A Comparative Analysis of American and Chinese Retail Market - Research Proposal Example

Running head: CONSUMERISM: A COMPARATIVE ANALYSIS OF AMERICAN AND CHINESE RETAIL MARKET Consumerism: A comparative analysis of American and Chinese retail market [Writer's Name] [Institution's Name] Title: Consumerism: A comparative analysis of American and Chinese retail market 1-Area of study China is gaining importance as the most fast growing economy in the world. This has made it the centre of interest for most of the economists and financial analysts. Most of the organisations are analysing the potential of China as an important outsourcing destination. On the other hand China should also be explored as the fastest growing market with the largest number of consumers in the whole world. This has given rise to an important question as to which norms should be applied while expanding the market of an organisation in China. What are the differences in the consumers What are the hindrances What are the benefits attached What are the implications of Economic and financial policies The study is an effort in exploring and analysing all the above important areas while considering China as a retail consumer market. 2-problem statement The issue of understanding the differences in the economic policies and the consumer market between the established markets like U.S. and emerging markets like China is of immense importance. Many multinational enterprises view China as a vital market and one with tremendous potential for growth in the future. The successful expansion of most multinationals depends upon the strategies and policies designed by keeping in view these economic and social differences. After taking a review of the researches for the problem through different aspects I will try to find out and underline the differences in both the markets and Governmental policies of both countries. 3- Aim The aim of this research is to find out the differences in the consumers and the economic environment of Chinese retail market and US by undertaking the comparative analysis. 4-Objectives Following are the aims of the study: To review the literature about this issue up till now. To improve the awareness about the differences in retail consumer markets of U.S and China. To analyse the advantages and disadvantages. To investigate and find out the necessities of strategy matching the market conditions. In the light of the above finding the most appropriate techniques of successful expansion in shape of outsourcing or market extension. 5-Literature review A primary component of extensive theories of consumer behaviour is product assessment where consumers evaluate the characteristics of numerous product offerings. Such assessment is undertaken for their own decision making and for finalising purchasing decisions. In this phase of consumer behaviour, products are assessed on numerous characteristics, in regard to what consumers consider as their priority - as an outcome, product attitudes determining purchase decisions are developed. A significant body of empirical research has determined the importance which Chinese consumers attach to various product characteristics. Results suggest that a wide array of intrinsic criteria including style, comfort, colour, workmanship, and either fabric, fabric content, and fibber comfort were considered as top factors (Forsythe et al., 1999; Zhang et al., 2002). While the extrinsic criteria of either price or brand were evaluated as somewhat less significant than either attribute in two of the studies (Zhang et al., 2002), Forsythe et al. (1999) purport that price, along with design and quality, strongly influenced the purchase intentions regarding a jacket. Since economic and cultural factors have been associated with consumers' distinct use of country of assembly information when assessing and buying products (Low & Corkindale, 1998; Zhang, 1996), and outsourcing production is prevalent, there are studies which have studied the influence of country of assembly in more depth. Several studies have asserted that Chinese consumers' buying choice, perceptions of quality, and perceived value for money for various products is affected by country of assembly. For instance, consumers evaluated products manufactured or made in the US or other developed countries more positively than those assembled in developing countries (Ahmed & d'Astous, 1999; d'Astous et al., 1995; Hu, 1994; LaTour & Henthorne, 1990; Piron, 2000; Siu & Chen, 1997; Zhang, 1996). There are certain delimitation to past research on consumer evaluative criteria and Chinese consumers. First, presentation of lists of criteria for direct rating has caused extrinsic criteria to be overly emphasised. This is despite the fact that several intrinsic criteria have been most prominent to US consumers in studies permitting them to freely give their comments (Abraham-Murali & Littrell, 1995; Eckman et al., 1990). Second, majority of studies has investigated Chinese apparel consumer behaviour exclusively in the aggregate, not considering the probability of heterogeneity in the use of product characteristics. Lastly, past studies on Chinese consumer behaviour have been dependent on convenience sampling; thus constraining the generalizability of the results to the whole Chinese population. As China continues to open its markets and modernise its standards system, foreign exporters can expect to see increasing use by China of international standards, and increasing similarities between testing procedures used by China and other countries. WTO rules requiring transparency in the drafting process for mandatory standards will also help exporters by giving advance warning of changes and the opportunity to actually comment on draft standards before they are finalised. But at the same time, China's standards system is still in transition, and China will add new products to the CCC mark list and draft new standards. The challenge for exporters will be to keep abreast of those changes. One thing will be certain as China's importance as an export market grows: understanding standards issues are critical to any successful exporter's China export strategy. (U.S. Commercial Service) 6-Reasons for Choosing this topic The fundamental reason for choosing this topic is that having searched literature I found that very few works have been conducted concerning exploration of China as retail consumers market. Since most of the studies have been focusing on China as an important outsourcing destination. This fact has encouraged me to do this piece of work in order to contribute to the existing knowledge about the subject by adding a new point of view. Another reason is that most of the organisations give least importance to the differing policies and norms of different countries while taking the decision of market expansion, so it is so difficult for them to understand the problems faced by the organisations. Additionally they should understand that it is important to bring some changes in the strategy of the organisations in order to address the needs of the consumers of the destination country. 7-research design 7-1- Philosophy Research is a fact finding activity (Dominowski, 1980). The aim of primary research is to make known something previously unknown to human beings and to advance human knowledge by making it more certain or better fitting; the aim is discovery (Elias, 1986). Kerlinger (1970) uses more technical language to define it as the systematic, controlled, empirical and critical investigation of hypothetical propositions about presumed relations among natural phenomena. The research philosophy depends on the way we think about the development of knowledge and this thinking affects the way we do search (Saunders 2000). Whilst undertaking the research, a clear understanding of research philosophy is essential. Easterby-Smith et al (1997) identify three reasons why the exploration of philosophy may be significant with particular reference to research methodology: Firstly, it can help the researcher to refine and specify the research methods to be used in a study, that is, to clarify the overall research strategy to be used. This would include the type of evidence gathered and its origin, the way in which such evidence is interpreted, and how it helps to answer the research questions posed. Secondly, knowledge of research philosophy will enable and assist the researcher to evaluate different methodologies and methods and avoid inappropriate use and unnecessary work by identifying the limitations of particular approaches at an early stage. Thirdly, it may help the researcher to be creative and innovative in either selection or adaptation of methods that were previously outside his or her experience. Two views about the research process dominate the literature: positivism and phenomenology which have an important part to play in educational research (Saunders, 2000). Positivism is founded on the belief that study of human behaviour should be conducted in the same way that as studies conducted in the natural sciences. On the other hand phenomenology is concerned with the understanding human behaviour from the participant's own frame of reference (Hussey and Collis, 2003). Positivistic paradigm Phenomenological paradigm Tends to produce quantitative data Tends to produce qualitative data Uses large samples Uses small samples Concerned with hypothesis testing Concerned with generating theories Data is highly specific and precise Data is rich and subjective The location is artificial The location is natural Reliability is high Reliability is low Validity is low Validity is high Generalises from sample to population Generalises from one setting to another Figure 1: Features of the two main paradigms (Hussey and Collis, 2003) As the research philosophy depends fundamentally on the research question (Saunders 2000), the phenomenological philosophy has been chosen in this paper. This choice originates from that researcher's topic/question that aimed to undertake comparative analysis of Chinese retail market and US. In this specific research, -related to the question- the author will collect data and develop a theory as a result of data analyses rather than developing a theory and test it afterwards. 8-Methodology Qualitative techniques stand in contrast to quantitative techniques, the main difference being that quantitative techniques involve numerical data whereas qualitative techniques involve more abstract information. Data collected using qualitative techniques do not generally lend themselves to statistical analysis whereas quantitative techniques do (Veal, 1997). A mixed methodological approach will be used in this research, because mixing methods enables the insufficiencies of both qualitative and quantitative methodologies research design to be overcome and can assist with data collection and data analysis (Jennings, 2001). 8-1- Interviewing An interview is a purposeful discussion between two or more people. It enables you to gather valid and reliable data that are relevant to tour research question and objectives. There are three types of interview; structured, semi-structured and unstructured interviews (Saunders et. al, 2000). A semi-structured interview model will be utilised as it: Is flexible, not standardised. Enables me to gain an analysis, explanation and description in relation to my research aim and objectives. Facilitates the exploratory nature of my research gives me an opportunity to discover issues I have not considered before. Interviews provide in-depth information about a particular research issue or question. They are designed to gather a broad range of information from a few units. They are the best method to get detailed answers about your questions. They are also the best method for pre-testing, where researcher is seeking individual interpretations and responses. The main disadvantage of interviews is that they are time consuming, and that the respondent may feel like 'a bug under a microscope' and be less willing to open up than in the relaxed atmosphere of a group (Research solutions 2005). Choosing interviews for this stage of this part of the research was in order to get as much information as possible from the few people that will be interviewed. Interview questions will be compiled from the existing literature and detailed in relation to the research topic, aim and objectives. 8-2- Questionnaires In the questionnaires method of data collection the researcher can precisely obtain the information that he asks for and these information can be analysed in an easier way than if choosing another method. In addition to that questionnaires are not an expensive method of data collection, and they don't take long time to fill in. On the other hand questionnaires have some disadvantages such as: they do not have a high response rate, the wording of the questions can cause bias to the client's responses, and the questions might not be designed correctly, which will result in collecting unneeded answers (McNamara, 1999). Choosing questionnaires for this step was due to the relatively large sample size that the researcher intends to include in his research, and for the cheap cost of this method comparing with other data collection methods. A sample of 20 retail consumers from U.S. and 20 consumers from Chinese retail market will be involved in the questionnaire, because the larger the sample sized is the more adequate the results will be and the more generalisations can be drawn from the research. 8-3-DOCUMENTATION REVIEW: The aim of this method is to review how the program operates, without interrupting it, it can be performed through memos, review of applications, finances etc, the advantages to this method are, and comprehensive and historical information can be obtained. The disadvantages are the process is time consuming, there is not flexibility to collect the data, and the data may be incomplete. The review of different studies and journal articles will be undertaken in order to achieve deep knowledge regarding the topic. 8-4- Analysis On their own, data are rarely used in their original form. Through the process of data analysis, value is added to the data to turn them into information. It is information rather than data which users especially policy and decision-makers are interested in (Uganda bureau of statistics, 2005). However this will be a very sensitive and critical stage in my research process as misinterpretation or over-interpretation is always a potential risk. The process of data analysis in this research will include the following steps: Indicate the date of the questionnaires. Who completed them, and the number of returns. Categorise the data collected. Reading through the questionnaires and interviews carefully and coding them after the event in relation to the types of answers, themes and issues, and thencategorising of response (keeping a note of what the codes refer to). Then by asking some questions like what are the answers that keep repeating, what are the deviations from these answers, and Are there themes emerging Contradictions Then it would be possible to draw some related generalisation. 9-Possible limitations of the research Lack of literature of research done so far concerning the right choice of English examination for Maldives might represents a major obstacle. Another limitation might be lack of time. The researcher will follow a hybrid approach in data collection, which will include interviews and questionnaires. Collecting data through these methods, analysing and demonstrating them is time consuming and the researcher does not have much time. There might be challenges in convincing to gain access to the relevant information required within the educational institutions I intend to research. Confidentiality has been a barrier before researchers. It is required to reassure the educational institutes that all data and information collected will be treated in the strictest confidence. 10-expected end-product/expected outcome A research study, which will result in shape of important and helping, results to find out the difference between the Chinese and U.S. retail consumers and market environment. The study will also explore the potential advantages attached with the Chinese economy as an important retail market. 11-time schedule The study will be undertaken according to the following Gantt Chart Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Introduction Literature Review Methodology Interviews Data Interpretation Results Compilation Results and Conclusion References: Abraham-Murali, L. & Littrell, M. (1995). Consumers' conceptualisation of apparel attributes. Clothing and Textile Research Journal, 13(2), 65-74. Ahmed, A. & D'Astous, A. (1999). Product country images in Canada and in the People's Republic of China. In Chan, T. (ed.) Consumer behaviours in Asia: Issues and practice. New York, NY: Haworth Press. Dominowski, R, L, 1980. Research Methods. Prentice-Hall Eckman, M., Damhorst, M. & Kadolph, S. (1999). Toward a model of the in-store model decision process: Consumer use of criteria for evaluating women's apparel. Clothing and Textiles Research Journal, 8(2), 13-22. Elias, R. (1986). The politics of victimisation: Victims, victimology and human rights. New York: Oxford University Press. Forsythe, S., Kim, J. & Pete, T. (1999). Product cue usage in two Asian markets: A cross-cultural comparison. Asia Pacific Journal of Management, 16, 275-292. Hussey R., Collis J., Business Research, 2nd Ed. 2003, Palgrave Macmillan Hu, Q. (1994). China's consumer market: Shanghai consumers' attitudes toward consumer brand and Chinese brand apparel. Dissertation Abstracts International, 55(12). Jennings, N. R., (2001). An agent-based approach for building complex software systems. Communications of the ACM, 44 (4) 35-41. Kerlinger, F, N, 1970. Foundations of behavioural research. New York: Holt, Rinehart and Winston. LaTour, M. & Henthorne, L. (1990). The PRC: An empirical study of country of origin perceptions. Journal of International Consumer marketing, 2(4), 7-36. McNamara, C, 1999. Information available from: www.mapnp.org/library/research/overview.htm Piron, F. (2000). Consumers' perceptions of the country of origin effect of purchasing intentions of (in) conspicuous products. Journal of Consumer Marketing, 17(4), 308-321. Research solutions, 2005. Information available from: www.researchsolutions.co.nz/in_depth_interviews.htm Siu, W. & Chen, C. (1997). Country of origin effects on product evaluations: The case of Chinese consumers in Hong Kong. Journal of International Marketing and Marketing Research, 22(3), 115-122. Saunders M, Lewis P, & Thornhill A, 2000. Research Methods for Business Students, 2nd Ed. Pearson Education Limited. Uganda bureau of statistics, 2005. Information available from: www.ubos.org U.S. Commercial Service, Look Before You Leap, Essential Advice for Doing Business in China, Beijing and Rosemary Gallant U.S. Commercial Service, Export America, retrieved as on November 20, 2005 from http://www.export.gov/exportamerica/NewOpportunities/no_ch nabusiness_03 Veal, A, J, 1997. Research Methods for Leisure and Tourism: A Practical Guide. Chatham, Kent, Pearson Education Limited. Zhang, Z., Li, Y., Gong, C. & Wu, H. (2002). Casual wears product attributes: A Chinese consumer's perspective. Journal of Fashion Marketing and Management, 6(1), 53-62. Read More