Regional diversity in China and its impact on pricing strategy

Date of publication: November 1, 1996

Company: BBI Group

Author: Lynn Y.S. Lin

Abstract:

China, with its 1.2 billion people, presents itself as one of the most promising future markets for most multinational companies. China also has a proud and continuous history of more than five thousand years with one written language. However, China, through its historical and political development, was often isolated regionally. It is a very diverse country with more than three hundred local dialects. These regional differences translate into differences in consumer attitude and purchasing behavior between product categories and brands. Complicating the regional picture are the various degrees of market and income development by region. Eastern and South Eastern coastal areas are developing faster due to earlier and larger investments by overseas Chinese. Since most of the overseas Chinese originally come from Guangdong and Fukien, these two South Eastern provinces have received the lion’s share of their investments. The result is that income disparity among regions in China is widening.

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