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Chapter 1 Introduction
1.1 research background
Since China entered the WTO in 2001, China economic grew even faster. Statistics shows GDP has grown with 9.5 percent per year on average between 2001 and 2005. China’s GDP in year 2005 achieved US$2.225 trillion（The World Fact Book,2005,）

At present, China's National beer output 30 million tons, the actual consumption of 22 million tons.  And there is more than 500 brewery above-scale, 60% of the output of brewery is 100,000 tons below, According to China Food & Beverage Industry Report, (2006) Beer production in China increased 10.3% year-on-year in 2005 to 30.61 billion liter, thus took the world leading position for the fourth successive year. White beer production amounted to a total of 3.4937 billion liter, increasing 15.03% year-on-year. The economical benefit in beer realized a sudden growth. Sales revenue of large-scaled white beer manufacturers added up to RMB 72.265 billion. In 2005, grape beer industry kept a rapid development too. The total production of grape beer reached 434.3 million liter and realized a profit of RMB 1.256 billion, increasing 25.40% and 58.78% year-on-year respectively.
Figure 1: Beer Production in China, 2001-2005 China Food & Beverage Industry Report, (2006)
 

The beer market has growth rapidly over the last two decades and is now in a steady phase with beer itself gaining popularity.

Figure 2: beer market growth
 
Mainland beer market has grown at a CARR of 7.1% for the past 10years to over 28m kl in 2004 and has surpassed US as the world’s largest beer market.

With World Trading Organization accession, foreign beer brands will not neglect the huge potential of China's beer market. They bring not only capital and technology, and more importantly the brand name. The foreign investment will continue to grow as china pursues its desire to become an important export base for wide brand of beer, increased foreign investment will undoubtedly bring western management and production expertise to china’s beer industry. Thus this is great competition and challenges to domestic beer enterprise,

This cans also beer brand in the domestic market from abroad that the current situation in China has started to see foreign brand beer brand competition. Price competition is extremely detrimental to the long-term development in the face of increasingly fierce domestic and foreign competition, price competition will make enterprises more passive, especially in the face of the strong impact of foreign brands, domestic beer enterprises should fundamentally change the marketing idea, going low-level price competition, brand building the concept of competition competitive brands, and implement the brand development strategy, enhance the overall efficiency of the domestic beer industry and international competitiveness in the market.

Chapter 1 Introduction 2
1.1 research background 2
1.2 research aim and objective 4
1.3 Motivation of study 5
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