Executive summary of “Receptivity of young Chinese to American and global brands: psychological underpinnings”

Citation

(2014), "Executive summary of “Receptivity of young Chinese to American and global brands: psychological underpinnings”", Journal of Consumer Marketing, Vol. 31 No. 4. https://doi.org/10.1108/JCM-05-2014-0994

Executive summary of “Receptivity of young Chinese to American and global brands: psychological underpinnings”

Article Type: Executive summary and implications for managers and executives From: Journal of Consumer Marketing, Volume 31, Issue 4

This summary has been provided to allow managers and executives a rapid appreciation of the content of the article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present.

Companies in the USA are increasingly viewing overseas markets as a means to achieve strong growth. Relentless globalization has made such markets more accessible and helped to provide firms with valuable expansion opportunities.

One major consequence of this development is the emergence of brands perceived as being global. Studies have shown that creating and sustaining strong and eminent global brands is vital if foreign market ventures are to succeed. This is especially the case in emerging markets like China, where consumers now enjoy an extensive array of local and international brands to choose from.

Since 1990, China’s economy has experienced massive growth. Consumer buying power has escalated accordingly, and the country’s fast-rising middle class segment is driving demand for consumer goods. These materialistic tendencies are accompanied by a desire to use product ownership as a means to indicate aspiration and status.

Past research has asserted that country-of-origin (COO) significantly influences consumer preferences. It was widely concluded that consumers in emerging nations would consider products made in developed nations as being superior to domestic alternatives. Plenty evidence confirmed that consumer purchase behavior was influenced by such perceptions.

The impact of COO effects may, however, be lessening, according to some observers. It is claimed instead that a product’s image has accrued greater importance than its origin. More specifically, consumers are becoming progressively more enamored by global brands. Research suggests that brands perceived to be global are viewed positively in terms of quality and the esteem they afford to the consumer.

Global brands are ones which are known across much of the world. Apple, Microsoft, Disney, Nike and McDonalds are among the many American brands considered to be global. In the present work, Lysonski focuses on the US brands given their prominence in China. Various studies purport that people seek global brands as a means to experience a sense of “global belonging”. Others describe it in terms of yearning to become part of the “global consumer culture”.

Brands linked with global consumer culture are perceived as more powerful and desirable. Compared to domestic alternatives, global brands are also typically perceived as more credible and authentic. As a result, those who purchase such brands feel a heightened sense of status and self-worth. In the opinion of certain analysts, this increases the attractiveness of global brands compared to local brands and strengthens consumer purchase intention toward them.

According to the literature, shared meaning of global brands is created through media, travel and urbanization. One challenge faced by brand managers and marketers is how to use their brand’s global standing as a means to position the firm’s offerings in foreign markets. Establishing a presence in new markets demands some understanding of the prevailing culture.

International brands have played a massive part in introducing the Chinese public to consumerism that is more typical of Western societies. The influence of these symbolic brands on consumption behaviors within less advanced nations is widely noted. It is, therefore, purported that exposure to the latest fashions and consumer products has influenced the thinking of young urban Chinese consumers and helped integrate them into the global consumer culture. A major assumption from this is that these consumers will be favorable toward global and American brands.

While research confirms the existence of a global brand effect, little progress has been made to identify its antecedents. A key intention of the current work is to, therefore, ascertain which psychological factors make consumers feel more attracted to global or the US brands. The authors believe that important variables might include:

• Self-monitoring. The notion here is that people adapt their behaviors to become more like significant others. Gaining approval and social acceptance motivate this willingness to change. Consuming high-profile brands is seen as a way to gain acceptance to individuals who are subsequently responsive to “image-oriented advertisements”.

• Life satisfaction. Research has intimated that a positive relationship exists between material possessions like fashion, clothing and recreation and personal happiness. Young Chinese people might, therefore, assume that greater life satisfaction can be attained if they engage with the global consumer culture and obtain global or the US brands.

• Brand relevance. Evidence shows that brands serve to both indicate benefits and mitigate risk. In return, consumers are normally prepared to pay a higher price for brands perceived as relevant. Seeing as brands are integral to the global consumer culture, brand relevance should help consumers identify with it.

• Social demonstration effect. This refers to the symbolic purpose of consumption, whereby people consume certain brands to project and sustain a desired self-image to others. Consumers can become more conscious of what brands signify, and it is thought that younger Chinese individuals will likely associate global brands with trendiness and modernity.

• Change-seeking behavior. Some people are enthused by novelty and new life experiences. Because material possessions can fulfill this need, it is posited that young Chinese subjects feel that global brands are able to provide necessary stimulation through their perceived exoticness.

• Reference groups. People view certain other individuals or groups as important and are often prepared to modify their actions to more closely associate with these relevant others. Choosing or rejecting brands on the basis of their significance to reference groups is an example of such behavior. Previous work has defined “interacted” and “non-interacted” reference groups. The first concerns family, friends and other people the consumer regularly engages with, while celebrities are an example of the non-interactive type. Even though the latter reference groups are “socially distant”, consumers can still be attracted to the brands they advocate.

Lysonski explored these issues in a study involving 152 young Chinese adults attending a university in Guangzhou. Males accounted for 52 per cent of the homogenous sample which had a mean age of 21 years. Analysis of their questionnaire responses indicated that young Chinese consumers strongly identify with global consumer culture. They are in addition favorable toward global and American brands and demonstrate an intention to purchase them.

Examination of how different psychological variables relate to the above identification, attitude and purchase intention revealed that:

• the impact of self-monitoring is not significant;

• life satisfaction drives identification and brand preference but not purchase intention;

• change-seeking behavior showed no connection with the variables; and

• brand relevance, social demonstration effect and both interactive and non-interacted reference group influence had the strongest positive relationship.

The common denominator of the most influential variables is their social element. In the author’s view, their importance is understandable given that collectivism remains prevalent in China. The need to feel part of relevant groups is, therefore, much stronger than in individualistic cultures.

Globalization has a powerful influence on young Chinese consumers for whom modern urban lifestyle is the norm. Marketers should position their American or global brands on their relevance to this segment by highlighting quality, reputation and popularity. The symbolic value likewise needs emphasizing. Use of “reference group appeals” is also advised. Being able to demonstrate a brand in social circles should have particular appeal to consumers who best resonate with the global consumer culture.

To read the full article enter 10.1108/JCM-01-2014-0842 into your search engine.

(A précis of the article “Receptivity of young Chinese to American and global brands: psychological underpinnings”. Supplied by Marketing Consultants for Emerald.)