Globalization has opened up enormous opportunities for international businesses wanting to enter foreign markets. A market like China represents a huge potential for new entrants due to it's rapidly growing population, significant proportion of young people, as well as growing income and consumption. China has a middle class of nearly 612 million and retail sales are growing at an annual rate of between 8%-10% (Syed and Gonela 2007). This is a market that multnational corporations cannot afford to ignore due to the potential rewards at stake. But, on the other hand, a market like this pose a significant challenge for foreign entrants in understanding the specifics of doing business there and, most importantly, in understanding local consumers.
The fact that a market like China has a significant geographical and cultural segmentation makes the task even more challenging. It requires great effort on the part of the company to try and understand each distinctive consumer group and the specific factors affecting their preferences and behaviours.
Consumer behaviour theory provides a solid foundation for marketers in understanding consumer’s preferences and needs and helps to formulate targeted and consumer oriented marketing strategies.
In this study, we attempt to identify the key elements of consumer behaviour theory which are essential in understanding the issues described in the case.
As the class of the consumer is one of the central issues raised by the case authors, we place a special emphasis on identifying what features distinguish consumers belonging to various classes in China and how they affect their shopping behaviour and choices.
Finally, based on our findings about Chinese consumers, we attempt to ...