Branding Management in Chinese Luxury Fashion Retailing Market - Literature review Example

BRANDING MANAGEMENT IN CHINESE LUXURY FASHION RETAILING MARKET Name Institution Professor Course Date Literature Review Part 1: Underneath Chinese Luxury Consumption Market In the global context, China comes out as the third-largest consumer regarding the high-end fashions, accessories, and other luxury products. From a broader perspective, luxury goods refer to the products with the ability and potentiality to communicate elegance to the consumers, as well as the refined approach to living concerning style and quality. In most cases, the luxury products tend to target the high-end, as well as middle/high-end markets. Evidently, China accounts for about 12 percent of the global marketing practices, which is just below Japan’s 41 percent, United States’ 17 percent, and 16 percent within the context of the European nations (Amatulli and Guido, 2011). In the case of China, the luxury market provides the platform for the creation of more than $2 billion per year in sales. In the last decade, the Chinese economy did have the platform to experience 9.5 percent economic growth (Ailawadi and Keller, 2004). The substantive growth or boom in the Chinese economy associates with the increase in the number of consumers of the luxury goods, thus, the platform to oversee enormous growth and development of the Chinese luxury market. The market tends to have the opportunity to oversee further growth. According to the previous researchers, Chinese luxury goods consumers exist in two categories. In the first category, there were wealthy consumers who tend to be crowd-averse while seeking to satisfy their needs for the procurement of the personalised services. In this context, such consumers engage in the frequent visits to the luxury retail outlets with the objective of procuring newest, as well as most fashionable products offering. These consumers are not sensitive to the pricing systems or mechanisms because of their ability and potentiality to procure such products. Secondly, there is a group of consumers in the luxury retail market consisting of the white-collar employees working for the foreign companies in most cases. These consumers have the culture of spending an entire monthly wages or salaries on the procurement of the single luxury product. According to the surveys by researchers in the modern context, these consumers tend to be between the ages of 20 and 40, thus, relatively younger compared to buyers of the luxury products in the context of Europe and the United States (Degen, 2009). Evidently, men tend to become the traditional purchasers or buyers of the luxury products in the Chinese market. One the other hand, women tend to account for about 30 percent of the consumers procuring the luxury products and services. The approach by women to achieve or realise greater social and economic independence enables them to improve their share within the context of the luxury market. In China, the consumers engage in the procurement of the luxury products without much study or research. On the other hand, similar consumers in the context of Russia and other European nations focus on the real value of the products and services at their disposal (Atwal and Williams, 2009). Additionally, the Japanese consumers prove to be discrete in comparison to their Chinese counterparts. Japanese consumers have the tendency of perceiving the purchase of the luxury products as the manifestation of the social status, as well as the achievement of financial success. Most of the noveaux riche consumers engage in the utilisation of the material affluence towards impressing their friends, families, and colleagues, thus, the platform for the creation of distinction from the masses. The Chinese consumers in the luxury fashion retailing market concentrate on the exploitation of the ‘spend now and worry later’ culture or mentality in the course of procuring the luxury products. From this perspective, these consumers engage in buying the most expensive items with the intention of indulging in the newfound lifestyle. Previous literature practitioners or researchers have also focused on the assessment of the relationship between the Chinese luxury markets and the developed luxury markets in the global context (Bian and Forsythe, 2012). Categorically, these researchers believe that the Chinese new luxury goods segment has been able to experience faster platform for growth in comparison to other markets such as France, the United States, Italy, and the other European nations among the developed markets. Furthermore, the researchers have been able to identify subsequent differences in these markets (Zhan and He, 2012). One of the marked differences emanating between the Chinese and mature markets relates to the kind of the luxury products consumption in such markets. In the Chinese market, the consumption of the luxury products adheres to the item-driven mechanism. From this perspective, consumers have the culture to engage in searching for the latest collection or product at their disposal in the contemporary society (McColl and Moore, 2011). On the other hand, the more developed markets engage in pursuing experiences with the ability to pamper their needs (Kim and Ko, 2012). In such instances, the consumers engage in the consumption of products such as the luxury holiday, as well as services with the ability to reduce the time they spend in the execution of the task in question. Researchers also focus on the concept of ‘the democratisation of luxury,’ which associates with the widespread availability of the luxury products in the contemporary society. The concept tends to be common in the developed economies and markets such as the case of the United States in which even supermarkets tend to offer luxury products in the form of the gourmet food products (Ko and Megehee, 2012). In the case of China, the purchases tend to illustrate or demonstrate wealth, as well as the social status of the consumers in the market and industry of operation. In the context of the United States, as a developed market, it proves to be difficult to assess and determine wealth based on the procurements because almost every person tends to have access to the existing luxury products in the market. With time, the Chinese luxury market will be able to achieve the similar condition in which every consumer will have the opportunity to access and procure the luxury products and services at their disposal in various markets and industries (Li, Li,. and Kambele, 2012). Furthermore, researchers have been able to identify the diversity between the Chinese and developed markets while focusing on the approach of numerous global luxury entities or firms. The developed markets tend to have numerous multinational luxury firms in comparison to the Chinese luxury retailing market. Most of the international business entities and firms have focused on the utilisation of unconventional route of working or associating with the local entities and business practitioners (Liu, Perry, Moore, and Warnaby, 2016). The objective of this strategy is to facilitate the establishment of the brands of such international or global firms in the context of the Chinese market. This route is not common among such international firms in the developed markets in which business landscape, for the execution of business objectives, experiences well structuring (Phau and Siew Leng, 2008). Consequently, most of the luxury products’ firms recognise the challenges or difficulties in the brand advertisement and promotion, which prove to be complex in the case of China in comparison to other developed markets. In spite of China being larger than the continental United States, the Chinese communications systems are primitive, thus, limitation of the advertising opportunities (Zhang and Kim, 2013). In the midst of these deficiencies, companies selling the luxury products or brands focus on the utilisation of their storefronts with the intention of connecting with the relevant Chinese consumers, thus, the increased importance of the new store locations (Atsmon, Dixit, and Wu, 2011). Consequently, certain firms experience success in advertising of the brands during large events, through utilisation of the direct mail approach, and personal invitation among other techniques. Moreover, business entities have focused on the utilisation of the willingness of the Chinese press to help with the promotion of the products, which reflects a tendency absent in most nations in the international business context. In their article, Ling et al (2009) focused on investigating the market segmentation regarding the affluent Chinese consumers for the development of the identified segments of the potential target markets concerning the luxury fashion goods. According to the findings of this research article, there are five distinct market segments relating to the affluent Chinese consumers with three coming out as the most promising target niches for the luxury fashion products and services with the intention of satisfying the needs and expectations of the consumers. On the other hand, Wang, Sun, and Song (2011) sought to explore the motivation, attitude, and behaviour of the Chinese luxury consumers in the contemporary society. In the course of achieving this goal or objective, the researchers focused on integrating the consumers into three segments such as the distant, democratic, and elitist (Snaiderbaur, 2010). According to the findings of the study, elitist segment tends to procure more pieces of luxury products averagely in comparison to their distant and democratic counterparts. Evidently, the number of wealthy people in China continues to increase because of the phenomenal economic growth of the nation in the recent years, thus, the platform for the eventual growth and development in the Chinese luxury fashion market (Delong, Bao, Wu, Chao, and Li, 2004). The economic growth is essential in stimulating a desire for the Chinese people regarding luxury lifestyle. The wealthy Chinese tend to be willing, as well as able to afford the high costs regarding top-line merchandises. From a historical perspective, luxurious consumption did suggest corruption in the Chinese culture. Brand Awareness Theory According to the brand awareness theory, consumers have the tendency to choose or select brands they recognize ahead of unfamiliar brand. One of the major roles and implications of the brand is to act as an identity to the products and services so that it can undergo separation from other products and services in the same category. In the course of seeing the logo, customers have the platform to make substantive decisions on the products to procure or purchase (Macdonald and Sharp, 2000). Brand awareness theory is essential in facilitating protection for the consumers and manufacturers in the market and distribution of their products. This is one of the critical theories making it possible to assess and evaluate the Chinese fashion luxury market. The Country-of-Origin Effect Theory Various factors such as brand image, brand personality, brand associations, and communication messages are essential in influencing the perception of customers regarding the quality of the brand. One of the critical reasons for the indulges in branding is to offer substantive assistance to the consumers in procuring and purchasing decisions through cues on quality, credibility, and value of the product in question. One of the factors contributing the perceptions of the consumers towards brands relates to the place of its manufacture, thus, the essence of the country-of-origin effect (Batra, Ramaswamy, Alden, Steenkamp, and Ramachander, 2014). According to researchers of the international marketing, country associations tend to generate customer bias in the assessment and procurement of the products at his or her disposal. The concept is also evident among the consumers in the Chinese fashion luxury market. Part II: Branding Management Branding management for luxury fashion retailers In this context, research practitioners have focused on the assessment of effective brand management mechanisms, particularly in the luxury fashion market. Moore, Fernie, & Burt (2000) sought to explore the concept of brands without boundaries, thus, the platform to examine the internationalisation of the designer retailer’s brand. The objective of the article was to address the gap existing in the internationalisation of the fashion designer’s brand management. In the course of managing the brands effectively and efficiently, business entities in this industry focus on the utilisation of a decision-making process from companies with respect to the choice of the geographical market. This is because of the complexity and desire for the individual strategies by the companies pursuing effective and efficient maximisation of the profit levels at the end of each fiscal period. Evidently, there are pull and push factors providing the platform for the decision-making by the business entities during the brand management. Some of the push factors include limited opportunities in the local market resulting from saturation, regulation, and other adverse trading conditions (Zhou and Hui, 2003). On the other hand, the pull factors influencing the decision-making during the brand management include the pursuit of opportunities in valuable markets to the relevant retail offers, thus, the platform for the internationalisation of the brands (O'Cass and Choy, 2008). Brand management relates to two approaches concerning the reactive and proactive schools of internationalisation. Parameters of Branding and Luxury fashion products branding It is ideal to demonstrate the fact that brands tend to form an integral part of the reputation or image, which companies seek to portray to the outside world. In the last decade, the cost of luxury goods has experienced rapid increase by more than 60 percent across the globe, thus, the desire for effective and efficient brand management. In the luxury fashion market, brand management tends to adhere to diverse parameters with the intention of interacting effectively and efficiently with the consumers or target markets in the contemporary society. One of the brand management parameters is the essence of brand loyalty, which associates with the marketing costs, as well as the attraction of the new consumers. Brand management in this context aims at creating awareness and reassurance among the consumers of the product in the Chinese and global or international markets. The second brand parameter is the brand awareness, which relates to other parameters such as perceived quality and brand associations in pursuit of competitive advantage and sustainability in the modern context. Conclusively, there is still substantive gap in the existing research on the Chinese luxury fashion market. Execution of this research will play a critical role in helping bridge the gap in the existing literature. There is still need for the examination and evaluation of the role and influence of the digital era or social media in the Chinese luxury fashion market. Additionally, the research paper will contribute to the assessment of the emerging or ever-changing factors affecting the perceptions of the consumers in this market in accordance with the Chinese culture. In the course of achieving their goals, business entities and corporations have focused on the utilization of the branding dimensions. Evidently, business corporations engage in the exploitation of such dimensions as Symbol Dimension Corporate Dimension and Product Dimension. These dimensions provide the platform for the brand strategists to engage in distinguishing between symbolic and functional brands. These relate to the brands with the ability and potentiality to engage in the satisfaction of the functional and product-related needs of the consumers (Bhat and Reddy, 1998). The dimensions engage in enhancing the self-esteem and social needs of the consumers. Evidently, it is the obligation of the brand managers to engage in positioning the brands as symbolic, product, and corporate elements to facilitate effective and efficient decision-making by the consumers in the procurement of the products and services at their disposal in the markets. List of References Ailawadi, K.L. and Keller, K.L., 2004. Understanding retail branding: conceptual insights and research priorities. Journal of retailing, 80(4), pp.331-342. Amatulli, C. and Guido, G., 2011. Determinants of purchasing intention for fashion luxury goods in the Italian market: A laddering approach. Journal of Fashion Marketing and Management: An International Journal, 15(1), pp.123-136. Atsmon, Y., Dixit, V. and Wu, C., 2011. 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