Targeting lower-income consumers (CRI) Updated: 2006-06-05 15:33
It has already become a marketing clich¨¦ that major consumer goods
manufacturers should try their luck in China. Under any calculation, a market
with more than one billion potential consumers represents a sales opportunity
that is too big to be overlooked.
The question has always been more about marketing strategy and which
consumers to target. A recent study by US consultancy McKinsey & Co.
suggested multinational companies with an eye on China should start to focus on
blue-collar workers in the country.
The McKinsey report, covered in Wednesday's Wall Street Journal, categorized
blue-collar workers as lower-income middle class, including households with an
annual income of 25,000 yuan, or about 3,100 US dollars, to 40,000 yuan, while
the middle classes will earn 40,000 yuan to 100,000 yuan.
According to McKinsey estimates, by 2011, this group will expand to about 290
million people, almost the same as the current US population.
Taking into consideration living expenses in both countries, McKinsey said
that people with an annual income of 100,000 yuan in China would enjoy a similar
lifestyle to what people with an annual income of 40,000 US dollars in the
United States would have.
The consultancy firm cited Procter & Gamble as a successful example of
working in niche markets. P&G has launched various types of shampoo, shower,
and cosmetic products designed and packaged for lower-income consumers in China.
(For more biz stories, please visit Industry Updates)
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