Market analysis [essay papers] (part 2)
Posted by admin on November 13th, 20092. Uncertainty Avoidance. Unlike Westerners, who will take calculated risks, Chinese consumers and buyers are risk averse. In Confucian-based societies, stability is highly prized. Chinese place a great deal of emphasis on uncertainty avoidance and spend a great deal of time planning in order to reduce even the smallest risk. It will be critical in this context to have a very detailed plan for exporting wine into China with projections for at least the next 10 years and contingency plans to account for possible poor crop levels.
3. Achievement versus Ascription (status and respect are achieved by “doing” versus status and respect are ascribed by “being”). In the more egalitarian Western societies, respect and honor go with merit; that is, they have to be earned. In China, status is awarded to non-merit-related factors such as age and family. Where Westerners place great importance on product quality without respect to age, gender, or race, in China age tends to be viewed as valuable. Deference toward authority is perceived as upright and prudent (Schutte & Ciarlante, 1998). Older firms and businesses tend to be viewed as having proved themselves over a period of time, and since they have survived, they have obviously delivered on their promises to customers. The importance of age and the importance of family give old family firms a significant advantage over newer firms when exporting to China.
4. Individualism versus Collectivism. The behavior of consumers in collectivistic cultures will tend to be externally focused. Schutte and Ciarlante (1998) split consumption into two categories: public and private. Consumers choosing products for public consumption will be highly involved, conformist, status seeking, and aware of the need to reduce social risk. When purchasing for public use, the purchaser is less concerned with price and practicality.
The above views represent the standard notion of Chinese consumer behavior. Li (1998) stated that over the next 15 years the “S” generation, defined as those consumers aged 18 as of 1996, would be the most influential consumers in China. They have characteristics unlike any other group in China. They are the first group of Chinese consumers raised in front of a television. They know the power and language of advertising and respond quickly to it. Li noted that this group had much in common with Generation X in the West, although he noted that they are more conservative than their Western counterparts and that one should not forget they are Chinese. These consumers have driven the growth in the number of restaurants in China. Typically, these young, wealthy Chinese spend three to four nights out on the town each week. Better food and the enjoyment of it are also seen as critical to urban consumers, as hospitality is important in building the all-important relationships that breed personal status.
III. Related and Supporting Industries
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