Just a few days after the announcement of Kraft’s takeover of Cadbury, China has recalled over 170 tons of milk powder amid another melamine crackdown. The new discovery most likely doesn’t directly link to either of the companies’ products but certainly has an impact on their markets. As I had mentioned in the recent Cadbury article, chocolate is suiting well with booming middle classes in China, India, and Brazil. However, I would like to ask you if you think this new melamine scare will be beneficial or detrimental to Cadbury and Kraft’s efforts in China.
We’d love to know what you think. Leave your comments below. Useful links to resources providing additional insight are especially appreciated. Thanks, Eddie from getchee. =)
Related Links
More Tainted Milk Found in Latest Crackdown – China Daily
More Tainted Dairy Products Are Found in Chinese Stores – NY Times
What’s global reach worth to Kraft? $19 Billion – Advertising Age
Both emerging and both have a population of over 1 billion people each. So what’s the difference between the two economic giants?
1. Infrastructure
China’s got it. India needs to get it together.
2. Class
China’s already got 300 million in the middle class. India’s got only 50 million. However, India is a country that is turning “one billion people into one billion consumers,” says Manvinder Banga, the president of Unilever’s global food and personal care division. Whichever strengthens its middle class faster is what will matter the most.
3. Bullseye
China’s got a bigger target on its chest. The news about China isn’t always positive, but any news is better than no news. Self-marketing and building better international connections will generate more economic dollars.
Two Questions
1. What major differences do you think separate China and India?
2. If you were a food retailer, FMCGer, auto company, or bank, where would you invest? Why?
Whether you agree or disagree, we’d love to know what you think. Leave your opinion, thoughts, and/or comments below. Useful links to resources providing additional insight are especially appreciated. Thanks. =)
Absolutely. The recall is an astronomical headache for Toyota, especially in China. More and more people are looking to buy cars as the middle class continues to grow. And for many, it’s their first time buying a car. A recall is not something that will attract a first-time car buyer let alone a loyal customer.
Let’s focus on what Toyota should do to help turn that frown upside down in the world’s largest automobile market.
1. Fix the problem as fast as possible.
Actually, Toyota is already doing a phenomenal job at finding affected vehicles and replacing the faulty parts. Keep up the pace, Toyota.
2. Be honest.
Honesty is the best policy. There’s no point trying to cover up anything. Just like Donald Trump said, “Any news is better than no news.” Toyota can actually turn this blunder on its head and saturate the world’s largest car market (and one of the newest for Toyota) with its name. Get in the consumers’ faces, own up to the problem, fix it, and show new buyers that their products are still of great quality.
3. Market the market.
This mechanical mix-up will make Toyota even stronger. They just need to show how much they really care about their customers, current and potential. Everyone makes mistakes. With the right marketing and advertising, Toyota will get through this in no time.
What do you think?
Whether you agree or disagree, we’d love to know what you think. Leave your opinion, thoughts, and/or comments below. Useful links to resources providing additional insight are especially appreciated. Thanks. =)
Related Links
http://edition.cnn.com/2010/BUSINESS/01/29/toyota/index.html
http://connecttheworld.blogs.cnn.com/2010/01/29/will-recall-hurt-the-toyota-brand/
Nope. Since it’s official that Kraft has taken over Cadbury, people like business reporter Simon Atkinson of BBC News have been asking good questions like the one above. At the end of his article he asks another good question, “Will it be bad for the business?” Again, nope. This is going to be great for Cadbury and all its fast moving consumer goods. Kraft also has a great presence throughout the world. Not to mention, chocolate is suiting well with booming middle classes in China, India, and Brazil. Euromonitor analyst Francisco Redruello noted that China’s middle class, which he described as 300 million strong, “is trading up to chocolate from sugar confectionery.” This is a great time for both Cadbury and Kraft.
Comments anyone?
Whether you agree or disagree, we’d love to know what you think. Leave your opinion, thoughts, and/or comments below. Useful links to resources providing additional insight are especially appreciated. Thanks. =)
Related Links
http://news.bbc.co.uk/2/hi/business/8492956.stm
http://adage.com/article?article_id=141708
There’s been a lot of talk about China’s economy. Some of it is positive such discussions over the globally towering GDP growth. However, as the GDP continues to rise and dwarf those of other countries, predictions of market bubbles bursting and the economy facing risks are even more astounding than the GDP growth.
I always like to look at things from a positive perspective. First of all, China wouldn’t have been able to get to where it is today without knowing what it’s doing. China is just getting started. There are only 300 million people of the population in the middle class, leaving 1 billion looking to climb out of poverty. China needs to fatten its middle class in order to maintain continuous economic growth which is why the government is promoting more consumer spending.
What I’d like to take a closer look at is…
1. Who is spending?
2. Why are they spending?
3. On what and where is this target market group spending their money?
4. Why is this important to businesses?
1. Who is spending?
The rich are definitely spending, but not necessarily domestically. Many affluent Chinese have been able to travel abroad to more places in the past few years such as Hong Kong, Taiwan, and the United States. This means that a lot of these new world travelers are buying brand name and high-end products while on vacation at ‘discounted’ prices compared to what these products go for in the mainland. So what are the affluent buying locally? Food, goods for the home, and automobiles. This leaves us with the middle class. Their salaries are growing which means they have more disposable income. The younger generations make up a good percentage of this spending middle class and they are spending every penny.
2. Why are they spending?
The younger generations are spending every penny because they don’t care. Times are good for them and they want to enjoy life. They want to express to their friends and the world that they have ‘made it’.
3. On what and where is this target market group spending their money?
Some of the young middle class are spending good money on food, but a lot of them tend to eat cheap and quick food. These food sources consist of local mom and pop shops, fast food restaurants, and convenience stores. So where does the rest of their money go? A lot of them like to spend money on other ‘entertainment’ since food is not always considered a part of this category. This can range from going to see movies, hanging out at lounges, bars, and clubs, or just plain shopping. Sometimes the shopping doesn’t always end up in a quick purchase but sure enough they’ll empty their bank accounts once they have enough for that ‘status symbol’ mobile phone or designer bag. Credit card debt is always an option if the bank account isn’t fat enough for the luxury items. Why not? Most of them don’t have to pay rent anyways since Mom and Dad put roofs over their heads.
4. Why is this important to businesses?
During this recovery time, there’s still plenty of market potential. It’s just a matter of finding where your target market is, what they’re buying, and why they’re buying certain products. Keep an eye on this rising young Chinese middle class. They will fuel this booming economy to the next level.
Comments anyone?
Whether you agree or disagree, we’d love to know what you think. Leave your opinion, thoughts, and/or comments below. Useful links to resources providing additional insight are especially appreciated. Thanks. =)
