Chapter 17-- Advertising and Public Relations

Basically, I never seen Tencent has any advertisement shows on TV, newspaper or magazine. Tencent promotes its brand or products through the following ways:

First, Tencent enhances brand image with large world-wide activities. In 2010, Shanghai World Expo was a chance. Before 2009, Tencent has a well strategy for World Expo. First of all, Teencent opened up the World Expo channel. At the same time, they used QQ to launch online activities to spread the Expo concept of environmental protection. Tencent aims to let users cultivate a better understanding of and concerned about the Expo. After a few months, Tencent has large amount of users joined the Expo activities. Basic on this, Tencent used three major demands to attract advertisers—Expo, users’ amount and users demands. In general, Tencent were in a win-win situation. Not only users were attracted by Tencent’s Expo package activities, but also Tencent earned the profit by ads.

 

Second, related to users. In the thanksgiving holiday in 2012, Tencent released a brand commercial online. The video showed us the theme of Love; it recorded the most common scenes in our daily life, including a wife waiting for her husband from late night off-work; a father recorded for his son’s growing up moments, the love of friend, sister, teacher and public. These videos were very touching. It related to this holiday and the love we can find in our daily life. Of course, in those video also implanted Tencent’s products, in order to show users and non-users’ audiences that Tencent’s products are related to people’s life. With using Tencent’s chatting tool or Qzone, we can communicate with the one we loved easily and more convenient.

 

Third, star effect. For example, sometime when I watch a star interview, different from the normal microphone, a star holding a mic that attaches with a medium large brand logo—Tencent QQ with a signature Penguin.  Furthermore, Tencent would sponsor some award ceremony, such as Chinese Music Award. Normally winner will award a trophy, but at the same time, winner also receives a Tencent QQ stuffed animal. Using the powerful effect of TV and stars, Tenccent quickly increased products awareness and attract more investors and users.

Read more ...

Chapter 15--Retailing

 

Inditex is a Spanish company. Zara is one of the well-known and oldest brands of Inditex. Inditex has eight brands; Zara and Zara Home are the two most famous brands. Which are located in Deportivo La Coruna, Spain with its headquarter-Inditex. Zara advocates fast fashion. They are basically imitating the latest fashions, and then sell products at cheaper prices. Inditex's brand - Zara, Zara Home, Bershka, Massimo Dutti, Oysho, Stradivarius, Pull & Bear and Uterqüe –all follow Zara mode: beautiful high-end store sale fashionable and decent workmanship, but low-priced products.

Zara open its 2200 retail stores in Euro and other 55 countries in a very short time. More than that, Zara opens up its online store. Combine these two sale channels, Zara’s global turnover reached to 4.6 billion euros in 2004, better than the American brand GAP.

Different from the luxury brand like Gucci, Zara pursues fast fashion. For example, Zara designs a fall/winter series, then each style are issued only three or four dress, or shirt, or jacket to a store. There are only small amount of stock left in each store. However, if customer needs another size, store manager can apply for multiple shipments. All of the sales have been perfectly well trained, they will record customer’s reaction to each clothes. Listen and ask what customers need and their comments on Zara products. Every day, store manager will hand in all the customer information to headquarter. Headquarter then will send the information to their huge design team. Designers will quickly develop a new design and send the draft to the factory to produce the new products. Because of Zara’s fast fashion, the products in the store update very quickly. You may not find a same dress in a Zara store within 2 weeks. They want to make sure their products are unique but low-priced.

When I lived in China, I never shopped in Zara. I knew Zara is a famous brand. But as a student, I can’t afford it. More than that, because of its noble decoration, I couldn’t even walk into the store. For me, Zara is shopped by the rich with its high price. However, the first time I shopped in Zara was 2 weeks ago. I was looking for a jacket for spring. I aimless opened Zara’s online website and surprised at their low-priced. Therefore, I walked into SOHO Zara after work. As usual, Zara uses beautiful decoration and bright lights. What’s different from the Zara store in China is that, SOHO Zara’s décor is more close to civilians. You can freely select your cloths without any uncomfortable. There are some cloths designs for office working ladies, as well as some young line products that suitable for college students. I was thinking Zara can be my future shopping store. However, fitting room is one thing I want to complain. I picked up 2 cloths and supposed to go to the fitting room and try them. I stood in line for more than 20 minutes, but the line hardly moved a walk. I have no idea what’s going on the line, or if there was any employee controlling the line. I gave up waiting on line. Instead, I bought the jacket and tried it at home. The best thing is that you can return it within 30 days after purchasing.

Read more ...

Chapter 6-- Consumer Decision Making

All the business Tencent built up is basic on two platforms: Tencent instant messages and internet service portal. Until Jun, 2005, Tencent has initially completed the layout of online business model of industrial life. Tencent established QQ, internet service portal, QQ games and mobile service portal, which has built a huge online community. To meet the demand for information transfer and knowledge acquisition, Tencent develops internet service portal, QQ IM and QQ e-mail. To meet the demand of group communication and resource sharing, Tencent releases Q-Zone and QQ group. In the aspects of personality showing and entertainment service, Tencent has diversity of virtual imagine products, including QQ pet, QQ show, QQ games, QQ music, QQ radio and QQ live TV. To meet the demand of online trade, Tencent releases E-commerce Pai Pai online trade.

 

Most people have inertia when they using internet service. People are lazy to find another service provider if one website or one provider can satisfy all their needs. They will focus on using the same service provider. Otherwise, searching a new provider will cost more time and money. So in this way, Tencent has the inherent advantages to open up e-commerce. Because Tencent has occupied 76% of the instant messaging market share. That means they have the monopoly advantage on customer channel.

 

At the same time, Tecent released the special service for membership customers. Tencent designs a lot of privileges special for advanced users, and strengthen the manifestation of "Member" and the difference between ordinary users. Through this exclusive glory service, Tencent attracts ordinary users to register as a membership. Based on this model, Tencent continue to introduce new products and new levels to continuously meet the membership user endless "desire". So that membership users will stick on this product for period of time even though membership has to pay money every month.

In addition, Tencent opens platform for third-party applications to paid subscribers that cover almost users of all ages. Age 14 to 25 years old is the largest group of paid subscribers. It shows that the paid subscribers age are getting younger and younger. Paying customers are mainly distributed in early high school and undergraduate; mostly to high school and undergraduate education, accounting for 71.39%. This phenomenon exists for two main reasons. First, except employees who work in the office, student is a group spending the longest time on computer. They are also the target customer of Tencent. According to the research, students and white-collar workers (including company employees and management personnel) are the highest portion of Tencent users, respectively 32% and 30%, accounting for 15% of the users of freelance. Second, either membership fee or the games fee is cheap so that students can afford every month. Furthermore, white-collar workers have a large portion on online shopping or trade, because of their higher purchasing power and working environment.

The proportion of male and female users is 59:41. Men will focus on playing several applications each month, and male users are twice active than women. In the opposite, women prefer to try different applications. In addition, men prefer to play the game-type applications. Compared to men, women prefer to play non-active game, such as tools, lifestyle applications basic on their personalities.

 

 

 

 

Read more ...

Chapter 5 -- Developing a Global Vision

Tencent not only focus on WeChat‘s(instant massager app) development in mainland China, they also has plans for the oversea market in 2012. First, through the operation of the capital level, Tencent bought the share of Korea KaKao Company, and own the share of 13.54%. The investment amount is $ 63 million. In addition, Tencent released a new App especially for the Indonesia market. It called Qute. According to the market research, the users of Qute have over one million in July, 2012. What’s interesting is that KaKao announced to offcially enter into Indoesia market. Basic on the partnership between Tencent and KaKao, Qute and KaKao, even Tencent will become competitors.

 

Except for QQ and WeChat, Tencent Games is one of the main products of Tencent. In 2012, The UP2012 Tencent game annual conference, Tencent announced that they had obtained the global agent aoperating rights of Korean action new game called Sura. Sura is not only the first online game Tencent obtained as an international agent, it is also the first step Tencent plans for its own company’s development for global stage. The road to oversea online game industry has gradual expansion since 2004 in China. But always the patents of the R & D manufacturers rely on copyright export business model. But always the patents of the R & D manufacturers rely on copyright export business model. But because of the patents of the R & D manufacturers, we rely on copyright export business model. Until recent year, China inline game industry has received their harvest on their way of global market. Such as Shengda company bought a U.S online company and changed it into a community online game. They also established North America branch in 2010.

Researcher said, Tencent hands in Korea NSE Company action new game force to global market, this move will bring broader development of Tencent game business. Even though I never play this game Sura before, I did research some of the picture from the game. It has a rich oriental color screen, smooth combat experience and strategy changing battle model. Both players and media were pay attention on this game before it released. At the same time, there are comments that the Sura with darken style and the character style settings also tend to be the trend of globalization. The game has strong scalability and with room for adjustment to meet the preferences of the different players of the global market. So that it will meet the requirement of global promotion. Beside in Korea and China, America and Euro will have large market people will love this game.

But before that, in 2011, Tencent had planned for the way of global market. Tencent acquired the majority stake of U.S. online game company Riot Games. They did so is to pave the way for the future development in North America, Russia, Southeast Asia, India and many countries in the world. More than that, Tencent purchased ZAM game site made by ​​Europe and the United States. They obtained the market analysis and global top plug production.

Even though oversea market has a bigger stage, China never stand on the world’s top rank of online games. Chinese online game operators always stick to the local market. Overseer market is attractive, but still Chinese operators are looking for the strategy of world partnership global operations. Because they believe that Chinese online games technology hasn’t mature and perfect. If company rushes into global market individually, fail and lost money are the only result they will receive.

 

 

 

 

 

Read more ...