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” .
Porter’s Five Forces Framework Porter’s five forces model analysis is a model that can illustration and construe of how the five elements of competitive forces can be used and applied to describe and inspect low profitability and capable of working successfully to an industry (Zhao et al. 2016). These five forces were included bargaining power of supplier, the threat of new entrants, bargaining power of buyer, threat of substitutes, and rivalry among the existing firms in the industry (Lee et al. 2012). The analysis of Porter’s Five Forces Framework in this paper will examine the forces and competition that influencing retailing in China.
Be specific. Wal-Mart gives Chinese suppliers the specifications for Wal-Mart products. Wal-Mart teaches its suppliers on how to meet its specifications by giving them information about the price, quality and delivery schedule. Wal-Mart also keeps a very low inventory and has a fast turnaround. This forces its suppliers to speed up its production.
Chinese prefers face-to-face contact and less direct way of communication. Chinese are also less likely to express their personal point of views and knowledge on the products or service that they bought, and seek for information on the spotlight reviews. Therefore, the above behaviors are the main differences between Chinese and American regarding the cross-culture psychology when shopping online that online shop operators should take into account when operate their
Moreover, the retail business has been unable to apply the same tactics that are implemented in America. Wal-Mart is famous for the fact that it offers low-cost goods to customers who purchase the goods from the stores in bulk. However, the Chinese clientele understands the need to get value for their money thus requires more from Wal-Mart than simply low prices. Moreover, the China market is hostile to the western companies (Huang & Yu, 2015). Usually, the local businesses see the international industries as a threat, and this may pose a challenge even to the customers.
Some Indian parent forbade their daughters from going outdoors in order to keep them from getting dark. The case has situated that skin tones have take a critical role on class and beauty. Besides, in China fair skin or white skin is perceived as wealthy person because only the rich manage to stay indoor during day time while the poor people spend most of their time under the sun. those who has white skin in china also perceived themselves as higher status. People in China focus on beauty as an important concern because it helps them to get better career and their companion or husband.
IKEA designs its own product in Scandinavian nation (Sweden). Low cost is among the most important factors that IKEA considers whereas manufacturing home furnishings. At the design stage, IKEA checks that product to meet strict prerequisites for performance, economical distribution, quality and impact on the surroundings. They source raw materials to their suppliers in several countries and uses variety of trading service offices across the globe. They talk over costs with suppliers, check the standard of materials, analyze the environmental impacts that occur and conjointly keep a watch on social and working conditions of suppliers.
IKEA did a total layout modification of its store in China keeping the target segment in mind and gave more leverage to dining and living room in comparison to kitchen. IKEA did not find much success with it do it yourself furniture since it had to lavvy a fee to its assembly
IKEA : is a global company specialized in the furniture industry and operating in several countries such as ( Saudi Arabia, Jordan, Kuwait , Qatar, Italy, Canada ,Australia, Spain, Sweden, united states…and in many countries). The main headquartered in a Netherlands. As of December 2016, IKEA owns and operates 392 stores in 48 countries. IKEA designs and sells ready made home furniture, home accessories, Toilets, Toilet facilities, kitchens and kitchenware. IKEA is the largest furniture manufacturer in the world and it has been the largest furniture retailer stores in the world in 2008.
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. Most of the people in that economy don’t purchase luxury goods for personal utilitarian purposes, rather it is a conspicuous consumption. Methodology Step 1: Interviewing Store Managers Our journey started with interviewing store managers of various luxury retail chains – ranging from Cartier and Louis Vuitton to Burberry and Rolex. The purpose of these interviews was: a) To gather a basic knowledge of how the retail side of a luxury brand operates,