A Study Of The Introduction off a U.S. Consumer Product Into The People's Republic Of China Using Soft Drinks As A Prototype
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This dissertation discusses the considerations that must be evaluated by a U.S. enterprise wishing to conduct business in The People's Republic of China. Examination of regulatory issues, consideration of marketing techniques to adopt, and evaluation of the economic factors are three major areas that the U.S. soft drink companies, The Coca-Cola Company and Pepsi-Cola International, extensively reviewed in order to successfully enter the Chinese market. A general overview of the Chinese consumer market and an in depth study of these three main headings clearly show that the Chinese consumer market currently has the greatest potential of all the world's consumer markets due to two primary factors; one being the enormous Chinese population, and the second being intense desire of the Chinese people to obtain Western consumer products. This dissertation is a compilation of many different sources. Published literature obtained from the U.S., Hong Kong, and China, and personal interviews with key corporate personnel that are not available to the average U.S. undergraduate student as the author was frequently advised during many interviews with personnel from both Coca-Cola China Limited and Pepsi-Cola China Limited. The results indicate that indeed the consumer market in China has huge potential, however U.S. enterprises and other foreign investors must also be sensitive to and familiar with the culture of the country in order to conduct a successful and profitable business. One can not presume to make huge profits in a short period of time from this rapidly developing third world country. Generally success will be achieved only with long term investments and commitments in China, depending on the market that one is engaged in. China is clearly the market that the capitalist world is looking toward, but foreign economists have difficulty applying their capitalist economic approaches to this non-capitalist country. Capitalist economic theories do not apply to this communist country that is defined as having a "socialist market economy." Although Western economic theories may apply in the future, it is the author's observation that those theories are not operative at this present time. Using the U.S. soft drink market in China as a prototype, this dissertation outlines for the reader the specific process that these companies have used to enter this market and of the great potential China has to offer to the rest of the world in terms of a huge population of soft drink consumers. Although China remains underdeveloped and continues to operate under communist philosophy, the Chinese government is developing opportunities for foreign investment enterprises which are anticipated to eventually bring China up to a first world status.