China Market

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- need for uniqueness: unique or follow others

- price consciousness: sensitivity to price

- public-interest orientation: environmental protection

- need for achievement: accomplishment

- need for respect: high social status

Examined their influences on a number of consumption variables

- brand preferences

- brand discrimination

- preference to local vs. foreign brand

- attitudes toward counterfeiting brands

- Attitudes toward innovative products

- luxury consumption

- word of mouth

- Seeking for others’ opinions

- Sharing consumption experiences

- Impulse buying

Product localization in China Product Strategies

• Standardization

offering product virtually unchanged in markets outside of home country

• Adaptation

changing elements of design, function, and packaging according to needs of different country markets

Standardization drivers

• Pushing for economies of scale benefits

• Growing standardization of tastes in some product areas

• Increasing convergence in consumer demand

• More homogenous markets and identifiable consumer segments

Adaptation drivers

• Culture and usage differences across nations

• Government and regulatory influences

• Differing consumer behavior patterns

• Local competition rules/conditions

Branding issues in China

• Inexperienced in brand building

– Wrong concepts about brand

Brand = quality/packaging

Brand building is an expense

– Short-sighted goal

Transactional more than relational focus

– Shortage of branding management expertise

• Changing environment

- Companies transforming from being OEM (Original Equipment Manufacturer) to branded product marketing

- Government actions to rescue industries which fail to comply with the brand transformation

• Undervalue of traditional brands

– many good local brands need revitalization

Shanzhai Marketing’s Definition and Types

- Definition:

"Shanzhai products" are defined as those products which lack technology, and cheap copies of big brand products.

- Features of Shanzhai Marketing:

• Quickly-provided to meet civilians’ needs

• Marketable of multiple functions

• Low price products in terms of copy, imitation, learning, innovation and improvement

• Copy big brands’ appearance, functions and even the name

- Types of Shanzhai Marketing

• First, a full copy of products is most typical.

• Second, some Shanzhai brands confuse consumers by imitating big brands’ brand names, trademarks, packaging and other outside cognitive factors to achieve sales objectives.

• Third, Shanzhai brands imitate big brands’ marketing communication strategy and channel operation strategy and therefore are similar in brand advertising planning, creativity and communications, and brand spokesperson.