I. Summary
This case studies the business strategy and expansion of JWT China from the late 1990s to 2008. As part of one of the world’s largest marketing communications network, JWT China grew into one of the largest integrated communications companies in China operating from offices in various parts of the country. The case delivers a thorough history of and inclusive insights into China’s advertising industry and the challenges for foreign and domestic firms operating within a highly regulated media environment controlled by the Chinese government. Moreover, this case offers understandings and perceptions into the structure of the highly segmented Chinese consumers market, exploring the socio-economic disparities in income access as well as culturally determined consumer behavior across different regions and urban and rural areas. The case allows us to explore how these trends might impact JWT’s advertising and marketing strategies in the future and how to evaluate JWT’s business expansion in China dealing with local and foreign competition.
II. Problems and Situation:
The biggest problem of JWT is how to adapt with China’s fast-growing economy and rapid rise of consumption. With the growing economy, there will be more competitors from both international and local areas. Therefore, JWT China has to strategize its expansion to take advantage of a bigger market share. The second problem of JWT China is “their consumers were becoming increasingly individualistic and demanding participants in the marketplace” . This change requires JWT to constantly re-evaluating its channel and advertising approaches for a more sophisticated consumer markets. In the other words, JWT China has to always investigate and learn about their consumers’ trends, cultures. characteristics, wants and needs to meet their changing requirements. III. Key Issues:
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The foreign company should be careful by making business in China because of the Chinese consumer behavior, their history and culture. As a major advertising agency, JWT should be very careful with the multinational commercials in order to avoid the conflict and have a positive impact. Since Chinese consumers can be characterized as very highly traditional, their culture and history should be taken in high considerations. As one of the major companies on the Chinese market, JWT is able to quickly and easily secure its great market share and major role on the market. However, as there is a problem with Chinese income gap, the company should try to target cheaper goods and services, which can bring more profit and advantages. By using marketing and advertising strategies for more affordable products, JWT will explore different segments of Chinese consumers; it will affect them and will bring the positive impact over itself. Although China is the fastest grow country and has a great ability of inventing the new technology, adopt the new and transform its traditional media understanding to the new media, TV, newspapers and radio still have the greatest impact over the Chinese population.
Having in mind, every second person of China uses computer and internet; Chinese consumers are not willing to adopt the new advertising media as a primary source. Using the data from some research we can say that China is a country without a middle class. Because of the difference in the social status of Chinese, there is a significant problem- how to find and determine that middle class. The government also has a great impact over the advertising agencies in China. The law has some regulation for advertising contents, and prohibits some wordings that are not appropriate for the Chinese consumers. Advertising agencies in China were subject to the Advertisement Law of People’s Republic of China. Dealing with local clients also is a challenge for JWT compared with foreign clients since it is difficult to convince the local ones to implement advertising strategies that had long-term brand vision instead of focusing solely on quick returns. In addition, it is harder to develop the loyalty of local clients, which leads to a shorter relationship between JWT and local clients.
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IV. Advantage and Disadvantage
Advantage:
– JWT China is one of the largest integrated communications companies in China, and their Shanghai office become the largest creative center of the company. It means they have a big market share and their brand has already established securely in Chinese’s eyes. In addition, being a pioneer in marketing and communications industry mean JWT China has the advantage of a trend setter and a wide spreading image. – JWT China has built a strong team which is diversified, talented and creative. It ensures they will manage the growth and competition in a quick, effective and creative method. From their recruiting and training processes, JWT nurtures leadership skills and creativity and talent of its employees as its powerful assets. – JWT China operated as a multinational company. This brings them the chance to be transparent and product-oriented work environment under excellent international leadership. – JWT China optimizes its services by synergize the Team JWT “solar system”, including JWT Shanghai, Always, Glendinning and RMG Connect. This powerful team allows JWT China to manipulate the nationwide smart promotion management network. It also enhance JWT China to adapt with various demands and changes from different level of clients. Disadvantage:
-Based on Chinese culture and media understanding, JWT could have some problems with staying at the top in advertising world. First we can say that China was considered as an “old media” market. Although, every family member owns a personal computer, Chinese consumers do not rely on Internet commercials. In China, television, radio and newspapers are still predominant. If the company continues to develop print and TV ads it will have a great success. On the other hand, if the company starts to work more on Internet advertisements and leave the standard commercials behind, it will not be able to continue establishing a good and profitable business in China -.With China being such a vast and diverse place with various tiers, and customs and values of people differing from province to province; thus, it requires a variation approaches to be successful. JWT China, as a big enterprise, may have disadvantage in quickly adapting and customizing to each specific consumer’s cultures and interests in regards of disparity of region and income. – Along with the mentioned culture difference, JWT will need more time and effort to understand the sophisticated difference between Chinese and Western, compared to domestic or local agencies who operated by entirely Chinese people.
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V. Conclusion/ Outcome
The future of JWT in China will eventually lead to expansion and growth to meet with the fast growing China’s economy. However, to keep their pioneer position in China advertising industry, JWT has to solve many arising concerns regarding the conflicts among JWT’s different disciplines within their company. They also have to find an efficient strategy to win over their domestic competitors regards of scales, market shares and client’s relationships. In addition, although JWT China already possessed a deep understanding of Chinese’s cultures and history in the past , they still need to focus on any hidden and sophisticated changes reflects the social-economy changing. In conclusion, the future for JWT China is promising, but there are many challenges and difficulties to overcome.
