Segmenting the Chinese Consumer Goods Market ¢â‚¬â€œ A Hybrid 2019. 12. 23.¢  Segmenting the Chinese Consumer

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  • IWIM - Institut für Weltwirtschaft und Internationales Management

    IWIM - Institute for World Economics and International Management

    Segmenting the Chinese Consumer Goods Market – A Hybrid Approach

    Erich Bauer

    Yanli Liu

    Materialien des Wissenschaftsschwerpunktes „Globalisierung der Weltwirtschaft“

    Band 39

    Hrsg. von Andreas Knorr, Alfons Lemper, Axel Sell, Karl Wohlmuth

    Universität Bremen

  • Segmenting the Chinese Consumer Goods Market – A Hybrid Approach

    Prof. Dr. Erich Bauer

    Universität Bremen, Germany E-Mail: ebauer@uni-bremen.de

    Dr. Yanli Liu

    BASF AG, Germany E-Mail: yanli.liu@basf.com

    Andreas Knorr, Alfons Lemper, Axel Sell, Karl Wohlmuth (Hrsg.):

    Materialien des Wissenschaftsschwerpunktes „Globalisierung der Weltwirtschaft“, Bd. 39, Juli 2006, ISSN 0948-3837 (ehemals: Materialien des Universitätsschwerpunktes „Internationale Wirtschaftsbeziehungen und Internationales Management“)

    Bezug: IWIM - Institut für Weltwirtschaft

    und Internationales Management Universität Bremen Fachbereich Wirtschaftswissenschaft Postfach 33 04 40 D- 28334 Bremen Telefon: 04 21 / 2 18 - 34 29 Telefax: 04 21 / 2 18 - 45 50 E-Mail: iwim@uni-bremen.de Homepage: http://www.iwim.uni-bremen.de

  • Abstract Due to the economic liberalization processes and the ongoing opening of the Chinese economy for foreign trade and investment, which have been carried out since 1980, Chinese consumer goods markets have been transformed from sellers markets into buyers markets throughout the last years. In such markets, characterized by a surplus of supply and a strong competition between a large number of national as well as foreign suppliers, a company can only succeed if it pursues a strategy of market segmentation. i.e. adjusts its product and as far as possible some other elements of the marketing mix to the needs and wants of one or several selected market segments.

    But up to now not only few but also rather inadequate empirical segmentation studies of these markets have been carried out and published. So, this book will present the results of a newer and better designed segmentation study of Chinese consumer goods markets. This study identifies and characterizes 12 market segments that are internally homogeneous and externally heterogeneous with regard to the product related needs and wants of their members. Moreover, it explains the possibilities of a segment specific tailoring of some other elements of the marketing mix. In that way it provides a valid and reliable informational basis for designing and pursuing a strategy of market segmentation in Chinese consumer goods markets.

    Key Words

    China; Consumer Goods Markets; Market Segmentation; Process Model of Market Segmentation; Hybrid Approach of Market Segmentation; Profile of Market Segments; Strategic Implications

  • Contents

    i

    Contents

    List of Figures ······························································································································································iii

    List of Tables·································································································································································iv

    List of Abbreviations ················································································································································v

    1 Introduction························································································································································1

    2 General Procedure for Segmenting Markets ················································································4

    2.1 Process Model of Market Segmentation.................................................................4

    2.2 Step 1: Define the Relevant Market ........................................................................4

    2.3 Step 2: Decide on Segmentation Approach ............................................................5

    2.4 Step 3: Decide on Segmentation (Basis) and Descriptor Variables........................6

    2.5 Step 4: Design the Survey.....................................................................................10

    2.6 Step 5: Decide on Data Analysis Methodology....................................................12

    2.7 Step 6: Collect Data ..............................................................................................14

    2.8 Step 7: Apply Methodology to Identify Market Segments ...................................14

    2.9 Step 8: Profile all Segments by using Basis and Descriptor Variables.................15

    3 Segmenting the Chinese Consumer Goods Market – Results of a Hybrid Segmentation Study ····································································································································16

    3.1 Step 1: Definition of the Relevant Market............................................................16

    3.2 Step 2: Applied Segmentation Approach..............................................................25

    3.3 Step 3: Segmentation and Descriptor Variables ...................................................25

    3.4 Steps 4 and 5: Survey Design and Data Collection ..............................................28

    3.5 Step 6: Data Analysis Methodology .....................................................................32

    3.6 Step 7: Identification of Market Segments ...........................................................32

    3.6.1 A-priori Segmentation................................................................................32

    3.6.2 Post-hoc Segmentation...............................................................................37

    3.7 Step 8: Description/Profile of Market Segments ..................................................44

    3.7.1 General Description of Market Segments ..................................................44

    3.7.2 The Relationship between Segment Membership and Personal Monthly Income .........................................................................................47

    3.7.3 The Relationship between Segment Membership and Education..............48

    3.7.4 The Relationship between Segment Membership and Occupation ...........48

    3.7.5 The Relationship between Segment Membership and Age .......................49

    3.7.6 The Relationship between Segment Membership and Sex........................50

    3.7.7 The Relationship between Segment Membership and Media Usage .........51

  • Contents

    ii

    3.7.8 The Relationship between Segment Membership and Preference to read “Reference News”..............................................................................53

    3.7.9 The Relationship between Segment Membership and Attitudes towards TV-Advertising ............................................................................54

    3.7.10 The Relationship between Segment Membership and the Con- sumption of Durable Goods .......................................................................55

    3.7.11 The Relationship between Segment Membership and Drinking Consumption Composition ........................................................................57

    3.7.12 Relationship between Segment Membership and Beverage Con- sumption Frequency...................................................................................58

    3.7.13 Relationship between Segment Membership and the Consumption of Bath Articles ..........................................................................................61

    3.7.14 The Relationship between Segment Membership and the Prefe- rence to the Social Insurance System.........................................................62

    3.7.15 The Relationship between Segment Membership and the Possess- ion of Bank Cards ......................................................................................63

    4 Conclusions, Limitations and Suggestions for Further Research·································65

    References·····································································································································································73

    Appendix ·······················