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C hina N ews Volume 2 Issue 4 Recently-published figures reveal that the total market research turnover of the top-200 US ‘for profit’ market research agencies fell in real terms in 2008 for the first time in more than 20 years. But the fall was (only!) 2.2%, a figure which I suspect many senior executives in ‘real economy’ industries such as automobiles, retail, home- building and improvement, watch making, aviation, hotels and tourism, etc. would gladly sign off for tomor- row! So is market research in crisis? What is a crisis? Next time that you find yourself with a group of people of different ages and professions, try asking each one of them to recall what was their worst crisis (in their professional rather than personal careers!). You will almost definitely get as many different an- swers as there are people in the group. One person said he had never known a crisis in his profession. He was a gynaecologist! The same goes for market research companies. Ask a sample of N mar- ket research companies if they are ‘in crisis’, and you will most probably get N different answers, depending on each company’s client base and the strength of their client ‘relationships’, the sectors and geographical region they work in, their degree of repeat business, and of course their underlying financial situ- ation (was their business sufficiently profitable before the present ‘crisis’?). So-called ‘crises’ for market research agencies are usually caused by one or other (hopefully not both!) of the following circumstances. Either an agency’s main clients are in diffi- culty and stop buying research, or the agency provides poor data quality, lack of service, and non-actionable results (usually due to personnel problems), and its clients change to another research supplier. Let’s take a look at both these possibilities in today’s eco- nomic climate. Are global research users in crisis? The current buzz phrase for many corporate marketing executives is “Get more value for less (budget)”. This certainly applies within the sectors mentioned at the beginning of this article. But leading companies (not necessarily all) in sectors as diverse as pharma/ health care, razor blades, dental care, cigarettes, food and non-alcoholic beverages (and even some of the alcoholic brands), fast-food chains (hamburgers, sandwich-bars to name two), mobile communications, bicycles, low-cost airlines, and on-line retailing are definitely not in a crisis situation. Nor are governmental policymaking and public service departments (trans- port, education, state-owned media), political parties and large NGOs, all of whom have become significant users of market research. In times of economic crisis, market re- search continues but the methodology may change. Budgets for syndicated and panel studies, as well as qualitative research, are more resilient to budget cuts than ad hoc quantitative research. The role of qualitative research remains very important. Most clients recognise the value of quantitative, but given the crisis this is temporarily being cut back. Are market research agencies in crisis? Having spent the past 40 years in the market research industry, and survived a number of ‘crises’ during that time, the basic question is “What’s differ- ent this time round?” Is there a real crisis in the market research industry, or are we just facing another “diffi- cult and challenging period”? Market research companies come and go - but historically they keep on coming! The annual ESOMAR members’ directory gets thicker each year. This is due to the relatively low barriers to entering our industry (start-up investment and personnel training), coupled with the now-common acceptance that almost nothing is done in the private or public sectors these days without an independent “survey” (or “audit”). An ex-colleague once remarked that about three-quarters of the market research companies currently listed as ESOMAR members did not exist 10 years previ- ously. He then went on to set up his own research company! September 2009 Is Marketing Research In A Crisis - Or Is History Just Repeating Itself? By Clive Armstrong¹ www.cbcnow.com China News – SEPTEMBER 2009 page 1 CBC Business Consulting Newsletter CBC Business Consulting Newsletter www.cbcnow.com China News – SEPTEMBER 2009 page 8 CBC Business Consulting Newsletter CBC Business Consulting Newsletter Is Marketing Research in a Crisis? China's Consumption Recovers Switzerland Ready for China Business Consulting CBC Business Consulting helps you to successfully setup your company and find the right partners for your expansion in China. We also provide feasibility and industry studies and offer sourcing and office-in-office services. Market entry strategies Industry studies Location evaluation Partner evaluation Company registrations Feasibility studies Office-in-office Executive Search CBC Executive Search works with a large number of companies to meet their talent and executive needs in China. We directly approach all our highly educated and experienced candidates working in different business sectors including the following. Automobile Chemicals Finance IT Healthcare Retail Textile Contact The CBC Office Nearest To You: For Europe For Japan For India CBC Marketing Research & Business Consulting CBC Creative Assist CBC India Pvt Ltd Marktgasse 32 HIK Building 1F 4-10-8 B-806 Sagar Tech Plaza Sakinaka Junction 3011 Bern Takadanobaba Shinjuku-ku Andheri Kurla Road Andheri (East) Switzerland Tokyo 168-0075 400072 Mumbai Japan India Tel: (+41) 31 560 3000 Tel: (+86) 21 5155 2000 Tel: (+91) 22 6770 3718 Fax: (+41) 31 312 5886 Fax: (+86) 21 5155 2099 Fax: (+91) 22 6645 9842 Email: [email protected] Email: [email protected] Email: [email protected] For Beijing For Shanghai and the United States For Guangzhou and Hong Kong CBC Marketing Research & Business Consulting CBC Marketing Research & Business Consulting CBC Marketing Research & Business Consulting 512 New World Taihua Office Tower CBC Building, 49a Wuyi Road Room 1901, Unit 10, 19th Floor 5-5 Chongwenmenwai Dajie 200050 Shanghai Ganglü International Center CTS Center 100062 Beijing China 219 Zhongshanwu Road China 510030 Guangzhou China Tel: (+86) 10 6709 1622 Tel: (+86) 21 5155 2000 Tel: (+86) 20 2227 3200 Fax: (+86) 10 6709 1633 Fax: (+86) 21 5155 2099 Fax: (+86) 20 2227 3201 Email: [email protected] Email: [email protected] Email: [email protected] Marketing Research CBC Marketing Research uses a variety of quantitative and qualitative methodologies ranging from traditional focus groups and in-depth interviews to CATI surveys and internet- based research. Quantitative Research: Telephone interviews (CATI) Personal interviews (CAPI) Street intercept interviews Central location testing Online research Mystery shopping Car clinics Qualitative Research: Focus groups Mini focus groups In-depth interviews Other: Desk research Retail research NEW: CBC offers movable web streaming technology in Japan and South Korea and FocusVision technology in Bern, Switzerland. Core Business Of CBC Special Issue: MR Quo Vadis?

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  • 1. CBC Business Consulting Newsletter CBC Business Consulting NewsletterSp CBC Business Consulting Newsletter CBC Business Consulting Newsletterec iaChina NewslIssue Core Business Of CBC:MRQ Marketing ResearchBusiness Consultinguo September 2009 Va CBC Marketing Research uses a variety of quantitative and CBC Business Consulting helps you to successfully setup your Volume 2 Issue 4d qualitative methodologies ranging from traditional focuscompany and find the right partners for your expansion in is? groups and in-depth interviews to CATI surveys and internet-China. We also provide feasibility and industry studies and based research. offer sourcing and office-in-office services. Quantitative Research: MarketentrystrategiesIndustrystudiesIs MarketingSwitzerland China's Telephoneinterviews(CATI) Personalinterviews(CAPI) Locationevaluation Research in Ready for Consumption Partnerevaluation Streetinterceptinterviews Centrallocationtesting Companyregistrations a Crisis? China Recovers Onlineresearch FeasibilitystudiesIs Marketing Research In A Crisis - Or Is Mysteryshopping Office-in-office Carclinics Executive SearchHistory Just Repeating Itself? Qualitative Research: CBC Executive Search works with a large number of companies Focusgroups to meet their talent and executive needs in China. We directly Minifocusgroups approach all our highly educated and experienced candidates In-depthinterviews working in different business sectors including the following. By Clive Armstrong Other: Automobile Deskresearch Chemicals Recently-published figures reveal that So-called crises for market researchIn times of economic crisis, market re- Retailresearch Financethe total market research turnover agencies are usually caused by onesearch continues but the methodology ITof the top-200 US for profit marketor other (hopefully not both!) of the may change. Budgets for syndicated Healthcareresearch agencies fell in real terms infollowing circumstances. Either anand panel studies, as well as qualitative NEW: CBC offers movable web streaming technology in Retail2008 for the first time in more than agencys main clients are in diffi- research, are more resilient to budget Japan and South Korea and FocusVision technology in Bern, 20 years. But the fall was (only!) 2.2%, culty and stop buying research, or thecuts than ad hoc quantitative research. Textile Switzerland.a figure which I suspect many senior agency provides poor data quality, lack The role of qualitative research remains executives in real economy industriesof service, and non-actionable resultsvery important. Most clients recognise such as automobiles, retail, home- (usually due to personnel problems),the value of quantitative, but given the building and improvement, watchand its clients change to another crisis this is temporarily being cut back.Contact The CBC Office Nearest To You: making, aviation, hotels and tourism, etc. would gladly sign off for tomor-research supplier. Lets take a look atboth these possibilities in todays eco-Are market research For EuropeFor JapanFor Indiarow! So is market research in crisis?nomic climate.agencies in crisis? CBC MarketingResearch&BusinessConsulting CBC CreativeAssistCBC IndiaPvtLtd What is a crisis?Are global research Having spent the past 40 years in themarket research industry, and survived Marktgasse32HIKBuilding1F4-10-8B-806SagarTechPlazaSakinakaJunction Next time that you find yourself withusers in crisis?a number of crises during that time, 3011Bern TakadanobabaShinjuku-kuAndheriKurlaRoadAndheri(East)a group of people of different agesThe current buzz phrase for manythe basic question is Whats differ- SwitzerlandTokyo168-0075 400072Mumbai and professions, try asking each one corporate marketing executives is Getent this time round? Is there a real Japan Indiaof them to recall what was their worst more value for less (budget). This crisis in the market research industry, Tel:(+41)315603000 Tel:(+86)2151552000 Tel:(+91)2267703718crisis (in their professional rather thancertainly applies within the sectorsor are we just facing another diffi- Fax:(+41)313125886Fax:(+86)2151552099 Fax:(+91)2266459842personal careers!). You will almostmentioned at the beginning of thiscult and challenging period? Market Email:[email protected] Email:[email protected] Email:[email protected] get as many different an- article.research companies come and go - but swers as there are people in the group.historically they keep on coming! TheBut leading companies (not necessarily For Beijing For Shanghai and the United States For Guangzhou and Hong KongOne person said he had never known annual ESOMAR members directoryall) in sectors as diverse as pharma/ a crisis in his profession. He was a gets thicker each year. This is due to CBC MarketingResearch&BusinessConsulting CBC MarketingResearch&BusinessConsultingCBC MarketingResearch&BusinessConsultinghealth care, razor blades, dental care, gynaecologist! the relatively low barriers to entering 512NewWorldTaihuaOfficeTowerCBCBuilding,49aWuyiRoad Room1901,Unit10,19thFloor cigarettes, food and non-alcoholic 5-5ChongwenmenwaiDajie 200050Shanghai GanglInternationalCenterCTSCenterThe same goes for market researchbeverages (and even some of the our industry (start-up investment and 100062Beijing China 219ZhongshanwuRoad companies. Ask a sample of N mar-alcoholic brands), fast-food chains personnel training), coupled with the China 510030Guangzhou ket research companies if they are in (hamburgers, sandwich-bars to namenow-common acceptance that almost Chinacrisis, and you will most probably gettwo), mobile communications, bicycles,nothing is done in the private or Tel:(+86)1067091622Tel:(+86)2151552000 Tel:(+86)2022273200N different answers, depending on each low-cost airlines, and on-line retailingpublic sectors these days without an Fax:(+86)1067091633Fax:(+86)2151552099 Fax:(+86)2022273201companys client base and the strength are definitely not in a crisis situation. independent survey (or audit). An Email:[email protected]:[email protected] Email:[email protected] their client relationships, the sectors Nor are governmental policymaking ex-colleague once remarked that about and geographical region they work in,and public service departments (trans-three-quarters of the market research their degree of repeat business, and ofport, education, state-owned media),companies currently listed as ESOMAR course their underlying financial situ-political parties and large NGOs, all ofmembers did not exist 10 years previ- ation (was their business sufficiently whom have become significant usersously. He then went on to set up his profitable before the present crisis?).of market research. own research company!page 8China News SEPTEMBER 2009 www.cbcnow.comwww.cbcnow.comChina News SEPTEMBER 2009page 1

2. CBC Business Consulting Newsletter CBC Business Consulting NewsletterCBC Business Consulting Newsletter CBC Business Consulting Newsletter The main differences which strike one when looking at todays market research industry compared to that ofl horizontally-oriented products- customer satisfaction, brand recogni-tion, loyalty and value, new productresearch, people who have both theintellectual ability to analyse, interpretand present market intelligence dataIs Marketing Research In A Crisis? the 1970s and 1980s, are: lthe domination of the pub- lic-quoted research conglomerates,testing, marketing media measurement(traditional vs. Direct Marketing vs. on-line), employee satisfaction, mysterycorrectly, and who can also act asbusiness consultants because theyhave taken the time to get to knowThe Swiss View which have been built up mostly by shopping, CRM, etc., which are oftentheir clients business in-depthby Hans-Ruedi Hertig financially-driven acquisitions than marketed as branded products (espe-land, lastly, the 4 Ls be- organic growth: the top-10 researchcially by the larger agencies)ing recognised as a Leader in your companies in the US accounted for lvertically-structured researchresearch area, Located near to your The current crisis also high- over 80% of total market research turn-teams media, healthcare, retail,client, speaking the clients Languagelights structural problems. over in 2008 travel, NGOs, etc.and, as in all walks of life, there isThis applies to marketing re-the importance of international The question is always an element ofl"MR companies Luck! search in general and to the research: the top-50 research com- whether, because of the panies in the US generated just over global financial crisis, Being more creative Swiss scene in particular. half their total revenues in 2008 from a deep understand-come and go. But in a crisis does notCutbacks prove that research- outside the US ing of the nature andevolution of Customerhistorically theymean in my view that the client decidesers are not among the most l the growth of small, bou- tique research agencies, specialising Insights has suddenlykeep on coming"to ask their researchtrusted to remedy the eco- in certain types of market researchbecome less necessaryagency to supply themnomic downturn. Obviously,to private sector com- only with the research (sectorial, methodological, etc.), manysome marketing research fails of whom had a healthy growth inpanies, and organisa-data, and they do the turnover in 2008 incidentallytions in the public sector? The answeranalysis and write the report them- to deliver value worth keepinglthe amount of marketing infor-is definitely not!selves. Nor does an experiencedwhen budgets get tighter. Thismarket researcher/business consul- mation available, due primarily to ITSo is history repeating tant need to be told that a goodraises the question of how val- and the Internet itself? focus group isnt necessarily one thatid research is.l the growth in consumer protec-says your clients product will be a tion legislation and the blurring of the As in all previous crises, the futureKonso is in charge of the Swiss Consumer Confidence Survey produced in the CBC Call Centerof the market research industry willsuccess. Both these statements were in Bern (Switzerland). This survey adheres to the strictest quality standards and unlike many boundary between market research made in respected market research Validity describes to which degree re-continue to be determined by the fol-private and government sponsored surveys nowadays is pure random sampled CATI, com- and direct marketing methods (tele-industry journals published in 2009 search is asking the right questions inputer aided telephone survey. Konso with its unique telephone database reaches 90% of all Swiss marketing, CRM, etc.)lowing fundamentals:by the Customer Insight Manager of aview of a particular task. Reliability ex- households with a phone. Overall, market research is still a veryl the ability of the industrylarge corporation, and the head of aplains how well the chosen methodol- competitive, and increasingly global,to adapt to new opportunity areas research agency. If they are a reflec-ogy is adequate. Representativenessand needs in the traditional, heavy- defines how sampled results can be representative and reliable are resultsradio and print as compared to less de- industry, which most users agree has tion of research users and agenciesresearch-user markets (e.g. media,produced that way? manding survey designs. This is unwel- supplied good value-for-money, and attitudes towards 21st century market generalized.automobiles, food and drink retailing,come news for media producers where also creative products and services forFMCGs, healthcare), and to identifyresearch needs, then parts of ourGenerally speaking, the crisis is affect-Cost versus qualityprices are based on reach. On the other clients over a long period of time.industry could well be in crisis - andnew markets for market research (e.g. ing the Swiss economy hardest in areas The effects of the crisis on Swiss mar-hand, reach for the new media is - as Mainly as a result of the information will remain so for quite a long time!energy conservation, environmentalexposed to the open market. However, keting research are dramatic in areasexpected - out of proportion if based explosion, over the past 10 years,protection, customer service, socialThe most successful client-research many business segments in Switzerland on online panel surveys.agency relationships are long-term exposed to competition: Consequently market researchers, both in compa- networks) are still protected from global compe-partnerships where the above-men-high-quality random sampled research Simple item based, scaled client and nies and in research agencies, havetition. Furthermore, the small size of lthe need for Customer Insight tioned fundamentals of successfulis losing ground to survey panel based staff satisfaction in more or less com- discovered that their clients needs Switzerlands domestic markets fostersManagers (both in agencies and on the market research are fully recognised research, increasingly on-petitive markets typically (marketing, new product development, oligopolistic structures. Research insti-line and some almost sales, etc.) were changing. Market client side) to provide more creativ-ity and imagination for a fair price,and implemented. These partnerships tutes operating within these protected as a setback to the basics"We should notshow 80% satisfaction. CBC and Konso produce researchers now have the possibility ofdo not wait for an economic crisis to heavens have less to fear from any crisis collecting, analysing, and integrating rather than squeeze more for lessbudget. There are no quick-fix solu-decide together what insights and mar-in the short term. postal. A good example is the once prestigious be surprised that segmented data revealing data from an increasingly wide range ket intelligence are really critical to thethat high satisfaction rates of sources both primary and second-tions in research, and if you decide to clients business.Nevertheless, history reveals that pro-establishment survey formarket research are also due to loweredpay peanuts, you will get monkeys!tectionism and favouritism weakenthe electronic media pan- expectations of clients and ary data, from external and internal sources (not least of which are the l the two most important things__________________competitive positions in global marketsels which to some degreeis taken less staff actually lowering theClive Armstrong is Special Advisor to uses postal interviews clients own customer da-in market research are datathe President of CBC, an internationalin the long term. Problems also arise now, shunning costly butseriously"competitiveness. CBC and tabases). Market researcher managers have become (at"Market quality (especially truefor on-line research), andmarketing research company withwhen quality is at stake: As respon-dents become increasingly unwilling highly representative ran- Konso are convinced that honest research shouldoffices in Switzerland (where CBC least this is what is printedresearch is secondly, the quality of thepartners with Konso Ltd.), China, Indiato participate in surveys, institutes are dom sampling.also deliver unwelcome news butwith tools such as the learning streetresearch team working on on their name cards!) Cus- tomer Insight Managers. still a veryyour specific project and Japan. He is a specialist in interna-tempted to cut the contact and inter-Professional research -in order to communicate results moreview outlay incurred by random sam-tional marketing research, and teaches unwelcome results? efficiently and oriented towards solu- Research agencies have adapted to this by offeringcompetitive l this means at-tracting more people withmarketing research and internationalpling and respondent-friendly ques-tionnaire designs. Thus more and moreKonso parallel tests illustrate how top-tions.marketing courses at various universi- their clients: industry" good brains into market ties. respondents are lured onto survey pan-els by coupons and cash. But just how quality random samples and method- Switzerlands market research associa- ology show lower media reach for tv,page 2 China News SEPTEMBER 2009www.cbcnow.com www.cbcnow.com China News SEPTEMBER 2009 page 3 3. CBC Business Consulting NewsletterCBC Business Consulting NewsletterCBC Business Consulting NewsletterCBC Business Consulting Newslettercommunity when lifestyle changesThe crisis a chance to are commented at length although the changes are basically due to the switch from clean, random-sampled telephone deliver value In Switzerland like anywhere re-Switzerland's SECO Offers"Ready Ear" For Foreign interviews to an online survey panel. search has not prevented the bubble from forming nor from bursting. Sur- Digging your ownveys are strongest when used as a graveEntrepreneurs feedback tool in order to reach stake-holders. No doubt, better The reluctance of respon- dents to participate in re- "9 out of 10 stakeholder orientationcan speed up the recovery. search is on the increase.phone calls areHowever researchers needBy Hans-Ruedi Hertig This is partly due to the 9 out of 10 phone calls thatnot research-to design research with aneutral view. UnfortunatelyMrs. Rhl can look back on a career in The continuity of activities and are not research-based, butforeign economic affairs that brought personal relationships within mixed are placed by telemarketers.based buteven marketing researchtext books consider theher into contact with CBC in 2005 whencommissions as institutionalised with In addition, with numer- visiting China as an advisor to formerChina for decades ous infotainment surveysare placed bysupport of a given opinionFederal Councillor Joseph Deiss. Mrs. Improving and safeguarding marketor view as the number one tion claims that 2/3 of all Swiss adultswe should not be surprised that market research is tak- telemarketers" motive for commissioningRhl discussed Sino-Swiss economic re-lations with Hans-Ruedi Hertig, senioraccess for Swiss exporters and investors have been interviewed in 2008. How-marketing research (Kuss Private public partnerships such as ever, many of these interviews areen less seriously. Considerclient manager CBC Switzerland Mar- from the Freie Universitt Berlin).with OSEC, the Swiss foreign trade or- conducted within survey panels. As asurveys such as the one about choco- keting Research and managing partnerganization result, it is not an increasing late Easter bunnies: Do you start eat- CBC and Konso strongly believe thatof Konso Ltd., Institute for Consumering the bunnys head or the and Social Analysis. Standardised mutual agreements re- amount of Swiss respondents who are being interviewed,"More tail first? the main challenge to our business community is professionalism commit-garding investmentThe interview with but an increasingly smallerrespondents One large institute even ted not only to delivering what youMrs. Rhl concerned Chinese investors protection, double tax- ation and free trade see but also to what you do not see. group of respondents who are selling their answersare lured onto claims maximize response, it der tothat (quote!) in or- After all, this has always been the basistwo SECO mandatesrelating to foreignappreciate the liberal SECO is developing of success for Swiss quality. many times every year. Evensurvey panels is indispensable to do inter- economic policy: theSwiss labor market strategies like these based on close con- government surveys are nowviews on Sundays.__________________ development of an Meeting with: Ambassador and the quality of the run in panels. by coupons An imperfectHans-Ruedi Hertig is Managing Part-Monika Rhl-Burzi, Head ofincreasinglybetter tacts with private partners already lo-framework for Swiss Survey panelsand cash"marketner of Konso, Institute for Consumer the Bilateral Economic Rela- enterprises involvededucational systemcated in the relevant and Social Analysis Ltd. Basel, Switzer- and their mar-In Switzerland the distri-land and Senior Client Manager of CBC tions Division in the Foreignin export or invest- (foreign) markets con-cerned, including systematic surveys as keting hype bution of research volume is a long Switzerland Marketing Research. HeEconomic Affairs Directoratements abroad as well as the promotionwe survey specialists have learnedof Switzerland as an investment loca- Survey panels are being compiledway away from the otherwise typical is active in Swiss Marketing Researchwith satisfaction. competitive SME (small and medium since 1979 and has held senior posi-of SECO, the State Secretariat tion. With regard to China, the potential with the argument that some 10 tofor exports and Swiss investments is 15% non-registered phone users will enterprises) market structure: 2 insti- tions in Swiss multinational machinery, for Economic Affairs still enormous with continuing double-Foreign economic relations are a task of tutes account for over 50% of the mar-IT and market research companies. He the Swiss federal government unlike be included. But 80% of them willdigit growth rates over the last 10 years ket and 4 companies cover ca 80%. teaches strategy at the University ofSwiss location promotion, in which a be among the registered households which is also the timeframe of CBCs One institute alone takes a very largeBedfordshire (U.K.) and Marketing Ex-mix of local, cantonal and federal insti- within two years. No proof is yet in presence in China. slice of the survey contracts placed by cellence at the Marketing and Business tutions and private public partners are sight that households not registered government institutions.School Zrich (Switzerland). SECO has a clear strategy with trans- involved. Mrs Rhl, however, has offered in directories behave differently fromparent milestones:assurances that SECO has a ready ear for those registered. Konso identifies al-foreign entrepreneurs seeking invest- most 90% of all Swiss households us- Targeted cooperation, such as thement opportunities in Switzerland. The ing its telephone database including recent Sino-Swiss memorandum relatingopen and uncomplicated contact with mobile-only users. to environment technologies and the es-Mrs. Rhl is living proof of this.tablishment of a task force to this end Online research chances and risksSustainability, personal With their technology and incentive-drive and charm based bias, consumer online research Current Vice-President of the Federal panels will produce significantly differ-Council Doris Leuthard, Head of the ent lifestyle structures due to the ex-Federal Department of Economic Af- tremely small segments of the universe fairs, visited China in May 2008 and that they represent. When recruited, then further developed bilateral rela- only 5 to 10% will participate in an on- tions with China on the occasion of the line survey panel, about half will click visit of Chinese Prime Minister Wen Jia-Intensifying economic relations: Chinese Com- the questionnaire link in their e-mail bao in January 2009 when the new bi-merce Minister Chen Deming shakes hands and others will not complete the sur-with Swiss Economy Minister Doris Leuthard atlateral investment protection agreement vey. It is embarrassing to the researcha meeting in Zurich in February 2009. was signed. The memorandum relatingpage 4China News SEPTEMBER 2009 www.cbcnow.comwww.cbcnow.comChina News SEPTEMBER 2009page 5 4. CBC Business Consulting Newsletter CBC Business Consulting NewsletterCBC Business Consulting Newsletter CBC Business Consulting NewsletterChinese Consumers Increase Spending to environment technologies as signed by the Chinese commerce minister Chen Deming while visiting Switzerland in Feb. 2009 has also furthered economicChina Research,Statistics And ties. SECOs director, State Secretary Jean By Michael Zhao Daniel Gerber, will be visiting China in September.Recently a friend of mine called me. SheIn the 2nd wave, consumers are gener- viously detected enhanced consumer Numbers sounded very excited, I just bought aally less concerned about the interna-confidence. Chinese enter Europelong-dreamed-for Louis Vuitton hand-tional and domestic economic situation, More Spending than in 2008 through Switzerland bag at Plaza 66. It is on discount now. IChinas foreign affairs, food/daily neces- February 2009 July 2009 can almost see luxury-obsessed custom-sities prices, employment situation, etc., 60% CBC offers everything from office space ers rushing in and out of Plaza 66, the indicating the gradually rising consumer 59% More Wealthy In China. The fourth-annual average growth rate exceeded 49%to staff recruitment and, of course, mar- elite location where LV neighbors withconfidence which originates from the im- 50% largest population of the worlds 50% between 2005 and 2008.32%44%ket intelligence for foreign investors in Hermes, Prada, Celine, Versace, Cartier,proving domestic environment. 40%43%34% 36% 38%wealthy will live in China by the year 38% Switzerland as well as in Asia, particularly Chinese Auto Components Indus- etc., and I cannot help wondering, first30%38% 26%32% 2015, says consulting firm McKinsey. In the July survey, respondents are 24% 20%30%China and India. Mrs. Rhl, in this context, try Catches Up. Chinese car com- what is going on? and secondly, is LV20% 26%24%14% According to the report, as of 2008, found to have conducted more con-17%19% has characterized Switzerland as an attrac-ponent manufacturers will closethe same brand as the one I know?15%10%there were 1.6 million families in China sumption activities in the past three 10%tive Chinese stepping-stone for Europe. Automotive Food at Home Daily Necessities Bills GarmentsTravel / VacationBeverages / snacks Luxury ProductsEnterainment Eating Outthe technology gap on Western and Continuing Education Housing,with household incomes of over USD The answer is yes to my second ques-months, especially traveling where This because Swiss free trade agreements Japanese companies more quickly80,000. By 2015, it is estimated that thetion despite the minimal discount of- there has been an increase of 7% com- with the EU open up particular Europeanthan is generally expected, benefit-number will jump to 4.4 million. fered as a friendly gesture at a time ofpared with the previous wave. economic potential for Chinese partnersing from state subsidies for research Source: CBC Marketing Research with locations in Switzerland. China Will Dominate IC Market.and development, a new study by economic downturn. And well, I soonChinas Integrated Circuit market isKPMG found. The auto componentsfind some clue to what is happening General Consumption Behavior in past 3 months Respondents profile with my friend and others at Plaza 66Crisis Offers Op-February 2009 July 2009expected to grow to USD 100.1 billion production in China is expected to - Geographical coverage: from the findings of the two-wave na-100% in 2013, when it will represent 35% ofgrow to USD 350 billion by 2015, l Tier 1 cities (Beijing, Shanghaiportunities In China tionwide consumer consumption be-83% 83% the global chip market, according to awith 30% of parts being exported,80% and Guangzhou), Tier 2 cities (Shenyang, havior and confidence index study that65%report by IC Insights.the report said.And SwitzerlandChengdu and Changsha), and Tier 3 cit- 62% CBC Marketing Research conducted in 60%DTV Market Expected To Grow Bank Lending Drives Real EstateFebruary and July 2009. In each wave, 40% ies (Yantai, Shantou and Guiyang)30%33% Unlike most countries Switzerland Rapidly. By the end of 2008, ChinaPrices. Chinese banks made RMB a total of 945 consumers, aged 16 to 4928%26% - Sample size:still has a positive trade balance with had almost 400 million TV subscrib- 7.37 trillion (USD 1.07 trillion) of new years old from nine cities across China,20% Shopping / WatchingTravellingEating Out ers, of which 164 million are cable loans in the first six months of 2009were interviewed.Window Movies l105 interviews in each city,China, greater in total than its trade Shopping equal split by gendervolume with Japan. Switzerland hasTV users and more than 200 millionas the government sought to bolsterSource: CBC Marketing Researchalso stayed in tune with Chinas pres-wireless TV users, revealed a new in- economic growth. Record bank lend- Positive attitudes and ris- - Age and income:ent day Go West strategy of mov-dustry report. By the end of March2009, China had 49.86 million Digitaling drove average prices for newhomes 6.3% higher in summer in 36 ing confidenceConsumers are spendinging the weight of economic devel-opment away from the centers andTV users, less than one-third of ca-large and medium-sized Chinese cit-When the recession first hit in 2008, moremore Age Split coasts to inland markets. In China, ble TV subscribers. But the numberies, a survey by the central govern- people chose to hold on to their money. More spending is recorded in all cat-additional government funding isof DTV users is growing rapidly; thement revealed. But now a rather positive attitude andegories in July compared with Febru- 14% increasing confidence has been noticed28% 16-19 yearsnow available for the improvementary, especially on household bills, bev-20-29 yearsof the infrastructure there. among respondents in the surveys. If it erages/snacks, food at home, garment 29%30-39 years is not getting any better, but neither is itand big-item purchases (housing, au-40-49 yearsFurthermore, Switzerland is paying getting any worse.tomotive). This is in line with the pre- 29%even closer attention to investmentopportunities for sustainable andenvironment-related technologies as Overall Concernedness (Very Concerned + Concerned)Monthly Household Income (in RMB)illustrated by the latest Sino-Swiss February 2009 July 2009 memorandum. In partnership with 100% 13% 16% 2400 or belowBAK Basel Economics, Konso has 87%89% 2401-4000 89%conducted a survey among Swiss 80%79% 18% 13% 4001-6000 6000-10000producers of sustainable and environ-68% 65% 10000+59%ment-related technologies targeted 60% 49%64%53%59% 20% 20% Refuse55%for additional government funding. 58%59%41% 49% 53% 49%36%45%42% 40% 47%40%SECO has commissioned OSEC to co-37% 40%Source: CBC Marketing Research 30%ordinate government-funded private 20%enterprise projects for the expansionA B CD EF G H I JKL M of foreign trade in order to relaunch__________________ A Int'l and domestic economic situation HChildrens educationexport-based growth. In view of ad-B Foreign affairs IFood safetyditional government funding for theC EmploymentJTravel and vacationMichael Zhao is Industrial Studypromotion of Switzerland as a tourist D E Housing prices Food, daily necessities K LLeisure and entertainmentContinuing education Director at CBC Marketing Research indestination CBC could offer its de-F Stock marketMHobbiesShanghai, and can be reached as fol-cades of experience with China. G Interest rate lows: [email protected] / 0086 Source: CBC Marketing Research 21 5155 2000.page 6 China News SEPTEMBER 2009www.cbcnow.comwww.cbcnow.comChina News SEPTEMBER 2009 page 7