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Preference of Foreign Brands amongst Chinese People

The acceptance of products of foreign origin by Chinese consumers is with a genuine enthusiasm and due to various seasons: better quality, good reputation, greater diversity of choice, more attractive appearance, a feeling of liberty, new arrivals and so on. During the recent period everything that has a foreign name had to be of good quality, high price, and all those who consumed these products were regarded as rich and refined. This research paper consists of four main parts.

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Initially, we believe it is necessary to present the evolution of foreign brands in China, which allows us to have an overview of the context of our research.

The second part will be devoted to the presentation of he conceptual framework of the issue of foreign brands. Then, we will trace the development of consumption in China. Last but not least, we propose, from all our lectures, methods of the research to solve our problem. We will conclude with the presentation of the contributions of our research and considered future developments. BODY 1 . The evolution of the foreign brands in China The Chinese economy was characterized by shortages, due to insufficient domestic production before the year 1979 (Guy, 2005).

Indeed, during the Cultural Revolution (1968-1978), ‘ration tickets’ have been distributed to buy products in China. Obviously, it was impossible for the Chinese to make a choice among competing brands. After 1979, a reform and opening policy to engage fully in building a modern economy allowed all industrial sectors to experience prodigious growth. At that time, many foreign companies have failed to penetrate because of their lack of knowledge of the Chinese market and local habits, but foreign brands remained very attractive for Chinese. However, the price of foreign products was so high that average employees could not afford them.

In 1990, many Chinese have expressed a genuine enthusiasm or foreign products, from car to food and clothing. By purchasing a product that bears a worldly famous name, Chinese consumer achieved a part of their dream. Some even saved intentionally to be able to buy foreign products. With the deepening of reform and opening up the economy and improving the investment environment, especially with its entry to WTFO, the enormous Chinese market has attracted more and more foreign products in China, and attracts more foreign companies coming to invest.

The number of applications for registration and trademark registrations is increasing, so is their proportion in the annual applications compared to all existing brands. In 1982, applications for registration of foreign brands accounted for 8. 4% with 1 565 applications. In 2002, one year after the formal accession of China to the WTFO, they increased by 25. 2% over the previous year to reach the number of 50 902, which stood 13. 7% of applications. Before 1979, only 20 foreign countries and territories had registered trademarks in China, for a total of 5130 recordings.

At the end of 2003, the number of countries and territories reached 129 and the number of registrations was 361 795, as 71 times more. The proportion of the cumulative number of foreign trademarks registered in relation to the total rose from 15. 7% in 1979 to 18. 3% in 2003, representing a growth of nearly three points (1). At the same time, Chinese consumers like foreign products because they demonstrate a higher life quality. Thus, some foreign products with special character are still quite requested.

For example, European or American clothing are still in vogue, and very high-end foreign products are the new trends in consumption in China. According to a study cited recently by the Financial Times, China is the third oral market for luxury products with annual sales of two billion dollars and growth prospects annual 20% until 2008 and 10% up in 2015 (9). The influence of foreign brands on consumer behavior is a hot topic. It is first studied in the literature in terms of brand strategy to be adopted by enterprises (non- domestic customers).

Motormen & Sharking (1998, (10) have noted three main points to understand: 1 . How consumers in each country consider the choice of brands, 2. How they evaluate them, 3. The different needs that drive their purchasing decision. In a context of globalization of markets, there are many studies about the alternatives f a marketing strategy, standardized or localized, which derives the question of a branding strategy standardized (global) vs. brand adapted (Seafarer, 2002 (5) , Roth, 1992 (1 1), and 1995 (12)).

Research shows that it is important to identify potential obstacles, for example, some national characteristics, in the process of developing a global brand. Before looking at the value of a particular brand in a given market, it is also necessary to know the predisposition with which consumers of this market consider the brand in general, and then this brand in particular. 2. The concept of country of origin and its effects on consumer behavior Indeed, much has been said and written about the role of country of origin on the perception, evaluation and choice of foreign products.

However, the effect of origin on brand has rarely been studied, and only in recent years it becomes an interesting subject for the researchers, with the rise of a movement that believes that the congruence between these two variables is more important than their effects taken separately (Airier and Fort, 2005). Our research intends to adopt this congruence approach to better understand the symbolic value and the practical value of the country of origin in the perception of foreign brand by Chinese consumers. There are a smaller number of researches studying the problem of countries of origin in the context of developing countries.

Bator & AAA. (2000 (3)) showed that consumers in these countries perceive the country of origin as a factor indicating not only quality but also social values symbolic, and they give preference to trademark ‘non-local ” compared to local brands. However, these proposals were rarely tested by empirical work. The study of Bator & AAA. 2000) among Indian consumers is an important reference on this point. Their results showed that consumers in developing countries have a more favorable attitude towards brands perceived as non-local, and for reasons that go beyond evaluating the quality of the brand.

According to the authors, non-local brands are regarded as symbols of prestige, at least by certain categories of consumers and for categories of products with high symbolic value. These consumers are identified as those with a high degree of standard setting influence, one of the main influences that a reference group has on n individual. This group admires the lifestyles of economically developed countries. It is interesting to note that the brands are generally presented as non-local and non- associated with a given country, as in other more conventional research on the effect of country of origin. In sum, the study Bator & AAA. Mongo consumers in India provides us with the first clues for further research on the perception of foreign brand by consumers in developing countries. In this research, an interesting feature of Chinese consumers towards foreign brands in a society in transition is explored. Basing on this literature review and its limitations, we can assume that cultural orientation can influence consumer attitudes towards foreign brand in a positive way. Cultural values are considered as determinants of attitudes and behaviors and provide a more stable and domestic-oriented consumers (Kumara and Novak, 1992 (5)). . The Chinese culture and consumption of foreign brand 3. 1 The traditional Chinese culture and consumption of foreign brand The presentation of some of these principles will help us gain a better understanding of the behaviors of Chinese people. Some elements or values are respected, promoted and implemented in everyday life, including how to choose a brand. The features are introduced below: -The first feature of Chinese society is the collective nature The Chinese will adhere more easily to the standards of group than people in individualistic societies.

An essential element in Western culture and consumer behavior, the desire to distinguish themselves, is also in China. It assumes a difference as a member of one group over another group, while respecting individual standards of his group. We therefore believe that the consumption of the product of reign origin is rather symbolic other than utilitarian to correspond to social status. Imitation is also a behavior used for identification as a member of the group. Moreover, it is obvious that luxury products are well sold in China in recent years.

This means that the brand is in the process of buying decision because it meets the needs of good social status than personal needs (Guy, 2005). -The second characteristic feature is the concept of social interaction The relationship of trust leads the development of interpersonal relationships that underpin the functioning of many Chinese. The behaviors of Chinese consumers are more easily influenced by the existing trust between people who have a good personal relationship.

It is assumed that the recommendations and comments from others play a very important role in the choice of brand. The Chinese consumers tend to regard the brand as part of their social life and their relationships to others. The exchange of gifts is considered as the most direct and most visible to cultivate social interaction. The way a person respects and implements the complex rules of gifts exchange is an essential element in assessing the social position of that person. For example, luxury products and international brands that can be gifts are well sold in China in recent years. The third feature is the concept of self-esteem In Chinese tradition, the concept of elf-esteem refers to the obligation of reciprocity. It is important to give oneself a positive image, reflecting his role, his status and is in line with the traits that respect his group membership… Len view of the higher price and ostentatious function of the international brand compared to the local brand, consumers choose brands which is best known locally and do not want to take the sis of spending money for these brands anonymous on the market (Lu, 2004 (8)).

The reputation of the brand foreign in domestic market is required for the reason of saving face. 3. 2 The modern Chinese culture and consumption of foreign brand The attitudes towards international brands of Chinese consumers are influenced by modern Chinese culture as well as traditional one. Specifically, modernity, youth, success and wealth allow Chinese consumers to pay greater importance to the brand, to develop a preference for foreign brands since it itself can constitute a social and symbolic universe (Lenitive and London, 1997 (7)).

Modern consumers have more ways, consume more symbolically; they look for products with brand, either for their good quality or value for signs of the brand through research statute. Western Life influences consumer behavior of young Chinese. The admiration of the quality of life of developed countries exerts a positive influence on the attitude towards foreign brands. The relationship of Chinese consumers with foreign brands, which includes several aspects, manifests itself in a more or less depending on different social backgrounds, different categories of people.

Elements such as age, sex, education level, and the tankard of living… Certainly seem to influence the perception of foreign brands. A global study published by Accentuate shows that to attract Chinese consumers increasingly sensitive to foreign brands, companies must adjust their marketing strategies to the preferences of three categories of clientele. So the “golden youth”, I. E. Young urban graduates, mostly women, who have a high standard of living and significant interest to the foreign brands is the first category with the most potential.

According to the study, consumers in this class are two times more likely than others to only to buy new brands (28% against 14% maximum for others), but also to be the first to test (43% against 32% maximum). The other two categories are, on the one hand, “ambitious”, young people who are sensitive to brands and covet the latest and best products, but whose incomes do not allow them to realize their dreams. On the other hand, “high income”, who are also looking for exclusive products at the cutting edge of technology, but unlike the former, deserve the brands (14). 4. Guidelines for the management of foreign brands in China – Practical Value

Numerous studies on the problem of country of origin are interested in the influence of this concept on consumer preferences, and more specifically, preferences for foreign products or domestic products. The research in this field has highlighted a trend among consumers in developing countries to prefer foreign products to domestic products because of the superiority of foreign products in terms of quality. Long accustomed to basic products and very poor quality, Chinese consumers welcome these products of foreign origin with an enthusiasm, which may explain a better quality of these products.

We therefore believe that the greater the perceived quality gap between the local brands and foreign brands is, the more Chinese consumers are sensitive to foreign brands. – Symbolic Value The importance of symbolic value tends to increase when society evolves socio economically from a low level to a higher level (Supplely and GarГёenough, 2003 (13)). The Chinese consumers today are looking for brands capable of performing not only utilities functions but also symbolic functions and give them greater importance.

The value of symbols and social standards of Chinese culture invites us to assume that it esters the perception of foreign brands by Chinese consumers. We also assume that the differences of the perceived symbolic value between local and foreign brands exert a positive influence on the perception of foreign brands. 4. 2 Perception of foreign brands – Integration of foreign brands in the Chinese culture The Chinese cultural characteristics influence the behavior of Chinese consumers.

More precisely, Confucianism (the collective nature, the concept of social interaction, the notion of the self-esteem and modern Chinese culture exert a positive influence on the perception of foreign brand. Segmentation of the Chinese market In addition to the cultural differences that characterize Chinese consumers, their attitudes and behaviors appear closely related to other factors such as age, sex, education level, the standard of living… Indeed, the evolution of the perception of foreign brand in China takes place at a very rapid pace.

This can create significant differences between groups of people more or less susceptible to the effects of opening up the country, for example, between cities and rural areas, between generations… For the foreign firm, it is essential to find segments of Chinese nonusers who are more sensitive to brands. – The impact of competition China is entering a new phase of its economic development during which the foreign brands are no longer in the same position visit-Г-visit the Chinese consumers. The local competition may exert a negative influence on the perception of foreign brands.

The Chinese brands have made progresses and become competitors for certain foreign brands. Faced with the improving quality of domestic products and the maturity of Chinese consumers, foreign companies must understand the symbolism of consumption that is implanted in the mind of Chinese consumers as a fundamental element of Chinese culture. In summary, the situation of foreign brands in China and Chinese consumer behavior visit-Г-visit foreign brands are discussed in this paper. The Chinese preference to foreign products seems to be an interesting feature in a society in transition to consumerism.

The phenomenon of foreign brands in China appears somewhat different from what is often addressed in research in marketing, because of the complexity of the market situation and cultural characteristics of today’s Chinese society and consumer behavior, closely related to the combined experience of generations of Chinese. Together with globalization and integration of markets, foreign investors wishing to work in China have to be aware of this reality. To have a good strategy of building brand image, it is important to understand the symbolic values of prestige required by the Chinese.

To attract Chinese consumers, our study suggests several options: to highlight differences in terms of product quality and in terms of the symbolic value of brands; to strengthen orientation to Confucianism and to the theme of modernity and youth linked to consumption; to emphasize the importance of segmentation for the Chinese market; to emphasize the difference in hooch between categories of products with high symbolic value and low symbolic value and at last to identify new constraints imposed by local competition.

Finally, we hope that this study makes a contribution to knowledge about the management of the brand in general and on the issue of foreign brands in the Chinese market in particular.