This essay stresses that in the case of marketing the proposed educational toy in China, the recommended strategy is to start with a flagship shop in a boom town like Beijing, Shanghai or Guangzhou and using the radiation effect of such a metropolis, to diffuse sales throughout the country. The flagship shop makes the concept and power of the European brand visible and attracts Chinese licensees through word of mouth.
This paper makes a conclusion that the business plan proposes to first open a flagship store to attract licensees and thereafter move into franchising. This offers a cost effective way to enter the Chinese market, while also building brand identity and reputation. Rather than relying on expensive advertising, the flagship store will serve as the means of promotion, while the word of mouth among licensees will serve to effectively promote the product and establish brand identity. The financial risks posed through this approach are lower, because the franchising option would require Chinese partners to make some financial investments in order to gain a franchise and capitalize on the brand identity of the product, especially among the Chinese baby boomers. It would also provide them an incentive to work hard at promoting the product, in order to recover their investments and to make a profit. This approach also avoids the problems of using middlemen such as distributors and can provide a wider range of access into the local Chinese markets as well. ...Show more