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2a_Heiman_TanChocChina[1]

2a_Heiman_TanChocChina[1] - CHOCOLATE IN CHINA DETERMINANTS...

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1 CHOCOLATE IN CHINA: DETERMINANTS OF WESTERN BRAND LOYALTY Bruce A. Heiman (Corresponding author) San Francisco State University Lan Tang San Francisco State University Accepted for publication (forthcoming) by Journal of Global Commerce Research (do not cite or quote without authors’ permission) Chocolate in China: Determinants of Western Brand Loyalty Abstract We explore empirically, using quantitative methods, factors affecting Chinese consumer loyalty for western chocolate brands. A convenience sample of subject matter experts was surveyed from China’s Shanghai region. Following a descriptive analysis of the sample, survey responses (Likert-type scales) were analyzed using ordinary least squares (multiple) regression. Our findings show that increasingly (1) marketing chocolate for gifts, and (2) distributing chocolate through supermarket predict increased loyalty to western brands. We offer insight for foreign managers and manufacturers interested in succeeding as exporters to China’s relatively nascent, but potentially colossal, retail market for chocolate. 1. Introduction Four primary marketing strategies are used in China by western chocolate manufacturers. The first strategy tailors chocolate to the local gift culture (used, for example, by Dove Chocolate). The second strategy provides consumer education (Cadbury Chocolate). The third emphasizes targeting youth (Kit Kat). The fourth focuses on partnering with local distributors (House of Brussels Chocolates). Some companies adopt multiple strategies to achieve competitive advantage. There is little agreement which strategy works best. Many argue new distribution channels (supermarkets) are the best competitive weapon (Beijing Review, 2007), while some suggest new product development is the best approach (China Daily, 2004). Using survey data from 51 industry experts in Shanghai, we test for the effects of three established approaches (focusing on chocolate for gifts, use of supermarket distribution and increasing holiday marketing efforts) to explore how western chocolate can best build brand loyalty in the Chinese retail chocolate market. This paper proceeds by first providing a market overview of chocolate in China, (cultural and the competitive landscapes). We next argue for three testable hypotheses, and then describe our methodology, sample data and variable construction. We then present the results of a rigorous, controlled multiple regression model. We conclude
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2 with the implications of our findings, issues, and future research possibilities. Our goal is to make a modest exploratory contribution to understanding what factors determine western brand loyalty among Chinese consumers. We offer a substantial descriptive background in order to provide a context for understanding potential managerial actions hinted at by our findings.
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