Market Price Of Konka example essay topic

Konka group is one of the biggest TV set manufacturer in China and Konka is the leading brand in Chinese TV market. Facing the drastic competition of Chinese market, Konka started its globalization in 1999. In year 2000, Konka exported more than 450,000 TV sets, which was 10% of its whole year production. Konka!'s marketing strategy was proved very successful in the United States, within 2 years, Konka had sold 650,000 TV sets in US and obtained more than 3% of the US market. Because of its lower price and good quality, this brand soon became well known in North America. Encouraged by the success in US market, Konka started their business in east Europe (they didn! t choose west European countries because of European Union!'s restriction to Chinese TV producers) and chose Poland as the first goal.

Unfortunately, there they encountered their first defeat in the global market. Konka had already gained close relationship with some world-wide retail companies such as Carrefour and Wal-Mart. The channel building and management was very easy for them in Europe (Administered VMS). In Poland, Konka TV quickly appeared in these supermarkets.

But in Poland, nobody wanted to buy a Konka. The sales were so bad that they had to withdraw from the Poland market temporarily. One of the reasons of Konka!'s defeat was its pricing policy. In the US, the price level is much higher than that in China or in Poland. The lower labor cost in China was the most important advantage for Konka. Its price was so low that even Konka earned higher average interest in US than in China; the market price of Konka was still the lowest of all the TV brands.

But in Poland everything was different. Thomson, the famous home electronic appliance manufacturer, had already started their business in Poland. They had built a factory outside Warsaw to produce TV sets and sell them in Poland market. In spite of the lower Chinese labor cost, the price of Konka is still higher than Thomson!'s primarily because of the high import duty into Poland.

Another reason is Polish people!'s attitude to Chinese products. Their impressions to Chinese productions are Cheap, Low-tech and Undependable. They were willing to buy inexpensive Chinese commodities but wouldn! t spend large sum of money on Chinese TV sets. It was not easy to change their impression a day. I would like to recommend Konka to make some adjustment in their globalization strategy in Poland if they are willing to return to the market. 1.

To invest more on public relations to change the old ideas of Polish people to Konka productions: advertise more in mass media, build up the hi-tech image of Konka and make Polish people know more about the brand and its success in the North America. 2. To use a penetration pricing policy in Poland: enter the Polish market with lower price to gain more market share. In order not to be considered dumping by the government, Konka could adopt some sales-promotion skills. For example, to price higher than the cheapest brand but give out coupons or refunds to make the actual price lowest. These recommendations might bring some cost at the beginning.

But Polish market is one of the biggest markets in east Europe with more than 40,000,000 consumers. The market share and the brand!'s new image in Poland will sure help Konka in its business development in east and central Europe (because of the central European geographic position of the country). It really worth spending the money on this huge potential market.