On Chinas Alibabas Five Ps Marketing Strategies

WANG Guo-An

Abstract

An overview of Alibabas path of development; Alibabas effective marketing strategies based on Professor McCarthys 4Ps theory; Some suggestions on the improvement of its marketing strategies regarding the fight against the financial crisis worldwide which began in 2008.

Outline of the paper

Introduction Alibabas Development Process Alibabas 5Ps Marketing Strategies Suggestions for Alibabas Marketing Strategies in Global Financial Crisis Conclusion

Introduction

Alibaba includes five main branches:

B2B websites, such as china.alibaba.com, www.alibaba.co.jp,www.alibaba.com www.taobao.com, www.alimama.com www.alipay.com, http://trust.alibaba.com.cn www.alisoft.com www.koubei.com

Alibabas Development Process

The first phase (1998-2001): Providing free information for companies to enter the market. The second phase (2002): Carrying out the enterprise credit certification for making profits. The third phase (2003-2004): Developing overseas markets to expand the scope of trade. The fourth phase (2005-2007): Creating a new extendable ecommerce search engine after merging www.yahoo.com.cn. The fifth phase (2008-): Developing a new online transaction model to enter the B2C (business-to-customer) market.

Alibabas 5Ps Marketing Strategies

Alibabas 5Ps marketing strategies, namely Professor McCarthys 4Ps Product Place Price Promotion PERSONIFICATION.

(1) Alibabas Products

Virtual Product

Convenient and prompt issuance and management of information China-tailored payment instrument Sound evaluation system

Brand promotion strategy Service Strategy

Figure: Three Parties Relationship

(2) Price Strategy

At the very beginning, Alibaba provided free registration and information services for its clients in order to elbow its way to the ecommerce market. After a considerably big number of clients have registered at alibaba, it began to charge membership fees.

(3) Place Strategy

Alibaba was established in Hangzhou, the capital city of Zhejiang Province in the east of China, developed its customers in the Yangtse Delta Region, finally its customers have extended to all over the world. In order to get the lions share of the world market, Alibaba has localized its e-commerce services by creating different websites in different languages and tailored their designs and layouts to the local cultures and traditions in the local markets overseas.

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(4) Promotion Strategy

Alibaba precisely ascertains its clients, namely the small and medium-sized enterprises (SMEs) and individual businessmen. Because Alibaba had limited financial resources in its early stage of development, it established forums and added its site links to those forums in order to advertise its services, expand its recognition and make sales promotions, and achieved good results.

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(5) Personification Strategy

In the terms of the webpage design, Alibaba and Taobao have made efforts to make their webpages simple and easy to operate with Chinese characteristics and they are popular among Chinese clients. All messages sent by the Alibabas members are classified and processed by its full-time message editors.

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Suggestions for of Alibabas Marketing Strategies in Global Financial Crisis

To offer free and testing services to its new clients for a trial period in order to reduce its clients financial burden and to let them get familiar with the new products and services.

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To further subdivide the target clients according to their industries and categories.

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To adopt a new price strategy and a new fee-charging pattern to attract more members.

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To build up the Customer Relationship Management (CRM) system to reduce the difficulty in trading.

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Banks worldwide supporting e-trade and e-payment. E-trade involves epayment among different banks worldwide.

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Conclusion

Alibaba has built an effective information bridge between Chinese SMEs and overseas buyers and among individual businessmen through its distinctive services, reasonable prices, multi-dimensional marketing channels, novel dissemination and promotion methods and high quality personalized services. As a pacemaker in e-commerce, Alibaba has created a miracle in Chinas e-marketing in the 21 century after its 10 years development. In 2008 the financial crisis swept the whole world. But in this stage, both opportunities and challenges exist. Alibaba should take advantage of the opportunities and actively searches for new breakthroughs to further improve its marketing strategies in proper time.

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Thank
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you