China Compare to Australia

Abstract Consumer behaviour is all- colossal(a) for any market placeer. Cross hea past analysis put forwards crucial information as to what post be successful exported to international markets. In congenator air division in mainland mainland chinaware Australians submit understand finish, sub kitchen-gardening and cross- pagan affiliation. Another grand concomitantor when considering marketing opportunities is Maslows Hierarchy of involve. It is ever present that thither be economic and cultural differences inwardly China. repayable to increased globalization and increased horse operaisation of China cultures argon beginning to bl completion.Understanding these two theories is imperative for exporters difficult to expand into the diverse and complex Chinese market. Introduction Cross-Cultural outline The Australia -China Free allot Agreement (ACFTA) is offering the opportunities for Australian exporters to a wear to a greater extent sustainable competitive ad vantages in the second largest providence in the world. Chinese domestic economic growth, liberalisation, and youthful membership to the World Trade Organisation realise given opportunities for Australian exporters and firms to expand in China (ACCI, 2004).Therefore, cross cultural analysis has pay back an important overlyl for Australian marketers in analysing to what extent consumers of the two contrastive nations differ. As a result, marketers depart be able to study and understand in-depth the immaterial market which to whom they bequeath market their products to, since cultural ackat erstlight-emitting diodegement will have a substantive impact to every aspects of marketing particularly in segmenting the market and discretion the consumers behaviors. People from different countries have different culture that shaped their characteristics and behaviors in their purchasing activity.Chinese goal vs. Australian Culture (Segmentation Culture, subculture and cross-cul tural affiliation) Consumer behaviour is the or so essential aspect of marketing, which outlines what consumers need, and what influences their buying behaviour. Therefore, it is vital to discuss the cultural, social, personal and physiological characteristic of the Chinese consumers in influence for Australian marketers to understand Chinese consumer behaviours in order to successfully penetrate into the Chinese market. There be several ifferent studies conducted by experts which emphasise that the immature Chinese markets behaviour is sympathetic to Australian culture who argon price and strike off sensitive, and are now constantly moving towards mature market, who view the well known foreign posts with superior quality and utility as leverage to their social lieu (Yi-You, 2004). This movement is the result of the Chinese culture that underpins the importance of social precondition and a robust economy that boosts consumer confidence in spending (Giele, 2009). For instan ce, the gross sales figure for luxury railway cars in China has surprisingly increased within 2005-2010.According to the customs figures China has import more than 100,000 luxury cars in recent yrs, approximately valued at $4. 84 billion (China lineage, 2006). This example underlines the outgrowth Chinese economy that signifi chamberpottly affected by consumers spending bahaviour. It is lucid that Australia is similar in a sense where we live in a culture that underpins importance of social status however this does not have in mind Australians will go out and buy a luxury car for the sake of promoting their economical situation.Australian consumers tend to riding habit a cost-benefit analysis, that is, will the benefits of the fomite outweigh its price, if yes sales will tend to increase, if no sales will drop (Reh, 2009). Therefore while there is a sensitive affinity in demographic segment opportunities (socio-economical status), the buyer behaviour decision notwithstand ing differs. Luxury Cars Thus, it is crucial for Australian marketers to choose the best entry and price strategies to gain the potential markets loyalty and trust.In relation to the car industry, Australian subsidiaries much(prenominal)(prenominal) as Holden and Ford freighter penetrate the market with their high end vehicles the Calais, Caprice, Senator and Mondeo and ultimately make Chinese consumers aware of the quality and luxury that such brands underpin (Financial Times, 2009). In doing so exporters need to set themselves aside from competitors including Mercedes, BMW, AUDI and purge neighbouring brand Lexus and charge consumers the unique luck of investing in an Australian Luxury Vehicle. Chinese Superstition Furthermore, distinct Chinese culture is besides playing an important consumption in shaping consumers behaviour.Chinese populate consider in Feng Shui, it is the strongest cultural impact on consumers in the decision- fashioning process. This Differs from Austr alian culture who has a different perspective on such superstitious belief, in most cases Australian consumers would mock a marketing strategy with such a belief. Thus where the buying decisions of the Chinese is dependent on this cultural principle, the Australian consumers care more about product quality, price, perceived benefits and service of the product, as opposed to what the product represents (Giele, 2009). Chinese believe that Feng Shui will work on them luck and peace.Therefore, Chinese consumers will consult Feng Shui experts before do the purchasing decision. For example, Chinese people interpreted number quaternion (? pinyin si) as big(p) luck since it is nearly homophonous to the word death (? pinyin si). Therefore people in China do not equivalent anything that involving number four (Lubin, 2010). In say this when marketing Australian exporters should market in relation to positive Feng Shui beliefs in China. For example when marketing Australian vino which is promptly increasing in popularity in the Chinese market, a marketer should forefend any aged wine with the number four.That is for example Shiraz from 2004, 1994, 1984. This has been reflected in the dramatic fall in sales, during 2004, and marketers were bewildered as to why it occurred (Lubin, 2010). Marketers should in fact promote wine from years that have the number eight included, as this is a symbol of prosperity and happiness. In saying this in the year 2008 Australian wine exporters could not keep up with demand from Chinese consumers, an increase in 32% from the previous year (Winefacts, 2009).Thus in order for Australians to penetrate the market they should do so harmoniously with the Feng Shui principle in order to succeed. Exporting alcoholic beverage to the Chinese Segment Culture is one(a) of the most important factors and basic causes that influence consumer behaviour. It involves the attitudes, beliefs and knowledge which agree consumers buyer behaviour (Schif fman et al. 2008). For example, when there are a small number of consumers, it is easy for them to try and feel product variations and quality then the producer moldiness meet the expectation.If these expectations are not met, consumers would never salvation that product. However, if there are a large number of consumers, a brand name must be established in order to affect new consumers, and it will develop with continued secure by the consumer. In this process, marketer must adjust the product depending on different segmentations like culture. Take beer for instance, when a new brand of beer is introduced into a beer drinking state like Australia, fresh beer is always kept chilled, and Consumers do not destiny to order beer without being cool.It as well as needs to be kept forward from the sunlight to maintain its taste, which is different from Chinese. In China, beer does not need to be kept in freezer and always exposed to the sunlight. only, there is a difference of beer taste surrounded by Australian consumers and Chinese consumers. If the company exports the Australian beer directly to China, Chinese consumers will not accept it because Australian beer tastes too strong for the Chinese consumer (Mona Chung , 2007). Similarly, Chinese white spirit cannot fit Australian consumers because it is too hot for them.Nowadays, Chinas taste for wine provides a great market opportunity to Western Australia. Chinese consumers are growing interest for straight-laced Australia wine. Agriculture and Food Minister, Mr. Redman said Premium wine industry is gaining the tutelage of consumers in China, but to date there has not been a Chinese language book with information on WA wineries for this market. Because Chinese consumers are getting thirst for Australia wine, Redman had launched a book in mandarin orange tree in Shanghai about Australian wine which includes 100 drop deadical anaesthetic top wineries in order to foregather Chinese consumer expectation. Australia is one of top suppliers of wine to China. The wine exported per year to China has increased by 20% over the past 2 years (Josette Dunn, 2010). Redman predicts that the number of wine imported to China would grow to 1. 26 billion in 2013. Also , fit in to the research , total Australian wine exports to China grew 37% annually from 1999-2000 to 2004-2005 and increased at a rate of 84% annually from 2004-2005 to 2009-2010 . Moreover , wine intelligence shows the market in China which import wine could grow to amongst 70 and 80 million cases by 2025 (2010).In saying this, it is obvious that when segmenting to the Chinese market, marketers must take into account the diverse cultural beliefs of Chinese consumers, but also take into account the close similarities between buyer behaviours of the two nations. Hierarchy of needs Maslows hierarchy of needs (appendix 1) has been cited in numerous texts both in psychology and marketing. In the marketing context the hierarchy is usef ul in interpreting how different products and run satisfy different needs. The hierarchy is based on intuitive judgment that certain needs must satisfied, at least partially, before stint the next level.The most basic need of the hierarchy is physiological, examples are food, water supply and breathing. The next level is safety and credential needs which covers shelter, protection and stability. These startle two levels are necessary for human survival. The next three levels dwell of psychological needs. These respectively are- social needs such as affection, belonging and friendship ego needs which includes prestige, status and self-respect and final self-actualisation which is the idea of self completement or finding meaning with ones life. Differences between culture China is generally considered a collectivized culture.Collectivism is based on unity of the group, where people are encouraged to adjust to society and do what is best for the community as a all (Brita nnica, 2010). This means individuals are more easily persuaded by friends and family as there is a strong desire to fit in. Contrastingly, Australian and other Western Cultures are seen individualist societies where more emphasis is placed on for each one person being unique. This is why marketing is focused on making individuals stand out kinda than blend in with the rest of the crowd (see appendix 2 & 3 for examples).In the Chinese commercial (appendix 2) it can be seen that collective culture and history dummy up plays a major role in Chinese culture. The ad clearly targets the social need as Pepsi is seen to be drunk by the group and the new student must crush the can to be accepted into this culture. This allows him to become part of the dynasty and conform to the norm. This is juxtaposed to American commercial (appendix 3) where the individual is the focus of ad. It appeals to the ego and self actualisation needs as by drinking Pepsi you can procure your ambition and be s eparated from the rest of the crowd.Thus the distinct marketing differences between the Collective Chinese culture and individualistic Australian culture can be seen. China is the worlds fastest growing economy and as such there has been a huge influx of Multi-national corporations. This has started to have an influence on Chinas urban areas as they are becoming individualistic due to Western products. The change can also be attributed to the one child policy. This has made the new generation of Chinese removed more self-centred and have become more hedonic in themselves as costs to run a family have move dramatically.This has allowed this generation far greater influence over their families decision making (Mari, 2008). Though Australia is seen as a uniform society where there is brusque poverty and relatively small gap between rich and scant(p) in China however there is very distinct apportion between urban and rural populations. The annual per capita income of urban Chinese was rough three times as high as their rural counterparts and the Engel coefficient was 37% for urban and 46% for rural (Mari, 2008). Even more demonstrative is that Chinese urban and rural consumer spend only 3. and 2. 13% of their total income respectively on entertainment. This is compared to Australia where our total GDP per capita is $38,911 (World economic outlook database, 2010) and the average planetary house spends a $150 a week on both groceries and entertainment. This equates to 22% of GDP per capita. It is obvious Australian culture focuses on high levels rather than the lower need on the hierarchy (ABS, 2006). The effect of Culture on the Hierarchy The differences in purchasing behaviour for urban and rural Chinese can be explained by Maslows needs hierarchy.People living in rural China live in a far more traditional society (Collective) and their consumption of franks is used to satisfy the social need to give a sense of belonging. Though the majority of their earn ings is to satisfy their physiological, safety and security needs. The bicycle is an example of the social differences of culture in China. The bicycle is the main mode of transport as cars are still too expensive to afford for rural commuters. The bicycle is fulfilling their safety and security need as it allows people to get to work and thus provide for their family.Contrastingly, bicycles and bike riding in Australia is seen as a subculture mainly for leisure. Consumers who purchase bikes are doing so for their ego and self actualisation needs as they are simultaneously helping to lower pollution and increasing their strong-arm appearance (At, 2006) Chinese moving up Maslows Hierarchy Due to the cultural differences, there are high demands in luxurious brand items such as Louis Vuitton. This demand has increased due to higher incomes which has led consumers to access the higher levels of Maslows hierarchy.Chinese people are now purchasing luxury items for the prestige and social status which is associated with the high end brand. Loius Vuittton introduced itself into China as must have brand in order to conform to popular culture (Bloomberg artweek, 2007) Therefore, marketers of this brand have successfully expanded into this emerging market as it is evident that Chinese consumers tend to buy the very(prenominal) brand as others which is represented in their buying culture (Yau, 2007). However, Australians are less concerned about conforming to society so once a brand becomes popular consumers tend to try and create a new fashion trend.When Loius Vuitton markets to Australia it has constantly change its products as to not become a fad or lose interest allowing customers to remain brand loyal. Australian Exporting opportunities It appears there are opportunities for Australians to export into China. As more and more urban areas are becoming Westernised more international companies are trying to gain entrance into the Chinese market. Hence as Chinas econom y continues to grow so will the income of its population large-minded them more discretion on purchases as they move up Maslows needs hierarchy.To effectively market to these consumers at present an Australian exporter would use direct marketing and word of mouth to make use of state-controlled culture of China. Exporting education is the most worthwhile export. Marketers can accentuate the self actualisation and ego needs of the Chinese people and show them that by attending an Australian University they are likely to have a break up education, giving them more employment opportunities, ultimately a better way of life thus satisfying these higher level needs.Moreover, Australian exporters can highlight to Chinese businesses the growing importance of speaking English, which they can gain under an Australian education. This will give them a far greater ability to expand outside of Asia. To make this easier Australian Universities can situate a campus within China in order to coll apse easier access to Australian education. This maintains the social needs of Chinese students but could fulfil their ego and self actualisation by learning English from a prestigious institution.Recently the world expo in Beijing gave Australian exporters a chance to promote Australian education and give a good insight into the benefits of studying in Australia (Xiuyun, 2009). Conclusion It is evident there exists great potential for Australians to expand in the Chinese market but in order to do this they must understand socio-cultural segmentation and why different segments embody different needs on Maslows hierarchy. It is also important to understand the similarities between the two nations as China is becoming more Westernised, therefore insight into Western and Chinese culture is collectively important.References At, M. 2006, hertz culture, Copenhagenize. com, viewed at 26th marvelous 2010 . Australian Bureau Statistics, 2010, Perspectives on regional Australia, Australian Government view at 25th dread 2010, . Australian Chambers of Commerce And Industry, 2004, Australia-China Free Trade Agreement, ACCI, Viewed 25th swaggering 2010 . Australian Wine and Brandy Corporation 2009, Winefacts, Australian Government, viewed 27 August 2010 . Reh, JF 2009, Cost-Benefit Analysis, About. com, viewed 27 August 2010, . Australian Wine and Brandy Corporation , Did you know? -China , Issue 31, 6 August 2010 , viewed 27th August 2010 . Bloomberg Businessweek 2007, Louis Vuittons Life of Luxury, Bloomberg, viewed August 23rd 2010 http//www. businessweek. com/magazine/ case/07_32/b4045419. htm. Chan RYK 2001, Determinants of Chinese consumers green purchase behaviour, Psychology and Marketing, vol. 18, issue 4, pp 389 413 Chung M. , smith W. 2007, The Importance Of Overcoming Cultural Barriers In Establishing Brand Names An Australian partnership In China, Innovative Marketing, Volume 3, Issue 2.China Business, 2006, Luxury Car gross sales Booming in China, Asia Times online, viewed 25 August 2010 http//www. atimes. com/atimes/China_Business/HK28Cb02. hypertext markup language. Dunn J. , June 28 , 2010 . Chinas taste for WA wine translates to market opportunity ,viewed 27th August 2010 , http//www. ausfoodnews. com. au/2010/06/28/chinas-taste-for-wa-wine-translates-to-market-opportunity. html. encyclopaedia Britannica 2010, Collectivism, Encyclopedia Britannica, viewed at 25th August 2010 http//www. britannica. com/EBchecked/topic/125584/collectivism.Financial Times 2009, obtain Habits of Chinas Suddenly Wealthy, Save the Elephants, viewed 25 August 2010 http//www. savetheelephants. org/news-reader/items/shopping-habits-of-chinas-suddenly-wealthy. html. Gatfield, T Youseff, M 2001, A critical examination of and Reflection on the Chinese Family Business Unit and the Chinese Business Clan, Family Business Review, vol. 14, issue 2, pp 153 158 Giele, F 2009, Chinese Consumer doings An Introduction, Frans Giele, viewed 25 August 2010 http/ /fransgiele. be/freematerial/2009chineseconsumerbehaviour. pdf.Lubin, G 2010, A Short guide to the Buying Habits of Chinese Noveau-Riche, Business Insider, Viewed 25 August 2010 http//www. businessinsider. com/a-short-guide-to-the-buying-habits-of-chinese-nouveau-riche-2010-7. Mari, A. 2008, Understanding Chinese rural consumers, Course of foreign Management, viewed 25th August 2010 http//www. scribd. com/doc/10863701/Understanding-Chinese-Rural-Consumers-Implications-for-marketers-by-Alex-Mari. Sun, L 2007, Understanding Self-gift Consumer Behaviour (SGCB) in China How culture influences SGCB, MA in Marketing thesis,Weinshall, TD 1993, Societal culture and management, de Gruyter-Studienbuch, Germany World Economic Outlook Database 2010, GDP Per Capita, International Monetary Fund, viewed on 25th August 2010. http//www. imf. org/external/pubs/ft/weo/2010/01/weodata/weorept. aspx? pr. x. html. Xiuyun, S. 2009, Education to China, Austrade, viewed August 23rd 2010 http//www. austrade . gov. au/Education-to-China/default. aspx. Yi-You, L 2010, Brand Effect on Consumer Behaviour in China, Southern