DEMERMO Marbles Jewelry Now in China Vision Statement: DEMERMO will be recognized and respected as professional, innovative, profitable information, and knowledge based Designer enterprise. Demermo embeds Internet based technologies into its internal operating structures and as Style selector for customers at the core of its operations demonstrating a clear concern for ethical conduct and good corporate citizenship with the objective of ongoing growing as global player. Mission Statement: “Demermo Style for your looks” Design's mission is to make innovative pieces of art in jewelry form out of marbles. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall in to place. Our services will exceed the expectations of our customers 1 Cu rrent Situations –Macro Analysis 1.1 Background of China: Dynasties: Ancient China was governed by a ruling class of warrior nobles headed by a king. Ruling families are referred to as dynasties. The Shang Dynasty (1766 BC) was the first verifiable dynasty and ruled China for 600 years. The Shang dynasty was overthrown by Zhou who established a dynasty and introduced the idea of the Mandate of Heaven. The Han dynasty centralized the Chinese government and established a bureaucracy which included eighteen different ranks of civil service jobs that civilians obtained by taking competitive examinations. 1911-1949 The Republic of China was established under the leadership of Sun Yat-sen 1949- The Republic of China moved to the island of Taiwan 1
DEMERMO will be recognized and respected as professional, innovative, profitable information,and knowledge based Designer enterprise. Demermo embeds Internet based technologies into itsinternal operating structures and as Style selector for customers at the core of its operationsdemonstrating a clear concern for ethical conduct and good corporate citizenship with theobjective of ongoing growing as global player.
Mission Statement:“Demermo Style for your looks” Design's mission is to make innovative pieces of art in jewelryform out of marbles. We exist to attract and maintain customers. When we adhere to this maxim,everything else will fall in to place. Our services will exceed the expectations of our customers
1 Current Situations –Macro Analysis
1.1 Background of China:
Dynasties: Ancient China was governed by a ruling class of warrior nobles headed by a king.Ruling families are referred to as dynasties. The Shang Dynasty (1766 BC) was the first verifiabledynasty and ruled China for 600 years. The Shang dynasty was overthrown by Zhou whoestablished a dynasty and introduced the idea of the Mandate of Heaven. The Han dynastycentralized the Chinese government and established a bureaucracy which included eighteendifferent ranks of civil service jobs that civilians obtained by taking competitive examinations.
1911-1949 The Republic of China was established under the leadership of Sun Yat-sen
1949- The Republic of China moved to the island of Taiwan
1949 –The People’s Republic of China came to power under the Communist leader Mao Zedong. Republic of China Era_ After the Communist regime under Mao Zedong took over mainlandChina in 1949, Nationalist Chinese government led by Chiang Kai-shek fled to Taiwan which iscalled The Republic of China. After the death of Mao Zedong in 1976, China adopted a plan of modernization, The Four Modernizations. Under the new leadership of Deng Xiaoping, China
wanted to improve agricultural production, update and expand industry, modernize its army, andimport foreign science and technology.
1.2 Physical
Total area: 9,596,961 sq. km. (about 3.7 million sq. mi.).
Cities: Capital --Beijing. Other major cities--Shanghai, Tianjin, Shenyang, Wuhan, Guangzhou, Chongqing, Harbin,
Chengdu.
Terrain: Plains, deltas, and hills in east; mountains, high plateaus, deserts in west.
Climate: Tropical in south to sub arctic in north.
1.3 Economy
GDP (2008): $4.222 trillion (exchange rate-based).
Per capita GDP (2007): $2,459 (exchange rate-based).
Agriculture: Products--Among the world's largest producers of rice, wheat, potatoes, corn, peanuts,
tea, millet, barley; commercial crops include cotton, other fibers, apples, oilseeds, pork and fish;
produces variety of livestock products.
Industry: Types--mining and ore processing, iron, steel, aluminum, and other metals, coal; machine
building; armaments; textiles and apparel; petroleum; cement; chemicals; fertilizers; consumer
products, including footwear, toys, and electronics; food processing; transportation equipment,
including automobiles, rail cars and locomotives, ships, and aircraft; telecommunications equipment,
commercial space launch vehicles, satellites.
Trade (2008): Exports--$1.5 trillion: electrical and other machinery, including data processing
equipment, apparel, textiles, iron and steel, optical and medical equipment. Main partners--United
States 19.1%, Hong Kong 15.1%, Japan 8.4%, South Korea 4.6%, Germany 4% (2007). Imports--
$1.156 trillion: electrical and other machinery, oil and mineral fuels, optical and medical equipment,
metal ores, plastics, organic chemicals. Main partners--Japan 14%, South Korea 10.9%, Taiwan
10.5%, U.S. 7.3%, Germany 4.7% (2007).
1.4 Legal
The government's efforts to promote rule of law are significant and ongoing. After the CulturalRevolution, China's leaders aimed to develop a legal system to restrain abuses of official authorityand revolutionary excesses. In 1982, the National People's Congress adopted a new stateconstitution that emphasized the rule of law under which even party leaders are theoretically heldaccountable.
Since 1979, when the drive to establish a functioning legal system began, more than 300 laws andregulations, most of them in the economic area, have been promulgated. The use of mediationcommittees--informed groups of citizens who resolve about 90% of China's civil disputes and someminor criminal cases at no cost to the parties--is one innovative device. There are more than
800,000 such committees in both rural and urban areas.
Legal reform became a government priority in the 1990s. Legislation designed to modernize andprofessionalize the nation's lawyers, judges, and prisons was enacted. The 1994 AdministrativeProcedure Law allows citizens to sue officials for abuse of authority or malfeasance. In addition, thecriminal law and the criminal procedures laws were amended to introduce significant reforms. Thecriminal law amendments abolished the crime of "counter-revolutionary" activity, although manypersons are still incarcerated for that crime. Criminal procedures reforms also encouraged
establishment of a more transparent, adversarial trial process. The Chinese constitution and lawsprovide for fundamental human rights, including due process, but these are often ignored inpractice. In addition to other judicial reforms, the Constitution was amended in 2004 to include theprotection of individual human rights and legally-obtained private property, but it is unclear howthose provisions will be implemented. Although new criminal and civil laws have provided additional
safeguards to citizens, previously debated political reforms, including expanding elections to thetownship level, and other legal reforms, including the reform of the reeducation through labor system, have been put on hold.
1.5 Government
Type: Communist party-led state.Constitution: December 4, 1982; revised several times, most recently in 2004.Independence: Unification under the Qin (Ch'in) Dynasty 221 BC; Qing (Ch'ing or Manchu)Dynasty replaced by a republic on February 12, 1912; People's Republic established October 1,1949.
Branches: Executive--president, vice president, State Council, premier. Legislative--unicameralNational People's Congress. Judicial --Supreme People's Court.Administrative divisions: 23 provinces (the P.R.C. considers Taiwan to be its 23rd province); 5autonomous regions, including Tibet; 5 municipalities directly under the State Council.Political parties: Chinese Communist Party, 73.1 million members; 8 minor parties under Communist Party supervision.
1.6 Technology
Telecommunications infrastructure: China has very well developed telecommunications
infrastructure and as a percentage of GDP expenditures in this sector are similar to other
economically advanced countries.
High-speed data transmission lines; advanced wireless communications networks.
Electronic commerce sales will be in the B2B sector
Mobile CRM system for efficiency
SQL server & Office Share point server for CRM
System centers & fore fronts softwares for CRM
1.7 Socio-Cultural
People
Nationality: Noun and adjective--Chinese (singular and plural).
Health (2009 est.): Infant mortality rate--20.25 deaths/1,000 live births. Life expectancy--73.47 years
(overall); 71.61 years for males, 75.52 years for females.
Ethnic groups: Han Chinese 91.5%; Zhuang, Manchu, Hui, Miao, Uyghur, Tujia, Yi, Mongol, Tibetan, Buyi,Dong, Yao, Korean, and other nationalities 8.5%.
Religions: Officially atheist; Daoist (Taoist), Buddhist, Christian 3%-4%, Muslim 1%-2%.Language: Mandarin (Putonghua), plus many local dialects.
Education: Years compulsory--9. Literacy--90.9%.
Work force: (2008 est., 808 million): Agriculture and forestry--43%; services--32%.
1.8 Supply Chain
The Supply chain for our business will be like that
1. Suppliers of Raw material form Pakistan2. Manufacture of Costume Jewelry is our industry in China
3. Distribution to our Warehouses all over our Outlets in China4. Finally from outlets product is delivered to our customer.5. Transportation in China is quite quick and has all GPS technology in tracking our
Consignments
2 Current Situation- Market Analysis
2.1 Market Definition
Peoples are much interested in using new beautiful jewelry at lower cost. China is famous for
fashion and jewelry is the major part of fashion among women. So there are no of actual buyer
and potential buyers in the Market.
2.2 Market SizeAppended the are list of the Market where there are large no of potential buyers as their
population is high and also the people are engaged in fashion and are among rich peoples.
We are launching DEMERMO Outlets firstly in top these cities of china and will approach to move over
the other cities with gradually growing business.
2.3 Market Segmentation
As initially we are going to target the markets of these Top cities of China (mentioned above in
Market size) of China. Here we have the major segments of Fashion industry and younger women
markets between the ages of 15 to 40 for our stylish designed jewelry. Because younger arealways ready to try new things that are going to add some on their look in cheaper costs.
Many researches have shown that young markets have high income then other segment and have
high disposal on fashion. These young people are much keen about their dressing and look and
are updating their selves according to the trend of fashion.
DEMERMO Jewelry is going to be famous among the young ladies soon if the management uses
print media, electronic media, and magazines advertising.
The Markets will be further stretched gradually in terms of share with enlarging our networks to
different cities of China.
2.4 Porter 5 forces Analysis
Threat of New Entry.
New entry is not as easy as the Marbles jewelry is a new concept in China markets.
But it will cover the markets possibly in short time because people will adopt the new
innovative techniques for business in markets.
Production level would be high
There is a cost advantage because cost of artificial jewelry and the marbles are
No. of Supplier of Raw material (marbles) is not high.
We can substitute our suppliers with the need of expansion of our business Cost of Changing can be ignored as the rate of return & profit margin for our business
products will be high.
Threat of Substitute.
There are rare chances of emergence of substitute for marble products. Only different
colors and designs are possible ways to attract the customer for the new innovative
substitutes.
Buyer Power.
There are large no of buyers in China markets.
Still Marbles competitors are not in the market of China for jewelry, but there are other
competitors whose product made up of different stones makes really differences. But
we are safe because of our cheaper costs.
Large no of potential buyer will be attracted to our product
Demermo Outlets can be given to other locals of China different cities, which will havebig orders of purchase according to their requirements.
Competitor’s Rivalry.
As a famous country of Fashion, there are large no of competitors in the jewelry
market. But not in Marble made jewelry yet.
New competitors can emerge with our concept but before that we can have our brand
name famous in China markets.
Quality wise our product will be maintained at high level.
We would focus on long-term relation with the customer and build brand loyalty.
As these competitors have high strengths but they have also got some weakness as all
have.
Their wage Costs are high
High supply chain costs
High import charges on Stones and wood and other raw material
Have ignored poor peoples of china in Poor cities
Expensive Designers
3 Current situation – Internal
3.1 Company Resources
3.1.1 Financial
DEMERMO is a combined effort and concept of four partners and every partner is taking partactively in the management of the company’s business. All have contributed to sum of 18.19millions Pk currencies. Out of 10 % has to be spend on Raw material and 30% on Promotionalexpenses, 20% on manufacturing of Stylish designed jewelry, 10 % on four DEMERMO outlets,5% on people as salaries hired for designers and 5% for managers. Remaining 20% is kept in theReserves to meet other expected expenses.
3.1.2 Human ResourcePeople of China are hardworking and we will hire people from poor cities of China.
3.1.3 TimePeople of China are interested to perform full time job duties.
3.1.4 SkillsLabors are highly skilled and professionally intelligent and are educated.
3.3 Corporate Culture
Friendly Atmosphere
Suggestion by employees are encouraged
Organized environment
Performance Appraisal depending Management by objectives
Consumers of China are attracted for their style and appearances. They always go for Jewelry with somedifferentiated style and design. They also go for famous brands used in fashion industry. Their buying
decision is backed by generally the buying capacity. So trying our brands will be a new test for them. If our
product and designs gives them the satisfaction more than their expectation or equal then they will definitely become loyal and also tell others to buy and try our cost effective designs.
5.2 Buyer motivation and expectationConsumer are expecting better quality designs with a differentiated styles in cheaper costs
5.6 Loyalty segments
5.6.1 Availability
Our product will be available with the latest designs in all of our outlets for meeting consumer requirement and demand.
5.6.2 Time
We are maintaining an effective supply chain so that we would be always ready to meet the
requirements before approaching to the danger level for our raw materials.
5.6.3 Quality
We will maintain the quality as implementing the TQM at our best.
6 Marketing Research
6.1 Information requirements
For launching our business at maximum, we have to know about the lifestyle of Chinese ladies interms of liking designs for fashion and wearing in terms of jewelry. Other than that we will requirethe info about norms, values and attitude. For targeting the initial cities we have to take intoconsideration about the population of the targeted cities.
6.2 Research Methodology
Methodologies we use to do the marketing research are not at high level but mostly we gatheredthe information from different sites of Internet like info please, etc. We also got some information
from some experience people that which type of marketing research will more valuable for us.
6.3 Research Results
Research results concluded that we should target the young female b/w the ages of 15 to 45, asthe population of younger is high in percentage from China. They are also brand conscious and
Here we invest on high promotions for awareness of our brand product and generate the demand
for our Products. During this stage we will carefully monitor the Customers and make ensure that
they start to grow in short span as possible through high advertisement.
7.2.2 Growth Stage
In growth stage people will be trying our product and demand has been generated so and we will invest less
money on promotions. Our company will try to increase market share and market growth.
7.2.3 Maturity Stage
In maturity stage our company will adopt the strategy of incentive promotions... like buy a set and
get entry tickets of organized fashion shows or free earrings or rings. This will keep our valuedcustomer to our long-term relationships. Also the outlets manager will be provided with incentiveon the growth of sales revenue.
7.2.4 Decline Stage
In this stage we will try to make some additional feature in our product or launch new product bydiversification in our business. Also we will prefer to reduce the price of the product at our maximum.
Before launching our product, we will test our product to a fewer people about its liking anddisliking. If the result would be favorable then we spend money on the large production andimplementation of our project.
7.4 Product Portfolio Analysis & Product life cycle
BCG analysis
As Demermo is new in the targeted country with all its competitors, so it will arrive to theintroduction with Question Mark. Here we have to spend a lot of money as investment to make theChinese people aware of this brand cost effective products for all peoples and making Demermo aprofitable company as compared to competitors.As there are potential buyers and looking to potential markets, we believe that Demermo will be inthe position of stars my making more Market growth and Market shares with in short span of time .
