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Marketing Analysis

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1. What are GinoÐŽ¦s competitive advantages and disadvantages in China and how has its channel structure and performance contributed to its competitive position?

Advantage Disadvantage

Product Ñ"Ь Full product range

Ñ"Ь Best known for domestic burners

Ñ"Ь In-house production capability

Ñ"Ь Strong in domestic segment Ñ"Ь Still weak in industrial segment, a star market

Price Ñ"Ь 10-20% price competitiveness Ñ"Ь Price advantage is not so obvious in commercial and industrial segments

Ñ"Ь Consumers are not so price sensitive in these segments

Place Ñ"Ь Distributors carry Gino only Ñ"Ь Solely rely on distributors

Ñ"Ь Distributors have more power

Ñ"Ь Distributors are not so dedicated to GinoÐŽ¦s business

Promotion & service Ñ"Ь Strong technical supporting team Ñ"Ь Mind share in industrial segment is still weak, while it is the market with high growth and margin

Ñ"Ь Service and parts heavily rely on distributors

At that time, Gino solely relied on three distributors to sell through its products to OEMs and end-users for the three completely different segments. There are 3-degree separation between Gino and OEMs. The graph above illustrates the current channel structure and the optimal one for Gino. There is a large gap for commercial and industrial segments. The graph below shows what extent the gap with optimal channel structure influences the market share across the segments.

Gino only select appropriate channel structure in its domestic segment, which consolidate or maintain its competitive advantage. However, in commercial and industrial segments, Gino would fall into the vicious circle to lose market share and competitiveness would be deteriorated further if it had not changed its channel structure

2. Analyze the segments for GinoÐŽ¦s products in China. What are the SODs of various segments? How well is Gino meeting these demands through the channels it is currently using? What are the major short and long term problems that Gino should be concerned about? Why?

SOD analysis and gap

SOD GinoÐŽ¦s performance


Ñ"Ь Price

Ñ"Ь GinoÐŽ¦s channel structure well match these SODs except that some stole sales caused unnecessary price chaos


Ñ"Ь Brand and reputation

Ñ"Ь Supply of spares and after-sales service

Ñ"Ь Distributors seldom promote GinoÐŽ¦s brand

Ñ"Ь Distributors are reluctant to stock large number of spares

Industrial Ñ"Ь Reliability

Ñ"Ь Availability of stock

Ñ"Ь Word-Of-Mouth, brand and reputation

Ñ"Ь Distributors are reluctant to stock GinoÐŽ¦s burners and spares

Ñ"Ь Distributors seldom promote GinoÐŽ¦s brand

Short-term and long-term problems

For domestic segment

Ñ"Ь Short-term problem will be the transshipment. With the decreasing margin and over-saturated marketed, three distributors of Gino will further poach otherÐŽ¦s region and cause more bitter price war and price chaos

Ñ"Ь Long-term problem will be the price war. With the catch-up of local manufacturer in scale and technology, they will leverage their local connection and knowledge and born human resource advantage to establish leaner and shorter channel. This will further pull down the price and drive this segment into a cake with slim margin, which is not suitable for the global players with relatively higher operation cost, like Gino, to survive

Ñ"Ю The similar comedies occur many times in ChinaÐŽ¦s stage to many industries, like personal computer, cellphone, etc. Global player used to dominate the whole market from low-end to high-end, but gradually lose the cake of low-end to local players due to their inherent cost disadvantage and channel disadvantage and grab the top of cream in the high-end market through the technology or know-how barriers

For commercial and industrial segment

Ñ"Ь Short-term problem will be GinoÐŽ¦s disconnection with OEMs or end-users, which require customized products and special terms about price and services. GinoÐŽ¦s distributors canÐŽ¦t match these requirements in terms of technology, logistics and dedication. However, Gino canÐŽ¦t bypass its distributors to serve these OEMs directly such that it lost these opportunities to catch up in these segments

Ñ"Ь Long-term problem will be the inherent disadvantage of GinoÐŽ¦s channel structure. The SOSs of Gino and its distributors totally canÐŽ¦t match the SODs of OEMs and end-users, who will be the most powerful players in these segments. If Gino canÐŽ¦t fix the problem fundamentally from the perspective of structure or governance, it will be always secluded from this piece of meat

3. Analyze the market chain for the burner business in China. What are the R&R, SODs and SOSs of each of the players? How well are they being matched? Are there any



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