Hong Kong is celebrating its 40th anniversary of legislative trade promotion activities. So what actually does trade promotion means? Is it a selfish activity or would it be something inducing mutual gain and win-win between the national trading parties?
- Trade promotion does not equal to trade. Trade is the core exchange activities taking place between the human-defined boundaries. Economists talk about barter, competitive advantage, core competency, custom barrier, quota, externalism etc., and these are all basic elements in modern trade.
- Trade promotion, on the other hand, is the marketing effort to attract trading partners to do business. It is normally proactive, specialised but often defined in a generic manner.
- Trade promotion is a product of planned economy, or I should say targeted trade promotion is most probably the derived result of planned economy. It is a question of chicken and egg. I always doubt how it goes the trade business without planned trade promotion. It may be that the presentation of trade and business of a territory and the recognition of such presentation to outside parties evolve, and voilà, we get a reason for trade promotion.
- Is trade promotion an enemy of laissez-faire economy? Should we ask again Milton Friedman?
- Trade promotion is creating the marketplace for traders. A marketplace is a matching occasion for the parties to gather, to negotiate and to exchange before they proceed to business. Apparently trade promotion provides the platform for trade, but then a platform may exist even when there is no trade promotion. Interestingly trade promotion should be a part of the integrated work of an independent business who seeks for orders all the time. Think about an ancient horse seller. They would lead their breeds to the central market, the place where one would meet at most ease one’s potential clients, for sale. A bazaar at town centre was always the marketplace, be there a dealer who arranged the event and regarded themselves as a trade promoter or not, but simply it could be another business model to gather people and wealth.
- Partially, trade promotion bodies are event management entities, or nowadays an e-marketer, a B2B2C site administrator, a business agent, a trade fair organiser, an institution, an asset management consultant, a nationalist, a diplomat…
- Existing trade promotion bodies, due to social and institutional constraints, are mostly public, regional, industrial and governmental. The special status of these marketing groups attributes to their implementation of unique accountability system and KPI definition.
- However, with the abovementioned assumptions being applicable to trade promotion bodies, there exists actually a possibility of privatised trade promotion bodies.
- How to deal with competition? When a trade promotion body competes with another trade promotion body, what would they do? …the theory of core competency and specialisation, an economically anticipated human behaviour. Consciously rational, and of course a social system is required.
- In this case, trade promotion activity plays within the boundary of laissez-faire economy, apparently. One step further, if trade promotion activities occur, and due to competition among the nations, promoters act quick and that can be a catalyst to the development of specialties for each nation, thus reaching equilibrium in due course. Trade promotion should be important.
- Oops, something has been ignored…institutional control? Governmental policy, politics, any trade embargo or privilege treatment? Partnering? Are we always rational? Can we always make the right decision? The classic social cost issue plus the art of execution.
- We talk about expectation. Trade promotion manages expectation too, and after all, I think this is something very crucial.
- What about branding? Another tool of marketing and promotion. Think about branding but think wisely please. Everybody knows that marketing is cost-sensitive.
- Trade promotion is a concept and a PR tool for community sharing a common interest, such as an identity of nation or a belonging to any instituted body, industry or group.
- So some questions: Is there a need for trade promotion? Who pay? How to execute effective trade promotion? How far should trade promotion go?
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