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Study urges more focused branding

By He Wei  (China Daily)

13:20, June 14, 2012

A new study has highlighted the growing need for Chinese companies to better identify the branding strategies they are planning to use in the particular regions of the country they are selling their goods and services.

The report, produced by the American Chamber of Commerce in Shanghai and leading global management consulting firm Booz & Company, says an increasing number of Chinese consumers in top-tier cities demand high quality products and are willing to pay a premium price.

But in smaller cities and rural areas, brand loyalty is more important than price.

The second annual China Consumer Market Strategies report was based on interviews with more than 150 Chinese and multinational companies.

Industries covered included automobiles, consumer goods and pharmaceuticals, but the report suggested that many companies weren't considering carefully enough which strategy they were choosing for particular areas of the country.

Among the nine most disruptive consumer trends identified by the chamber, both Chinese and multinationals chose "value" as the most important condition affecting their business in China.

The term now covers both product quality and value-for-money, and represents a significant evolution from what has been for so long a purely price-driven market.

More than 83 percent of respondents said they expect the trend for value to drive brand loyalty among consumers in the future, and 87 percent expect to see an increase in willingness to pay more for quality products and services.

The study paints the typical value consumer as a young to early middle age (from 21 to 40), middle income (between 10,000 yuan, or $1,569, and 50,000 yuan) man or woman who lives in cities like Beijing, Shanghai and Guangzhou.

They are knowledgeable about brands and tend to research before buying.

Some 81 percent surveyed said they would find out about the best features and study comparative products before making a final decision.

And they also value the overall "shopping experience" as influencing their decision on what to buy.


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