to draw on its own sales peoples' understanding of the market. It's reasonable to assume
that they have overcome most of the barriers mentioned above regarding cultural differ-
ences, language translation, geographical distance, etc. However, if the company previously
has only had a high-end position in China, it will still be crucial to do further investigations
in order to understand the specific conditions of the mid-market, since the needs of the
mid-market customers can be very different from those of high-end customers.
sales were slowing down. Yet, the overall market of the industry was growing
fast, so a product manager located in China decided to investigate the market
situation. He initially asked the sales organization, which responded: "Yes, we
have some local competitors, but they are not very big". However, a thorough
competitor analysis found that there were in fact 70 competitors in China
of which the sales organization only knew 5%. Three of the competitors had
40% of the market. At that point, the product manager decided not to trust
the sales organization and instead made up his own mind, since "sales peo-
ple don't see the part of the market where they don't have access".
first step towards learning about the mid-market is to "unlearn". One needs to be very
critical of existing "knowledge" and assumptions floating around in the organization.
Preferably, knowledge should originate from fact-based investigations of the mid-market
and not be based on opinions and guesses. Worst case, it may be necessary to challenge
and correct the sales organization which can be rather controversial in China. It's im-
portant to maneuver with political elegance when overruling the sales organization.
offerings to the market, and not to conduct market intelligence as input for developing a
new business in a new market. Sales organizations are often driven by short-term sales
targets, so they naturally focus on the immediate opportunities in the market, where the
current portfolio matches the customers' needs. Due to the organizational setup, the
sales organization is only motivated to investigate the mid-market if they have products
that match this segment. In fact, sales cannot be blamed for not having market insight
beyond their focus.
mid-market in China. None of the case companies in the SfG program have local product
management or marketing resources in China. Instead, these functions are located at
HQ and service all the company's markets. This may work well in established well-known
markets, but in China, this is problematic because the marketing people at HQ are likely
to lack a deep understanding of the particular Chinese mid-market situation.
difficult for B2B companies with long value chains. Long value chains are not unique for
China; they exist in all markets. However, value chains are sometimes longer for inter-
national companies in China because they may use distributors as intermediaries to the
market or have local partners responsible for sales.