Chapter 1

THE PROBLEM

Background of the Study

One of the most significant current discussions in business

is marketing and management strategies. Several studies show that

the increasing importance for firms to develop marketing

strategies to compete effectively in the market are recognized by

majority of managers. Managers around the globe are recognizing

the increasing importance for the firm to develop marketing

strategies to compete effectively in worldwide markets.

Researches show that with globalization of market and

competition, businesses are trying to maximize performance

through creative marketing strategy and trying to achieve

marketing strategy implementation effectiveness.

Improving marketing strategies has been of great interest

to researchers and practitioners to gain competitive advantage in

the market (Karakaya, Badur & Aytekin, 2011). According to Morgan

et al. (2018), formulating and implementing marketing strategy is

central to the practice of marketing that helps navigate and

adapt to changing customer and firm needs. Jager (2007), as cited

by Karakaya, Badur & Aytekin (2011), mentioned that marketing

strategy has been an effective tool and approach for increasing

the sales of a product (Jager, 2007).

The purpose of the study is to determine the marketing

strategies of Beijing XCHD science and technology development Co

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Ltd. In line with this, according to Katsikeas et al.2016;

Morgan, 2012, as mentioned by Morgan et. al 2018, marketing

literatures show that a firm’s marketing efforts influence the

marketplace performance of a business through the making and

application of strategic marketing. This reiterates the

importance of determining the best marketing strategy of a

business. In a study conducted by Lehtinen (2017), to a

telecommunications company in Finland, result shows that

developments in the marketing strategy could increase customer

satisfaction and loyalty. In Nigeria, a study on the impact of

marketing strategy on business performance concluded that

marketing strategy in product, promotion, place, price and

packaging were significant joint predictors of business

performance in terms of profitability, market share, return on

investment, and expansion (Adewale, Adesola, & Oyewale, 2013).

Moreover, Belaya (2016) conducted a thesis study for a startup

company of 3D printer in Amsterdam and concluded that marketing

strategy in business could help increase brand awareness of the

business and could help attract a larger amount of users of 3D

printing technology.

In China, the study “Analysis for marketing strategy plan

of Nanchang City China” by Wei Qin (2012) concurred that the

marketing mix strategies used to describe marketing strategic

plan could better help a firm extend their business and keep

superiority in market competitiveness.

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Marketing strategy is an organization’s integrated pattern

of decisions that specify its crucial choices concerning

products, markets, marketing activities and marketing resources

in the creation, communication and/or delivery of products that

offer value to customers in exchanges with the organization and

thereby enables the organization to achieve specific objectives

(Varadarajan 2010, p. 119). In marketing strategies, companies

would accomplish their objectives by looking for segmentation of

its consumers, provision of successful goods and services for

each consumer segment and also by employing right promotional

tools and pricing strategies (Walker, Mullins & Larreche 2008 as

cited by Morgan et al.,2018). According to Solomon, Marshall &

Stuart (2008), marketing mix, comprised of product, price, place,

and promotion, is the strategic tool that marketers use in order

to create a desired response from consumers.

In this regard, the researcher aims to investigate the

marketing strategy of Beijing XCHD science and technology

development co. Ltd. by evaluating the effectiveness of the

existing marketing strategy of Beijing XCHD science and

technology development Co Ltd. in terms of product, price, place

and promotion and determine the problems encountered by the

company in the development of their marketing strategy. Based on

research, Beijing XCHD Science & technology development co. Ltd.

is a state-owned enterprise affiliated to aerospace science and

technology corporation (formerly known as Chinese Ministry

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Aerospace), China Aerospace Science and Technology Corporation

(CASC). The company engages in the increase of material

manufacturing technology, research and development, technical

service of application to undertake and complete a number of

space vehicle to add material manufacturing tasks at the same

time, tasks and other markets geared to the needs of education

market to carry out independent research and development and

sales of desktop 3D printer.

Beijing XCHD Science & Technology Development Co. Ltd. is a

core business of additive manufacturing technology services, 3D

printing desktop demonstration equipment development, industrial

production line system consulting and technology integration

services, environmental protection and energy saving equipment

development and implementation, and aerospace cultural

development. The modern technology-based enterprise with

comprehensive development of various businesses is a market-

oriented, user-centered advocate and provider of advanced

manufacturing and intelligent equipment solutions.

Moreover, Beijing XCHD Science & Technology Development Co.

Ltd is a wholly-owned subsidiary of Beijing Satellite

Manufacturing Plant founded in 1958. It is a national high-tech

enterprise engaged in the manufacture of space vehicles. Since

the establishment of the factory, the company has completed

scientific experiments, returning, communication and resources

represented by "Dongfanghong-1" satellite, "Shenzhou" series

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spacecraft, "chang’er" series satellites, and "Tiangong-1" target

aircraft. The development tasks of a series of more than 140

(spacecraft) space vehicles, such as navigation, deep space

exploration satellites and Shenzhou spacecraft, have made

important contributions to the development of China's space

industry and the modernization of national defense. Beijing

Satellite Manufacturing Plant has a number of core technologies,

manufacturing in large manned capsules, manufacturing of high-

strength and high-modulus composite materials, ultra-precision

machining and assembly of spacecraft, preparation and testing of

spacecraft thermal control systems, and spacecraft pipe welding.

The technology of spacecraft cable network manufacturing,

spacecraft power supply and power supply and distribution product

design and manufacturing is advanced, and computer-aided design,

manufacturing, testing, assembly and other digital technologies

are widely used and system integration is realized.

In line with this, the study focuses on one of the products

of Beijing XCHD Science & technology development co. Ltd. which

is the desktop 3D printer. Desktop 3D printer covers a host of

processes and technologies that offer a full spectrum of

capabilities for the production of parts and products in

different materials. Essentially, what all of the processes and

technologies have in common is the manner in which production is

carried out — layer by layer in an additive process — which is in

contrast to traditional methods of production involving

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subtractive methods or moulding/casting processes. Applications

of 3D printing are emerging almost by the day, and, as this

technology continues to penetrate more widely and deeply across

industrial, maker and consumer sectors, this is only set to

increase. (The Free Beginner’s Guide to 3d Printing, n.d). 3D

printing is usually done using a digital technology material

printer. It is often used in the manufacture of molds in the

fields of mold manufacturing and industrial design, and is

gradually used for the direct manufacture of some products. The

technology is used in the jewelry, footwear, industrial design,

construction, engineering and construction (AEC), automotive,

aerospace, dental and medical industries, education, geographic

information systems, civil engineering, firearms and other

fields. The difference between traditional manufacturing and 3D

printing is that the 3d printer involves additive approach but

most of the traditional manufacturing processes involve

subtractive approach that includes a combination of grinding,

bending, forging, moulding, cutting, gluing, welding and

assembling. At the beginning 3D printing was mostly seen as a

tool to shape and bring it to the artistic or different designs,

but in the last few years this technology is developing to a

point where mechanical components and some required parts can be

printed. It completely changes not only the

industrial/manufacturing field, but also our entire way of life

in the future as 3D printer makes possible to complete model in a

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single process (Anderson, 2012, as cited by Kamran and Saxena,

2016).

The earliest 3D printing technologies first became visible

in the late 1980’s, at which time they were called Rapid

Prototyping (RP) technologies. This is because the processes were

originally conceived as a fast and more cost-effective method for

creating prototypes for product development within industry. As

an interesting aside, the very first patent application for RP

technology was filed by a Dr. Kodama, in Japan, in May 1980.

Unfortunately for Dr. Kodama, the full patent specification was

subsequently not filed before the one-year deadline after the

application, which is particularly disastrous considering that he

was a patent lawyer. In real terms, however, the origins of 3D

printing can be traced back to 1986, when the first patent was

issued for stereolithography apparatus (SLA). This patent

belonged to Charles (Chuck) Hull, who first invented his SLA

machine in 1983. Hull went on to co-found 3D Systems Corporation

— one of the largest and most prolific organizations operating in

the 3D printing sector today (History of 3D Printing: The Free

Beginner’s Guide, n.d.)

Today, 3D printing has improved, innovators are pushing the

envelope in ways that Charles Hull could only dream of. Designers

are no longer limited to printing with plastic. Case in point:

One can now print the engagement ring of your dreams using gold
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or silver. Engineers at the University of Southampton have flown

the world’s first 3D-printed unmanned aircraft, and KOR Ecologic

prototyped Urbee, a car with a 3D-printed body that’s built to

get 200 mpg on the freeway. Beyond jewelry and aircraft, 3D

printing is now being used to manufacture affordable housing for

the developing world, and visionaries have begun to employ the

technology to print everything from smart robotic arms, bone

replacements, and even particles just a few atoms thick which

could result in even smaller electronics and batteries(Goldberg,

2018). In the world of developing technology, 3d printing has

been replaced in the entire manufacturing firm/system with its

improved version of building parts layer by layer using additive

approach and new trends (Kamran and Saxena, 2016).

Research shows that 3D printing (3DP), has been evolving

over the past 30 years. According to EY global survey of 900

companies, thirty-six percent of companies are already applying

or intend to apply 3D printing. Aerospace, defense and automotive

are the most mature industries in applying 3D printing and there

is growing evidence that the advancements in technology and

materials have finally brought it beyond the hype stage

(Thewihsen et. al., 2016). The 3D printing market is estimated to

be valued at USD 32.78 billion by 2023 and according to the

survey in statistica/mordor intelligence in 2018, North America

is the largest market for 3D printing which is expected to

increase its global market share, during the forecast period.

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In China, the number of literature concurred that the

technology has gained significant presence there. In 2013, the

value of China’s 3D printing market was estimated at 1.72 billion

yuan, it was growing at 77 percent a year and accounted for 9 per

cent of the global market. Furthermore, the local industry is set

to continue its phenomenal growth with some observers expecting

it to top 9 billion yuan within the next few years (Ng and Tan,

2015).

With this fact, the researcher aims to identify the

marketing strategies of Beijing XCHD Science and Technology

Development Co Ltd. on their 3D printing product and determine

the level of effectiveness of the strategies in terms their

product, price, place and promotion. Moreover, it also seeks to

determine the problems encountered by Beijing XCHD science and

technology development Ltd. in implementing their strategy. Since

the company is still new in the market, the researcher’s aim is

to determine how the customers perceive the 3D printer of XCHD.

In Beijing, there are at least five (5) companies that sell 3D

printer but XCHD’s 3D printer is the first to have advance

technology.

This research could help business owners, managers and

employees of technology related businesses in improving their

marketing strategy. Findings of the research could provide

insight to businesses on the perception of customers on marketing

mix strategies. In addition, the research is essential as it

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could be an addition to the body of knowledge to future

researchers of marketing strategy. As an employee of Beijing XCHD

science and technology development Ltd. and researcher, this

study could be useful to improve the future endeavor of the

company in improving their market strategy. It could also help

increase clients’ satisfaction and help contribute to customer

value.

Theoretical/Conceptual Framework

This section of the study presents the theoretical and

conceptual basis of the research at hand and the discussion of

the relevant theories and concepts of marketing strategy in terms

of product, price, place, and promotion.

The task of any business is to deliver customer value at a

profit. The key to do this is through marketing strategy.

According to Morgan et al. (2018) and Jager (2007), marketing

strategy is the heart of marketing practice and has been an

effective tool and approach for increasing the sales of a

products or services. Business dictionary defines marketing

strategy as an organization’s strategy that combines goals into

one comprehensive plan. It is focuses on the right marketing mix

in order to achieve the maximum profit potential and sustain the

business. According to Stevens (2018), marketing strategy helps

determine the aspect of a business that have the most influence

on customers. It is also a way for a business to maximize results

from money and time spent on marketing. Keller and Kotler (2016)
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mentioned that marketing strategy results to building strong

brand of a product, creating value to customers that could be a

competitive advantage of the company, delivering value,

communicating value and conducting marketing responsibility for

long-term success.

In this regard, one of the strategic tools to realize the

aforementioned results to customers is marketing mix. Marketing

mix, commonly known as the McCarthy’s (1960) 4Ps, consists of

product, price, place and promotion are essential elements of a

marketing strategy (Solomon, Marshall & Stuart 2008). Given the

breadth, complexity, and richness of marketing, however—as

exemplified by holistic marketing— clearly these four Ps are not

the only Ps in marketing anymore. However, the researcher focuses

the study on the main 4Ps of marketing to determine the level of

effectiveness of the existing strategy of Beijing XCHD science

and technology development Ltd.

Marketing mix is the combination of four elements, called

the 4P’s (Product, Price, Promotion and Place), is the set of

tactical marketing tools that the firm blends to produce the

response it wants in the target market (Kotler and Armstrong,

2014). Figure 2 presents the 4P’s of marketing that are intended

to deliver customer value.

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Figure 1

4 P’s of Marketing

The Four (4) Ps of Marketing

Product

Peter F. Drucker once said: “The aim of Marketing is to

know and understand the customer so well that the product or

service fits him (her/it) and sells itself”. Product or service

is the one of the ways to get potential users or customers.

Product means the goods-and-services combination the company

offers to the target market (Kotler and Armstrong, 2014). A

product is defined by most modern marketers as the sum of the

physical and psychological satisfactions the buyer receives when

he/she makes a purchase. For example, when he/she makes a

purchase the consumer receives an article with certain features;

he/she receives the item at a convenient location; he/she

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is able to purchase at a convenient time and receives the item

about which he has some knowledge (form the salesperson or from

consumer advertising). Creating customer value is fundamental to

business organizations. Product’s variety, quality, design,

features brand name, packaging is some of the ways to create

customer value.

Product is a combination of tangible and intangible goods

and services offers to a customer for sale. It is any idea,

method, information, service or object created as a result of a

process and serves a need or satisfies a want. There are many

things which will increase the product sales. Product is made up

from the mixture of different elements: Quality, protect

ability, fulfilling the needs of consumer’s and also the

packaging’s which will enhance the product’s existence and built

a strong image in the consumer’s mind. According to Sayeda

et.al., 2015, in a study conducted to 300 respondents, finding of

the research study revealed that packaging is one the most

important factors that influences consumer purchase decision. It

is further concluded that the packaging elements like its color,

packaging material, design of wrapper and innovation are more

important factors when consumers making any buying decision.

Another important consideration in product is quality. In a study

conducted by Atiyah (2016), the result concluded that there is a

positive effect of quality to customers. Quality is important as

it leads to satisfaction and loyalty. It leads to pleasing the

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customer and increase loyalty and increase the degree of

profitability in the medium and long term in the organization.

According to Park et al. (n.d), firms offer variety of

products to increase market share and profits and customer

satisfaction. Ulrich and Randall (2001) as cited by Park et al.

(n.d) defined product variety as the number of different versions

of a product offered by a firm at a single point in time. Ton and

Raman (2010) examined the effects of product variety and

inventory levels on store sales and concluded that product

variety and inventory is with higher sales. Another product

strategy is quality. Parasuraman (1990) as cited by Atiyah

(2016), quality is defined as the interaction between the

customer and the service provider, since the customer sees the

service quality through comparing his expectations of this

service with the actual performance. Quality is also a standard

of correspondence between the actual performance of the service

with the customers’ expectations or the difference between the

customers’ expectations and their realization of the service’s

actual performance (Hoffman and Bateson, 2011, p:4). In a study

conducted by Halim et al. (2014), the authors posited that

quality of product could lead customers to trust the product and

influence customer loyalty. Similarly, Suchánek, Richter, and

Králová (2015) also studied the influence of quality on customer

satisfaction and on business performance and competitiveness and

concluded that indeed customers are satisfied if the product they

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buy is quality and the business performance could also improve

its profitability.

From here, design, features, brand name, packaging and

services are also strategies that could increase customer value

and improve sales of a company. Design is a fundamental part of

the history, culture and technology of societies all over the

world. It is a critically important process in the business and

creative industries (2010). According to Macarti and Munari

(2008), consumers have the possibility to buy products having a

lot of features and consumers perceive a benefit from increasing

the number of features when these features are congruent with the

product.

The role of brands and branding toward corporate

performance and customer satisfaction has been variously

researched. According to Ajike (2015) branding as a marketing

tool has been recognized as a source of sustainable strategic

competitive advantage tool in the organization. The study focuses

on evaluating the existing product strategy of XCHD in Beijing

which includes quality, packaging, customer service, after sales

service and warranty, and brand name.

The XCHD’s product is considered to be quality. It has the

advantage of high aerospace grade aluminum alloy body,

independent touch terminal, professional protective cover and

ultra-high precision and is more reliable than other similar

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products in the market because the company is a national high-

tech enterprise relying on aerospace technology. The company also

provides excellent customer service as it owns a mature training

and after-sales service system. In terms of packaging, there are

requirements in packing. Parts and technical documents should be

packed separately and marked outside of the package. The company

documents the package and requires that packing list should be

packed in every packages. There are also detailed packing list,

certification of quality, technology documents (instructions) and

other necessary documents. The company also makes sure that the

product is carefully packed and is suitable for land

transportation.

According to Najmi’s (2014) study, he found that the

product's warranty has a significant impact on preferences of

customers. In terms of warranty, after the acceptance of the

product and the delivery to the buyers, the sellers shall provide

documents such as instructions. The documents should include the

working principle, the operation, the operation of the software

and the daily maintenance of the software and hardware. The

sellers’ technicians can achieve safe and independent operation

and routine maintenance of the equipment through learning. The

quality guarantee period is 3 years form the date of the final

acceptance and delivery to the buyers. The quality guarantee

period of some parts is detailed in Form 1 (see attached sample

contract). If there are any questions regarding the quality

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during the quality guarantee period (under normal operation and

no man-made damage), the buyers cooperate by enumerating and

identifying the causes of damage and send back the parts to the

seller, the sellers is responsible for the free maintenance and

replacement of the damaged parts. The quality guarantee period of

new parts is the same as the original parts. The sellers will

replace the damaged hardware for paid replacement caused by man-

made reasons. If the buyers need maintenance beyond the warranty

period, the sellers should respond positively. The seller is

responsible for the paid supply of parts, and the maintenance

cost shall be separately agreed upon by both parties. The Sellers

shall not be held responsible for any delay in delivery or none

delivery of the goods due to force Majeure. However, the seller

shall advise the buyers immediately of such occurrence and within

fourteen days thereafter，shall send by airmail to the Buyers for

their acceptance a certificate issued by the competent government

authorities of the place where the accident occurs as evidence

thereof. Under such circumstances the sellers however，are still

under the obligation to take all necessary measures to hasten the

delivery of the goods. In case the accident lasts for more than

ten weeks，the buyers shall have the right to cancel this

contract. The brand name of the company’s 3D printer is SINGMA.

It is considered as the competitive advantage of the company as

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it is believed to create quality and reliable product for its

customers.

From here, our company provides teaching video free,

including the operation of desktop 3D printer, the operation of

3D printing slice and model software. The online training is free

which provides services such as answer questions and other

distance network training service can be provided for partners or

purchasers. Teachers, who are users of 3D printer can fully grasp

the basic operation of desktop 3D printer (distance network

training service need advance book, partners need to submit an

application for distance network training before 30 days. Our

company will arrange training service as the time of partners

required).

Price

According to Sing (2013), price is one significant factors

in attaining high market share in companies. Main pricing

objectives are, profit maximization, and high market share to

attain status quo by stable price and meeting competition in the

market. Kotler and Armstrong (2014) define price as the amount of

money customers must pay to obtain the product. Price is also the

amount charged for a product or service. It is the second most

important element in the marketing mix. Fixing the price of the

product is a tricky job. Many factors like demand for a product,

cost involved, consumer’s ability to pay, prices charged by

competitors for similar products, government restrictions etc.

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have to be kept in mind while fixing the price. In fact, pricing

is a very crucial decision area as it has its effect on demand

for the product and also on the profitability of the firm.

Guillao (2015), also defines price as the value given up in

exchange of the use or ownership of a good or service. This

value can be in terms of money, goods, or services. Price plays

fundamentally important roles aimed at ensuring the

competitiveness, sustainability, profitability and growth of a

company (Naseri, 2013). Pricing is the process of ascertaining

and allocating prices for goods and services based on

consideration of certain factors including cost of production,

return on investment and profit mark-up desired, pricing

objectives, and the competition (Gregor & Fred, 2010 as mentioned

by Naser, 2013).

The strategy of XCHD 3D printer’s price is affordability.

Affordability perceptions improve prediction of purchase over and

above that provided by purchase intent according to Notani

(2019), XCHD’s 3D printer is cheaper than other equivalent 3D

printers at home and abroad without sacrificing the quality. In

terms of payment an agreement is made between the company and the

customers wherein, after the contract is signed, the buyers shall

pay the 34% of the contract value to the sellers within (five) 5

working days. A discount is made if within (three) 3 working days

of one year of the contract execution period, the buyers shall

pay the 33% of the contract value to the sellers. Within (three)
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3 working days of two years of the contract execution period, the

buyers shall pay the 33% of the contract value to the sellers.

The buyers are also provided list of prices of 3D printer to help

them decide whether to buy the product with the price given.

Place

“Place” as one of the “P’s” of marketing mix do not only

talk about where the products and services are found or are made

available, instead, it also talks about how products get from the

makers to the end-users. Place, according to Kotler and Armstrong

(2014), includes company activities that make the product

available to target consumers. Product must be made available to

the consumers at a place where they can conveniently make

purchase. According to Sampson (n.d) place is the element in

marketing is that ensures that the product is distributed and

made conveniently available for customers. If customers face

issues regarding the availability of product, it is most certain

that they will buy somewhere else. This is why it so important

that products make it to the customers at the right place and

time.

Place is regarded as a distribution point through which

product is positioned at a place for accessibility of consumers.

Various strategies can be implied in this regard

like intensive distribution, selective distribution, exclusive

distribution and franchising (S. Kumar & Bansal, 2013). Promotion

is an important ingredient of marketing mix as it refers to a

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process of informing, persuading and influencing a consumer to

make choice of the product to be

bought.

One of the strategies of XCHD company is its location as it

provides accessibility and convenience to customers. The main

office of the company is in Beijing which is the capital of China

thereby easier for clients to locate. In addition, there are four

(4) production bases in China, located in the east, south and

north of the country that are located strategically to cater to

clients in different the different areas of China.

The company also, uses logistics to deliver the 3D printer

to customers located in China wherein all expenses related to the

delivery of 3D printer to the customers are shouldered by the

company. This strategy is one of the competitive advantages of

the company as it attracts more customers to avail the 3D

printer. Another strategy of the company is setting up website

that caters to international and domestic customers. The company

set up https://www.sz-singma.com for customers and potential

customers abroad and www.bs-xchd.com for local customers in china

to order products and ask queries about the company.

Promotion

Promotion pertains to activities done to increase public

awareness about products, organizations, or ventures. “Marketing

Communication” is another term for promotion since it involves

reaching the target market through various types of communication

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(Guillao, 2015). Promotion means activities that communicate the

merits of the product and persuade target customers to buy it

(Kotler and Keller, 2014). Promotion is done through means of

personal selling, advertising, publicity and sales promotion. It

is done mainly with a view to provide information to prospective

consumers about the availability, characteristics and uses of a

product. It arouses potential consumer’s interest in the product,

compare it with competitors’ product and make his choice. The

proliferation of print and electronic media has immensely helped

the process of promotion (Keller and Kotler, 2016).

One of the strategies of XCHD company is personal selling.

Personal selling is a face to face communication between the

customers and the sellers. According to Oyulinka (2019) personal

selling has an influence on customers’ demand. The study also

found that there is a relationship between personal selling and

organizational sales volume. Employees of XCHD company are very

accommodating to their customers. They make sure that they answer

questions of customers precisely. To do this, they undergo

training to improve their performance in the company. I addition,

the company also promote their product by joining professional

exhibitions for education and manufacturing additives. From here,

the company also utilizes social media platform to promote their

3D printer to local and international customers. As mentioned

above the company has website to cater to customers both abroad

and domestic. Social media is a great communication tool that

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people use to connect to others or communicate with

organizations. According to Perumal (2018), people use social

media to share their experiences, reviews, information, advice,

warnings, tips and any kind of issues that are interesting to

their "connection" or friends. Marketers utilize social media is

used as advertising tool nowadays. Marketers create marketing

strategy by taking advantage of the use of social media, which in

turn could help them gain more customers.

Figure 2

Research Paradigm
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Statement of the Problem

The purpose of the study is to determine the marketing

strategies of Beijing XCHD science and technology Development Co.

Ltd.

Specifically, it aims to answer the following:

1. What is the level of effectiveness of the existing

marketing strategy of Beijing XCHD science and technology

development Co. Ltd. in terms of:

a. product;

b. price;

c. place; and

d. promotion?

2. What are the problems encountered by Beijing XCHD

science and technology development Ltd. in terms of:

a. product;

b. price;

c. place; and

d. promotion?