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China Chamber of International Commerce Report

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Updated: May 29th, 2020

Introduction

China Council for the Promotion of International Trade (CCPIT) was established in May 1952. It consists of businesses and organizations, which influences the economic and trade sectors in China. It is a state owned public agency with a large part of its budget coming from the government. It is an institution that promotes foreign trade in China. The main aim of this institution is to enhance the development of foreign trade between China and other countries. It also promotes the introduction of advanced foreign technologies. It was given power by government of China to handle all foreign related trademark issues. It consists of a team of highly qualified professionals. In 1988, the institution started using the name China Chamber of International Commerce (CCOIC), which is used together with CCPIT (Tao, 2003).

It admits new members from businesses in various parts of China and enhances trade through consultation, legal assistance, exhibition etc. A president, who is assisted by vice presidents, assistant presidents and advisors, heads the institution. The company has been recognized for the establishment of an effective intellectual property System in China. This report involves the marketing strategies adopted by the institution in order to survive in the competitive business world.

Market segmentation strategy

Marketing segmentation is the process of subdividing a homogenous market into segments with similar needs and wants (Schnaars, 2007). This is done in order to establish a marketing mix, which meets customer needs of a target segment. It is aimed at acquiring a large portion of sales to a certain group of customers. Most companies are unable to supply the needs of the whole market, hence the need to subdivide the market into segments.

Market segmentation strategies are based on demographic, psychographic and geographic differences. China Council for the Promotion of International Trade (CCPIT) is vested with the mandate, to promote international trade and introduction of foreign investment. It provides services to all businesses. It offers different services to different businesses hence market segmentation (Tao, 2006). The services provided include consultation, organizing seminars on international markets and China’s exhibition abroad.

The institution also hosts foreign exhibition in China and provide legal services as well as patent and trademark application. This institution makes use of multilateral and regional platforms enhance foreign trade and economic cooperation. For instance, it collaborates with US chamber of commerce in order to strengthen communication between business in China and United States (Tao, 2003). China has designed a program to revive industrial bases in North-Eastern China. CCPIT has developed a consultancy group made of representatives from China and other countries’ business organizations. This group holds discussions on how this part of China will be reinvigorated.

Marketing mix

Marketing mix is also known as the 4P’s of marketing. It is a combination of four elements, product, price, place and promotion (Kotler, 2007). Companies need to create a proper mix of the right product, sold at the appropriate price, in the right placement, and the use of the right promotion method.

Product is one of the most important elements of the marketing mix. Product means goods or services offered to customers. The product must have the right features to attract the target customers. The target customers need to be made aware of the existence of a product or service. The product or service range is a function of the marketing mix. The services or product offered by a company may be extended either to match competition or to make it more acceptable to a new group of customers (Schnaars, 2007).

China council for the promotion of International Trade (CCPIT) provides several quality services to businesses in China and other countries. Its main responsibility is to enhance international trade and economic development in China. Its services include developing foreign trade relations, sponsoring exhibitions, providing advisory services and carrying out other foreign trade promotion activities (Armstrong, 2008). Its services goes to all enterprises, also include providing trade and economic information, organizing seminars on international markets, hosting foreign exhibition in China and providing opinions to related government organizations. CCPIT provides quality services to its customers. These services are available all the time. It provides the appropriate service to the right customers.

CCPIT services help large companies in China to make investment in other regions across the world and compete on the international market. CCPIT enhances China’s foreign economic cooperation and trade; this helps China’s enterprises to go global and to participate in international cooperation.

The company focuses on business matching among different sectors. CCPIT provides quality legal services which are of great help to the business sector. These services are provided by qualified and experienced legal experts in the institution. Legal services include the following areas, arbitration, conciliation, issuing trade certificates and legal consultancy. CCPIT patent and trademark law office has helped most companies in the recent years and it actively working on litigation.

The institution also provides services to the government sector. Most of governmental agencies in China consult CCPIT on policy and legal matters. It encourages Chinese companies to promote Chinese investment across the globe and to develop Chinese Multinational Corporation. The institution has also designed a new service in areas of commercial certificates particularly in factual certificates. This is a fresh service offered by CCPIT, and this has helped most of the companies in China.

Price is another key element in the marketing mix (Armstrong, 2008). It is the amount of money charged for somebody in exchange of good or service. It is an important aspect as it creates sales revenue; all the other elements are costs. Pricing decisions should consider profit margins and probable price of the competitors. It also includes discounts, financing and other options such as leasing (Kotler, 2007). It determines the value of sales made by a company. The pricing policy of a company varies according to time and circumstances. CCPIT offers its services to businesses at an affordable price. It has a broad knowledge on pricing negotiations across the world. It participates in the formulation of policies on product prices. According to the policies of CCPIT, foreign based enterprises which last for 10 years are freed from paying local income taxes for a period of 5 years.

Export oriented enterprises and advanced technology enterprises are exempted from paying local income taxes for 10 years. Foreign invested enterprises which purchase more than 2000 square meters commercial building property are exempted from paying tax for 5 years. The key industry zone and newly developed industry zone are freed from local income tax. The reduction in taxes is a form of price reduction. CCPIT uses incentive of reducing taxes to encourage enterprises to promote foreign trade. This enabled several businesses in China to focus on foreign investment, and this has helped in marketing Chinese products a broad.

Promotion is another element of the marketing mix. It involves communicating about goods and services to customers. It provides customers with information that will help them in making the decision to buy a product or service. The cost of promotion represents a large proportion of the overall cost of producing an item. Successful promotion increases sales revenue of a company. Promotion activities include advertising, public relations, media types; personal selling etc. A company should ensure that customers are aware of the products or services offered by the company. Promotion decisions involve communicating and selling to potential customers. CCPIT promotes China’s exports, foreign investment, and imports from the world and China’s investment overseas. It promotes international trade and economic cooperation which needs a strong promotional strategy.

It makes use of regional and international platforms to promote foreign trade and economic cooperation. It collaborates with United States chamber of commerce to promote its operations in United State. It organizes several events such as trade shows, visits, seminars, and meetings in China and across the globe (Sutter, 2009). CCPIT organizes several meetings to discuss on service improvement and invites business people from different regions. It collaborates with ASEAN chamber of commerce on the establishment of ASEAN-China Free Trade Area. It has organized several events such as EU-China “Partenariat”, China Africa Cooperation Forum and CEPA promotion week.

These events help in promoting services offered by CCPIT (Robinson, 2006). The institution is also involved in organizing international and trade events to promote its services. For instance, it was actively involved in bidding for the World Expo 2010 in Shanghai. It has also improved its effort in preparing for the China Pavilion of World Expo 2005 Aichi in Japan (CCPIT, 2003). The company has organized “promotion week of Chinese commodities “as well as exhibitions and publications to promote export. CCPIT has also established a website which provides information about the institution and services offered.

Finally, the last element of the marketing mix is the place. Place or placement involves channels of distribution that helps in delivering products or services to the target customers (Hartley, 2009). It performs transportation and logistical functions. It includes market coverage, selection of channel members and logistics. It involves getting the right product to the right customer at the right place. The choice of distribution channel depends on various circumstances. Some companies will prefer to sell products to wholesalers who will sell to retailers, while others will prefer to sell directly to customers. CCPIT has established a network of about 700 offices in China and other countries in the world.

This enables the company to offer professional services, to many companies across the globe. In order to enhance proper delivery of service to businesses, CCPIT has established a trade support system in most countries. The trade support system mainly serves to meet the needs of Small and Medium Enterprises (SMEs). The institution helps companies to explore markets in Asia, Africa, and Latin America. It works together with local government to exhibit products in other countries trade shows. It organizes tailor made training programs to companies’ workers (CCPIT, 2003).

Recommendations

CCPIT mission is to provide professional and social business, environment to business people and to introduce people to Sino-international business community. Its purpose is to promote trade, economic and technological development in China and other countries. It plays a great role of promoting China’s trade through foreign liaison. Since its inception, CCPIT has enhanced improvement of international trade between China and other countries.

However, there are still some challenges which need to be improved. The structure of export products in China has not been fully utilized. The institution is vested, with the mandate to promote export should ensure that; this product structure is further optimized. The foreign based enterprises have a large proportion of total export volume. The competitiveness of export enterprises should be increased. The export markets are much concentrated, and SMEs markets have no development potential. CCPIT should improve the trade service system in China. The institution should also improve the competitiveness of export enterprises in the international market (Robinson, 2006).

The service support system adopted by CCPIT needs to be improved, especially services in market information, financing assistance, disputes solutions, research, etc. CCPIT has about 700 offices in China and other countries (Micham, 2005).

The institution should open more offices in order to serve many companies in the world. Today China faces challenges of economic globalization. CCPIT should improve on its role of promotion of economic and trade activities, and non governmental exchanges. It should be actively involved in organizing international economic and trade events in order to increase foreign exchanges and cooperation. It should improve on its new services, for instance in the areas of commercial certificates in order to serve many companies. Legal services should also be extended to deal with all types of cases involving trade. Finally, CCPIT should collaborate with other bodies promoting trade in other countries to enhance improvement of international trade (CCPIT, 2003).

References

Armstrong, G., 2008. Marketing: an introduction. Chicago: Prentice Hall. Web.

CCPIT., 2003. CCPIT:1952-1987. Shanghai: CCPIT. Web.

Hartley, R., 2009. Marketing mistakes and Successes. New York: Wiley. Web.

Kotler, P., 2007. Principles of Marketing. Chicago: Prentice Hall. Web.

Micham, C., 2005. China’s economic relations with the West and Japan. New York: Routledge. Web.

Robinson, T., 2006. Chinese foreign policy. London: Oxford university press. Web.

Schnaars, S., 2007. Marketing strategy. Chicago: Free Press. Web.

Sutter, R., 2009. Chinese foreign relations. New York: Rowman Publishers. Web.

Tao, J., 2003. Arbitration law and practice in China. Shanghai: Kluwer Law Intl. Web.

Tao, J., 2006. Resolving business disputes in China. Shanghai: Kluwer Law Intl. Web.

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