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Segmentation of the Market

The overall segmentation of the market can summarized into four basis categories: size, geography, products and distribution as depicted in the chart above. From these four categories extend the subcategories as in relation to their initial category. The size of the market as depicted can be broken down into such subcategories as: Lots of small breweries, and few regional big brewers (5) in all. Geography, the geography of the industry and location of any particular consumer and producer can be generalized in four specific regions: North/ Northeast, East, Mid-China and the South. Products, there are three potential product categories that exist in china as well as the rest of the world and these can be categorized into premium, standard and economy beers. Lastly, Distribution, the distribution in international companies is exceedingly important when establishing a market in a foreign country, for these are the ways in which a company’s products will reach the market. The main distribution channels in which the product, in this case beer, will reach consumers in China are as follows: independent food stores, convenience stores, and supermarkets External Environmental Analysis Political and Technological The political environment of China is highly decentralized; although many westerners believed their government to be highly bureaucratic and centralized in nature. An additional layer of bureaucracy was added by the communistic government. With this additional layer, the provincial and local governments were given a very significant sway of affairs in there province or region. When speaking of an understated hierarchy of power, a party must realize that not only do the government officials in the Chinese government hold power, but that the local and provincial authorities do as well. A deal of any sorts can be tied up in government rigmarole for weeks, or even years, because a party did not establish proper connections or “build bridges” with the local government or provincial government. The Chinese are presumed to be technologically advanced within the U.S. market; but poor infrastructures make for a challenge on the home front. Economical & Environmental The economical growth in China is exploding at an alarming rate with an ever increasing consumer base. However, the breweries that were supplying these consumers were sometimes backed by local governments; which allowed these breweries to operate on a not for profit basis. This not for profit business strategy, employed by the Chinese government, was not a luxury that foreign entities were able to take advantage of; meaning that competition in the Chinese market was bloody and at times hostile.
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