Demand Potential Analysis For Chinese Future Alumina Import Market And Suggestions On Marketing Policies

Ever since China started importing alimina in 1982, the annual import volume kept increasing rapidly. In 2000 total 1.88 m tons was imported. CMCN usually enjoy various preferential policies granted by the government, including preferential import duties. Therefore, it remains as the dominator in the market for many years with market share as high as 60-70%.However, the market environment will change greatly as China enters WTO. To be better prepared for the forthcoming challenge, the newly merged company CMCN has to rearrange its marketing strategies for alumina,. At the first stage, two issues must be considered thoroughly: (1) Analyzing the market potential of import alumina, (2) Estimating the changes in the market environment, and re-planning the marketing strategies in the new scenario.In recent years, the steady, sound and rapid development of Chinese economy brought along the astonishing growth of the aluminum consumption. Chinese aluminum consumption growth rate is the highest in the world. In 2000, it reached 17.4%, higher than its average rate of 15.1% in the last five years. China is the No. 2 biggest aluminum consumer in the world, second to the America. But in terms of annual consumption per capita, China is to be seated at the last row in the world with 2.6kg per capita, which implies in other hand that there is still much room for further increase in aluminum consumption in China.We have studied the statistics on consumption in the six main sectors from 1989~1998 and take the average growth rate of the last five years as the prediction basis. we can estimate that about 4.9 m tons of primary aluminum will be consumed in 2005.Considering the severely over-supplied total smelting capacity in China in 2005, we could come to the conclusion that the annual consumption of alumina in 2005 will be 9.8 m tons.According to the prediction, the maxmum of 7.5 m tons alumina can be produced domestically in 2005, leaving a rigid short supply of 2.3 m tons, which is the lowest level to be imported.Based on its performance and market share, the company should be positioned as the market leader. Considering the characteristics of Chinese alumina import market, medium and small sized smelters should be set as its main targeting market. Pricing policy will become the most effective measures. Securing and further increasing market share should be its main target. The company's marketing policies might be described as follows: Work actively on large smelters, and focus on medium and small sized smelters; Direct selling to the end-users should be the main form of distribution, with middlemen as supplementary channels; Better coordinate between different types of sales. Apply pricing policy flexibly to the marketing practice and further improve the quality of after-sale services. Pursue maximum profit in the long term on the basis of stabilized high market share.