Customer’s Perception towards Buying Chinese Products: Buying a specific country’s products (e.g. Chinese products) sometime depends on ethnocentrism. As Klein, Ettenson and Morris have mentioned in their research, “Ethnocentrism is a part of attitude that a consumer possess” . Therefore, if Chinese people buy its own manufactured products even though it is not as good as other country’s one, this is called ethnocentrism. In the context of China, Shimp and Sharma stated ethnocentrism as “the beliefs held by specific country’s consumers like Chinese consumers about the appropriateness, as well as an understanding of what purchase behavior is acceptable or unacceptable for China in regard to products produced outside the country” .
Globalization may become the potential threaten for traditional regional cultures and economics, in particular, the Chinese economy is in transition. (Zhang, p.740) On the other hand, globalization not only promotes the cooperation between countries, enforced the communication between the human beings and the world, (Zhang, p. 739) but also create the opportunities for the development of modernization. Therefore, local culture has absorbed the global culture and to achieve the goal of development itself. In other words, the global culture would not harm the local
PESTLE A market is the place or medium where specific activities are transacted between businesses and consumers. To study the macro-environment (i.e., external environment), PESTLE analysis is considered to be the most appropriate as suggested by Kotler and Armstrong (2010). 2.1.1. Political The current UK Government has made business conducive for the retail sector (UK Trade and Investment, 2014). In addition, the UK government has relaxed tourist visa application laws for large consumer countries such as China, the benefits of which are explained below (Davidson, 2015).
a) Economic Risk Economic risk referring to the chance that macroeconomic conditions like exchange rates, government regulation, or political stability will affect an investment, usually in a foreign country. As an example, let assume Aroma Nyonya wanted to build their own branches anywhere in China to expand their production. Aside from the business risk associated with making their production profitable, Aroma Nyonya is exposed to economic risk. Where political environment might shift quickly that may lead into the significant change laws from the government of China that affect Aroma Nyonya’s ability to continue to expand branches while maximizing their products in China.
Microeconomic factors significantly affect a business, especially global expansion. Therefore, some factors to analyze and monitor are the price elasticity of goods, competition in the market and the economy state. The state of economy determines consumer spending trends. An economic downfall will lead to a decrease in consumers spending and an increase in the economy state, will escalate consumer spending. There is no doubt that competition in the U.S. is robust and is the same in China, however, Nordstrom must have the ability to choose their competitive advantage as a global expansion strategy regardless if it is suited for success in the Chinese market.
Low cost of resources and cheap labour causes increasing of attractiveness of China for German FDI. Germany disposes technology know-how and managerial skills which leads them to good partnership with emerging markets like China. To the Location advantages may include market potential which is huge as the Chinese consumers have significantly purchasing power. Disposable incomes can equal or exceed those of European and American consumers. Now, the number of potential customers is more than 1,4 billion (worldometers.info).
These people might be looking for the following benefits:- 1. Self-directed pleasure: the hedonic experiences of using the product for one’s own pleasure 2. Self-gift giving: the use of a product for its utility that may enhance one’s emotions 3. Congruity with internal self: the brand image is the reflection of one’s own personality Casaburi (Casaburi 2005) in his paper about the influence of culture on luxury products talks about the difference in motivation for the people in different culture. In emerging economy like China which is seeing a growth in western luxury products recently, people feel that luxury brand is something that gives them social status and acceptance in elitist groups.
The analysis of Porter’s Five Forces Framework in this paper will examine the forces and competition that influencing retailing in China. The forces may assist in the analysis of Parkson to enter the China retailing market in formulating competitive strategies. Bargaining Power of Supplier The bargaining power of supplier is refers to the price negotiation of the relative supplier. The powerful suppliers can either limit or reduce the quality of services and products or increase the price in order to get greater value for themselves (Minov 2014). In China’s retailer industry, the relationship between supplier and retailers is two sided which are competition and cooperation.
5.1 NEW PRODUCT 5.1.1 STRATEGY Following the approach in the SWOT, the different strategies to follow in order to shrink the gap between the perfume company and the fashion one are: - Development of a premium product: the market analysis stats that limited editions are not enough anymore. Therefore a more aggressive strategy is needed; VIP or Private Collections. Private Collections are in need of a luxury strategy or some elements of it in order to target the right audience and transmit the high quality, expertise and uniqueness of each product of the collection. - The idea of developing a private collection gives Valentino the possibility to develop more than one product and try to adapt some to the Chinese market needs and others
Accordingly, The Mira hotel is selected to particular study to more clearly illustrate how much effectively a luxury hotel manages its brand equity would lead to an improvement of guest loyalty. As far as the research limitation is concerned, we all know that brand equity is considered as a contributor to a hotel’s success and reputation in guest’s perception. However, there are few empirical studies conducting the importance of brand equity management in hotel industry especially in scope of Vietnam and Binh Duong as well. This causes some difficulties when conducting the literature review and making relevant references for the applicability of those research results in the context of Binh Duong hotels. 1.6 Thesis structure This thesis is organized in five