a rapid and unpredictable fashion. The turbulence within the market is moving upward with the “Good Enough” local producers constantly having to evolve and improve their market products. With each evolution the “Good-Enough” segment of the middle class consumers encroaches on the small but highly profitable niche of the “premium’ market segment that is dominated by foreign multinational corporations. Gadiesh, Leung, and Vestring establish a solid and very compelling argument of how emerging markets will perform in the new millennium and, more importantly, how the lessons from the “Good-Enough” Chinese market segment should be applied throughout other developing nations and their markets.
Works Cited
Gadiesh,O. Leung,P.Vestring, T. The Battle for Chinas Good-Enough Market. Harvard Business Review, September. 2007, 81-89. Print