Pricing more important than nationalism for Chinese consumers

By Katie Bird

- Last updated on GMT

Related tags Chinese consumers Brand

Product price and ensuring distribution may be just as important in
Chinese purchasing decisions as whether a brand is, or appears to
be, local.

Although Chinese consumers may be vocal in their support for home-grown brands, a new report from the Boston Consultancy Group (BCG) suggests that affordable products, strong point of sale marketing and a reliable widespread distribution network may be more important. In addition many of the global giants have successfully managed to appear local, via tactics like the 'chameleon' effects. The cupboard doesn't always match answers ​The report is based on findings from a survey which questioned 4,000 consumers in 13 cities about their purchasing decisions. In addition, the results were supplemented by home visits, 'shop-alongs' and focus groups in order to explore the conflict between survey answers and behaviour. BCG was motivated to conduct the research by suggestions from a number of industry analysts that a rise of national pride surrounding the 2008 Olympics may affect the nation's brand choice. Although support for local brands is often voiced along with assumptions regarding the higher price of foreign imports, consumers' actions do not always reflect this belief, according to the report. For example investigators expected to visit consumers' bathroom cupboards and find rows of domestic brands staring back - instead Avon, Olay and Pantene often dominated. Chameleon effect ​ Intriguingly the report notes that a significant number of consumers were unaware these brands were foreign, having been fooled by affordability and product presence. International companies can, and do, add to this 'chameleon effect' by adopting meaningful Chinese names and using well known Chinese actors or local motifs in advertising campaigns. However, the BCG survey illustrates that 'pretending' to be a local brand is not necessarily the key to success in the market as consumers were unmoved by the truth of the product's provenance as the price and quality were right. Point of sale marketing ​ In addition, the report highlights that brand loyalty is not well developed amongst Chinese consumers and many factors will sway a purchasing decision including those made at the point of sale. Creative pricing and promotions can entice consumers away from their usual brands. As distribution can be a difficult task especially in the smaller towns and cities ensuring a product is in the right stores at the right time can give a critical advantage over a competitor. Furthermore the authors warn that word of mouth travels fast and one individual's bad experiences may affect the future purchasing decisions of colleagues, extended family and friends. Therefore, the report concludes, focusing on the ability to meet a consumer's needs in terms of performance, price and availability, is more important than national origin when operating in the Chinese market.

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