3.1 Win in China

Win in China

As mention above, the luxury brand owner has to face some new features and changes in China market, there are some relative theories could be helpful for marketers to keep growing in China market.

First, according to Degen said that “the reason Chinese affluent men and women buy Rolex watches and Louis Vuitton bags are not simply because of the Swiss craftsmanship or French design. Their motivation to buy these luxury brands has its roots in the more complex Confucian values and demand for social recognition, and the growing influence of Western values. For this reason it is important to understand the roots and changes of the culture and values that determine the buying behavior of the modern Chine affluent consumer”. These are opposing point of customer, for someone, high brand awareness is the important factor for a purchase which can match their success, and achievement social situation; for others, the product quality is the key decision factor (Keller and Lehmann 2006, 744). Successful luxury brand marketing requires the customer to perceive sufficient value in the luxury good to compensate for the high price charged. Therefore, luxury brands want to succeed in China must obtain high brand awareness understanding. 

Moreover, no one can deny that the types of value sought and the processes of value co-creation is important. The brand owner can not only create and deliver value to the passive customer, but rather through interaction and dialogue embeds value in the co-creation process between the luxury goods and its active customer. According to Tynan et al (2010, 1161) claim that “Brand owners do not just offer value rather they co-create value with inputs and influence from customers and other parties to achieve value sought in terms of exclusivity, recognition, access to privileged information and prestige”.So based on high brand awareness understanding, brand owner creates the most advantage by bringing itself, the right partners and customers together in the co-creation of value. The customer to be equal ‘partners’ and members of the teams that design and produce the products that they want.

Second, in a blue ocean strategy, companies should hence try to differentiate its offerings to specific market wants, and try to become the sole provider of differentiated products or services. With strong market demand, luxury brand's stone expansion cannot ignore the third tier cities which have already replaced the first and second tier cities to become the fastest-growing area in the retail market (Luxury sales aid world economy 2012). In other words, luxury brands can not only aim for the big cities like Beijing and Shanghai, but are also accelerating their efforts to expand into the second and third tier cities. Second and third tier cities like luxury virgin territory for luxury brands which is a blue ocean in China, with great potential of development. Ensure sufficient training, tracking, incentive mechanism to deliver professional service in second and third tier cities which maintain consistent service levels across shops in all city tiers at whole China. This is very important the development strategy for luxury brands.

Third, as mention above the customers of the luxury goods online stores are mainly the consumers the age between 20 to 40 who have a well-paying job. Compared to the wealthy, they pay more attention to the price-quality ratio which can suit their lifestyle. During this period, e-business for luxury brands face a lot of challenges. It is essential to examine that quality awareness of luxury goods is the solid basis of the luxury market. Consumers’concern about the price-quality ratio is the key point regarding the development of the luxury market (Wiedmann et al 2007, 5). Online markets are full of high quality counterfeited luxury products and copycat products, which is the chief obstacle facing the luxury brands' e-business as they try to improve it (Hays 2008). Therefore, a luxury brand must establish their own unique sales site, distinguished fake and counterfeit effectively. Based on their customers' trust, which make consumer awareness that even online shopping they also can enjoy the same level of service and also can purchase the satisfied product.

Then, counterfeiting product is a luxury brand in current market cannot ignore the topic. Are there any marketing strategies available to companies that can help them avoid the attentions of counterfeiters and potential legal troubles or costly litigation? Unfortunately, there is no perfect way to control the threat of counterfeiting completely, but there are some practical measures could reduce the risk. The first and most effective preventive method is to invest in building and maintain a strong brand, to the point that customer loyalty is so strong that customers will not be prepared to switch to cheaper, counterfeit alternatives (Lambkin and Tyddall 2009, 44). Therefore, as mention above, luxury brands must co-create value which convey effective information to consumers which make them recognize their culture equity and establish a strong brand loyalty. The next preventive measure is education. Specifically, in China most marketing and brand managers have only the vaguest concept about the patent or trademark status of their brands. According to Lambkin and Tyddall (2009, 44) said that “Often the first time they are forced to confront such issues is when they are challenged by counterfeiters and discover to their chagrin that their brand names, designs, processes, etc. have no legal protection because they never thought to investigate what was possible”. A modest amount of education explains a variety of adverse situation possibility, which make them initiative to seek effective measures and realize the importance of brand protection.

To sum up, for luxury brands, the China market is unbelievable large but also extremely complex and the competition is inevitable, more and more luxury brands will entry into China, luxury brands must find a suitable path for their development.



Reference: 

Degen, R. 2010. Opportunity for luxury brands in China. http://www.europeanfinancialreview.com/?p=1250 (accessed March 20, 2012).

Hays, J. 2008. Luxury goods and brands in China. http://factsanddetails.com/china.php?itemid=1889&catid=9&subcatid=62 (accessed March 20, 2012).

Keller, K., and D.Lehmann. 2006. Brands and Branding: Research Findings and Future Priorities. Marketing Science 25(6): 740-759.

Lambkin, M., and Y. Tyddall. 2009. Brand counterfeiting: A marketing problem that won’t go away. Irish Marketing Review 20(1): 35-46.

Luxury sales aid world economy. 2012. China Daily. http://www.china.org.cn/business/2012-01/17/content_24425150.htm (accessed March 20, 2012).

Tynan, C., S. McKechnie, and C. Chhuon. 2010. Co-creating value for luxury brands. Journal of Business Research 63(11): 1156-1163.

Wiedmann, K., N. Hennigs, and A. Siebels. 2007. Measuring Consumers’ Luxury Value Perception: A Cross-Cultural. Framework Academy of Marketing Science Review 2007 (7): 1-23.