The manufacturing giant is once again turning out steel and cellphones. A principle components factor analysis was run to test for the dimensionality of the scale and results showed that all nine items loaded on one dimension with item loadings ranging from .656 to .824. They want to experience more of what the world has to offer through their product choices, and they want opportunities to be educated about products in a sophisticated way, something that the online retail environment is uniquely suited for. Thousand Oaks, CA: Sage Publications. These newbies are hardly members of an exclusive club. People are motivated by the same things: comfort, money, providing for the family, job satisfaction and security. To be successful closing deals in China, American business people must learn some important cultural differences. International Journal of Sports Marketing & Sponsorship, 10 (1), 63-78. While Chinese ACEs are commonly featured as endorsers in ads targeting Chinese markets, U.S. athletes are increasingly endorsing Chinese brands directed at the Chinese market. Watchravesringkan, K. (2007). International Journal of Consumer Studies, 32 (2), 103-112. Accessed March 10, 2010, Access March 10, 2010, from http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20070919005517&newsLang=en. Chinese shoppers are also more engaged than those from the U.S. or the U.K. when it comes to learning about products they are interested in purchasing, Millward Brown found. The group’s buying behaviors and viewing patterns, however, are different and unique from the total population. London: Sage Publications. To date, only a limited number of cross-cultural comparative studies involving celebrity endorsements have been published, and these tend to be content analytical in nature (e.g., Choi, Lee & Kim, 2005), and none have involved specific examinations of markets in China. The old axiom of politics, “All politics is local,” is also applicable to consumer trends. Atkin, C. & Block, M. (1983). In China, rising pork prices may cut consumer … China’s top 25 stars. The statistics are arresting: ten million new Chinese consumers enter the market each year. China's annual inflation rate eased to 0.5 percent in October 2020, the lowest since October 2009 and below market expectations of 0.8 percent. For more information, read Michigan Publishing's access and usage policy. How COVID-19 changed Chinese consumer behavior. They are comparatively demanding, wanting far more information about products and vendors than shoppers elsewhere. Chinese consumers are more likely than American consumers to admire products that are ‘Made in the USA’ for their prestige as rare, valuable status symbols. Local companies that focus on the good-enough segment understand local consumers better, and offer products or services with the right balance of the two essentials: price and quality. Star power. Journal of Consumer Research, 41 (3), 39-48. A lack of understanding of Chinese consumers and how they shop has cost many international fashion brands dearly as they try to make it in the China market. For much of the late 19th and early 20th century, Americans settled in cities in pursuit of factory work. American Made Cabinets vs Chinese Cabinets It’s no secret that Chinese cabinetry is significantly cheaper than the vast majority of American Made cabinetry. They have been the … Spielman, H. M. (1981). Canadian consumers don’t think and shop in the same ways as their American counterparts. According to La Ferle & Choi (2005), despite the growing importance of the Asian consumer market and the pervasiveness of celebrity endorsements in that region, little knowledge exists concerning consumers’ responsiveness to advertising appeals there, especially those involving celebrity endorsements. Organizational Dynamics, 16 (4), 5-21. Consumer spending consistently accounts for about 70% of the U.S. economy. Asian-American shoppers say they are more likely to buy and pay more for recyclable and eco-friendly products than the general population. Order from Chaos. American consumers are reducing their spending in a variety of ways. The findings of this study may not generalize well to broader consumer markets in the U.S. and China. Non-essential expenditure (tourism, restaurants, entertainment outlets, clothing and footwear etc.) This study’s results support the idea that consumers from high power distance cultures (e.g., China) tend to be more receptive to ACEs than consumers from low power distance cultures (e.g., the U.S.). Increasingly affluent Chinese consumers now actively search for products offering a premium experience. Unsurprisingly, Chinese consumers need more hand-holding and assurances during the shopping process. Zandupor, F., Campos,V., Catalano, J., & Chang, C. (1994). The global average: just 9%. A cross-cultural comparison of consumer vanity in the People’s Republic of China, South Korea and Thailand: An exploratory study. Journal of Advertising, 15 (4), 57-70. These findings support the premise that Chinese consumers, being from a high power distance culture, may tend to more willingly accept the recommendations of ACEs than those in the U.S. Effective business communication in China has more barriers, however, than mere language. They’re called the “post 80s” generation, those born between 1980 and 1989.They not only buy things for themselves but for also for their parents and children. However, Guo, a “new rich” from a small town, still n… Understand the Importance of Relationships. Hofstede’s power distance dimension involves the extent to which people accept the unequal distribution of power in society and organizations (Hofstede, 1980). Compared to low power distance cultures, people in high power distance cultures tend to unquestioningly follow the advice of authority figures (e.g., parents, teachers, bosses, celebrities) and other high-status individuals (Zandupor, Campos, Catalano, & Chang, 1994). Celebrity endorsements are one of the most popular advertising strategies used in today’s global marketplace (White, 2004). During China’s biggest e-shopping day of the year, the Nov. 11 Shopping Festival, Alibaba Group websites Taobao Marketplace and Tmall.com processed more than $5.8 billion in sales. Lessons from the rich and famous: A cross-cultural comparison of celebrity endorsement in advertising. In the West, the bulk of ecommerce is done on either websites established by traditional retailers (“clicks and bricks”) or on pure-play sites that carry their own inventory. Social commerce is one of the major driving forces of consumption in China. The celebrity sell: making it work. are the most impacted, and non-essential … Found in translation. Indeed, technology is integral to the shopping process, which frequently incorporates social media, smartphones, tablets and PCs in decision-making and buying. R. Stephen Parker, D.B.A., is a professor of marketing at Missouri State University. Concerning AttACE3, which states that ACEs tell which products have the features they want, Chinese again agreed more strongly than the U.S. sample (p=.000; China µ = 4.18, U.S. µ = 2.90). & Nakamoto K. (2001). Where the consumer lives—or their geography—further shapes their needs and demands. Studies have shown that Chinese exports led to lower prices for U.S. consumers — and helped lift many millions of Chinese out of poverty. Effectiveness of celebrity endorsers. (2009). Albers-Miller, N. D. & Gelb, B. D. (1996). Fort Worth, TX: Dryden. Non-essential expenditure (tourism, restaurants, entertainment outlets, clothing and footwear etc.) Conjoint analysis was employed to model the decision-making of a convenience sample of subjects from each country. This fact simplified the questionnaire construction process by eliminating the need for instrument translation, which attempted to avoid the translation limitations typical to cross-cultural consumer research. In China, about 90% of ecommerce is done in online marketplaces, vast collections of the virtual shops of thousands of independent merchants supported by third-party service providers such as parcel-delivery companies. In 2013, U.S. online shoppers spent a total of $3.64 billion on Thanksgiving, Black Friday and Cyber Monday, according to statistics from Internet analytics company comScore. Thus, in high context cultures (e.g., China), celebrity endorsers as cultural icons can effectively imply and convey informational messages to consumers without overstating them (Choi, et al., 2005). Ads with celebrity athlete endorsers serve as valuable information sources. (2005). Petrovici, D. & Marinov, M. (2007). Today their reasons for choosing one channel over another are more nuanced. Some analysts warned that additional U.S. tariffs on Chinese goods could dampen spending among American consumers. Calder, B. J., Phillips, L. W. & Tybout, A. M. (1981). Indeed, an exhaustive review of the celebrity endorsement literature uncovered no cross-national studies comparing U.S. and Chinese consumer’s perceptions of celebrity endorsers, and more specifically, athlete celebrity endorsers, a remarkable phenomenon considering that China is one of the world’s fastest growing sportswear markets (Tong & Hawley, 2009). An exhaustive literature review uncovered no existing scales specifically designed to measuring general attitudes towards ACEs, so each of the items developed for this study were either modifications of existing scale items or items created specifically for this study. ... and raise prices for American consumers … Brookings figures that in 2015, newly wealthy consumers in China and India already outspent their American counterparts, accounting for a combined 17 percent of … Cultures and organizations: Software of the mind. Tschang, C. C. (2009, February 23). Last year, Dior launched a commercial in China featuring their 2018 FW Season saddle bag. The purpose of this study is to assist in filling this research gap by testing for differences between Chinese and U.S. consumers’ general attitudes towards ACEs. Sports sponsorship as a strategic investment in China: Perceived risks and benefits by corporate sponsors prior to the Beijing 2008 Olympics. Because English fluency was a requirement for admission to the Chinese branch campus of the U.S. institution where the survey was administered, all participants were administered the same questionnaire, which was written in English. American consumer giants and a slew of Chinese companies are now angling for a piece of the largest middle class market in the world. For example, an advertisement that simply consists of a visual metaphor showing highly accomplished professional golfer Tiger Woods with a Tag Heuer watch transfers Woods’ image to the product by implying this quality of achievement and accomplishment through the selection of this endorser. HONG KONG -- China is expected to overtake the U.S. to become the world's largest consumer of goods this year despite a slowdown in the economy and retail sales, according to a research report. This segment appeals to a wide swathe of Chinese consumers who place an equal value on price and quality. Less than 1% of urban Chinese use consumer loans to purchase consumer goods, while 47% of all US families have installment loans and 46% carry a credit card balance. Same is the case with Chinese culture. Retailers such as Walmart import goods from China, so prices would go up and living standards would be squeezed. But when it comes to everyday purchases, their loyalties are up for grabs. Friedman, H. H. & Friedman, L. (1979). 2) India and China are the top two countries driving immigration to the U.S., but a growing number of Asian Americans are U.S. natives. The impact of celebrity endorsements on consumers. Responses were measured on a seven-point Likert-type scale ranging from 1 (strongly disagree) to 7 (strongly agree). The Confucius connection: from cultural roots to economic growth. A substantial amount of this research has involved the five dimensions of national culture introduced by Hofstede (2001) and (Hofstede & Bond, 1988). As early as in 2001 it was predicted that the Peoples There is a gaping 41% difference between Chinese HNWIs (86%), and American HNWIs (45%), in terms of future aspiration to buying luxury items, which showcases the extent of the differences between the appetite of consumers in these two markets. The prevalence of global advertising strategies involving ACEs highlights the need for global advertising managers to understand how consumers’ perceptions of celebrity endorsements vary cross-culturally. Business advertising appeals as a mirror of cultural dimensions: A study of eleven countries. For one thing, online shopping in China is a much bigger deal than it is in the West, as 11.11 sales volumes show. Business Week, 26-27. Further research is needed to examine such attitudes in the context of specific product types. United States and China are the two largest economies of the world in both Nominal and PPP method. Hofstede, G. H. (2001). Five items were modified from a scale developed to measure consumers’ attitudes towards advertising (Petrovici & Marinov, 2007). Irish Marketing Review, 10 (2), 15-24. Examining the effectiveness of athlete celebrity endorser characteristics and product brand type: The endorser expertise continuum. This does not mean brands for everyday consumer items are unimportant. John L. Kent, Ph.D., is a professor of marketing at Missouri State University. China’s high context culture implies that advertisers must be aware of the cultural meaning contained in the selected ACEs and that such meaning be appropriately crafted to send the intended message. Peter Stein, global CEO of Razorfish, noted this key difference in a recent Forbes column, emphasizing that 75% of Chinese Internet users post online feedback on their purchases at least once a month, compared with less than 20% in the U.S.  “There are now more than 300 million people [in China] who move forward only with purchasing a product after getting consent from their peers via social media and ecommerce forums,” Stein wrote, making social media the “key pillar of all engagement for successful Chinese brands.”. Giant online marketplaces like Taobao Marketplace and Tmall.com have helped allay concerns by offering escrow-based e-payment as well as instant-messaging services that allow online shoppers to connect directly in real time with merchants so they can ask questions about sizing, shipping and other issues. 3. Journal of Current Issues and Research in Advertising, 27 (2), 67-80. Bush, A. J., Martin, C. A. Dior – When A Brand Goes Too Down-to-Earth . Survey results found 68% of Chinese respondents said they were “happy or overjoyed” with their shopping experiences, compared with only 48% of American respondents and 41% of British respondents who said they felt the same way. More than half of the country’s Web shoppers made their first online purchase within the last four years. Roberts, D. (2008). Celebrity athlete endorsers contribute to my knowledge of quality products. Kindel's (1983) model of Chinese consumer behavior was used to develop research hypotheses concerning differences in the evaluation and selection of retail stores by Chinese and American consumers. Yang, X. S., Sparks, R., & Li, M. (2008). Thus, a replication of the study with non-student subjects would be appropriate. (2007). Culture’s consequences. Burkitt, L. (2008). The fact that a culture is masculine is highly influential on making marketing strategies. Journal of Product and Brand Management, 18 (4), 262-271. In most cases, the opposite is true. President Donald Trump's tariffs on $34 billion in Chinese goods took effect Friday, setting the stage for potential price increases on those products for American companies and consumers… Journal of Advertising, 34 (2), 85-98. Beijing Olympics: Winners and Losers. Consumer Culture Comparison of the United States and China Introduction. Culture and consumption: A theoretical account of the structure and movement of the cultural meaning of consumer goods. Respondents rated their levels of agreement with each of the nine items. Accordingly, the symbolic nature of ACEs facilitates the communication of advertising information in a high context culture. The Chevy truck of ball players.”. This fact alone is a compelling reason to get to know the idiosyncrasies of Chinese shopping behavior. Chinese consumers love to get a bargain, but they definitely don’t want to spend a fortune on something that looks cheap. China imposed 5% to 10% tariffs on one-third of the 5,078 goods it imports from America, with tariffs on the remainder scheduled for December 15. That China can handily outdo the U.S. in an area of core American-consumer competency—spending money—provides an eye-opening example of the unique consumer culture that has developed in China. Other U.S. celebrity athletes endorse non-U.S. or non-Chinese brands to the Chinese market. Journal of Consumer Research, 13 (1), 71-84. Kindel's (1983) model of Chinese consumer behavior was used to develop research hypotheses concerning differences in the evaluation and selection of retail stores by Chinese and American consumers. To capture the potential benefits of this practice, U.S. firms make substantial monetary investments in celebrity endorsements, sometimes running into the millions of dollars per endorsement deal (Simmers, Damron-Martinez & Haytko, 2009). Here are seven key differences between Chinese and Western consumers: The feeling that shopping is an enjoyable pastime rather than a chore is much stronger among Chinese consumers than Americans or Brits, according to a report from research firm Millward Brown. Unlike ethnically homogenous China, whose population is 99% Han, the USA is made of many ethnicities: 14% African American, 6% Asian, 15% Hispanics, and 65% Caucasian. Many of the changes taking place in China are common features of rapid industrialization: rising incomes, urban living, better education, postponed life stages, and greater mobility. They want to experience more of what the world has to offer through their product choices, and they want opportunities to be educated about products in a sophisticated way, something that the online retail environment is uniquely suited for. Later, Hofstede & Bond (1988) conducted an additional study with a questionnaire designed for the Chinese employees and managers. In high context cultures (e.g., China), advertising tends to be more indirect, soft-sell, emotional and symbolic (Choi, Lee & Kim, 2005). For example, Chevy trucks employed the ACE services of former Baltimore Orioles short stop Cal Ripken, who holds the record for most consecutive Major League Baseball games played, to communicate the selling message of their brand’s durability. Certainly, there are differences, though. Items such as soy milk, seaweed, Asian curries and many others are entering mainstream markets. The whole concept of brands is relatively new to China, so consumers haven’t built up a lifetime of affinity for famous labels. On Nov. 11, millions of Chinese consumers are expected to go online to shop during an event called the 11.11 Shopping Festival. More pain than gain: How the US-China trade war hurt America Ryan Hass and Abraham Denmark Friday, August 7, 2020. If I ask you, “Bill Gates and Guo jingming (郭敬明), a young Chinese new rich, attend the same conference. This isn’t the case in China, where counterfeit, shoddy and unsafe goods are all too common, as are Internet fraudsters. Sports stars still find endorsement gold in China. This would affect not only US businesses but also American consumers. Levitt, T. (1983). Which one of them will dress in a more flashy style, and more likely will dress in luxury brands?” It’s highly likely that Guo will wear the latest season’s Prada, but Gates will come in a low-key shirt. The sheer number of Chinese consumers with web-enabled devices is staggering, but perhaps the most interesting point of the report is that Chinese consumers not only own but are using their web-enabled devices. Indeed, the percentage of television commercials worldwide featuring a celebrity has doubled during the past decade to 17 percent (White, 2004). Other research has shown celebrity endorsements to be an effective strategy for gaining and holding consumers’ attention (Atkin & Block, 1983), improving brand attitude and increasing purchase likelihood (Friedman & Friedman, 1979), and increasing brand loyalty/enhancing favorable word-of-mouth (Bush, Martin, & Bush, 2004). Relations among attractiveness of endorsers, match-up and purchase intention in sport marketing in China. Identifying cultural differences and similarities: China vs. the US. Chinese consumers may have soured on some American products, like iPhones, but they have only sweetened on U.S. residential real estate. Many American firms assume Chinese middle class consumers will buy more of a high quality brand named product if it is discounted. American consumers are reducing their spending in a variety of ways. Present research focuses on the power distance dimension in developing a research hypothesis as to how U.S. and Chinese consumers may differ in their general attitudes towards ACEs. The main reason Chinese and American consumers say they'd pay anywhere from 10 to 60 percent more for U.S.-made goods is that American-made products are seen as being of superior quality. Chinese consumers want to feel special, just as American and European consumers do. Chinese consumers, by contrast, take a more nuanced approach by accounting for positive and negative reviews simultaneously. Therefore, companies targeting Chinese markets with such ads must clearly understand how these markets may respond, since initial indications from this study predict a high level of receptiveness to such marketing techniques. Shopping patterns on Tmall.com, China’s largest shopping website for authentic branded goods, demonstrate that consumers especially seek out imported brands for several reasons including better quality, product safety, lack of domestic availability, and lower prices. Shimp, T. (2000). These include oil and other fuels, metal ores, plastics, and organic chemicals. U.S. and Chinese cultures exhibit wide variations in the Hofstede index scores for power distance. How COVID-19 changed Chinese consumer behavior. China sporting goods industry report 2006-2007 out now. Management consultancy Bain & Co. says brand is a top purchasing consideration among Chinese for all kinds of products. Jennifer Mueller; by . A comparison of American and Chinese consumers’ attitudes toward athlete celebrity endorsers. Advances in Consumer Research, 28, eds. Perhaps even less knowledge exists about the overall nature of celebrity endorsements in China. It's true: Some aspects of China's rise--primarily the availability of cheap labor and the country's devalued currency--have made things more challenging for the United States. Determinants and antecedents of general attitudes towards advertising. For a whitepaper summary of this article, visit: http://www.jsasonline.org. Accordingly, the Chinese consumer market is the second largest in the world in terms of Purchasing Power Parity (PPP) and is growing at a double-digit pace since 1990s (Sun 2007, Fraser and Raynor 1996). The United States imposed new 15% tariffs on about $112 billion of Chinese imports, such that more than two-thirds of consumer goods imported from China were then subject to tariffs. In the United States, about a quarter of all ads feature a celebrity endorser (Shimp, 2000). Chinese HNWIs are worlds apart from American HNWIs when it comes to luxury spending. Get the Ecommerce, Marketing & Operations info you need when you need it. This may be especially true in the case of China, since the size of China’s middle class ($6K to $25K annual income) is projected to increase from 130 million to 340 million between the years 2006 to 2016 (Cui & Song, 2009). A celebrity sports endorser is defined as “a famous [athlete or coach] who uses public recognition to recommend or co-present with a product in an ad” (Stafford, Spears, & Hsu, 2003, p. 13). John W. Spelich, Vice President of International Ecommerce Business Development at Alibaba Group. Over the next several years, it is expected that this e-shopping nation will nearly double in size. However, while lacking a cross-cultural element, one study examined consumer responses to ACEs in China using an experimental design (Liu, Huang, & Minghau, 2007). If available, Chinese consumers are likely to buy gray market unlocked iPhones even though the cost exceeds $800, and is a large percentage of annual income. Journal of Advertising Research, 19 (5), 63-71. 1. China’s government has estimated that nearly one out of three people who regularly shop online have been duped by scam sites. As such, relative to low power distance cultures, persons in high power distance cultures (e.g., China) tend to be more tolerant of hierarchies and autocratic leadership and are more likely to expect clear directions from leaders. Cross-cultural research has stressed the importance of culture in explaining consumer responses to advertising (e.g., Choi, Lee, & Kim, 2005). As MNCs expand in China, the marketing infrastructure in the country has also experienced dramatic transformations. Regional market segments of China: Opportunities and barriers in a big emerging market. & Song, K. (2009). While deep brand loyalties are not solidified, this process is underway. The article was written from the perspective of an American, and it did not include Chinese perspectives on the way Americans do business. Chinese consumers generally favor foreign brands Product safety incidents and lax government supervision have scared Chinese consumers away from certain domestic products. While the results of this study suggest that Chinese consumers are especially open to the information value of ACEs, marketers considering the use of ACEs in their advertising strategies to reach the Chinese markets should exercise caution in the manner in which this information is communicated. In general, I like ads that use celebrity athletes as endorsers. Meanwhile, Chinese people spend an average of three hours a day on their smartphones, mainly for social media and ecommerce. Additionally, McCracken (1986) argued that celebrity endorsers can serve to transfer cultural meaning from the celebrity to the advertised product. But a number of Chinese economic practices have also benefitted American consumers. Allen D. Schaefer, Ph.D., is a professor of marketing at Missouri State University. More significantly, one in four Chinese consumers say they shop with a mobile phone at least once a week. Zhou, Z. The single hypothesis in this study posited that relative to U.S. consumers, Chinese consumers will have more favorable attitudes toward ACEs, supporting this hypothesis in six of the nine scale items. While they enjoy an afternoon of casual window shopping as much as anyone, they value the brick-and-mortar retail experience less than consumers in the West, while they value e-retailing more. As a society, China places tremendous value on harmonious relationships—something marketers may wish to emphasize when crafting messages. By providing a refreshing variety of merchandise in China, including big brand names and niche brands, U.S. retailers help shoppers stand out. The present study involved a comparison of U.S. and Chinese college students’ general attitudes towards celebrity endorsers (see Table 1 for sample description). A survey of more than 15,000 global online shoppers recently released by PricewaterhouseCoopers (PwC) found that 75% of Chinese shop online weekly, compared with a global average of 21%. Schaefer, A. D., Parker, R. S., & Kent, J. L. (2010). Cui, A. GPS hits the airways with Magellan, SueSue, and Yao Ming. Chinese consumers, by contrast, take a more nuanced approach by accounting for positive and negative reviews simultaneously. They pay careful attention to what their peers are saying on social networks when they shop. Retrieved March 8, 2010, from http://www.forbes.com/global/2008/0630/049.html. There was a sharp slowdown in prices of food (2.2 percent vs 7.9 percent in September), with pork prices falling for the first time in over 1-1/2 years. In China, bu… In China, establishing cordial relationships in business is extremely important, no matter how much time that takes. Journal of Current Issues and Research in Advertising, 25,13-20. Thus, in today’s business climate, China seems to offer a large and receptive market for ads with ACEs. Hofstede (1980) argued that power distance explains how different societies have dealt with basic human inequalities involving social status, prestige, wealth, and power. This finding suggests that advertisers may benefit from knowing the cultural meanings contained in potential ACEs or may otherwise risk the association of undesirable meanings with their products. China imports raw commodities from Latin America and Africa. US is at top in nominal whereas China is at top in PPP since 2014 after overtaking US. Shoppers in the West almost take it for granted that the websites they patronize are trustworthy and the products they buy will be of good quality. In contrast, US culture is not that much of a masculine. In four Chinese consumers ’ general attitudes towards ACEs more sophisticated and more of! Consumers want to feel special, just as American and Chinese cultures wide. 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