Analysis of the Chinese Markets according to market potential for a premium coffee brand

Table of Contents

1. Introduction

1.1 Research question and motivation

1.2 Scope and limitation

1.3 Methodology

1.4 Company profile

2. Brand Culture in China

2.1 Character of Transitional Economies

2.2 Brand Evolution in China

2.2.1 Purchasing Best Brand

2.2.2 Brand Competition

2.3 Food and beverage

2.4 Cosmetic

2.5 Coffee

3. Culture values according and regional differences in China

3.1 Modernising versus westernising

3.2 Individualism and Collectivism

3.3 Purchase decision

3.4 New Nationalism

3.5 Differences among regional markets in China

3.5.1 The seven regional markets of China

3.5.2 Geographic diversity and economic disparity

3.5.3 Dramatic differences among customers

3.5.4 Notable differences across regions

3.5.5 Significant differences in consumption patterns

3.5.6 Income has had a direct impact on demand

3.5.7 Beijing the traditional capital

3.6 Major Findings

4. Target group segmentation

4.1 Working Class

4.2 Salary Class

4.3 Middle Class

4.4 Economic- Policy Elite

4.5 Gender issues

4.6 Target group specification

4.6.1 Occupation

4.6.2 Gender

4.6.3 Age

4.6.4 Lifestyle

4.7 Major Findings

5. Brand building in China

5.1 Brand equity literature

5.2 The functions of a brand

5.2.1 The functions of a brand for consumers

5.2.2 The functions of brands from a company’s perspective

5.3 A brand building process based on core values

5.4 Brand core development

5.5 The Keller brand equity approach and the model of the brand- nature

5.6 The brand- nature Model

5.7 Suitable brand-drivers for the Chinese market

5.7.1 Brand name and Country-of-origin effect

5.7.2 Chinese identities

5.7.3 Quality

5.7.4 Price

5.8 Major Findings

5.9 Basic economics legal conditions for foreign investors

5.9.1 Trade mark right

5.9.2 Anti Unfair Competition Law

5.9.3 Contract Law

5.9.3.1 Contract law of the People’s Republic and legal choice for contract negotiations

5.9.3.2 Expiry of the contract negotiations

5.9.3.3 Contract fulfilment

5.9.3.4 Legal pursuit

5.9.3.5 Arbitration

6. Branding

6.1 Brand naming and brand name translation

6.1.1 The need for brand name translation into Chinese

6.1.2 Brand Naming in International Marketing

6.1.3 Critical methods for brand naming in China

6.1.4 Critical aspects for brand naming in China

6.2 Brand logo

6.2.1 Logo design of foreign brands in China

6.2.2 Logo design of foreign brands according to aesthestics

6.3 Product packing

6.3.1 Packing elements in China

6.3.2 Packing elements according to Chinese luxury goods

7. Relationship Marketing

7.1 Relational benefits

7.2 Relationship between brand and target group

7.2.1 Dimensions of brand- personality

7.2.2 Effects of brand- relationship

7.2.3 Relationship between brand and consumer

7.3 Culture and Relational Orientation

7.3.1 Power Distance

7.3.2 Uncertainty Avoidance

7.3.3 Individualism / Collectivism

7.3.4 Masculinity/Femininity

7.4 Relationship Communication

7.5 Relationship communication in China by advertisements

7.6.1 Informational versus Emotional Advertisements

7.6.2 Essential notions and important backgrounds

7.7 Tools for relationship communication

7.7.1 Selection of communication tools

7.7.2 Personal and interactive communication tools

7.8 Suggestions for brand- advertisements

7.8.1 Structure of the Communication Mix

7.8.2 Advertising Objectives

7.8.3 Target Group

7.8.4 Choice of an Advertising Agency

7.8.5 Advertisement Regulation

8. Conclusion

Objectives and Core Topics

This study explores the market potential and strategic brand-building requirements for foreign premium products, specifically premium coffee, within the Chinese urban market. It seeks to identify the core characteristics of the premium brand target group and establish effective communication strategies to foster long-term brand relationships.

• Analysis of consumer behavior in transitional economies and the impact of cultural values on purchasing decisions.
• Segmentation of the Chinese urban population into four distinct socio-economic groups to identify the prime target demographic for premium brands.
• Examination of regional market disparities in China and their influence on brand positioning and market entry strategies.
• Evaluation of branding, relationship marketing, and communication tools, including the adaptation of brand names and logos to Chinese aesthetics.

Excerpt from the Book

Summary of Chapters

1. Introduction: This chapter introduces the research question regarding premium brand positioning in China and outlines the thesis methodology, including extensive interviews and literature research.

2. Brand Culture in China: Provides an overview of the development of brand culture in transitional economies, examining the evolution of Chinese consumer habits in food, beverage, cosmetics, and coffee industries.

3. Culture values according and regional differences in China: Analyzes the interplay between traditional Confucian values and modern westernization, highlighting the significant market diversities across different Chinese regions.

4. Target group segmentation: Categorizes Chinese urban consumers into four segments—working class, salary class, middle class, and economic-policy elite—based on socio-demographic and psychographic factors.

5. Brand building in China: Discusses theoretical frameworks for brand equity and core development, providing guidelines for aligning brand strategy with corporate objectives and navigating legal environments.

6. Branding: Focuses on the practical aspects of branding in China, specifically addressing the critical importance of brand name translation, logo design, and product packaging.

7. Relationship Marketing: Investigates the significance of long-term relationship building in the Chinese market, emphasizing cultural orientation and effective communication tools for brand success.

8. Conclusion: Synthesizes the research findings, reinforcing that successful premium brand entry in China requires a deep understanding of local market complexity, long-term commitment, and localized relationship management.

Keywords

China, Premium Brand, Brand Building, Consumer Behavior, Market Segmentation, Cultural Values, Relationship Marketing, Brand Equity, Brand Communication, Transitional Economy, Purchasing Decisions, Regional Markets, Modernization, Westernization, Foreign Brands

Frequently Asked Questions

What is the primary focus of this research?

The work primarily investigates the potential and strategies for launching foreign premium brands in the Chinese market, using premium coffee as a core case study for understanding consumer behavior and brand loyalty.

What are the key thematic areas addressed in the study?

The study focuses on the evolution of brand culture in China, the impact of cultural values and regional diversity, target group segmentation, legal conditions for investors, and the critical importance of localized branding and relationship communication.

What is the central research question?

The study seeks to discover which consumers belong to the premium brands target group, how these brands should be developed, and what characteristics define a successful premium brand in the specific cultural and economic context of China.

Which scientific methodologies were employed?

The author utilized detailed library and internet research, supplemented by 35 open interviews with professors, managers, and legal experts in Shanghai and Beijing, alongside personal observation over one year.

What topics are discussed in the main body of the work?

The main body covers the history of brand culture in China, the psychological and cultural drivers behind Chinese purchasing habits, the segmentation of the consumer base, and the necessity of tailoring marketing communication to ensure long-term trust and relationship success.

Which keywords best characterize this work?

The most relevant keywords include China, Premium Brand, Brand Building, Consumer Behavior, Market Segmentation, Relationship Marketing, and Cultural Values.

Why is the "face" concept significant for premium branding in China?

The concept of "face" is crucial because it governs social interactions and risks. Consumers are risk-averse and prefer reputable, well-known brands that provide security and social status, acting as a "social business card" that prevents the loss of face.

How does the author characterize the difference between Shanghai and Beijing consumers?

Shanghai is described as the "Dragon Head," cosmopolitan, open to western trends, and business-oriented, while Beijing is viewed as the traditional political capital, with consumers who are more conservative, nationalistic, and focused on rational, value-driven purchasing.

Why does the author caution against mass media advertising for premium brands?

The author argues that mass media advertising often targets a broad audience, whereas premium brands should focus on niche, affluent segments to maintain a perception of exclusivity and avoid the brand dilution that occurs when an premium product is advertised to everyone.