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Patterns of Chinese shoppers

From the article posted Chinese shoppers, try to reflect on the following questions: 1. Can you identify at least two research problems/opportunities from this article? Identify relevant variables for each research problem you propose. 2. How was the survey conducted? What was the sample size? Can you support or critic with some explanations of the data collection method? 3. Can you draw a conceptual model connecting your identified variables with paths (appropriate arrows) to represent the nature of relationships between variables reflecting the results from this research study?

How Women Consume in China's Tier 3 \& 4 Markets Posted: 31/08/2012 MECChinastudy MEC, a leading media agency, today released a report titled "Spectacular -Women in China's Tier 3 \& 4 Markets". This report provides an all-round view of women's life values, attitudes towards consumption and media habits in China's low tier markets. As tier 1 and tier 2 (T1\&2) markets are becoming more saturated, the next wave of economic growth in China is going to come from the numerous T3\&4 cities. They provide huge potentials and have become vitally important strategic markets. In T3\&4 markets, women's consumption is a major force. Marketers who manage to tackle these markets and the females consumers there are going to win big in the next 5 to 10 years. Christian Guinot, President, MEC China, said, "T3\&4 cities are diverse and full of nuances. They are very different from their T1\&2 counterparts. Women in T3\&4 cities, who are either direct or indirect decision-makers when purchases are made, have come to represent very significant spending power and consumer demand. Hence MEC undertake this research to assist marketers to tackle these markets." The key findings of this report fall under three main sections: 1. The Market Kaleidoscope China is vast and diverse, and disparities in economic development between cities are huge. Hence the market and consumption pattern of T3\&4 cities are vastly different from their T1\&2 counterparts: Consumption Disorientation: Female consumers in T3\&4 cities are still at the initial stage of brand consumption, a transitional period characterized by a strong desire to consume but lack of brand/product knowledge. They show an increasing interest in imported products and a greater will to buy them - their will to buy imported brands is 109% higher than it was in 2009 . For food and daily necessities, however, they do not care much about brands, and their brand loyalty (61%) is lower than that of their counterparts in T1\&2 cities (68\%). Domestic Brands Strike Back: Although female consumers in T3\&4 cities are showing a growing awareness of and preference for international brands, currently it is the numerous domestic brands that lead in these markets. Domestic brands rely on their competitive pricing and better understanding of local tastes and preferences to win over local consumers. Chasing Fashion \& trendiness: Female consumers in T3\&4 cities have shaken off their former image of being old-fashioned and behind the times, and have their own modish interpretation of fashion trends. Their zeal for and pursuit of fashion and trendiness (52%) has even outrun their counterparts in T1 cities (45\%) and T2 cities (39\%). The internet, shanzhai brands/products, "distorted" brands, purchasing agents and domestic brands are means through which they access the latest brand and fashion information. The Value of Simplicity: Unlike female consumers in T1\&2 cities, who like creative advertising, those in T3\&4 cities prefer their ads to be simple and straightforward in content and execution. Overcomplicated messages are a burden for them. A direct and simple communication strategy works best. Online shopping is huge: As many T1\&2 brands have not yet established a physical presence in T3\&4 cities, online shopping has become an effective channel for products and information for female consumers there. They actively engage in social commerce and display a strong desire to consume. Over the past year, women in T3\&4 cities recorded per capita online spending of 1,757 yuan, only 339 yuan less than women in T1\&2 cities. In comparison to 2009 , this is a 146% increase. For the same period, the rate of increase in T1\&2 cities is only 45%. 2. Women and Their Inner Turmoil Through rigorous quantatitve and qualitative research, MEC found that women in T3\&4 cities are a complex social group. They face lots of inner turmoil as they try to manage the contradictions and conflicts in their lives: Restlessness vs. Satisfaction: Many women in T3\&4 cities hanker after the attractions of the outside world. Some have actually lived there, but many ended up returning home. While they feel more comfortable at home, they still hope their children may one day go out to live and work in the bigger cities. Meanwhile, overall, women in T3\&4 cities are more content with life (52\%) than women in T1\&2 cities. Family vs. Individual: For women in T3\&4 cities the family is their unshakable refuge, and when there is a conflict between career and family they will willingly choose the family. Women in T3\&4 cities (54\%) value their time with the family more than those in T1\&2 cities. Hedonism vs. Self-restraint: With the growing importance that women in T3\&4 cities attach to personal development, they are learning how to break free of their roles. They are willing to spend more time and resource on themselves. They are more prone to impulse buying (36\%) than women in T1 (28%) and T2 (29%) cities. They are eager to get more fun out of life and are more inclined to include their children in their fun and enjoyment. Group Influence vs. Individuality: While women in T1\&2 cities often have no idea who their neighbors are, those living in T3\&4 cities still have a fairly strong community consciousness. They like to go out in groups, ask other people's opinion, and share their daily lives and shopping experiences. Deeply affected by group thinking, they are more susceptible to the influence of other people's opinions (16\%) than their counterparts in T1\&2 cities. Their wish to be different and unique (28\%) still lags behind their counterparts in T1 (43\%) and T2 (38%) cities. The notion that "the bird which sticks its head out gets shot" still carries weight with them. Dreams vs. Reality: Women in T3\&4 cities find it easier to accept their lives as they are, but they still have dreams. They have their own aspirations for their work and career, and they are full of yearning for a better life. When dreams and reality clash they try to find a balance; they "dream realistically" and they work hard to realize their dreams in a down-to-earth manner. Looking for satisfaction in their jobs and hoping that their child will get a good education are examples of some of their "realistic dreams". 3. Consumer Segmentation Female consumers in T3\&4 cities can be subdivided into five consumer segments: the Practical Women, the Traditional Women, the Pressure Cooker, the Undecided and the Achiever. The women in these different segments have different attitudes to life, consumption pattern and media habits. The 20% of Practical Women: Practical women take a realistic view of things. They are frugal, but their real focus is on value for money. They are open to foreign brands since the latter stands for better quality. Through long practice they are experts in balancing price and value. They can also tell the difference between real value in a product and promotional puff and exaggeration. In their media habits, their consumption of the internet, magazines and mobile phones is much higher than average, and their use of online shopping, online payment and search engines is also higher than average. But TV penetration is relatively low with them. Their favorite pastime is reading. The 19% of Traditional Women: Traditional women's lives are centered on the family, and they are willing to sacrifice themselves for the good of the family. They dress and behave fairly conventionally and traditionally. They have limited interest in trying new things or taking risks, and they tend to favor Chinese brands. They respect traditional customs and values such as thrift, but they are happy to spend without reserve for their child's sake. In their media habits, their TV penetration rate is higher than average - they tend to like TV dramas and weather forecast programs - but their use of new media such as the internet and mobile phones is much lower than average. Their favorite leisure activity is visiting relatives and friends. The 16% of Pressure Cookers: While these females are happy to do everything possible for their children and family, they also want to shine at work. Furthermore, they hope to retain their identity as women. Such expectations often conflict with each other, but they are willing to tackle that. In their media habits, they have higher than average TV penetration, but their internet and mobile phone use is also impressive. Mahjong and card-playing are their favorite leisure activities. The 29% of Undecideds: The Undecided neither think nor care about the social and economic changes happening around them. They are not willing to obey traditional values, but they are also not prepared to go all out for what they want themselves. They skirt between the traditional and the modern, maintaining a wait-and-see attitude towards life. The females of this segment tend to be younger. In terms of their media habits, their use of the internet and mobile phones is higher. They are active users of instant messaging, blogs and micro-blogs. However, their liking for all kinds of TV programs is lower than average. Their favorite pastime is gardening. The 16% of Achievers: The Achievers want to be successful in their careers, even if it is at the expense of their family life. They have clear life goals, along with specific plans and arrangements for getting there, and they are willing to make every effort for these goals. They are open-minded and willing to try new things. In their media habits, their access to all kinds of media are generally higher than average, and they use the internet and mobile phones more than any other groups of women in T3\&4 cities. They often get information from the internet and they have the highest participation rate of all groups in online education and training. Surfing the internet is without doubt their favorite leisure activity. Theresa Loo, MEC China's National Director of Strategic Planning and Analytics \& Insight, said, "There exist a great deal of differences between women of T3\&4 cities and their counterparts in T1\&2 cities. What work in the big, developed cities may not work for T3\&4 markets. Brands need to communicate with T3\&4 cities women in ways that resonate with them." Implications \#1 Integration of online and offline platforms While offline brick ' n mortar stores are great for product experience, the challenge for the brands is that consumers in T3\&4 cities are influenced by the opinions of other people, so online comments and shopping website ratings are important. For online, official brand websites need to provide information or consumer benefits that cannot be found elsewhere, such as limited edition sales of special products, or else need to introduce special mechanisms to attract consumers, like additional gaming features. The ideal approach is an organic integration of the online platform with offline brick ' n mortar stores with interactive links between the two. \#2 Move from e-commerce to social commerce Although the use of social media by women in T3\&4 cities lags behind T1\&2 cities, it is only a matter of time before they catch up. Chinese females have a strong need for socialization and communication along the purchase pathway. Before buying they need other people's opinions as a reference point and want to discuss the purchase with others; in the process of purchasing they want to compare prices to make sure they get the best value; after the purchase they want to share with friends and get their recognition and praise. Brands need to create communication platforms for their customers, since their customers' sharing of experiences can increase the awareness of and preference for the brand. \#3 Be mentor and friend to T3\&4 female consumers It is true that T3\&4 consumers are practical and realistic, but it is far from enough to offer them just the product. A brand must offer these women an idea and/or a state of being. Brands can bring these women a lifestyle they yearn for and relieve them from the conflicts and contradictions in their daily lives. For example, by showing how a product or service offers an opportunity to enjoy "private moments" and "personal space". In communication with T3\&4 consumers the brand can also take the role of mentor or friend, to educate and guide them to resolve their daily problems. \#4 Children are the key to unlocking female consumption Children are the "golden key" to reach women in T3\&4 cities. These women often want to take their children along when they go to enjoy themselves. This means that when the brands are promoting women's self-improvement and personal satisfaction they should also design components for children, so that mother and child can enjoy and spend time together. As for children's brands themselves, T3\&4 cities are surely a goldmine, as women there are never reluctant to spend on their children. \#5 Size rules, but brands can do more T3\&4 markets are still places where size rules. In other words, only large, well-known brands and products with high acceptance are truly popular with consumers there. Brands could seek out local opinion leaders as endorsers to meet the needs of this ingrained "group complex" of T3\&4 consumers. Though size rules, what those consumers treasure most is the added value of the brands that can do extra. When providing products with similar functions to those of their domestic brand counterparts, international brands can gain an edge by offering more user-friendly technology, design and superior production quality. Posted: 31/08/2012