Marketing Management in Hong Kong

Marketing Management in Hong Kong There are growing concerns on the need to conserve the environment at national and internal level. The world has undertaken numerous environmental conservation measures. The effects of global warming are increasingly affecting people, plants, and animals negatively. One of the major emitter of green house gasses is burning of fossil fuel.Advertising We will write a custom research paper sample on Marketing Management in Hong Kong specifically for you for only $16.05 $11/page Learn More The automobile industry is one industry that largely depends on fossil fuels for production and running of its products. Introducing new products in a market needs strategic management and undertaking feasibility study in the market of test. A number of considerations need to be looked into when choosing the test market. Company A, a large multinational automobile producer has developed â€Å"ecological or green† vehicles. It wants to test the viability of their product s in Hong Kong (Wah 12-45). This paper analyzes the market potential of ecological automobiles in Hong Kong. It will offer insight information about Hong Kong’s market that will assist the company launch its products effectively. Hong Kong Hong Kong is situated at Chinas south coast; it is one of the two SARs (special Administrative Region) of China. It has a fast growing economy and the demand of automobile is increasing. The country is known for its deep harbours and is one of the world’s densely populated countries. According to population census of 20009, the population of the administrative region stands at 7.4 million with 95% being of Chinese origin and the remaining 5% being other nationalities and tribes. The total surface area of the country stands at 1104km sq or 4265 Sq metres. The island was colonised by the British. Hong Kong’s birth rate stands 11.7 per 1,000. The country has high-ranking university and high education and has basic education as fr ee (Economic Trade Information on Hong Kong). The country have well developed infrastructures like roads, banking system, judiciary, information technology, and well learnt human capital. The political situation of the country can be said to be relatively stable with a strong independent election commission. Hong Kong’s Economic situation The demand for a product, especially vehicles is highly influenced by the economic performance of the economy. The living standards of the people of Hong Kong will determine the success of the market. The country has free trade policy when dealing with international trade. The country has well-developed infrastructures and maintains an almost perfect capitalist economy (Loh).Advertising Looking for research paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Its capitalistic nature has made the country to be a major international trade and finance centre where majo r international offices are situated. The role of the government is limited to provision of basic economic development facilities like transport and communication networks. Government participation is minimal and follows the concept of â€Å"positive non-interventionism. The country land mass provides minimal land for arable agriculture and thus it depends mostly on imports for foodstuffs. It is the eleventh country in international trade volume according to 2009 trade reports. Between 1960 and 2000, the country’s economic growth rate (gross domestic product) grew by a record 180 times while per capita GDP over the same time grew by 87times. The country currency is one of the strongest in the world where it remains stable against the dollar; it was pegged to the dollar in 1983. The strength of the dollar facilitated international trade in the country. Year 2009 saw the country have the highest IPOs in the country history and was number one in the whole world, having almost a quarter of the worlds IPOs. During the same year, it stock exchange has US$2.3 trillion traded. In 2009, unemployment rate stood at 3.9% and inflation stood at 2.3%. According to Ease of Doing Business Index 2009, the country was named third in the world for its ease of doing business (Economic Trade Information on Hong Kong) Road, sea and air transport are well developed making movement of goods and services easy and fast. The country is one of the world technologically developed country where government supports any invention and innovation in technology (Stone, Chung, and Reggie 75-90) Hong Kong’s Environmental policy Environmental protection in Hong Kong is the mandate of the government through Environmental protection Department that was established in 1986. The department is under executive powers and has the mandate of ensuring pollution in the country is reduced. The department devises rules and regulations to be followed when making environmental laws. It licences companies that are environmentally friendly in their processes and products. The environmental body aims at reducing all forms of pollution that include land water and air pollution. The approach taken by the department is to include players in the economy to devise mechanisms that will result to minimal pollution.Advertising We will write a custom research paper sample on Marketing Management in Hong Kong specifically for you for only $16.05 $11/page Learn More Company A will be favoured by legislations in the country as it produces vehicles whose emission of air pollution is minimal. It aims at having automobiles that emit minimal green house gasses. Environmental protection department, recommends compliant companies to enjoy tax holidays and investment deductions from the government thus an establishment in Hong Kong will have a reduced cost of doing business thus venturing in the market is easy. When making decisions on the approach to take, Environment al Protection Department involves the public in giving recommendations on which ways can be used to protect the environment. In 2008, the department started collecting public views on strategies they can recommend for environment protection. One of the most dominant answers that were coming out is the need to adopt environmentally friendly vehicles. From the massive campaigns and recommendations, company A will find a market that is prepared and willing to buy environmentally friendly automobiles. A marketing platform has been raid by the Environmental Protection Department. Hong Kong being part of the larger China has ratified Kyoto Protocol, the protocol requires for minimal emission of green house gases and countries t the protocol are supposed to make reports n their green house gases inventory and measures that the government have taken to reduce emission. One of the major recommendations brought about by Hong Kong is having environmentally friendly vehicles in the market (Laer mer, and Simmons 67-89). This is another preparation the country has made for company A’s products. Ecological vehicles from the company The company aims at making environmentally friendly automobiles. These vehicles emit minimal green houses gasses when they are made or when run. The products that the company aims at producing are mostly passenger and commercial vehicles. In addition, a department will specialise in the manufacture of motor cycles. There are three categories of these vehicles:Advertising Looking for research paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Highly fuel-efficient vehicles These are vehicles whose consumption of fuel is highly efficient. They burn their fuels fully and do not emit any gases as a result. These vehicles use fossil fuels however; they have technology that ensures that all fuel combustion is full thus emitting minimal green houses (Miles 13-76). EVs (Electronic vehicles) These are vehicles wholly or partly driven by electric power. The vehicles are chargeable and can use the charge to move over a distance. Charging may be through using electricity or can be using solar energy that is freely available in Hong Kong. When solar energy is used, the vehicles are fitted with Fuel cells and photocells to tap energy from the sun. The insulations and the technology adopted in the automobile make the car relatively expensive than normal fuel vehicles when buying them. However, in the medium and long term, the vehicles are cheap as their maintenance cost is relatively low. Bio-diesel engines These vehicles do not use f ossils fuels but use bio diesel fuels for their running. Bio diesel does not pollute the environment since its consumption is full and highly effective. The company under the category of bio-fuels has produced Hydrogen vehicles and hydrogen fuel cells vehicles that are seen to have a lesser environmental damage(Chiras 19-26). Hong Kong’s new Vehicles Market The government has increasing campaigns for the use of public means of transport that the use of private means. However, there is a growing demand for private cars. To ensure that the public do not use private cars, the government have increased taxation of private cars that ranges from 35% of cars of the cost between 0 and HK$150,000 and 100% of private cars of cost above HK$500,000. Parking fees are also high and depends with the location of the parking at the city centre the costs are extremely high. In 2010, Hong Kong’s economy was estimated to have 55 cars in every 1000 of the population. This is relatively low er than other countries that are less developed like Malaysia which have 311 cars per 1000 people. The demand for new cars in the economy has been volatile for a long period and is influenced by the economic performances. In 2000 for instance, the demand for cars increased to 17.9% at a time when the country’s economy grew by 10%. In 2002, when the economy reduced, the country recorded a new car registration of 15.3%. Sale in 2009 plunged by 22.9%, this can be attributed to world economic crisis which started in 2007. In most cases when there is a plunge, then the following year is mostly a year of boom. Between 2004 and 2009, public vehicle sale increased by average of 3% and according to economist after interpolating economic trends and government policy, they expect that the industry will grow with 5-6% between 2010 and 2014. This is expected to bring about 30,000 demands for new cars every year. On the other hand, the country over 90% of transport is through public means. The advantage offered by this trend is that the company have a market that it can tap. The demand for vehicles will assist the company in marketing its automobiles and probably win in the market. The size of the country is also a major advantage to the company. This is because people will be more willing to adopt technology that emits minimal green house gasses. This move will make the company’s product remain in demand for a long period (Economic Trade Information on Hong Kong) Hong Kong does not have its own vehicle manufacturing plant but depends to imports is vehicles. Competition likely to be faced by company A is from external companies however, it is likely to have a competitive advantage as the country have taxation and priority incentives of vehicles that are environmentally friendly. European and Japanese cars are favoured by the country’s tough environmental policies. US cars though are considered more luxurious fall short of the efficiency level required by the country, thus demand is lower. To sell in the market, international companies have ventured the market through sales agents were certain sale agents representing a certain intentional company markets the products locally. They have can finance, offer after-sales service and supply of spare parts. In 2009, the leading agent was Inchcape of the UK, which gets its products from Crown Motors. It has a market share of 28.9% this market share is a drop from 35.5%. The agent markets cars made in Japan, like Toyota. Toyota Corolla is the current bestselling car in the country. Local Dah Chong Hong (DCH) group, in 2009, had a market share of 25%. The company distributes German cars like Volkswagen, Audi and Bentley marques. The set preference by the market leader in the country is that the countries culture does not discriminate a company form its origin but they buy quality. They were willing to buy Japanese models distributed by an international UK agent and left their own local com pany distributer. This move is likely to benefit Company A since cultural barriers in the market has been broken by the existing companies (Sustainable Environmental Management). Getting an operating licence for dealership in the country is easy. The only need that the company applying for the licence is required to do is to company with set levels of operating standards. It is expected that the company with local and international laws on environment, labour and human right (Kotabe, and Helsen 12-45) Target market The highly populated Hong Kong population will offer the company market for its products. The company currently is specializing in passenger’s cars as the test models. One of the major target markets is the government. The government is willing to promote measure that facilitates environmental friendly production. Under the policies it has developed, the government is more willing to buy ecological products as it leads with an example. The general population will f ollow suit where the company will aim at the high-class people and medium class people in the society who can buy personal or commercial vehicles. Motor cycles will be targeted to low class earners in the economy. There will be massive campaigns, a where possible conducted with Environmental protection department to create awareness and market the company’s products. The success of this approach is an existing platform that has been set by Environmental protection department. The company is likely to enjoy from cost reduction policies set by the government like tax holidays and investment deductions. This makes the company produce at relatively low cost and thus selling price of the vehicles is lower than existing vehicles in the market (Rakesh 1-34). Operational cost of the vehicles is expected to be relatively lower than the cost of operating fossil fuel cars. This is in terms of fuel used. Electricity and solar energy are some of the world cheapest sources of energy, thus vehicles using these energy sources will be have a cheap operating cost. On July 1, Environmental Protection Department (EPD, came up with a project that aimed at replacing Euro II diesel commercial vehicles, the program was sponsored by the government to enable those people having the vehicles replace them with ,modern environmental friendly vehicles. The program cost the government $ 540 million. Those people who acquired Euro IV emission standard vehicles were given grants depending with the model of the car, which ranges from $17,000 to a maximum of $203,000 per vehicle. The program is to last for 36months from the date of establishment (Environmental Protection Department). Analyzing this government policy from a business point of view, the country seems to be geared towards the product made by company A. for the nest 30montths, demand for ecological vehicles will be facilitated by the grants given to buyers thus they will be willing to buy the company’s products. One of the major attribute of the government policy is that it extends to the entire population as an incentive to buy environmentally friendly vehicles. This widens Company A’s target market and market segment. Although the passenger cars market in Hong Kong is approaching saturation, it is saturated with automobile that emit high green house gases. These vehicles will eventually have to be phased out by environmentally friendly one creating high demand for the company’s vehicles (Hooley, and Saunders 23). Research Approach method To determine whether the market can be used as the test market, it is important to conduct a research in the country other than the literature review conducted. Taking primary data will assist in making sound decisions. To get the sample which will interviewed and questionnaires sent to then, use of scientific sampling method is crucial: The following are the methods to be used in sampling: Judgment sampling Under this method, the researcher makes determines the population to be interviewed. The researcher has the final decision and follows information or instincts to determine the number king of sample to be used. In the case of â€Å"ecological or green† vehicles in Hong Kong, judgemental samples to be used are, companies that have environmental conservation as one of their social corporate responsibility, government corporations and universities and colleges. This is the first sampling. Stratified sampling The second sample will come from members of the public. People to be interviewed should be only those who have vehicles. The greatest position will be on commercial vehicles holders. In stratified sampling process, the researcher develops his sample from a set of people in the population who have a certain similar characteristic. In this case, the population will be chosen are: Commercial vehicles operators People who have personal vehicles After the sample population have been chosen, the researcher will go ah ead and use three forms of data collection methods, they are Interviews Interviews will be conducted on the sample population guided by research questions that will not be exposed to the interviewee but will be used as guiding principle. Interviews will be conducted in the following forms: Face to face interviews Telephone conversations Internet and social networks chats Where the interviewee agrees, the interview may be recorded.(See appendix for a sample interviewing questions) Focus groups Focus groups will be composed of people derived from the sample; the researcher will be available to facilitate discussions that will facilitate collection of information to be analysed for final decision making (see appendix for guiding questions to be used in focus groups). Use of questionnaires Questionnaires are structured questions that aim at getting information regarding a certain issue. They are given to a certain sample population; the sample population is expected to fill in some qu estions that will help the researcher understand the situation on the ground. In the case of â€Å"ecological or green† vehicles in Hong Kong, the research will use closed ended question and open-ended questions (see appendixes for sample of questionnaire to be used) Reason for the above data collection methods Methods above will offer in-depth information on the situation of Hong Kong, they will be able to give the demand and the potential that the population of Hong Kong has as far as â€Å"ecological or green† vehicles, are concerned. The population attitude will also be interpolated for strategic decision-making. When doing interviews, the researcher will give the interviewee a chance to express what he/she feels about â€Å"ecological or green† vehicles, this is important in that more insight information will be collected. Recommendations Hong Kong is a good test market for Company A’s products. This is because the company product seems to be in line with national policies set by environmental protection department. The main market in the country in public vehicles, it is supported by the government. Policies set to ensure that there are environmentally friendly vehicles in the roads will make the available vehicles obsolete and need for replacement. The government intervention of public transport sector creates a market that the company should tap. Conclusion Hong Kong is a capitalistic economy, which depends on importation of vehicles for its transport industry. The government is interested with environmental conservation and through environmental protection department; it enacts policies and laws to protect the environment. One law likely to favour company A is the replacement of Euro II diesel commercial vehicles by Euro IV emission standard vehicles. Company A’s products meets Euro IV emission standards. As a test market, the company is favoured by international policies adopted by the country that makes market entr y easy. Chiras, Daniel. Environmental Science; spotlight on sustainable development. New York: Jones Bartlett publishers, 2009.print. Economic Trade Information on Hong Kong. Hong Kong Trade Development Council, 27 April 2009. Web. Environmental Protection Department. Public consultation on Hong Kongs Climate Change Strategy and Action Agenda. The government of Hong Kong Special Administrative region, 2010. Web. Hooley, Graham, and Saunders John. Competitive Strategy: the Key to Marketing Strategy. New York: Prentice Hall, 1993.print. Kotabe, Masaki, and Helsen Kristiaan. Global Marketing Management.New York: John Wiley Sons, 2004.Print. Laermer, Richard, and Simmons Mark. Punk Marketing. New York : Harper Collins, 2007.Print. Loh, Christine. Hong Kong: A Review of Environmental Policy and Quality (1997-2007). Hong Kong, 2010. Web. Miles, Raymond. Organizational Strategy, Structure, and Process. Stanford: Stanford University Press,2003. Print. Rakesh, Mohan. International Market ing. New Delhi: Oxford University Press, 2005.print. Stone, Andrew, Chung Chow, and Reggie Ho. Hong Kong and Macau. Oakland: Lonely Planet, 2008. Print. Sustainable Environmental Management. Ricoh Hong Kong, 2010. Web. Wah, Wong, and Edwin Hon-wan. Building Hong Kong: environment considerations. Hong Kong: Hong Kong University Press, 2000.Print.