Chapter 4 -- The Marketing Enviroment

Tencent is a compant that has no supplier, no marketing middlemen. Tencent uses the way of self-promotion and allows users to produce psychological dependence on their products. This strategic started from Tecent’s inception. Only in this way, company’s products can meet their target users directly and reduce costs. At the same time, it improves the company's competitiveness.

The company’s target market is consumers and directly to all the Chinese. No matter they are students or worker; overseas Chinese or they are living in China. Tencent makes appropriate changes according to the requirements people on the Internet. Until now, Tencent has variety of products based on users’ needs. For example: from the beginning, Tencent only had the chatting tool. Step by step, they develop the aspects on entertainment, e-commerce, searching tool, music, video, client application software and other types of services. The ways to change lead to Tencent’s success in the online world. Furthermore, Tencent has becomes a public media. The news Tencent provides has become the only source for part of the online users. And Shenzhen government offered great help for Tencent since it established. Tencent itself also form a culture called Q culture.

Population impact on Tencent- China has the largest population in the world. The population is over 1.4 billion. Tencent has a great impact on people’s study, work and lives, the main reason is its instant messenger—QQ. Therefore, Tencent’s target consumer group has large span on age, start from the 10 year-old elementary school student, to the 80 years old elder people. The news I read one week ago on TV, it shows that some Chinese community encourages elder people to learn how to use QQ to contact with their children. Most of the young generation work away from home and the only chance they can go back to their hometown is spring festival. QQ is the popular tool that they can contact with family. With the expansion of the products, the age structure of their consumption will also change in the future.

 

Economic impact on Tencent- Nowadays, China is developing with the high speed. In 2012, Chinese GDP growths at the speed of 7.8. People’s per capita income rise substantially, and people’s purchase power grows at the meanwhile. With the world financial crisis had impact on China in 2008, the network products decreased at the same time. However, due to the mass users, financial crisis didn’t bring a huge harm on Tencent’s operation.

 

Competitive impacts on Tencent- Chines network hasn’t mature when Tencent established. For this reason, Tencent step-by-step development and change, and slowly accumulated a large number of users. Tencent has penetrated the market prior to other competitors. Just like Facebook is so popular in western countries, log in QQ and contact with friends and colleagues become Chinese daily life. Chinese government blocks Facebook and Twitter in China. I can’t open Facebook’s website or create an account. And that means Tencent lost two major competitors. Since I was an elementary school student, I used QQ to contact with my classmates, it won’t cause you money, unlike dialing the phone. When I grow up, there are more and more chatting tools came up. I would like to download them and tried. Such as Fetion, MSN, and Sina. I stop using them and keep on using QQ for the reason that the other products are not as common as QQ. I can’t chat with my friend if they don’t download the software. The second reason is that those products are simplification. On the other hand, Tencent has diversity of products that connect together.  I can play games with my friends; share my music or video with them. More than that, we can have a conference with specific group of people; ask for help with people all over the world. Tencent makes my life easier and faster. So when I came to America, I still use QQ to connect my Chinese friends who live in China or America. I own a Facebook account right after I came here, but I seldom upload pictures on it. Facebook is only a tool I can contact with my foreign friends. As I know, most of the young generation who came to U.S has at least one QQ account number. And we get more used to using QQ as a way we connect each other.

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Chapter 3--Ethics and Social Responsibility

“Tencent, Inc. will be more responsible to our customers and the society.” Said Mr. Ma, the founder of Tencent, Inc. Corporation social responsibility is not only respond to our investors, but also respond to our customers, partners, employees, even the promotion of harmony to the whole society. To improve a healthy, sustainable development internet environment is Tencent’s goal.

“Responsibility helps us to grow steadily.” Said Mr. Liu, the CEO of Tencent, Inc. How much money we can make from it is not the most important we are looking for, instead, we are looking for the intangible value the Tencent open platform will bring to us and the society.  And this is also the basic business value. As Mr. Liu said in a speech.

As one of the Chinese largest Internet service providers and one of the internet companies owing the largest amount of users, Tencent creates its own value prior to other internet services; it makes people’s lives richer and improves people’s quality of lives.

In May, 2008, Tencent was first elected to the constituent stocks of the Hang Seng Index. Therefore, Tencent started to summarize the social responsibility of the company's operations over the past decade. And company worked out the first CSR report in the form of white paper. In 2009, Tencent was participated in the Oxfam assessment, ranked 14. In 2011, Tencent established the CSR department, built up management system and work modules. At the same time, company released the CSR report of year 2008-2010. In 2012, Tencent expected to establish evaluation index system of CSR and promote the implementation of CSR system.  Furthermore, Tencent will make CSR system integrates into business operation completely.

Tencent released guidelines called open platform. It is a strategic that works with the third parties. Open platform means necessary to meet users’ needs. At the same time, it helps more small and medium-sized entrepreneurs. With the access to the third parties application, Tencent insists to the premise of ensuring the security of user information. In addition, Tencent stressed that the third parties could bring scalability after they join with the open platform. Thus, it is the win-win situation.The open platform includes opensns. qq. com( QQ community); open. Tenpay.com; open. Soso.com; pop.paipai.com; open.t.qq.com.

There is a Chinese largest public service portal gongyi.net. It was established by Tencent, Inc. In this website, public charitable organization can use the benefit of mass users, contact with recipients and donors easily and instantly. Tencent provides the simple, public diversity way for users to experience, participate and inspect public service activities. Strated from the southern snowstorm in 2008, Tencent set to emergency mode for a major disaster. After that, when there was major disaster happened in China, Tencent foundation will make a decision and donation basic on the disaster assessment. Until 2010, Tencent had donated over 55 million RMB for the major disasters, not only in China; it also includes the serious earthquake happened in Haiti. Tencent also called out mass users to donate and collected total 36.46 million RMB. In addition, Tencent has contributed to education, environment, medical, internet and construction area.

 

In my opinion, except the contribution for the society; Tencent should pay more attention to its own product’s development. Internet security is also an important part for corporation reasonability. As I heard my cases my friends been through, there are some people use the vulnerabilities of network, steal other people’s QQ numbers and information. Then stealers deceive people’s money or public untrue statement. Many people had reported the cases to Tencent. But still, I just met the same situation. My QQ number was stolen a few weeks ago. And one of my friend in China told me that a strange used logged in my QQ number. He tried to borrow money from my friend on behalf of me. Of course my friend didn’t do so when she noticed. So, in that case, I think Tencent also need to focus on improving the security of their products.

 

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Chapter 2- Strategic Planning for Competitive Advantage

As I mentioned in the last blog, Tencent, Inc .‘s mission is to enhance people's quality of life through Internet services. Focus on the long-term development of the company by putting consumer value above short-term commercial interests.

 S--During the development, the large user networks and super user relationship chain is the greatest strengths and core competencies of Tencent, Inc. The company has accumulated a large number of users because of the main product QICQ( current QQ),which was created in the early days of the company’s founding. QICO established a large platform for Tencnet ‘s later development. According to the research, currently registered users are over one billion, and active users are more than six million.

Basic on the large relationship on the internet, Tencent can contact the maximum range of users in the meantime. This advantage can let users know the newest products in a short time. When Tencent  opens up a new product, there is a current large group of customers ready to receive the new product information.  So that Tencent can exceed his competitors all the time.

 

Different kinds of products involve wide range of aspects. When users log in QQ, they can use many different kinds of services or function that Tencent provide. And all the function are related, you can find it once you log into the QQ page. First of all, Tencent has portal related to its products, such as the instant QQ message, WeChat,SOSO search, QQ e-mail and Tencent .com. These features satisfy users’ group communication and resources sharing. Second, QQ music, QQ games and QQ pets can satisfy customer’s entertainment requirement and personality. Furthermore, the C2C E-commerce platform is offer for customer’s trading needs. Many business and advertisements are posted and updated every second.

 























W--However, products excessive and investment diversification is either Tencent’s advantage or disadvantage. In addition, most of Tencent’s products imitate existing products on the market. Even though Tencent has good market sharing of its products, it could not be the best without its own creativity.  I have use Tencent’s products since I was an elementary school student. I found that the most part I don’t like is that there are so many plug-in advertisements on my QQ webpage. Ordinary user can not cancel the ads, only Tencent membership can do that. However, you have to pay for the membership every month. These unwanted features and ads would slow down computer’s running and occupy cyberspace.

O--Tencent has very important status in China, especially in the Internet. At the same time, China’s rapid development also provides a good environment for Tencent’s developing. No matter in internet trading or communication. In addition, organizations start to use software to manage and communicate with employees. Tencent released QQ corporation version TM in 2003, in order to help company manage their company more effective. But so far, MSN still has more market share than Tencent TM. It is an opportunity for Tencent to further improve their product.

T--More than that, there are threats in Tencent’s development. First, Tencent excessively depend on the QQ users. Tencent don’t have progress on the product itself or create its new product. Once Tencent lost the QQ users, then no one would like to buy their products because of the huge competition. Further, in the mobile instant messaging aspect, China mobile released Fetion service. Comparing to China Mobile has the advantage of its own mobile communication; Tencent is weaker at this part. At present, there are more and more small companies spring up. More and more instant massagers or apps are launched. And Tencent released WeChat for competition. But their function is so close that the whole market is close to saturation. This is undoubtedly a huge challenge for Tencent at this moment.

 

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Chapter 1-- An Overview of Marketing

Tencent, Inc. was founded in November, 1998. It has grown into China’s largest and most used Internet service portal. During company's development, Tencent has maintained steady growth under its user-oriented operating strategies. On June 16, 2004, Tencent Holdings Limited (SEHK 700) went public on the main board of the Hong Kong Stock Exchange. The headquarter of Tenccent, Inc. is located in Nanshan district, Shenzhen, China.

Ma Hua Teng (Mr. Ma), current CEO of Tencent, Inc., accompanied with his classmates officially registered a company called Shenzhen Tencent computer system Inc. This company's main business is to expand wireless network paging systems at that time. But before that, in 1997, Mr. Ma got an opportunity to contact ICQ and became one of its users. He personally felt the charm of ICQ, as well as the limitations of this product. First, ICQ only had English version; second, ICQ had the problem of operation difficulty. It made ICQ domestic use broad, but still not particularly widespread in China. Therefore, Mr. Ma and his friends decided to develop Chinese version ICQ software. Tencent, Inc. officially launched Tencent QQ In February, 1999, which is an instant messenger and became the most famous product of Tencent company.

 

 

 

In the aspect of marketing philosophie, Tencent is providing value-added Internet, mobile and telecom services and online advertising under the strategic goal of providing users with "one-stop online lifestyle services". Tencent’s leading Internet platforms in China – QQ (QQ Instant Messenger), QQ.com, QQ Games, Qzone, 3g.QQ.com, SoSo, PaiPai and Tenpay – have brought together China's largest Internet community, to meet the various needs of Internet users including communication, information, entertainment, e-commerce and others. As of Sep 30, 2011, the active QQ users accounts for QQ IM amounted to 711.7 million while its peak concurrent users reach 145.4 million.

 

 

 

Tencent, Inc. focuses on what its customers want and the marketing needs. It shows on the company’s mission: to enhance people's quality of life through Internet services. To treat the Internet like electricity: a reliable service that makes life easier and more enjoyable. To address the diverse needs of different regions and consumers by offering differentiated products and services. To build a healthy and win-win Internet ecology based on open collaboration with partners. Consumer value as first priority, as it shows in Tencent’s website. Focusing on the long-term development of the company by putting consumer value above short-term commercial interests. Developing a deep understanding of consumer needs in order to provide the most satisfying products and services. Communicating candidly with consumers, respect their feelings, and grow with their evolving needs.

Tencent, Inc. treats its employees like a family. Company provides employees with comfortable working environments and attractive incentives. They coach and encourage employees to achieve success in work based on the attitudes of trust and respect. Company considered employees as its most precious asset and emphasized on the training of employees. They will offer different kinds of trainings to different employees depend on their positions.

 

 

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