Marketing and Internet Service Industry

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Acknowledgments

Completing this dissertation has proven to be a very challenging endeavor, and it certainly would have been a whole lot more difficult to accomplish without the help of many important persons. First of all, my dissertation supervisor, Shannon-Little, Paul A, has provided valuable guidance and direction along my research and writing path. I would like to express my sincere appreciation and thanks to him for his support, patience and encouragement.

Also, special thanks go out to Mario Ding and Janie LIU, who has been there at important times to bounce around ideas to give me a large number of suggestions and to assist me along this dissertation. She suggested many clear ways to design the structure of this dissertation.

Finally, a feeling of appreciation goes out to the many friends and classmates who provided support when things got tough. They support me actually and expressively when I contribute myself to this program. Their helps directly and indirectly push me to finish this dissertation.

Table of Contents

Table of Contents2
List of Figure3
List of TablesChapter One Introduction4
1.1 Background of Chinese Internet service industry5
1.2 Background of Tencent7
1.3 The current events - Tencent VS 360 Safeguard9
1.4 Scope, sources and methodology10
Chapter Two: Literature Review12
2.1 PEST analysis12
2.2 SWOT15
2.3 More on the difference and relationship between PEST and SWOT16 2.4 Marketing Mix (4P) in Internet contexts17
λ Products or services19
λ Price22
λ Place24
λ Promotion25
2.5 Porter's Five forces model27
Chapter Three: Context analysis30
3.1 External context analysis30
3.2 Internal context analysis with SWOT37
Chapter Four: Marketing Mix ----4P39
4.1 Product strategy39
4.2 Price strategy40
4.3 Promotion strategy42
4.4 Place strategy43
4.5 Additional strategies A - Customer services43
4.6 Additional strategies B -word of mouth campaigns43
Chapter Five: Conclusion45
References46

List of Figure

List of Tables

Chapter One Introduction

1.1 Background of Chinese Internet service industry

The Internet was invented in the US, American Internet companies dominate the headlines, and the major Internet governance bodies are based in the US. So it is not surprising that many people think of the "Internet" as an American-dominated industry. However, that is a mistake. The results of recent research on the Internationalization of the Chinese Internet industry have showed that a few of China's prominent Internet companies in different segments have climbed up the value chain. In fact, over the past few years Internet usage in China has exploded, making China now the world's largest internet market as measured by users. And don't forget that the Chinese market is still in its early growth stages, with Internet usage at 22% of the population, versus 75% for the US. (BI,2009) The common disproof is that these millions of Chinese online users don’t spend much money, and that advertisers aren't willing to spend money to reach them. However As measured by revenue or market cap, The current leader is Tencent (better known as QQ) with 2008 revenue of US$1 Billion and a current market cap of US$24 Billion (bigger than Yahoo, almost as big as eBay). Close behind is Baidu, China's leading search engine, which accounts for 60% of China's searches, versus 30% from Google China. Most analysts concur that Baidu is on track to US$1 Billion in revenue this year. (TechNode, 2009) In short, if you want to talk about "The Internet", you need to understand China. And you need to understand Tencent. Do you know how Tencent makes money? Some say the reason for the success of local Chinese companies, and the failures of American entrants, is due to Chinese government protectionism. To some extent that is true, but it's certainly not the whole story. This study has...
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