Tag Archives: Strategies

Market Analysis

China Market Entry Strategies – Bypassing 1st Tier Cities

The first decade of reform and opening up in China saw large multi-national companies pave the way with big investments in all aspects relevant to their industries. Famous quotes such as “the risk not to be in China is bigger than the risk to be in China” from Heinrich von Pierer, the CEO of the Siemens AG from 1995 to 2005, were typical of a time when large capital investments were deemed necessary to enter the Chinese market.

As average wages have increased and consumers possess more disposable income and are willing to spend their hard-earned wages on modern products, more small and medium sized companies from around the world have entered the Chinese market importing products ranging from French cosmetics to German paint, from Ukrainian Vodka to Malaysian fruit juice.

As recently as a decade ago, entering the Chinese market was synonymous with entering the Beijing, Shanghai, or possibly the Guangzhou markets. It meant understanding the potential of a few select regional markets, as only those markets were believed to be profitable. The result has been a massive increase in marketplace competition coupled with the increased sophistication of 1st tier city consumers. New advertising campaigns continue to attract legions of curious consumers and their willingness to try new products is high; however, brand and product loyalty for many product categories continues to remain low.

Market Entry Strategy in China

The breakneck speed of the development of consumer markets in 1st tier cities such as Beijing, Shanghai and Guangzhou has led to a dynamic saturation of these markets by a constantly changing abundance of similarly-perceived products coming from around the globe. The term “dynamic market saturation” has been used to describe the high turnover of products entering the 1st tier city markets, all chasing after the same consumers although the size of the market in terms of the number of consumers remains fairly stable.

The vastness of China and the sheer size of the population mean that opportunities still abound for companies interested in entering this market. However, regardless of the product category, a passive market entrance that relies on the sheer number of potential consumers in China to flock to any and all products is no longer enough. A strategic decision-making methodology is now essential for determining whether or not to take the plunge in China.

Research in 2nd Tier Cities

Bypassing the highly competitive 1st tier markets is a viable option for many companies and can offer numerous rewards; in fact, it should be seriously considered. A recently concluded market research study carried out by Labbrand focused on understanding the feasibility of a new vodka brand to enter the Chinese market by bypassing the 1st tier markets, and identifying areas of consumption which go beyond the competitive battlefields of the nightlife and entertainment venues of the 2nd tier markets. In short, the objective of the study was to understand which vodka products from the client’s portfolio are suitable for whom, and where they are most likely to be consumed.

The scope of the study included a semiotic analysis of baijiu (1.) codes, video ethnography, and qualitative consumer focus groups with regular drinkers of baijiu and other alcohol in Chengdu, Shenyang and Wuhan. The focus groups were organized in restaurants together with a meal in order to allow for a thorough product tasting. The following key points were addressed in the consumer market research:

* General understanding of spirits and consumption habits,

* Consumption occasions (specifically for hotels, restaurants and cafes),

* Vodka category understanding,

* Brand name test,

* Taste test ,

* Packaging design test.

The project was completed with a brand positioning and strategy workshop to develop a compatible positioning of the brand for China.

Semiotic Analysis

The semiotics phase consisted of identifying the positioning of different Baijiu brands, the main codes used in communication and an analysis of various bottle styles currently found in the market place. The semiotic analysis identified the key axis for positioning in China. For Baijiu brands, codes used in communication were positioned along an axis ranging from power and achievement to universalism, tradition and heritage to hedonism and stimulation. The bottle designs were classified from power and status to universalism, from classical to modern, as can be seen in the diagrams below.

Data Collection and Recommendations

The focus groups revealed that in comparison to their 1st tier city counterparts, knowledge of foreign alcohol was limited among small city consumers. Foreign alcohol types were not differentiated, for example many participants did not know the difference between vodka and wine. Perceptions regarding drinking occasions and behaviors also varied. Within Chinese liquors, consumers would often buy the most expensive baijiu to have a drink with their boss, but purchase an inexpensive liquor to enjoy with their friends. With regards to foreign alcohol, beer was considered to be a casual drink that could be enjoyed with friends over dinner, whereas wine, specifically red wine, was considered more sophisticated and romantic. Foreign hard alcohols were associated with clubbing and being cool and trendy.

The idea of having a glass of whisky for enjoyment was not present among respondents. Purchases of foreign alcohol were based mostly on promotion and availability, while the reasons given focused on wanting to be trendy or garner the admiration of peers.

Information from the video ethnography and consumer focus groups also helped refine the client’s understanding of the target consumer and how they can best be engaged. Further recommendations included key areas identified as requiring improvement, namely the product name and packaging. The semiotic analysis also offered clear findings regarding dominant and emerging packaging and bottle codes.

Labbrand also made several comparisons and recommendations regarding potential distribution channels of interest for or client. By focusing on consumption occasions and locations, new restaurant types currently not considered a priority by major foreign brands were identified as potentially viable for introduction of the clients Vodka brand. For example, a vodka brand could develop a partnership with a Western-style restaurant positioned mid-market managed by a Chinese single proprietor. Premium alcohol brands are unlikely to target this type of outlet, yet a lot of consumers could be reached through this restaurant channel.

Conclusion

There is a vast amount of information available regarding Chinese consumers; however, most of these studies often forget to mention that their research was limited to a few 1st tier cities and possibly some quantitative statistics provided by the statistics bureau of China. A major learning for our client was that their understanding of the Chinese market and the results from the research were unique and required them to re-evaluate their market entry strategy. 1st tier and 2nd tier consumers are very different. Product understanding, market exposure, needs and expectations will be different in different product categories. Only through a well-formulated brand strategy based on comprehensive market understanding can brands, large or small, domestic or foreign, hope to build brand equity to succeed in the long run in China.

(1.) Baijiu (c��e�’; pinyin: báijiC”), is a Chinese distilled alcoholic beverage. The name literally means “white liquor”

Forex Trading Articles

Forex Strategies to Establish Your Financial Power in The Forex Market

Forex pertains to foreign exchange which is the trading transaction occurring between the foreign currencies. If you are planning to land your feet in the forex market, you should be equipped with the information and details about it. Venturing into this kind of market without sufficient knowledge is just like suicide because the mind still has more impact than money.

To make sure that your Forex trading venture will be very profitable, you need to know the technical details that will boost the nature in which they successfully trade. In connection with this, you should unlock the Forex secrets by knowing the right Forex trading strategies to use. These strategies are the combinations of price patterns and indicators that will aid you in deriving the tradable signals.

The following are just some of the most effective Forex strategies that you can use to establish your name and financial power in the Forex market:

Trade timing-this is a very important strategy because it will provide you with the sign on how to decide about the entry and exit points in Forex. By knowing when to enter and when to exit, you will be able to manage your money well. The principle of this strategy stresses the impossibility of ascertaining both the trade’s technical pattern and the price all at the same time.

Volatility and interest rate gaps correlation-this strategy suggests that when the interest rate gaps are widened, it should also correlate with the rise of volatility. By understanding this correlation, you can always adjust your portfolio accordingly.

Crossover-based technical strategy-this is considered as one of the easiest and most popular strategies. But according to experts, this might also be risky sometimes because it has the tendency to create false signals unless confirmed by data. The crossover is known to signal the momentum change in the market.

Technical analysis-based Forex strategy-with the help of this kind of strategy, you can foretell the future price that is based on the past developments. If you would like to make the right decision, then you need to make use of this strategy well.

In technical analysis, the very first step is to identify the market with which a certain trader is intermingling. Then, he will make use of visual tools, oscillators and trend lines to identify the market type. Based on the market type, the right tools will be picked to carefully examine the trading chart. When the tools have already been selected, the analyst should decide on the range and periods for which Forex values should be supplied to his chart. When done, he will look for the signal again, conduct the analysis, compare and contrast the results and carry out the trade.

With the help of these Forex trading strategies, you can successfully boost your online trading with different currencies. Before using any strategy, make sure that you know how to use it. In the Forex trading market, you don’t have to be contented with simply knowing the strategies because you should execute them the right way.

General Forex

4 Best Forex Trading Strategies

The Successful forex traders have learned to use several different strategies as well as they know accurately when to apply each one and when to stop it. However most of the Forex traders are searching for the best strategies but they don’t get exactly what they need, so here are some of the strategies which can help you to make your trading more successful.   

 

Understand the fundamental factors:

You need to understand the fundamental factors that affect you’re trading such as political, economical or social. Take into account those fundamental factors that have an effect on its country currency’s exchange rate.

Experiments are the key to success when it comes to Foreign exchange currency trading system. Traders who are constantly using the same track of trading they don’t lose their money but however they even don’t earn too much. That’s why you need to always invent some unique best trading strategies but don’t invest too much in any trade.

Keep a close eye on the countries’ economies:

You have to constantly keep a close check on various economies of the countries. Always keep an eye on their foreign exchange dealings as well as on activities.

Learn the forex market trends:

Learn the market trends and keep a close tab on the global forex trading and the policies of central banks of different countries as well. You have to do this in order to understand the market trends, and update yourself with the current trends of market that will help you in taking weighed trading decisions.

One of the biggest problems with the available market software is to know whether they are providing information according to the current market condition or not. So it is better for you to find the market information by yourself only.

Must know the rules of game:

If you are Forex trader then you must know the rules of the game. Doubts and confusion in the process of trading brings you nothing but take you to the doom of your trades.  Therefore the best thing is to always consult with your financial advisor when you are in need and in such situations wherever you have doubts.

Forex Trading Articles

Forex Trading – The 3 Most Powerful Strategies For A Successful Forex Trading

Most of the trader spent lots of their time to learn the trends of forex trading but still they won’t be able to trade perfectly, the reason behind that is only learning trend is not enough in Forex trading because forex is unpredictable and complex market, so need some powerful strategies that changes you’re trading into perfect trading. The three most important strategies that turn you into a professional trader in no time are as follows:

Advance trade planning:

You should plan your trade in advance, because trading needs perfect planning. If you trade with a perfect planning then sudden market changes will not affect your trading. Most the trader makes more than ten plans for each trade and this makes their trading more confusing. So you don’t need 10 plans for each trade, you only have to make one perfect plan that will change your trading forever.

Be patience and disciplined:

Keep patience and be disciplined in your trading. In any kind of business patience and disciplined is required. Most of newbie traders wants huge profit at their starting point but if the result is not according to their expectations either they will close their account or trade continually to get back lost money.

Money Management and Risk Reward Ratio

Money management is main factor of successful Forex trading. If you properly manage your money then you can trade like professional traders or you can also limits you risk and perform well. The perfect money management strategy can keep you from loss, or else the wrong decision can break down most of the professional traders. Choose the most simplistic and affordable ratio that is 2:1, if you take risk more than this ratio then this will badly affect your trading.

Forex Trading Articles

Swing Trading Strategies – How You Use It

A swing trader usually has his trades open from days to weeks. Keeping a position open for that long can be quite risky, especially in forex market where the market movement is really volatile, thus you’ll need solid swing trading strategies. These strategies can be applied by all traders, but it’ll be easier if they match your trading style.

Identifying the Trend

The purpose of swing trading is entering trades in the direction of the major trend. Thus, identifying the trend is an extremely essential initial step to master for a swing trader. The sooner you can identify the trend, the higher your chance to get massive profits.

The problem is aside from identifying a trend, you have to be able to avoid whipsaw (a condition where a sharp price movement is quickly followed by sharp reversal) too. It can be misleading and looked just like the market is trending, so make sure you can avoid it. These are several common methods to discover trends:

– Making use of indicators: probably the most widely used indicators are Moving Averages and Relative Strength Index.
– Price Action Trend
– Pivot Point Trend
I recommend using 15 minutes and 4 hours charts for this.

Look Forward To Pullback

As soon as you identify the main trend, don’t rush and place your order. Wait for some kind of pullback first to get a good entry point. By waiting for a good price level before truly entering the market, you’ll enter at a great price and have much better opportunity to score winning trades.

Stop Loss Order

Every good trader implements strict risk management and stop loss is one of it. For stop loss, just use the latest swing high or swing low. Make sure you place your fund in a trusted broker that won’t ignore your stop loss.

Exit Point

The easiest way is to shoot for exactly the same quantity of the pips you are risking. Illustration: if your stop loss is twenty pips below your entry point, then just set 20 pips above your entry point as the exit point (take profit order). Needless to say, it’s possible to aim higher than the amount of pips you risk; it’s completely up to you.

This is just one example as there are a lot of swing trading strategies out there. A few of them may need you to learn more advanced strategies or making use of more sophisticated software; nonetheless, if you’re still learning, it is advisable to stick to one currency pair and get used to it. Also, know the best time to trade for that specific currency pair.

There are hundreds of strategies variation for swing trading, but the fundamental is the same: finding a trend and ride on it to get as much profit as you can. Just like that. People just discover a lot of different way to do that, so just go with one that suits you the best.