Marketing plan for an online shop (2012 to 2015)

By | April 25, 2014

This Assignment Is Published With Permission From The Author For Online Review Only
All Rights Reserved @ ChinaAbout.Net

Executive summary

 

When the traditional retailing channels do not grow as people wish at the very beginning, when life is becoming very difficult for the Chinese people, when many industries do not look like as bright as they were several years ago, still the growing of the E-commerce industry is cheerful to us. With least investment and possible high ROI rate, E-commerce becomes not only an option but a better option for business development. This study focus on providing a marketing plan for 2012 to 2015 for a Taobao shop which was founded by me but now operated by me and another partner joint recently, besides the macro environment analysis, we focus on the micro environment, in particular the customer buying behaviors. Based on a real case, this marketing plan is designed to achieve profitability by setting appropriate business and marketing strategies as well as budgeting.

Acknowledgement

 

************

 

List of figure, charts & tables

 

Table 1 Porter’s Generic Strategies……………………………………………………………. 10

Table 2 Conclusion of PESTLE analysis…………………………………………………….. 24

Table 3 Table of SWOT analysis on “YRMC.taobao.com”…………………………… 35

Table 4 Action program and budgeting for financial year beginning June 2012. 39

Table 5 Action program and budgeting for financial year beginning June 2013. 39

Table 6 Action program and budgeting for financial year beginning June 2014. 40

Table 7 Action program and budgeting for financial year beginning June 2015. 41

 

Figure 1 Online marketing mix…………………………………………………………………… 9

Figure 2 The strategic clock……………………………………………………………………… 11

Figure 3 Porter’s Five Forces……………………………………………………………………. 24

Figure 4 Age groups of the respondents…………………………………………………….. 29

 

Chart 1 China cultural system in Hofstede’s Five Cultural Dimensions………….. 13

Chart 2 China GDP annual growth rate from 1989 to 2012………………………….. 18

Chart 3 China inflation rate from 2010 to 2012 (May)…………………………………. 19

Chart 4 Average spending per year on selected product and service categories by consumers across Tier 1 to Tier 5 markets………………………………………………………………………………………… 21

Chart 5 Summary of gender details…………………………………………………………… 30

Chart 6 Allocation of respondents in different provinces……………………………… 30

Chart 7 Place of origin…………………………………………………………………………….. 31

Chart 8 Allocation of respondents in different income levels……………………….. 32

Chart 9 Preferred payment methods (multiple choices)………………………………… 33

Chart 10 The shopping preference by different product groups…………………….. 34
Table of content

 

Executive summary………………………………………………………………………………………….. 1

Acknowledgement…………………………………………………………………………………………… 2

List of figure, charts & tables……………………………………………………………………………. 3

Marketing plan for an online shop (2012 to 2015)………………………………………………… 7

  1. Introduction……………………………………………………………………………………………… 7

1.1           Research background…………………………………………………………………….. 7

1.2           Research question…………………………………………………………………………. 7

1.3           Proposed structure………………………………………………………………………… 8

  1. Research objectives……………………………………………………………………………………. 8

2.1           Analyze the macro and micro business environments under which our business operates8

2.2           Analyze the customer behavior trends in the e-commerce industry……… 8

2.3           Set the business targets and marketing strategies………………………………. 8

2.4           Identify the proper mix of marketing tools……………………………………….. 8

2.5           Provide the action plan and budgeting…………………………………………….. 8

2.6           Establish the control framework……………………………………………………… 9

  1. Literature review……………………………………………………………………………………….. 9

3.1           E-marketing features……………………………………………………………………… 9

3.2           Online marketing mix…………………………………………………………………….. 9

3.3           Different views over Porter(1980)’s Generic Strategies……………………. 10

3.4           Features of China cultural system: long term orientation and collectivism12

3.4.1     Long term orientation……………………………………………………………. 13

3.4.2     Collectivism…………………………………………………………………………. 14

  1. Research methodology……………………………………………………………………………… 14

4.1           Research objectives……………………………………………………………………… 14

4.2           Research strategy………………………………………………………………………… 15

4.3           Sampling……………………………………………………………………………………. 15

4.4           Data collection……………………………………………………………………………. 15

4.5           Data analysis techniques………………………………………………………………. 16

  1. Marketing audit……………………………………………………………………………………….. 16

5.1           Analysis of the macro-environment using PESTEL…………………………. 16

5.1.1     Political factors…………………………………………………………………….. 16

5.1.2     Economic factors………………………………………………………………….. 17

5.1.3     Sociological factors……………………………………………………………….. 20

5.1.4     Technological factors…………………………………………………………….. 21

5.1.5     Legal factors………………………………………………………………………… 22

5.1.6     Environmental factors……………………………………………………………. 22

5.2           Analysis of the micro-environment………………………………………………… 24

5.2.1     Porter’s Five Forces Analysis………………………………………………….. 24

5.2.1.1Existing competitors……………………………………………………….. 24

5.2.1.2Threat of new entrants…………………………………………………….. 26

5.2.1.3Bargaining power of buyers…………………………………………….. 27

5.2.1.4Bargaining power of suppliers………………………………………….. 27

5.2.1.5Threat of substitute products or services……………………………. 28

5.2.2     Analysis of consumer behaviors………………………………………………. 29

5.2.2.1Section A. Respondent general information……………………….. 29

5.2.2.2Section B. Online payment………………………………………………. 32

5.2.2.3Section C: Internet usage………………………………………………… 33

5.2.2.4Section D: Online shopping……………………………………………… 34

5.2.3     SWOT analysis……………………………………………………………………… 35

  1. Strategies………………………………………………………………………………………………… 35

6.1           Porter’s generic strategy (1980)…………………………………………………….. 35

6.2           Market segmentation and positioning…………………………………………….. 36

6.3           4P’s Marketing mix……………………………………………………………………… 36

6.3.1     Product strategy……………………………………………………………………. 36

6.3.2     Price strategy………………………………………………………………………… 37

6.3.3     Promotion strategy………………………………………………………………… 37

6.3.4     Place strategy……………………………………………………………………….. 38

  1. Action program and budget setting……………………………………………………………. 38
  2. Implementation……………………………………………………………………………………….. 41

List of references…………………………………………………………………………………………… 42

Appendix 1.0 Online customer buying behaviors survey…………………………………….. 48


Marketing plan for an online shop (2012 to 2015[1])

A case study of a real Taobao Store (http://YRMC.taobao.com)

 

1.        Introduction

 

1.1    Research background

 

This e-commerce store was established in 2010 by me but its operation was suspended shortly after the beginning stage due to some specific reasons, and she regains the energy and reopened in January this year, one of my friends become the sole partner of the business. Four months’ operation has achieved obvious and comforting results though it is still far away from making a lot of fortunes. We began by selling online game and mobile phone top-up cards on Taobao, the largest C2C E-commerce platform in China, and now we have expanded into other market segments such Korean style clothing, shoes and other virtual services. When all the market segments and products seem to be able to generate profit for us, some problem appears: should we focus on only one market segments or operate in several market segments at the same time? Also, currently there is no long term plan for our business; this is the background under which we decide to enact a comprehensive marketing plan for our business.

 

1.2    Research question

 

After more than four month’s operation, we come to the conclusion that marketing will mean a lot and play critical part on our business success. To be detail, first, we have to build up good relationship with suppliers to get the low price; second, we are looking at the key word optimization methods in Taobao search engine which is proved to be critical, important and fatal; thirdly, traditional 4Ps still mater to some extent. Our research question is that how the marketing plan framework could be applied in our e-commerce business and provides us with useful guidelines for the future business development.

 

1.3    Proposed structure

 

Four major contents are involved in this E-marketing plan: (1) a relatively comprehensive literature review of the E-marketing related theories and concept to high light the differences between the traditional marketing and the E-marketing; (2) analyze the influence and implications through the analysis of the external and internal environment as well as our website and also our team’s capabilities and weakness; (3) setting the business level strategies and the e-marketing strategies based on the analysis; and (4) propose the detail marketing targets, actions and relevant budgets and use tools and skills to ensure the achievements of the business targets and marketing objectives.

 

2.        Research objectives

 

2.1    Analyze the macro and micro business environments under which our business operates

 

2.2    Analyze the customer behavior trends in the e-commerce industry

 

2.3    Set the business targets and marketing strategies

 

2.4    Identify the proper mix of marketing tools

 

2.5    Provide the action plan and budgeting

2.6    Establish the control framework

 

3.        Literature review

 

3.1    E-marketing features

 

Chaffey (2004) mentioned the “6 Is” of e-marketing as a tool to take into account the differences between “traditional” marketing and e-marketing to accommodate the special characteristics of e-commerce. The “6 Is” of e-marketing are: Interactivity (refers to the orientation toward dialogue with the customer); Intelligence (about the customer to provide the ability to respond to changes in customer behaviors); Individualization (the degree the products could be tailored to meet the customer needs); Integration (the degree to which media channels serves complementary to other communication channels to support the service offered to the customers); Industry restructuring (decides the possibility of disintermediation); Independence of location (which decides the cost of delivery base on the delivery charge if necessary).

 

3.2    Online marketing mix

Figure 1 Online marketing mix

Source: Kollmann 2007

 

Online marketing could be comprehended as a layer of activities, representation and interaction within marketing in general, which is closely connected to rapid development in the area of information and communication technology (Barowski 2000). According to Kollmann (2007), the online marketing mix is similar but different from the traditional marketing mix and some of the key methods in the marketing 4Ps mode in term of internet marketing are categorized as shown in the figure above.

 

3.3    Different views over Porter(1980)’s Generic Strategies.

Table 1 Porter’s Generic Strategies

Source: adapted from Porter 1985

 

Along with the two scopes, competitive advantages (lower cost or differentiation) and competitive scope (broad target or narrow target), Porter (1980) built up a famous framework: the Generic Strategies or the Three Generic Strategies. In the model, Michael Porter has described a category scheme consisting of three general types of strategies that are commonly used by businesses to achieve and maintain competitive advantage: cost leadership, differentiation strategy and segmentation strategy. The abundant empirical research findings have shown that there is a general consistency between commitment to one of Porter’s strategies and higher performance (Dess & Davis 1984; Hambrick 1983). And it is believed that in many cases, the strategic option chosen is the reflection of the market environment in which the organization finds itself. For instance, cost leadership would be likely to be of additional value when markets are sensitive to the variations of prices. It is claimed that a company must make a choice between these three generic strategies or else it would be “stuck in the middle” and suffer from below average performance (Porter 1980, p.40). While this view is widely accepted, however, a number of instances do exist wherein organizations have been able to pursue a low-cost differentiation strategy which combines two of the three generic options. Indeed a variation on the Porter model is advocated by Evans (2003) in which it recognized that, in certain circumstances, a “hybrid” strategy can be successful.

Figure 2 The strategic clock

Source: Bowman 1988

 

Another generic strategy framework that does acknowledge the possibility of a high-value/low cost strategy is the strategic “clock” as demonstrated in the figure above. According to Duncan Angwin, Stephen Cummings and Chris Smith (2011, p. 143), this theoretical model suggests that viable strategy options depend on how the firm’s offering is perceived by the market in term of its price relative to other offerings and its relative perceived use value. Whereas a low price strategy offers a standard perceived use value at a low price, a differentiation strategy offers a high perceived use value at a standard price. In term of the how this strategy could be adopted, it is a mixture or hybrid of low-price and differentiation and targets a segment of value-conscious buyers that is usually larger than a market niche, but smaller than a broad market. Successful implementation of this strategy requires the company to have the resources, skills, capabilities (and possibly luck) to incorporate up-scale features at lower cost than competitors. This strategy could be attractive in markets that have both variety in buyer needs that make differentiation common and where large numbers of buyers are sensitive to both price and value (managementparadise.com 2010). Hence, theories have already supported the view that companies must choose only one of the three generic competitive strategies, i.e. cost leadership, focus and differentiation in order to be successful, there are strategies such as hybrid that could provide advantages of both lower cost and higher perceived value than the offering of the competitors. Empirical research also supports the notion that some businesses can excel both at differentiation and low cost. One example is the global TV set industry in which Japanese firms were able to achieve higher quality and lower cost: both at the same time (Magaziner & Reich, 1982, chap. 14). Miller (1992) found that firms in his study were able to pursue a combination of cost leadership and differentiation strategies without any penalty to financial performance.  Likewise, in their study based on the PIMS database, Miller and Dess (1993) found ‘hybrid’ strategies not only feasible, but also profitable.

 

3.4    Features of China cultural system: long term orientation and collectivism

Chart 1 China cultural system in Hofstede’s Five Cultural Dimensions

Source: Geert-hofstede.com 2011

 

Armed with a large database of cultural statistics, Hofstede analyzed the results and found clear patterns of similarity and difference amid the responses along these five dimensions. Interestingly, his research was done on employees of IBM only, which allowed him to attribute the patterns to national differences in culture, largely eliminating the problem of differences in company culture. The five dimensions are: Power/Distance (PD), Individualism (IDV), Masculinity (MAS), Uncertainty/Avoidance Index (UAI) and Long Term Orientation (LTO) (mindtools.com 2005). And the two major features found in the Chinese cultural system compared to the world average are: low level of Individualism (IDV) and high degree of Long Term Orientation (LTO).

 

3.4.1            Long term orientation

 

Based on the view of Barry J. Babin and Eric Harris (2010, p. 153), high long term orientation means that a consumer values thriftiness and perseverance as well as the maintenance of long term relationship. Relationships need time to develop and are intended to last for a lifetime. As a result, negotiations between suppliers and buyers are more likely to consider long term effects to both parties in high-long-term-orientation culture in China.

 

3.4.2            Collectivism

 

In collectivist societies people belong to ‘in groups’ that take care of them in exchange for loyalty. At a score of 20 China is a highly collectivist culture where people act in the interests of the group and not necessarily of themselves. In-group considerations affect hiring and promotions with closer in-groups (such as family) are getting preferential treatment. Employee commitment to the organization (but not necessarily to the people in the organization) is low. Whereas relationships with colleagues are cooperative for in-groups they are cold or even hostile to out-groups. Personal relationships prevail over task and company (Geert-hofstede.com 2011). The low level of Individualism (IDV) or high degree of collectivism is said to be linked with the long tradition of the Chinese social system. According to Sebastian Hermann (2008, p. 53), there is a long tradition of caring for one’s own decedents, therefore, the amount of saving relative to gross domestic product in China belongs to the highest saving ratios in the world. In addition, the Chinese collectivist family culture derived from a civilization that originated in a continental environment and prospered through agriculture and not maritime trade. In this environment the Chinese civilization developed around the interest of the family and not the individual.

 

4.        Research methodology

 

4.1    Research objectives

 

This research aims at achieve four major targets: a) what is the macro and micro business environment and what are the benefits or threats from the analysis of the business environment; b) what are the difference between the traditional marketing and e-marketing; c) how the marketing plan could be applied in the e-commerce business; d) what are the business and marketing strategies advised to our online shop business.

 

4.2    Research strategy

 

Both qualitative research and quantitative research techniques will be adopted in this study. On one hand, qualitative research based on the literature review as well as the evaluation and summary of the own survey in this study would be used to analyze the business environment and strength and weakness of our new online business. Hence, qualitative research will help us to identify the appropriate business strategies as well as the direction of our business in the future. On the other hand, the usage of quantitative research can be construed as a research strategy that emphasizes on quantification in collection and analysis of data that entails a deductive approach to the relationship between theory and research (Bryman & Bell 2007, p. 28) and test the relationship between some of our assumptions and the actual facts.

 

4.3    Sampling

 

An online random survey will be done to collect 100 sample of response from the online customers. This random survey will not restrict the place of origin, race, income level, gender and all other similar factors.

 

4.4    Data collection

 

Data is one of the most important and vital aspect of our research studies. There are primary data and secondary data that we have referred to in this study. Data that has been collected from first-hand-experience is known as primary data. Primary data has not been published yet and is more reliable, authentic and objective. Primary data has not been changed or altered by human beings; therefore its validity is greater than secondary data (hubpages.com 2008). The primary data used in this paper include own observation, information summarized by Taobao seller center and ourselves, an original online survey participated by our customers, observation of the competitors’ strategies and behaviors and so on while the secondary data mainly involves text books, library journals, online resources and also industry reports.

 

4.5    Data analysis techniques

 

Analysis of data is a process of inspecting, cleaning, transforming, and modeling data with the goal of highlighting useful information, suggesting conclusions, and supporting decision making (Ardagna & Zhang 2010). We will use various data analysis techniques such as data mining which is a particular data analysis technique that focuses on modeling and knowledge discovery for predictive rather than purely descriptive purposes and also other data analysis techniques.

 

5.        Marketing audit

 

5.1    Analysis of the macro-environment using PESTEL

 

A PESTLE analysis, sometimes referred to as a PEST Analysis, is a useful tool for understanding the industry situation as a whole, and is often used in conjunction with a SWOT analysis to assess the situation of an individual business. PESTLE stands for “Political, Economic, Sociological, Technological, Legal and Environmental” factors (marketingminefield.co.uk 2010).

 

5.1.1            Political factors

 

The first element of a PEST analysis is a study of political factors. Political factors influence organizations in many ways. Political factors can create advantages and opportunities for organizations. Conversely they can place obligations and duties on organizations. Political factors include the following types of instrument (Learnmarketing.net 2010): Voluntary codes and practices, Market regulations, Trade agreements, tariffs or restrictions and Type of government regime e.g., communist, democratic, dictatorship and so on.

 

China is a one-party state with the Chinese Communist Party (CCP) controlling the government. The nine-person Politburo Standing Committee is the top decision-making body in China. Even though the CCP remains firmly in control of society, maintaining social stability and CCP power continue to remain primary objectives. The current political environment is dominated by the upcoming leadership transition. The fourth generation of political leaders – including President Hu Jintao and Premier Wen – who came to power in 2002 will step down in 2012 during the 18th CCP Congress (edc.ca 2012). Therefore in this year, there have been numerous rumors/reports this year that China has had attempted coups to change the leadership there. According to the new reports, the selection will in all likelihood still take place when the 18th Communist Party Congress meets this fall. But with the dismissal and investigation in March of Bo Xilai, the party secretary of metropolitan Chongqing, the notions of stability and consensus in China’s secretive political system have taken a big and possibly lasting hit (nytimes.com 2012). Despite the political instability caused by some political events, it is generally believed that the strict media and internet control will manage to ensure that the partial political instabilities would not cause significant influences over the economic and social life. High stability at any cost still dominate the political arena which is still good news to the business activities irrespective of the democracy issues.

 

5.1.2            Economic factors

 

When looking at the economic environment, for for-profit companies focus will usually been given mainly to the capital cost and availability and consumer demand. An evaluation of a country’s statistical data provides with an insight into all manner of factors, such as inflation rates, consumer spending, unemployment levels, exchange rates, etc. These will be closely linked to the political factors and will provide information relating to past and current trends, but they will also help to predict future trends (Jeffs 2008, p. 29).

 

 

Chart 2 China GDP annual growth rate from 1989 to 2012

Source: tradingeconomics.com 2012

 

The Gross Domestic Product (GDP) in China expanded 8.10 percent in the first quarter of 2012 over the same quarter of the previous year. Historically, from 1989 until 2012, China GDP Annual Growth Rate averaged 9.3 Percent reaching an all time high of 14.2 Percent in December of 1992 and a record low of 3.8000 Percent in December of 1990 (tradingeconomics.com 2012). In 2008 the global economic crisis began to reduce China’s growth rate. In the face of forecasts that this might drop below the rate at which school leavers can be absorbed by the growing economy (7%-8%) the government decided to pump Rmb 4 trillion into the economy in the form of an economic stimulus package consisting largely of investment in fixed infrastucture and human capital. The stimulus succeeded in preventing a dramatic fall in GDP growth in 2009 and in providing a sustained recovery in 2010, when the real annual GDP growth rate rose to 10.4% (chinability.com 2011).

Chart 3 China inflation rate from 2010 to 2012 (May)

Source: tradingeconomics.com 2012

 

While the large government led stimulus package succeed in preventing the sudden and obvious fall of economic growth which is the basis of social stability that the country dare not slow down, there are also some negative impacts brought by the government actions. Inflation is the biggest worry for China and it virtually stopped policy makers from announcing stimulus packages. In 2011, inflation topped the Chinese government’s monthly target of 4 percent, hurt most by food price increases. However, since February 2012, inflation started showing signs of easing. In March, inflation remained at 3.6 percent, and this recently came down to 3.4 percent in April (istockanalyst.com 2012). Though the inflation rate comes down slowly in the recent half year, it still takes some time for the people living in China to enjoy easier life since the high prices of the life necessities still prevail in China.

 

Speaking from influences from current economic environments on the e-commerce business, the high consumer price has both benefits and disadvantages. On one hand, since life is becoming difficult, people tend to choose to save up their dispensable money in the banks rather spending them on purchasing good; but on the other hand, since the goods sold online are generally considered as having lower price advantage over the goods sold by retailers such as super markets and medium and small sized groceries. Therefore, the current seemingly difficult economic conditions could possibly force more consumers into the e-commerce and online purchasing since it saves up money for the consumers.

 

5.1.3            Sociological factors

 

Social factors which mainly involve the demographic and cultural aspect of the environment which affect the products that customers demand and their pattern of purchases, such social factors include demographics, trends and changes to the population structure such as movements, growth, age distribution, ethnic mix, changing lifestyles, social trends and changing purchasing habits (Waters 2006, p. 209).

 

China’s remarkable economic achievements of the past decade are transforming people’s daily lives. Today, most Chinese have more social occasions and entertainment options than they did 10 or more years ago. Aside from work or study, they enjoy eating out, shopping, travelling, going to bars and karaoke, dance and fitness clubs and so on. According to an online survey done at the beginning of this year, there are three key emerging trends identified among the young consumers in China: more spending on apparel by younger generations, by women, and more heavy spenders in lower-tier cities. These will help business to adapt their strategies in response to new consumer demands over the coming decade (indiatimes.com 2012). The latest Synovate Media Atlas China findings show that China’s modern cities and rural areas share similarities in terms of daily expenditure, from products such as nutritional supplementary and apparel, to services such as entertainment and health & fitness.     The majority of Chinese consumers surveyed said family is a very important part of their lives. Eighty-two percent of consumers surveyed in Tier 1 cities indicated family is more important than career, very close to the 81% saying this in Tier 5 markets. Three in four consumers living in Tier 1 cities (77%) stated they usually think about the needs of their family members when buying things (synovate.com 2010). The focus of family value could be linked back to the long existing tradition and value for collectivism in the Chinese cultural system which has been analyzed in the literature review section.

Chart 4 Average spending per year on selected product and service categories by consumers across Tier 1 to Tier 5 markets

 

5.1.4            Technological factors

 

Technological factors have the potential to raise or lower barriers to market entry. They can also influence production efficiencies as well as necessitating outsourcing where applicable. The factors commonly identified have to do with technology influence on new product/service innovation, the influence of technology in attaining better quality and more efficient production, how technology is influencing research and development, possible creation of new and better channels of distribution, novel methods for communicating with customers, suppliers and other businesses, and the level of automation (gaebler.com 2011).

 

According to its E-commerce 12th Five-Year Plan (2011-2015) report, the development of new technologies will provide better technical conditions for e-commerce innovation and development. These include broadband, next-generation national information infrastructure, cloud computing and networking, intelligent search and social networking applications. The report also suggests that with the technology development, the number of Chinese users with 3G-enabled mobile devices hit 47 million in end-2010, adding that many Web sites also developed Internet applications for use in online shopping (zdnetasia.com 2012).

 

5.1.5            Legal factors

 

In China, the legal protection of e-commerce began from the Regulations for Safety Protection of Computer Information Systems in 1994. To enforce the safety protection of computer information system, China has formulated a series of laws and regulations according to different circumstances, which make the relevant systems more standardized and systemized. These laws and regulations include the Computer Information Network and Internet Security, Protection and Management Regulations, the Measures Governing the Computer Information System Security Product Quality Test and Sales Licenses, the security Requirements for Computer Field and so on (Qin 2009, p. 189). Though the government has been trying to regulate the online business and buying behaviors, there are still some deficiencies. First of all, there are still some areas where necessary regulations and laws are needed but the presence is not there such as the privacy, protection of internet purchase and security; secondly, the enforcement of laws is also generally believed as weak and in addition trust is low among both businesses and consumers (Kraemer 2003, p. 232).

 

5.1.6            Environmental factors

 

The Chinese government has paid great attention to the environmental issues arising from the country’s population growth and economic development, and has made protecting the environment an important aspect of the improvement of the people’s living standards and quality of life. In order to promote coordinated development between the economy, the society and the environment, China enacted and implemented a series of principles, policies, laws and measures for environmental protection in the 1980s (xinhuanet.com 2002). Though the government has the relevant laws and regulations to guild economic activities in protecting the environment, at the same time the lack of public awareness regarding environmental issues have hindered China’s effort to find a proper balance between economic prosperity and its environmental health.

 

DimensionPositive influence, opportunitiesNegative influence, threats
Political factorsPartial political instabilities
Economic factorsDifficult economic conditions force more consumers into online purchasingHigh consumer price reduces the purchasing desire
Sociological factorsValue for family, More spending on apparel by younger generations, by women, and more heavy spenders in lower-tier citiesFast social changes
Technological factorsInnovation and development. In the  broadband technologies, next-generation national information infrastructure
Legal factorsEnforcement of laws is weak; some areas are not regulated
Environmental factorsRelevant regulationsLack of public awareness regarding environmental issues

Table 2 Conclusion of PESTLE analysis

 

5.2    Analysis of the micro-environment

 

5.2.1            Porter’s Five Forces Analysis

Figure 3 Porter’s Five Forces

Source: Sachse 2012, p. 55

 

This model according to Porter (1980) is an aid to analyzing the enterprise environment and thus to determining important general competitive conditions for the development of an enterprise’s business strategy to be better than the competitors. The models functions with the acceptance of a classical free market (Sachse 2012, p. 55).

 

5.2.1.1      Existing competitors

 

The first of the five forces that we talk about is the rivalry among firms in the industry, existing competitors are consider as the force that has the greatest impact among the five forces in the model. According to David Ahlstrom and Garry D. Bruton (2010, p. 136), a variety of factors affect rivalry, but one of the key factors is differentiation. If firms in an industry can differentiate themselves from each other, rivalry is lowered and profits increase. It is for this reason that commodity products typically are high rivalry, low profit industries. Therefore a producer that tries to create differentiation for a product that is considered to be a standard commodity and that usually has to compete on price. Therefore, differentiation could be a strategy to avoid rivalry from the existing competitors, but it should be applied on the products that are not considered as standard commodities.

 

As in the e-commerce industry, it is actually more than an industry since almost all product offerings could be found in the online retailers such as clothing, food, drink, home electronic appliances and so on, considering markets segments that we are now operating which include casual clothing, shoes, socks and virtual products such as top-up cards (for online game and mobile phone top-up purposes), we will say that the competition is all very high among the existing competitors for the following three major reasons: on one hand, the products that we are selling are all from virtual suppliers that we picked up from the Taobao supplying and retailing platform and these suppliers also supply these same goods to other retailers like us. Therefore, it could be say that there is high rivalry among the existing competitors because the goods that we sold are indifferent to a large extent; on other hand, some goods are commodities standard commodities and as mentioned above differentiation strategy would be not be able to bring premium profits to the business because price is still a key consideration when consumers buy such standard products; thirdly, the number of sellers are large. According to the online resource, in China, 99% people who have an online shopping habit buy goods from Taobao, it has millions of wonderful items with competitive price on shelf, more than 100 million registered user and more than 2 million sellers (thebeijinger.com 2012). Suppose that the active shops account for only 20% of to total registered number, if would be 0.4 million shops that are operating in Taobao, hence the results is that the competition among the existing business will be high if offerings are also similar or indifferent.

 

5.2.1.2      Threat of new entrants

 

According to Patrik Wikström (2006, p. 52), the threat of new entrants may be determined by several different factors. One such factor may be capital requirements, for instance the financing needed to established operations and pay star-up losses. A second potential factor is product differentiation, for instance if existing firms already have unique products with great consumer loyalty, a new firm will have difficulty in getting a foothold in the market. A third factor is what is known as switching costs which involves the cost needed to be paid in order for a business to switch out to another market, another understanding of switching cost is the cost paid by the consumers to change to another supplier.

 

As in the e-commerce industry, the threat of new entrants is strong based on several facts. The first factor is the little capital requirement to start an online Taobao shop. Since the only necessary capital is the deposit 1,000 yuan to be paid by the sellers (individual sellers) in order for them to join the “Consumer Protection Scheme” in which if dispute happens and the investigation from Taobao suggests that the responsibility belongs to the seller, relevant compensation will be paid to the customers by the seller. Other than that in most industries, there are no extra costs that must be paid by the new sellers. A second factor is the low switching cost paid by the consumers to change from the original seller to another seller. Since there is basically no such switching cost, or little cost such as spending time to look for a good new supplier. Hence the threat of new entrants would be high in the e-commerce industry in China.

 

5.2.1.3      Bargaining power of buyers

 

According to Qingyuan Zhou (2011, p. 275), there are two basic factors determining the bargaining power of buyers: price sensitivity and relative bargaining power. The bargaining power of buyers is not very high but it is not in a very low level for several reasons. The first reason is that the customers’ high price sensitivity. According to Access Asia, a market research company in the region, estimates, for example, that prices of electrical appliances and 3C (that’s computers/communications/ consumer) products are generally 10% 15% cheaper online than in physical stores. And Chinese people are very price-sensitive and show less brand loyalty, cheaper price is definitely a major concern and initiative why people would choose to shop online (cnbcmagazine.com 2011). The second factor that reduces bargaining power is that since the majority buyers are not large buyers, their purchasing volume is small; hence their bargaining power is lowered.

 

5.2.1.4      Bargaining power of suppliers

 

Supplier bargaining power measures the ability of the supplier to influence price (or other characteristics) of the market. Supplier power is the inverse of buyer power. It may allow suppliers to affect prices, create buyer lock-in, and increase demand for their product. One key influential factor is known as supplier concentration (volume) which measures the relative size of suppliers to buyers. This depends, in part, on the number of suppliers in an industry. For example, a higher concentration of volume among a few suppliers may indicate that one or more suppliers are able to influence the prices, availability, or other terms (Nicosia & Moore 2006, p. 29).

 

As for the C2C e-commerce, suppliers could be two major kinds and sellers could choose the preferred suppliers. The first kind of suppliers is the suppliers contacted by the sellers and thus the sellers are responsible for any problems directly if there should be any such as the product quality; the second kind is the suppliers available in the Taobao distribution and retailer platform which are available to all the qualified sellers. For the first kind of suppliers, the bargaining power of the sellers basically depend on the sellers’ sale volume; and for the second kind of suppliers since they supply good to all interested sellers, the bargaining power of the sellers will be reduced to a large extent.

 

5.2.1.5      Threat of substitute products or services

 

A substitute product or service is a different product or service type, meeting the same customer needs but in a different way, for example, e-mail rather than postal-based systems. The threats presented by substitute products or services to the established organizations in established industries include: limiting profits (substitute products and services reduce demand for the established ones and therefore affect the level of price that can be charged) and redefining or destroying the industry (Allen 2001, p. 107).

 

Since we are focusing on a number of products and market segments, here we only discuss the substitute to the e-commerce shopping mode, people could choose to buy in shopping mall, groceries and other forms of retailers, but as mentioned earlier, there are more and more people choose to shop online rather than going to the physical shops. According to a report released by the Boston Consulting Group (BCG), China’s e-commerce market is projected to grow at a compound annual rate of 33 percent to reach more than 2 trillion yuan in transaction value by 2015, and the number of e-commerce shoppers will grow to 329 million during the same period and China had 485 million Internet users by the end of June 2011, of which 142 million shopped online. The report also suggests that the affordable and widely available Internet across the country, the rapid growth in the number of Chinese consumers shopping online, and the relatively low cost of logistics are driving the growth of China’s e-commerce industry (chinapost.com.tw 2011). Therefore the threat of substitutes of the e-commerce is minimal.

 

5.2.2            Analysis of consumer behaviors

 

5.2.2.1      Section A. Respondent general information

 

Figure 4 Age groups of the respondents

 

From the above light chart we can observe that young age groups of customers account for the majority of the online customer group. Among the 100 respondents, 78 of them are aged 30 or below. This actually reflects a basic fact in the e-commerce industry in China: the netizens are young. This is also in correspondence with the early finding that, according to Macquarie, one of the particular features of the Chinese Internet market is the young age of the average user. Teenagers comprise 35% of all Web surfers, and if those in their 20s are included, the figure jumps to 67% (marketwatch.com 2010).

 

Chart 5 Summary of gender details

 

Among the 100 respondents, the male against female is 56 : 44 which means that more women go shopping online compared to the male counterparts.

Chart 6 Allocation of respondents in different provinces

 

And looking at the allocation of respondents in different provinces, we observe that provinces that are more developed tend to have more online consumers as reflected in our survey. In particular, large and developed provinces and areas that include Guangdong provinces, Shandong Provinces, Beijing city and Shanghai city occupy for more than 30 per cent of the total surveyed online customers that we surveyed.

 

Chart 7 Place of origin

 

Also from the answers to the question that “Are you from the rural area or city?”, we can summarize that 66 out of the total 100 respondents are actually from cities. Therefore we managed to conclude that more than 60 per cent of the online customers are actually from the city and they tend to come from large developed cities and provinces.

Chart 8 Allocation of respondents in different income levels

 

And in term of the allocation of respondents in different income level, as the line chart above demonstrates, both high income and extremely low-income consumers account for a relatively small proportion of the total surveyed sample, and those that are allocated in the lower to middle income levels make up the main customer base of the online customers.

 

5.2.2.2      Section B. Online payment

Chart 9 Preferred payment methods (multiple choices)

 

About the preferred payment methods when doing shopping online, we have made a comparison with the data released in 2006. A statistics survey about the payment methods for online shopping among the Internet users in China released in 2006 showed that 73.8% would like to pay online with credit cards or debit cards, 28.1% by cash and carry; 15.2% by bank transfer, 12.4% by post offices remittance and 2.0% by other methods (CNNIC 2006). And according to our survey, the data have changed since 2006. The most apparent difference that we observe in this study compared to the data in 2006 is that the preference of credit cards or debit cards has increased from73.8 percent to 85 percent while all other payment methods’ preference among the online consumers have all decreased. And among the respondents, more than 80 percent of them suggest that the online payment is safe and only 11 percent of the respondents suggest that online payment has been one of the major barriers for them to shop online which has decreased from 21.7% in 2006.

 

5.2.2.3      Section C: Internet usage

 

 

When asked about “How long do you spend before your computer on average each week?”, we calculate the average number as 25.9 hours per person per week, this corresponds with the fact that the average time online per user increased from 2.8 to 3.6 hours per day between 2008 and 2011. Chinese users spend about an hour a day more on the internet than US users (newmediatrendwatch.com 2011). And on the other hand, the social network website is another important trend as 33% of them suggest that they will often visit the social network websites.

 

 

 

 

5.2.2.4      Section D: Online shopping

 

Chart 10 The shopping preference by different product groups

 

And regarding the different products that online customers may prefer to buy in the online shops, clothing and shoes are still the major products that people buy online, considering the large number of netizens, the market volume for these two product categories is very large.

 

5.2.3            SWOT analysis

 

Strength

Sufficient capital

High credit rating

Increasing sale

Weakness

No major business focus in any market segments

No exclusive supplier

Short operating time, few royal customers

Opportunities

Market is growing

Trust of online payment by majority of customers

 

Threats

Weak long term relationship with suppliers

 

 

Table 3 Table of SWOT analysis on “YRMC.taobao.com”

 

6.        Strategies

 

6.1    Porter’s generic strategy (1980)

 

One major problem that must be resolved before our business could actually make any further progress that finally result in great success: what business segments we should choose to focus on?

 

After doing a lot of literature review on the generic strategies, we come to realize that focus, low cost and differentiation are not the only choices that we must choose. Hybrid that combines lower cost and good product perception in term of quality and other functions could also a possible way that ensures larger market coverage and also certain profitability. We make this decision based on three major reasons: first of all, online stores unlike physical real shopping malls, they do not necessarily come with actual warehouse and delivery service since all these could be done by third parties. As a matter of fact, right now we sell all these products without having a real warehouse and make any delivery or mailing by ourselves. The suppliers do all these for us. This is also a good advantage of having powerful suppliers though the bargaining power of us as final seller is minimized; secondly, we have sufficient capital to operate several business segments at the same time; thirdly, the large traffic volume will attract people to buy more each time since people’s purchase demand could be stimulated.

 

 

6.2    Market segmentation and positioning

 

As we have analyzed above, among the 100 respondents, 78 of them are aged 30 or below, the young people represent the future of the e-commerce business, by segmenting the market by the customer ages, we decide to choose the 20s to 30s as the major customers based that we will focus in the future business operations.

 

And among the young ages, we will position the low to middle income level customers with clothing and shoes products who have money and are not extremely price sensitive and rather experience sensitive. And since we have adopted a hybrid generic strategy, we will also have relatively broad customer positioning. Another reason that we choose shoes and clothing products is that they are not standardized commodities and could be differentiated through different methods such as product design.

 

6.3    4P’s Marketing mix

 

6.3.1            Product strategy

 

There are two major strategies that we will adopt in different of the product relative decisions. First of all, we will refine the current suppliers that we are having cooperation with, and select the products that are in consistence with our positioning which is targeting at the young ages. Secondly, we will try to explore our own exclusive suppliers by directly contact the clothing factory and entrust them to produce the clothes that are in our designed fashion while at the same time reduce the cost in the middle channel.

 

 

 

6.3.2            Price strategy

 

The price of the products will be in low to medium level, we will adopt different price strategies rather than the cost leadership only which set the price at the lowest possible level. For example, the Taobao.com platform provides the special pricing strategy through which the system could set discount for the products and after a certain period of time the discounted price will return to normal price rate. Another pricing strategy that could be adopted is the psychological pricing which takes into the consideration of the special price’s meaning to the Chinese customers.

 

6.3.3            Promotion strategy

 

To promote our business, based on the long term perspective, we actually have three major strategies set to promote our business: firstly, we will use personal sale to promote our main promotion products. As so far, we plan to continue to sell the virtual products such as the virtual top-up card because they will attract large traffic though basically large visiting will not be too much profitable because the high competition among the virtual product retailers, we will let our customer service staffs to promote our clothing and shoes products through personally talking to the customers; secondly, we will use sale promotion by joining the promotional activities held by Taobao.com within the website, the website holds similar promotional activities from time to time and they are open for the application for all applicable sellers, what is more we will also advertise our product through techniques such as online ads and SEO (search engine optimization). The third promotion strategy that will be adopted is the membership scheme in which we will classify the members into several groups and those who are regular buyers will be given higher percentage in term of discount.

 

 

6.3.4            Place strategy

 

The place strategy will be of strategic significance over the e-commerce since the delivery will be a major issue in the e-commerce because customers only view the products on the pages rather than seeing the good themselves, hence choose of express delivery service partner will be of great importance. Also another part of our strategic plan will be to build up our own warehouse for the clothes designed by us as the major products that we would like to promote as under our own brand.

 

7.        Action program and budget setting

JunJulAugSepOctNovDecJanFebMarAprMayExpenditure
SOExxxxxxxx4000
Paid adsxxxxxxxxxx3000
Taobao promotional activitiesxxx1500
Salaries (for the customer service)xxxxxxxxxxxx8000
Rental for the Taobao high end templatexxxxxxxxxxxx1200
Warehouse building and managementxxxxx7600
Stylish clothing designxxx5000
Supplier relationship maintenancexxxxxx1000
Member relationship maintenancexxxxxxxxxxxx2500
Accidental expenditurexxx5000
Total38800

Table 4 Action program and budgeting for financial year beginning June 2012

*SOE= search engine optimization

 

 

JunJulAugSepOctNovDecJanFebMarAprMayExpenditure
SOExxxxxxxx6000
Paid adsxxxxxxxxxx4500
Taobao promotional activitiesxxx2250
Salaries (for the customer service)xxxxxxxxxxxx12000
Rental for the Taobao high end templatexxxxxxxxxxxx1200
Warehouse building and managementxxxxx3000
Stylish clothing designxxx7500
Supplier relationship maintenancexxxxxx1500
Member relationship maintenancexxxxxxxxxxxx3750
Accidental expenditurexxx7500
Total49200

Table 5 Action program and budgeting for financial year beginning June 2013

 

JunJulAugSepOctNovDecJanFebMarAprMayExpenditure
SOExxxxxxxx9600
Paid adsxxxxxxxxxx7200
Taobao promotional activitiesxxx3600
Salaries (for the customer service)xxxxxxxxxxxx19200
Rental for the Taobao high end templatexxxxxxxxxxxx1200
Warehouse building and managementxxxxx3000
Stylish clothing designxxx12000
Supplier relationship maintenancexxxxxx2400
Member relationship maintenancexxxxxxxxxxxx6000
Accidental expenditurexxx12000
Total76200

Table 6 Action program and budgeting for financial year beginning June 2014

 

 

JunJulAugSepOctNovDecJanFebMarAprMayExpenditure
SOExxxxxxxx17280
Paid adsxxxxxxxxxx12960
Taobao promotional activitiesxxx6480
Salaries (for the customer service)xxxxxxxxxxxx34560
Rental for the Taobao high end templatexxxxxxxxxxxx1200
Warehouse building and managementxxxxx3000
Stylish clothing designxxx21600
Supplier relationship maintenancexxxxxx4320
Member relationship maintenancexxxxxxxxxxxx10800
Accidental expenditurexxx21600
Total133800

Table 7 Action program and budgeting for financial year beginning June 2015

 

8.        Implementation

 

In relation with the implementation of the marketing plan, we will outsource the functions and activities such as customer service, promotional activity planning and monitoring and so on which could be done by the professional activities, as for us, we will focus on the management of supplier relationship management as well as new product development.

 

 

List of references

 

Ahlstrom, D. & Bruton, G. D. 2010, International Management: Strategy and Culture in the Emerging World. New Jersey: Cengage Learning. p. 136

 

Allen, M. 2001, Analysing the Organisational Environment. Cambridge: Select Knowledge Limited. p. 107

 

Angwin, D., Cummings, S. & Smith, C. 2011, The Strategy Pathfinder: Core Concepts and Live Cases. 2nd ed, New Jersey: John Wiley and Sons. p. 143

 

Ardagna & Zhang 2010 Run-time Models for Self-managing Systems and Applications

 

Barowski, M. 2000. Online Marketing, Berlin: Cornelsen.

 

Babin, B. J. & Harris, E. 2010, Cb2. London: Cengage Learning. p. 153

 

Bowman, C. 1988. Strategy in Practice, Harlow: Prentice Hall.

 

Bryman, A. & Bell, E. 2007, Business Research Methods. Oxford: Oxford University Press. p. 28

 

Chaffey, D. 2004. E-Business and E-Commerce with One key Course compass Access Card: Chaffey, E-Business and E-Commerce Management. 1e Boston, United States: Pearson Custom Publications.

 

chinability.com 2011. GDP growth in China 1952-2011. Accessed 22 May 2012 [online] URL: http://www.chinability.com/GDP.htm

 

chinapost.com.tw 2011. China set to become top e-commerce market. Accessed 22 May 2012 [online] URL: http://www.chinapost.com.tw/business/asia-china/2011/11/24/323852/China-set.htm

 

cnbcmagazine.com 2011. GREAT MALL OF CHINA: China’s liveliest and most lucrative marketplace is online. But will it ever welcome foreigners? Accessed 22 May 2012 [online] URL: http://www.cnbcmagazine.com/story/great-mall-of-china/1484/1/

 

CNNIC 2006. Emerging Markets And E-Commerce. Accessed 22 May 2012 [online] URL: http://www.cnnic.net.cn/

 

Dess, G. & Davis, P. S. 1984. Porter’s generic strategies as determinants of strategic group membership and organizational performance, Academy of Management Journal, 27/3 (1984), 467–88

 

edc.ca 2012. China political factors. Accessed 22 May 2012 [online] URL: http://www.edc.ca/EN/country-info/Documents/china.pdf

 

Evans, N. 2003. Collaborative strategy: an analysis of the changing world of airline alliances. Tourism Management 22 (3), 229 – 243.

 

gaebler.com 2011. Business Plan Market Analysis. Accessed 22 May 2012 [online] URL: http://www.gaebler.com/Business-Plan-PEST-Analysis.htm

 

Geert-hofstede.com 2011. China. Accessed 22 May 2012 [online] URL: http://geert-hofstede.com/china.html

 

Hambrick, D. C. 1983. High profit strategies in mature capital goods industries: a contingency approach, Academy of Management Journal, 26, 687-707

 

Hermann, S. 2008, Intercultural aspects of Mergers& Acquisitions in consideration of the Chinese market. Germany: GRIN Verlag. p. 53

 

hubpages.com 2008. Primary and Secondary Data. Accessed 22 May 2012 [online] URL: http://gulnazahmad.hubpages.com/hub/-Primary-and-Secondary-Data

 

indiatimes.com 2012. China apparel makers must observe social trends. Accessed 22 May 2012 [online] URL: http://articles.economictimes.indiatimes.com/2012-01-15/news/30627890_1_yuan-apparel-spending

 

istockanalyst.com 2012. Easing Of Inflation To Allow Central Banks To Mend Monetary Policy. Accessed 22 May 2012 [online] URL: http://www.istockanalyst.com/finance/story/5836389/easing-of-inflation-to-allow-central-banks-to-mend-monetary-policy

 

Jeffs, C. 2008, Strategic Management. London: SAGE Publications. p. 29

 

Kollmann, T. 2007. E-business. 2nd Wiesbaden: Gabler.

 

Kraemer, K. L. 2003, Global E-commerce: Impacts of National Environment And Policy. Cambridge: Cambridge University Press. p. 232

 

Learnmarketing.net 2010. Marketing Environment – PEST Analysis. Accessed 22 May 2012 [online] URL: http://www.learnmarketing.net/pestanalysis.htm

 

Magaziner, I. C., & Reich, R. B. (1982). Minding America’s business.  New York: Vintage Books.

 

Managementparadise.com 2010. PORTERS 4 GENERIC STRATEGIES. Accessed 22 May 2012 [online] URL: http://www.managementparadise.com/forums/publish-upload-project-download-reference-project/181838-porters-4-generic-strategies.html

 

marketwatch.com 2010. Chinese Internet still young and set to grow, analysts say. Accessed 22 May 2012 [online] URL: http://articles.marketwatch.com/2010-08-04/markets/30799089_1_chinese-internet-number-of-internet-users-penetration-rate

 

Menne, P. 2008, Potential of Geo-Marketing-Tools for the Development of Advanced Online business model. Germany: GRIN. p. 37

 

Miller, D. 1992. Generic strategies: Classification, combination, and context. Journal of Business Strategy, 13, 37-41

 

Miller, A., & Dess, G. G. (1993). Assessing Porter’s (1980) model in terms of its generalizability, accuracy, and simplicity. Journal of Management Studies, 30 (4), 553-585.

 

mindtools.com 2005. Hofstede’s Cultural Dimensions Understanding Workplace Values Around the World. Accessed 22 May 2012 [online] URL: http://www.mindtools.com/pages/article/newLDR_66.htm

 

Mrketingminefield.co.uk 2010. PESTLE Analysis. Accessed 22 May 2012 [online] URL:  http://www.marketingminefield.co.uk/pestle-analysis/

 

newmediatrendwatch.com 2011. China: Usage Pattern. Accessed 22 May 2012 [online] URL: http://www.newmediatrendwatch.com/markets-by-country/11-long-haul/49-china

 

nytimes.com 2012. A Populist’s Downfall Exposes Ideological Divisions in China’s Ruling Party. Accessed 22 May 2012 [online] URL: http://www.nytimes.com/2012/04/07/world/asia/bo-xilais-ouster-exposes-chinese-fault-lines.html?pagewanted=all

 

Nicosia, N. & Moore, N. Y. 2006, Implementing Purchasing and Supply Chain Management. New York: The Rand Corporation. p. 29

 

Porter, M. E. 1980, Competitive Strategy: Techniques for Analysing Industries and Competitor, New York: Free Press

 

Qin, Z. 2009, Introduction to E-Commerce. Germany: Springer. p. 189

 

Sachse, C. 2012, Global Product Development Strategy at Electric-hydraulic Market. New Jersey: GRIN. p. 55

 

synovate.com 2010. Consumers in upper and lower tier cities. Accessed 22 May 2012 [online] URL: http://www.synovate.com/news/article/2010/09/consumers-in-upper-and-lower-tier-cities-have-more-in-common-than-marketers-think-reveals-latest-synovate-media-atlas-china-research.html

 

thebeijinger.com 2012. Taobao shopping agent,10% of service fee,50% off EMS,paypal accepted. Accessed 22 May 2012 [online] URL: http://www.thebeijinger.com/forum/2012/03/29/Taobao-shopping-agent10-of-service-fee50-off-EMSpaypal-accepted

 

tradingeconomics.com 2012. GDP Annual Growth Rate. Accessed 22 May 2012 [online] URL: http://www.tradingeconomics.com/china/gdp-growth-annual

 

tradingeconomics.com 2012. GDP Inflation Rate. Accessed 22 May 2012 [online] URL: http://www.tradingeconomics.com/china/inflation-cpi

 

Waters, D. 2006, Operations Strategy. London: Thomson Learning. p. 209

 

Wikström, P. 2006, Reluctantly Virtual: Modelling Copyright Industry Dynamics. Sweden: Karlstad University Studies. p. 52

 

xinhuanet.com 2002. Environmental Protection in China. Accessed 22 May 2012 [online] URL: http://news.xinhuanet.com/zhengfu/2002-11/18/content_633191.htm

 

zdnetasia.com 2012. China aims for $2.8T e-commerce sales by 2015. Accessed 22 May 2012 [online] URL: http://www.zdnetasia.com/china-aims-for-2-8t-e-commerce-sales-by-2015-62304334.htm

 

Zhou, Q. Y. 2011, Advances in Applied Economics, Business and Development. Germany: Springer. p. 275

Appendix 1.0 Online customer buying behaviors survey

 

Section A. Respondent general info

 

How old are you?

 

A. below 15

B. 16 to 20

C. 21 to 25

D. 26 to 30

E. 31 to 35

F. 36 to 40

G. 41 to 50

H. 51 to 60

I. 61 and above

 

Are you a man or woman?

 

A. Man

B. Woman

 

Which province are you from (sequenced by beginning letters)?

 

安徽省 Anhuisheng

澳门特别行政区 Aomen Tebie Xingzhengqu

北京市 Beijingshi

重庆市 Chongqingshi

福建省 Fujiansheng

甘肃省 Gansusheng

广东省 Guangdongsheng

广西壮族自治区 Guangxi Zhuangzu zizhiqu

贵州省 Guizhousheng

海南省 Hainansheng

河北省 Hebeisheng

黑龙江省 Heilongjiangsheng

河南省 Henansheng

湖北省 Hubeisheng

湖南省 Hunansheng

江苏省 Jiangsusheng

江西省 Jiangxisheng

吉林省 Jilinsheng

辽宁省 Liaoningsheng

内蒙古 Neimenggu zizhiqu

宁夏回族自治区 Ningxia Huizu zizhiqu

青海省 Qinghaisheng

陕西省 Shaanxisheng

山东省 Shandongsheng

上海市 Shanghaishi

山西省 Shanxisheng

四川省 Sichuansheng

台湾省 Taiwansheng

天津市 Tianjinshi

香港特别行政区 Xianggang Tebie Xingzhengqu

新疆维吾尔族自治区 Xinjiang Weiwu’erzu zizhiqu

西藏自治区 Xizang zizhiqu

云南省 Yunnansheng

浙江省 Zhejiangsheng

 

Are you from the rural area or city?

 

A. City

B. Rural area

 

What is your annual income level?

 

A. No more than CNY 10,000

B. CNY 10,001 to CNY 15,000

C. CNY 15,001 to CNY 20,000

D. CNY 20,001 to CNY 25,000

E. CNY 25,001 to CNY 30,000

F. CNY 30,001 to CNY 40,000

G. CNY 40,001 to CNY 60,000

H. CNY 60,001 and above

 

Section B. Online payment

 

Which payment method do you prefer when you choose to purchase online (multiple choices)?

 

A. Credit card or debit card

B. Cash and carry

C. Bank transfer

D. Post offices remittance

E. Other methods

 

Do you agree with the saying that “inconvenient payment is one of the major barriers for you to shop online”?

 

A. Agree

B. Disagree

C. Not sure

 

Do you agree with the saying that “online payment is safe”?

 

A. Agree

B. Disagree

C. Not sure

 

Section C: Internet usage

 

How long do you spend before your computer on average each week?

 

hours

 

Do you often visit the social network websites?

 

A. Yes

B. No

C. Not sure

 

Section D: Online shopping

 

How many times will you shop each month on average?

 

A. Below 3 times

B. 4 to 6

C. 7 to 9

D. 10 and above

 

What kind of products would you buy most on line?

 

A. Clothing products

B. Shoes

C. Food

D. Virtual service such as top-up cards

E. Education products

F. Furniture

G. Home appliance

H. Others

 

[1] The marketing plan will be implemented since 1 June 2012.