Facing the Market of Consumer Behavior and Low-end Enterprise

Marketing Strategy Research

—— Based on the Perspective of Comparative Analysis

GAO Chuang1, CHEN Yanliang2

1. Capital University of Economics and Business, Beijing, 100070
2. Business School of Liaoning University, Shenyang, Liaoning, 110036

Abstract: The spread global economic crisis is not only the consumptive market both at home and
abroad, but also to consumer spending habits and preferences influenced the development of enterprises
in our country, the dilemma facing certain. Based on consumers' behavior in China as the breakthrough
point through traditional high-end consumption market and low-end consumer market, our company is
analyzed that should be combined with its own characteristics and low-end market income groups
consumption characteristics of low-end strategic transformation and innovation, and to construct a face
low-end market of integrated marketing strategy, and formulate the corresponding framework of the
marketing strategy, our company develops and satisfy that this market provides guidance. At the same
time, focus on the sustainable development of the enterprise, our long-term and sustainable development
of the enterprises draw spiral growth pattern, seek for the long-term development of the enterprise.
Keywords: Low-end market, Consumer behavior, Compare, Marketing strategy

1. Introduction

Since 2008 economic crisis, especially some of China's enterprises of small and medium-sized
enterprises in foreign trade type for the domestic and international market, development of enterprise is
a bigger dilemma, the main reason is the our country business enterprise ", "economic characteristics of
attachment in the global production network is still in the assembly process, enterprise power levels low
Krugman (1994), and thus, the consumer market weakness in order of enterprises. Additionally, the
RMB appreciation, the rise of trade protectionism, make our enterprise's development under great
pressure.
Aiming at this kind of circumstance, the domestic scholars also made some related research, Shen
Muzhu (2009) that the enterprises should actively explore the diversity of overseas markets, especially
in the market competition of the relative ease in emerging markets, Zhao xi san (2009) combined with
the characteristics of China's economic transformation, and probes into the stage of China's small and
medium-sized enterprise industrial upgrade path selection problem, LiXiuFang etc (2009) that
enterprises should seize the initiative of the favorable opportunity, implementing the strategy of "going
out", cross-border mergers and acquisitions, to avoid a trade risk and restrictions. These studies, we
found on most of scholars, pricing strategy upgrading by product differentiation strategy, and to develop
new markets. But in the current economic crisis, it develops under the background of emerging markets
or industrial upgrading needs a long and tortuous period, this to our country enterprise imminent
dilemma is not reality.

[Fund project] This work is supported by NSFCP:The ultimate shareholders of listed companies in control and
deprived of their studies based on social capital perspective;Project of Outstanding Cream Introduction of
Beijing:Study on the problem of Ultimate Shareholders’ Control Right of the Listed Companies: An analysis
paradigm based on the social capital control chain ; and soft science plan of Liaoning province #2009401044.
[author introduction] Gao Chuang (1953 -), male, shenyang, Capital University of Economics and Business
assistant principal, professor, tutor, the research direction of comparative management, corporate governance and
。
enterprise theory ChenYanLiang (1984 -), male, shandong linyi, liaoning Business school of liaoning university,
Doctoral students, dr. Research direction for corporate governance and the enterprise theory, E-mail:
chenyanliang412@sina.com.

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Based on the perspective of comparative analysis, based on the traditional high-end market and low-end
market of consumer behavior, and combining with the differences in domestic and international market
economic crisis, the impact of low-end market analysis of the "blue ocean", is our country enterprise,
especially for the sustainable development of small and medium-sized enterprises, based on the road to
reasonable theory foundation for the 4P+ 4C proposed some marketing strategy.

2. Low-end market environment analysis

2.1 Low-end market characteristics

(1) The market potential is tremendous. Our low-end market containing enormous business
opportunities and development potential. On one hand, from population in China is a big country,
including nine million rural residents, income level, the other is relatively low low-income urban
families also has many low-end market in China, therefore, the number of consumers in the world is
huge, nearly 1/4, On the other hand, from purchasing power with the rapid development of China's
economy, the people's living standards have improved significantly. Especially in recent years, in the
national agriculture, peasant, policies and urban reemployment project under the help of the purchasing
power of consumer low-end market, has greatly. More importantly, compared with the high-end market
is a relatively blank emerging markets, market development level is far from enough, market
competition is relatively low. So can foresee, along with the market competition of the market in the
future will certainly capacity has greatly ascend.
(2) The distribution of the geographical position. The most low-end market distribution in consumer
groups from the city center, or the distant suburbs are distributed in the vast rural areas, therefore,
though huge population, centralized purchasing certain, but because the living is dispersive, population
density low, purchasing power distribution was relatively small, average household to the purchasing
power of the residents and very low levels, makes most areas cannot support more and large-scale
commercial enterprise, to form the agglomeration of commercial network. In fact, this is not willing to
develop this enterprise one of the important reasons for the market.

2.2 Low-end market competition environment

Since the mainstream economics theory "purchasing power" as the enterprise target market positioning
and pricing strategies, one of the main basis of this theory in under the influence of the gentry, the
purchasing power of the ", "rich people naturally become the enterprise target audience, but today we
find in the bottom of the pyramid low-end market is our severely underestimated, at the bottom of the
pyramid contain wealth, the mainstream opinion without purchasing power and therefore does not poor
represents a feasible market... But, with their Numbers, poor people represents a potential purchasing
power. If we don't take the poor as victims of social burden, but they will and can make, as is the
creative consciousness of entrepreneurs and valuable consumers, we will open a new opportunity in the
world.
In fact, many domestic enterprises have started to low-end market, for instance, take "the layout of the
city of rural surrounded the launch, Lenovo is cola rural computer program, etc. Of course the foreign
enterprises also aimed at the market, the company has begun to enter even part in this field, such as the
company has been in the past few years has been on the phone business core high-end products in the
fields of samsung now plans to invest more money and manpower for development of emerging markets
for low-end phones, part of low-cost cellphones has begun selling, In order to cope with the expanding
lenovo, especially in the low-end market rising market share, dell also launched a price for 2599 yuan
"China computer".
Currently, China's low-end market in three main competitors:
(1) Early entrants. This kind of enterprise mainly refers to the current low-end market in a handful of
existing enterprises and domestic enterprises, mostly, such as described above, the association of
wahaha. After years of development are already in the field has obtained some achievements, they must

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share of the market for them, consumer brand awareness is high, but because it has long enough to a
market competition, they lack of awareness of the market competition, to reflect the sensitive enough.
Most of these enterprises by another is diversified enterprise strategy, market in their most energy, low
end the market is only as a substitute, remedy of identity.
(2) The export turns into domestic. This kind of enterprise mainly refers to the huge number of Chinese
export enterprise due to the current OEM to global economic crisis of RMB appreciation against the
dollar and bank loan interest rate rises, the export tax rebate rate cut, the price hike in raw materials,
labor costs, improve the influence of factors, and lose price advantage, is in trouble. In this case, there
have been some export enterprise strategic adjustment, market and brand strategy of tapping domestic
market turned to develop domestic market. Moreover, because the global economy will appear in a short
period of time, therefore, in the foreseeable future period, soon will have more potential entrants from
export, sale, transition to the number will be amazing.
(3) To low-end market expansion of multinational companies. With more and more of the enterprise
brand and the value chain of the extension, the high-end market competition, exorbitant profits are
becoming more and more difficult. Especially under the current economic crisis, high-end market.
High-end products and services of consumer spending, the economic recovery is not optimistic that
consumer confidence fell, all of these make high-end market slump will continue. Therefore, the face of
the increasingly central market space narrow and profit potential consumer market area and
multinational enterprises must adjust their own development strategy. As mentioned in the mobile phone
has been committed to samsung and high-end products market now company has a foray into the low
end the market. And, as the global economic crisis, more and more multinational enterprises into
something is low end the market, at present is only a matter of time.

3. Low-end market analysis and comparison of the consumers' behavior

All the people were confined to their social life experience. We are used to wear blinders, also is the
ideology, experience and the original management practices of world brand. But in our business world,
private enterprise, especially transnational companies who imitated multinational company of
large-scale enterprise, is also constrained by their life experiences ingrained in the "dominant" -- logic.
This is a logical thought: no, not the purchasing power of the market development represents a can, Due
to the geographical location, construction of market sales channel is very difficult, The consumer not
low-end market to accept advanced technology, no brand awareness.
But research shows that is not the case, the consumer market is low-end amazing performance compared
with conventional high-end market, the low-end market and consumers' behavior has the following
features:
(1) For the new technology has a desire
Contrary to popular belief, the low end the market on the practicability of the consumer products, also
be willing to accept the advanced technology. Wireless devices, cafe and personal PDA (PDA) at the
low end of the widespread use of market, many experts and researchers are riding. China's national
bureau of statistics reports that in 2004, telephone and mobile phone in China's popularization low-end
market is very high, including telephone share in the countryside has reached the average household,
and mobile phones and 0.9 popularization of Internet cafes in China also presents the rising trend. Also,
in the medical and health care and other fields, people are very eager to obtain high-tech products,
although they consider price is the primary standards.
(2) Also has a strong brand awareness
Although the low-end customers in consumer pays attention to quality and price is rational, as few
people to "luxury", "fashion" and "taste", perceptual consumption, but it does not negate they don't pay
attention to brand. Instead, the brand awareness is ubiquitous, they also hope and rich, use the same
brand of product, enjoy the same service. When buy home appliance such as rural residents very much,
especially famous brand of quality.

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(3) Consumption patterns and consumer behavior has high "demonstration effect."
In daily life, consumer spending behavior not independent of each other, but by surroundings, this is the
so-called "demonstration effect". Now there are many consumers not according to own actual needs and
economic power consumption, but compare to other people, even the consumption model. Due to the
low end the market information, consumers accept outside information channel lag, compared with less
especially strong conformity and compare the psychological, west lake in zhejiang, color television in
hebei province rural market achieves good performance, is one of the best examples. Speaking of the
enterprise, the characteristics of the marketing strategy formulation low-end market of advertisement
design is very important.
(4) Pay more attention to the product price
And high-end consumer market, the consumer market due to low-end low income and consumption, and
therefore their limited capital spending much of consumption, with benefits and fairly price sensitivity.
Like cheap products, the basic concept, luxury products without market.

4. For low-end market marketing strategy of innovation-----------based on the

integrated marketing 4P+ 4C framework

Through the above analysis, we already know, compared with the traditional consumer market, China's
low-end market has its unique characteristics. No doubt, the analysis of these characteristics is the
cornerstone of low-end enterprises to exploit market, we will be together, as is shown in Table 1.

Table 1 Chinese traditional high-end consumption market and low-end market

The market has been gradually Low-end consumer market
saturated
Competition Consumers are in pursuit of The gap in the market competition,
products of high quality moderate.
Product prices Consumer pursuit is to pursue the Consumer attention is practical,
latest fashion trends pays special attention to the product
price.
Technical pursuit Consumers are generally in upscale Consumers also pursuit of product
department stores technical standards, but not for the
performance of ascension to pay
higher prices.
Buying channels The market has been gradually Consumers are mostly in the
saturated supermarket, shops and wholesale
market places such as consumer.
Marketing strategy Consumers to purchase behavior Consumers purchase behavior with
more conspicuous, enterprises in the practical give priority to, the
marketing strategy on many reflect enterprise marketing strategies in
personalized feature. more reflect the quality of the
products.
Brand awareness The enterprise mainly through Consumer mainly through the
consumer marketing methods such mouth of product quality to obtain
as advertisement, etc. To obtain the approval of the brand.
approval of product brands.
Enterprise profit Through the analysis of the existing Enterprise through the huge
enterprise competitive advantage, number of consumer market for
the pursuit of individual products survival and development.
and services.

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Low-end market with a comparative analysis of consumer behavior, this paper argues that the traditional
marketing strategy can fully satisfy the 4ps low-end market demand, and consumers with customer
orientation of development May 4C market positively the auxiliary function, based on this cognition,
this paper constructs a based on the 4ps + 4C low-end consumer market for the integrated marketing
strategy of the framework, as shown in Figure 1.
(1) Based on customer demand the product strategy
Compared with the traditional high-end market in China, the market for core consumer low-end
products quality is compared commonly concerned. On the one hand, because of the functional
requirements of consumers low-end market, emphasize the obvious features on the quality of products,
such as product high demands of durability, On the other hand, some new techniques of consumer also
has a fairly. This requires our enterprise to improving their adaptability, adopting new technology, new
technology to meet the needs of consumers, Second, consumers to form product also pursue, for
example, enterprise can provide products, consumers choose leeway, customer satisfaction is selected,
the possibility of the variety of specifications will therefore product diversification, seriation, And the
consumer market, for additional low-end brand and packaging products, especially the pursuit is very
strong, the difference in consumer market consumers get low-end brand recognition in different ways,
most of them in television advertisements and the mouth of the product brand reputation to judge
discretion. But low-end market with strong consumer spending, conformity and compare the
psychological outstanding, which requires us to the enterprise shall establish themselves in the low-end
market of "high" brand image, the desire to satisfy consumer brands.

Based on customer demand Based on customer cost of

Under the impact of of product strategy price strategy
economic crisis in the
international market

Domestic
low-end market

Gradually saturated
domestic high-end
market Based on customers Based on customer
convenient channel communication of
strategy promotion strategy

Figure 1 In the market for low-end 4P + 4C integrated marketing framework

(2) Customers on the basis of cost price strategy

Low-end market price of the product, consumer attention to price comparison sensitive, it will need to
improve our company own pricing strategies, especially export to China by the enterprise will change
the low-end market orientation of the cost of past pricing model. Due to the long form the fine tradition
of thrifty, plus due to the relatively slow growth in earnings for actual purchasing power of relatively
low low-end market, the consumption has a notable low preference and low-end market demand
elasticity coefficient is relatively high, i.e. relative prices of minor changes caused a big sales will move
in the opposite direction. Therefore, enterprises in the pricing of products to the market research work,

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grasps the consumer psychology price, thus formulating reasonable pricing strategy.
(3) Customers on the basis of convenient channel strategy
Due to the regional market low-end dispersion and purchasing power of dispersion, this market
enterprise should break the traditional "pyramid" type of sales channels, adopt the channel model and
"completely, use, in a new huairou" management mode. To achieve direct distributors and ultimately
consumers sales terminals basic marketing strategy, the decrease of the intermediate links, with efficient
logistics flow and information flow, organization, channels and circulation costs to ensure reasonable
level, the terminal sales price competitiveness and product quality. Does the low-end market relatively
low cost, therefore, large scale and strength of the enterprise can custom channel network. In addition,
considering the consumers are mostly in supermarkets and stores and wholesale market places such as
consumption, enterprises can also with low-level commercial enterprise jointly, forming a "production
enterprise products stores a consumer" channel structure.
(4) Customers on the basis of the marketing strategy
Combined with the characteristics of consumers low-end market, this paper argues that the promotion
strategy, the enterprise should pay attention to the following respects. First is different with the
traditional high-end consumption market, consumers in purchasing goods low-end market main
mentality is good to see "ears", they mainly to store information channel is visiting relatives objects,
television ads, radio, newspaper, for the advertisement as well as assistant recommend that insufficient,
most of them. The scope of its cultural quality, life habit, media contacts, so as to take frequent business
activities for promotion, terminals, Secondly, the consumer identity low-end market and build positive.
Public relations to exploit the market has an important meaning, so enterprises to ourselves good public
image, Another due to the consumer market of low-end individual consumption ability is limited,
therefore, flexible, and for the payment of the enterprise is also important.

5. For low-end market sustainable development strategy

History tells us, painful experience any market enterprise cannot with a successful strategy
transformation and innovation to occupy the market once and grab a profit (although company
executives and managers seem very much, we hope to get affirmation). Regardless of how incredible
technology innovation, or how excellent business model, is inevitably will be "commercialization".
Along with the technological progress and the production process, and the explosive growth of trade,
both in the small and medium-sized enterprises, or large enterprise is the opportunity for market share,
and the price will be unavoidable, will the industry average profit margins will be back to be
unprofitable.
On the other hand, from the development of the industry, with the general rule of the consumers' income
and improving consumer demand change, high technical content of high-end products usually increases
and maintain stable growth. By inhibiting the high-end market economic crisis will demand better
economy in great degree after the release.
Based on this, we will be for those who have entered into the low-end market and try to provide a
long-term development strategy, and help enterprise management training such intuitive: not at the
sliding value can earn money, but the position of the flow of money to despotism. For this, we build a
long-term development of the enterprise strategic spiral growth model shown in figure 2.
Enterprise due to external macro environment deterioration, market competition ability is insufficient or
itself, the influence of factors such as the market with its original accumulated in the technical
advantages to develop high cost performance products, and through the medium of the reasons for
marketing, brand image and successful entering the market, because the low-end market catered to the
consumer for low-end brand new technology, etc, to make up for the market demand of loss and gain a
great success. But with the development of the market continuously, and other enterprises, the market
competition to adjust its development strategy, enterprises, relying on low-end market in the capital
accumulation, and through a lot of r&d input (independent technological innovation or acquisition) and

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brand promotion enterprise original brand accumulation or acquisition) to overcome barriers to market
access and re-enter high-end market to obtain high profit margins. With the development and change of
the market continuously, the enterprise with the spiral growth into a continuous growth path.

6. Epilogue

With global economic slowdown, countries are looking for new development enterprises, this article
only by road of consumer behavior and marketing in China, the characteristics of low-end market
consumer behaviors based on the analysis of the traditional high-end market, through the comparison,
we found that the market for a new technology, the consumer brands and so on, all have quite, also
showed some unique features, such as the ratio of consumption, the demonstration effect ", "etc.
Therefore, we think that the enterprises should seize the opportunity, combining the advantage of
enterprise's own ability, carries on the strategic transformation and innovation actively explore the
low-end market. While taking the 4ps + 4C as the theoretical basis, through the construction of
integrated marketing framework, formulate the corresponding marketing strategy to our general
enterprise strategic change and innovation of basic provide guidance and help. Finally, focusing on the
long-term development strategy, the enterprise to enter the low-end market, we drew up a long-term
development of the enterprise strategic framework, from the high-end market and low-end market in the
relationship between find opportunities and profits in the high-end market and the change rule between
low end the market, help enterprise to obtain future growth mode.

With the accumulation

of capital market in the High-end market Trapped in the
low-end, through external
ascension and brand environment and
building technology in their ability of the
the high-end market enterprise to enter
success low-end restrictions

Low-end market

Mature low-end With its brand and

market falling profits, the market in
enterprise coveted high-end
high-end market high technology and
profit margins market in the
low-end success

Figure 2 Enterprise sustainable development of spiral growth mode

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