Bridge the Gap between U.S. and Chinese Boat Markets Help you find the dream boat

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Bridge the Gap between U.S. and Chinese Boat
Markets??????????? - Help you find the dream
boat! ?????????

• Chen Ferguson
• Business Professor of Miami University
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• ????? www.Chinaboatmarket.com
• Shanghai Boat Show, April 5-8, 2007

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Bridge to the Chinese Recreational Boat Market!

• Acknowledgments
• This presentation is made possible due to our
  working relationship with the following
  organizations and collaborating with top
  international and Chinese shipyards
• U.S. Department of Commerce
• National Marine Manufacturers Association
• Chinese Boat Industry Trade Association
• China CEO Association
• The Richest People in China from Hurun Report
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• ?? Tel [phone]
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• ?? Email Chen.Ferguson_at_bridgetochina.com

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American Boat Sales in 2005

• Average price of a new boat was 13,389
• Average price of a pre-owned boat was 8,829
• 43 of new boat sales occurred in the second
  quarter
• Followed by 31 in the third quarter
• May, June and July are the most active months
  for boat sales

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Typical American Family Enjoying Boating
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American Boat Sales in 2005 (cont.)

• Top 20 registration states account for three out
  of every four boats registered in the U.S.
• Florida ranks number one in total boat-related
  expenditures followed by California, Texas, New
  York and Washington.

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Worlds Biggest Boat Show in Fort Lauderdale
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Ferguson with a Florida Mayor
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Typical Boat Purchase Process

• The average boat buyer spends six months from the
  time the decision is made to actually make the
  purchase.
• Boaters continue to purchase slightly larger,
  better equipped boats.

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Mega Yacht Trend
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Interior Design
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Interior Design
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Interior Design
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Typical Boat Purchase Process

• The six month timeframe gives enough time to let
  marketing and sales sink in.
• Sequence of the purchase process
• 1) Decide which type of boats fits their needs
• consult friends
• visit boat shows
• talk to dealers
• 2) Research manufacturer brochures, magazine
  articles and ads.
• 3) Decide on brand and model.

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Mega Yacht
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Houseboat
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High Performance Boat
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Sail Boat
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Fishing Boats
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Entertainment Boats
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Meet Buyers Expectation

• Utilize the demo opportunity in sales routines
• Mention related benefits accruing to buyer
  instruction during the demo
• Educate boat buyers more (e.g. general on-water
  safety) instead of pushing for a sale

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Educate Boating Benefits

• Boating delivers significant benefits to
  participants in the U.S.
• being outdoors
• relaxation
• stress relief
• escape from worries
• socializing with family and friends
• fishing
• experiencing nature

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Lifestyle with Class

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Spend Quality Time with Family
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Boating Experience with Friends
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Dealership, Test Driving and Demo

• 1/3 of boat buyers started boating with friends
  or friend's family
• 1/5 of first-time buyers and 1/3 of repeat
  buyers test drove boats at dealerships
• 3/4 of those taking test drives said it was the
  most helpful step in the buying process
• Boat demonstrations are the single most
  effective method of turning prospects into owners

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Meet Buyers Expectation

• Buyers expect to take two days for repairing a
  boat
• Half of the boat buyers prefer to negotiate
  instead of using a one price system
• Justify the purchase during the negotiation
  process on specific product features

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Poverty of Time

• Boating is competing with other outdoor sports
  camping, snow skiing, hiking, golf, tennis, etc.
• Prospects and former owners say they would
  probably own or buy again if they could find more
  time
• It is important to convince prospects to have a
  good taste of boating to understand it can be as
  much or more fun

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Important Factors for U.S. Boaters

• Note Sample is based on Virginia state data with
  multiple responses allowed. Source U.S. Coast
  Guard

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Impact of Boat Shows

• Boat shows are a stepping stone for non-boat
  owners looking to get into boating
• Boat shows boost current boat owners interest
  in improving their boating experience by
  upgrading their boats
• There are about 200 boat shows held annually in
  the U.S.

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Impact of Boat Shows

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Impact of Boat Shows

• Almost all recent buyers have been to a boat
  show
• 2/3 attended one or more boat shows during the
  six months prior to a purchase
• 40 of new boat buyers either ordered their boat
  at a show or bought it from a dealer they spoke
  with at a show
• More than 86 of boat show attendees were in the
  market to buy a boat or currently owned a boat
  when they visited a show
• 8 of the U.S. adult population attended a boat
  show

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Impact of Boat Shows
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Basic Boat Infrastructure in the U.S.

• There are approximately 12,375 marinas in
  operation
• by comparison, over 50 marinas are planned or
  under construction in China and expecting to
  build 1,000 marinas
• There are nearly 875,000 slips
• The average marina has 72 slips

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Marinas in the U.S.
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U.S. Boat Builders

• There are 1,400 active boat builders.
• In comparison, China has about 150 boat yards,
  among them about 50 have export-oriented
  capabilities
• In 2005, Florida ranked 1 with the most number
  of boat builders
• Leading the U.S. in boat building plants are
  Florida, Minnesota, New York, California and
  Michigan

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U.S. Boat Builder
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Boating Economy Direct Impact

• Direct Impact immediate consequences of economic
  activity
• From Manufacturers new buildings, tooling, raw
  materials, labor, and taxes
• From Boaters gas, oil, new boat, trailer, food,
  lodging, boating fees, and boat registrations

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Boating Economy Indirect Impact

• Indirect Impact from economic activities
  attributable to the industry
• From Manufacturers
• Raw materials purchased by the suppliers
• Supplier labor costs
• Community store employees
• From Boaters items for sale to boaters
• Groceries purchased by convenience stores
• Gasoline and oil purchased by stations
• Advertising purchased by lodges to bring in
  boaters

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Boating Economy Induced Impact

• Induced impact - the multiplier effects as the
  money continues to turn over again and again
• For example, the local stores pay their people
  who then spend a portion of their income in the
  community to others, who in turn do the same
  for several rounds
• Total Economic Impact
• Direct Impact Indirect Impact Induced
  Impact
• Source http//www.rbbi.com/folders/econ/econ.htm

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Boating Economy Induced Impact
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Demographics of Boat Buyers

• Three out of four current boat owners have an
  average household income under 100,000
• Boat owners spent an average of 41 days on the
  water in 2005
• An estimated 51 of current participants enjoy
  cruising
• While 43 enjoy fishing and 31 enjoy
  sightseeing and sunbathing

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Global Boat Demand from 1997 2005
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Global Market Demand Trend

• The global market demands doubled during the
  past decade
• Which market is going to infuse growth for the
  next decade? As in the automobile industry, China
  is going to be the bright spot of the global
  recreational boat industry
• The Chinese recreational boat industry is going
  to be the next booming consumer industry after
  real estate and housing

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Chinese Boat Market Demand

• Chinas recreational boat industry grew at a 30
  rate from 2005 to 2006
• With a GDP of USD 1.3 billion, China can
  therefore expect to reach 550,000 boats with the
  following break down
• 78,000 in Guangdong
• 73,000 in Jiangsu
• 37,000 in Shanghai

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Let Us Help You Find Your Dream Boat! ?????????

• Our strategic alliance, network and technical
  services will help you to find your dream boat!
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• Browse our web site
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• http//www.chinaboatmarket.com
• Contact U.S. Head office
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• ?? Tel [phone]
• ?? Fax [phone]
• ???? Email Chen Ferguson_at_bridgetochina.com