The Chinese market has become very attractive for Western companies. It is a huge consumption market with more than 1, 3 billion inhabitants and it is at the same time a goods’ provider with a very low labor cost. Western companies can nowadays be very successful in China because the population knew lately huge changes. Chinese people purchasing power is rising and they can afford goods that they could not reach before because it was too expensive or not available. The development of a rich elite and a large middle class has been accompanied by a rising strong taste for Western image, particularly in the luxury field.
But the Chinese market is still quite different than Western ones. The Chinese culture is totally divergent than in the West and the economy doesn’t work the same way and that impact on the Chinese consumers’ profile. Besides, there are huge inequalities in China since the whole country doesn’t evolve in a homogeneous way.
To be successful on this market for a Western brand, it is necessary to develop a marketing strategy adapted to the Chinese consumers’ expectations according to the products’ activity segments.
In the present thesis, we study which marketing strategy a Western brand should follow to be successful on the Chinese market according to its activity segment. Indeed, we assume that a mass market brand should rather follow a Chinese consumer’s adapted strategy and that a luxury brand should keep the same Western strategy in China.
Table of Contents
1 Introduction
2 The explanations of the success of Western brands in China
2.1 Empowerment and inequalities
2.2 Cultural explanations
2.3 Segmentation and profile
3 Marketing theory and Findings in the Literature
3.1 Theoretical Explanations about Marketing
3.2 Findings in the literature
3.2.1 Mass market brands in China
3.2.2 Luxury brands in China
4 Real cases of successful Western brands in China
4.1 Mass market brands
4.2 Luxury brands
4.3 Experiences from the successful cases that can be used
4.4 Some strategies to make Western brand successful in China
5 Conclusion
5.1 Western brands‘ strategies
5.2 Some limitations
Objectives & Core Topics
The primary objective of this thesis is to analyze the marketing strategies employed by Western companies to achieve success in the Chinese market, specifically examining whether they should rely on their established Western image or adapt their marketing mix to local consumer expectations. The study highlights the divergence between mass market and luxury segment requirements.
- Economic drivers of the Chinese consumer market
- Cultural factors influencing purchasing behavior and brand perception
- Marketing-mix strategies regarding Product, Price, Place, and Promotion
- Segmentation and profile analysis of Chinese consumers
- Case study evaluations of global brands (Apple, Nestlé, Chanel, Gucci)
Excerpt from the Book
3.1.5. Place
In the West, consumers can be reached through modern retailers. But in other economies, even very standardized hypermarkets like Carrefour are different. The stores formats are adapted to China. For example, Carrefour has created big “wet markets” in the Chinese stores to adapt itself to the Chinese consumers’ preference of fresh products. Moreover, in China distribution is composed by several “layers of tightly controlled distributors passed goods from the province, to the city, to the township”. Some distributors are now privatized but some other are still state-owned. State-owned distributors keep advantages in sectors like pharmaceuticals which stayed rather protected. The competition is more important in less-regulated industries as consumer goods distribution. Today, international companies have a great impact on older distributors, regarding their best practices, and so they are gradually influencing the market (Deepak Advani, Hal Sirkin, Boston Consulting Group “Special report: Selling in China”).
Summary of Chapters
1 Introduction: Provides an overview of the attractiveness of the Chinese market and the emerging research questions regarding the balance between localization and maintaining a Western brand image.
2 The explanations of the success of Western brands in China: Analyzes the socioeconomic factors, rising middle-class purchasing power, cultural shifts, and the consumer profile essential for understanding market entry.
3 Marketing theory and Findings in the Literature: Discusses marketing-mix principles applied to the Chinese context, including brand naming strategies, and differentiates findings for mass market versus luxury sectors.
4 Real cases of successful Western brands in China: Examines practical implementations through case studies of Apple, Nestlé, Chanel, and Gucci to illustrate winning strategic approaches.
5 Conclusion: Synthesizes findings on the necessity of varying strategies based on activity segments and acknowledges limitations, such as regional disparities and the future rise of competitive local Chinese firms.
Key Words
Chinese market, Western brands, marketing-mix strategy, brand name adaptation, mass market, luxury market, consumer behavior, localization, branding, retail formats, consumer segmentation, purchasing power, intellectual property, guanxi, global marketing
Frequently Asked Questions
What is the core focus of this research?
The work investigates the optimal marketing strategy for Western corporations entering China, weighing the benefits of maintaining a global Western image against the necessity of adapting products and services to local Chinese preferences.
Which consumer segments are considered primary?
The research distinguishes between mass market and luxury segments, while also analyzing the impact of urban versus rural demographics, "little emperors," and the rising influence of business professionals.
What is the primary research goal?
The goal is to determine if mass market brands require more aggressive local adaptation than luxury brands, which may benefit more from preserving their original Western prestige.
Which scientific methodology is utilized?
The thesis utilizes a literature-based research approach combined with the analysis of specific real-world case studies of multinational corporations to validate marketing strategies.
What does the main body of the work cover?
It covers theoretical marketing foundations in the Chinese context, a detailed examination of consumer profiles, and detailed case studies (Apple, Nestlé, Chanel, Gucci) evaluating marketing-mix elements.
Which keywords best describe this study?
Chinese market, marketing-mix strategy, brand adaptation, luxury versus mass market, and consumer behavior are the central thematic pillars.
How does brand naming influence success?
Brand naming is identified as a critical factor due to the linguistic nuances of Chinese. The work analyzes transliteration and translation methods to ensure names are phonetically pleasing and semantically coherent.
What specific strategy do luxury brands use for communication?
Luxury brands often invest in educating the Chinese consumer about the history of the brand, while using subtle adaptations, such as local celebrity ambassadors, to integrate with the Chinese culture without diluting exclusivity.
Why are counterfeits considered a "double-edged sword"?
While counterfeits undermine brand value and quality guarantees, they simultaneously increase the general awareness and desirability of luxury names among the population.
- Quote paper
- Isabelle Idrac (Author), 2013, How to make a Western brand successful in China: should it rely on its Western image or adapt to its products’ market?, Munich, GRIN Verlag, https://www.grin.com/document/231771
