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Published online by Cambridge University Press: 05 June 2012
Multinationals must squarely face the fact that the competitive edge that is potentially available to them from superior technologies, products and systems will be severely blunted unless they build much stronger local competencies. In many cases, that will require a new willingness and determination to master the complexities of distribution, sales and service in China's secondary cities and rural heartland and to learn how to more sensitively adapt everything from products and processes to marketing messages to the peculiarities of the Chinese market – competencies in which their local competitors are currently far ahead (Peter Williamson and Ming Zeng (2004, p. 91)).
In general, marketing involves making decisions on the so-called ‘four Ps’: product, price, promotion and place (distribution). In this chapter we discuss the challenges that transnational corporations face in marketing in China, and the strategies and approaches that they may adopt to deal with them. In section 1 we review a debate triggered by Levitt on marketing in the context of the globalization of markets, and discuss the implications of the debate for TNCs operating in the Chinese market. In sections 2, 3, 4 and 5 we discuss the major issues that TNCs need to take into consideration in making decisions on product, price, promotion and distribution in China, respectively. The final section summarizes.
The Levitt debate
In 1983 Theodore Levitt, professor in marketing at Harvard University Business School, published a paper entitled ‘The globalization of markets’ in the Harvard Business Review.
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