Article Summary: Segmentation, Targeting, Positioning
China has emerged as a considerable force in world economic set up as it is leading efforts to create new world order (Golub, 2016). In this regard, China has pursued an extensive geographical segmentation strategy where it has sought to dislodge existing market leaders such as Japan and the US, that is, China is “rewriting the rules”. It objective is to win more markets in East Asia, Africa, South America and South Asian trade routes. It has created an “East Asia-centric South-South trading system” which it has invoked to create new regional as well as transcontinental linkages.
Targeting
China targets all consumers groups in developing countries with a particular focus on South America, Africa and Latin America. However, the US is a critical market for Chinese goods but the typical target remains developing countries. China is working on the knowledge that trade between developed countries dropped from a high of 46% to below 30% over the last 20 years (Golub, 2016). The new order has been precipitated as most e most of the developed countries are re-establishing their trade relationship with Europe and US. The reason is that developing countries are gaining more global market share of “manufactured value-added goods” which currently stands at 30% from 8.8% 20 years ago and merchandise trade have also risen from 25% to 47% within the same period. For instance, South Africa’s imports from China have increased from 3% to 15% within the last years .Consumers in this countries are continuously gaining more purchasing power, thus Chinese goods have a ready and viable target market. To sum up, China is seeking to “generate new dependencies” as presented by (Golub, 2016)
Position
As the global market is continuously being re-structured, China has attempted to win clients (developing countries) from away from European and US markets. It aims to have a market advantage by giving developing countries substantial power in their engagements. China has positioned itself as an "equal partner" by allowing exports from developing countries. For instance, South Africa’s export share to China has risen from 1.8% in 1998 to over 12% (Golub, 2016). It has created structures such as “New Development Bank” (NDB), “Infrastructure Investment Bank” (AIIB) whose primary objectives would be to oversee investment and monetary functions in their target markets.
References
Golub, P. (2016). China rewrites the global rules - Le Monde diplomatique - English edition. Mondediplo.com. Retrieved 10 February 2016, from http://mondediplo.com/2016/02/08china
