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China Trek Reveals "Beer Necessities"

Great Wall 2008 miniWhen pitching a Chinese beer to a U.S. market, which is the more effective marketing strategy: modifying the brand name so it’s more pronounceable to Americans, or plastering the original name across the backside of a miniskirt?

Those were some of the questions pondered by MBA students from around the globe recently, when they participated in the first international case competition held in China.

The 2008 East-West MBA All-Star Case Challenge was the brainchild of Baohong Sun, Associate Professor of Marketing at the Tepper School, the brainchild of the international competition who envisioned an opportunity to offer her MBA students a deeper, more meaningful experience as part of the school’s annual winter trek to China.

“When they go to China, they want to learn about the culture and how businesses operate. But because of limited time and resources, they tend to focus on corporate visits,” says Sun. “We wanted to also make sure the students were learning in tandem with their travels.’”

An international collection of MBA student teams all working on an actual in-country, Chinese business problem served as the impetus for a management, cultural and real-time academic exercise. By its very nature, the competition would allow students to engage with corporate executives in a relevant, in-depth fashion — all in the 12 days planned for the China trek.

The competition also capitalized on China’s emergence as a growing economic force by requiring U.S. and Asian MBA students to team together regarding various aspects of the case study, giving students experience that they will likely draw upon after graduation.

“This is a very timely issue,” explains Sun. “With globalization, it’s a great opportunity for U.S. managers to learn how to compete with a Chinese company.”


A new venture

Sun designed the competition from scratch, because, as she puts it, “In China, they have no idea what a case competition is.” So she assembled the entire schedule, determined who would receive invitations, named the judges, and developed the case.

The latter was a relatively easy task. Sun had already done research for Tsingtao Beer, which was dissatisfied with its nearly invisible brand presence in the United States. Competing teams were challenged to recommend a market entry strategy that would transform the product’s image.

Sun also partnered with Cheung Kong Graduate School of Business (CKGSB) in Beijing, a relatively new school modeled after INSEAD with heavy emphasis on its executive MBA programs. Much of the staff and faculty at CKGSB were hired from the United States, making for a more seamless adaptation to a western-style case competition.

And she recruited other schools to participate, including three — Tsinghua University, the National University of Singapore, and CCKGSB — from Asia.

“It’s about going from Chinatown to downtown,” explains Sun. “This question cannot be addressed by their own managers or students who are actually living in China.”

Typically, business plan competitions give students the case the night before their solution is due. But Sun wanted to give the teams an opportunity to pursue a much deeper analysis, so they received the case information a month prior to the trip, and students were encouraged to collect primary and secondary research data to form their insights.

Teams designed a slogan, packaging and an advertising campaign. They also worked with executives at Crown Imports to refine their strategies. What they discovered was surprising to Tsingtao’s producers: Americans perceived the beer as very light.

“By Chinese standards, it’s a heavy taste, and in 30 years they never tried to understand the reaction of the U.S. consumer,” says Sun. “There is no market strategy; it’s purely product exporting.”

In the first phase of the competition, teams representing each school made their presentations. The differences in campaigns between the U.S. and Chinese students was noticeable. For example, the winning team, from the Foster School of Business at Seattle’s Washington University, suggested targeting younger consumers and changing the product name to Tao Beer, which is easier for Americans to pronounce.

By contrast, one Asian team wanted to put Tsingtao Beer on the back of miniskirts that women could wear in bars.

In the second half of the competition, organizers mixed students from the U.S. and Asia to create hybrid teams that had 12 hours to work on a second problem: figuring out food pairings for the beer brand.

“When students go to China, they need not attend a lecture where they listen to cultural differences, but [rather] to experience the difference,” says Sun. “In the future, once they find a job, they’re going to work with people from different regions.”

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Mark D. Burd

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Tepper School of Business
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mdburd@andrew.cmu.edu
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