Effects of Consumer Preferences on Foreign Sourced Products

Effects of Consumer Preferences on Foreign Sourced Products and Impact of Technology on International Business: A Case Study of China

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A Final Thesis Presented To the Academic Department of the School Of Business and Economics in Partial Fulfillment of the Requirements for the Degree of

ATLANTIC INTERNATIONAL UNIVERSITY

HONOLULU, HAWAI

Acknowledgements

I would like to thank my parents for their support and love throughout my learning process. In addition, I thank my teachers for instilling in me the knowledge I needed to complete this project and for the support they gave me throughout my educational journey.

Introduction

Whenever a product is positioned, marketing mix is placed into consideration so that profits can be optimized on in a specific time period. However, due to internationalization trade as well as production has been globalized and expanded due to increased demand for goods. Therefore, the country that carries out the production is an essential attribute in a mix especially to a particular corporate. Due to the foreign production conventional motivation, a company is able to increase its competitive advantage by diversifying or gaining admission to the raw materials and resources that are needed (Lawloor, 2007). Furthermore, in countries such as the US there are labeling policies that are compulsory especially if it is coming from the country of production. However, this has limited impact when it comes to foreign sourcing based on the choice of the consumer as well as their evaluation. Moreover, companies that are focused on technology end up becoming successful especially in the international market because they develop products that are high in value. Technological innovations as well as advancements have ensured that products that are sourced in foreign markets are manageable even though there are drawbacks and various issues (Pirouz, 2012). For example, there are companies that are as large as Toyota, Microsoft and Apple that are well known worldwide.

Chapter One1.

1 Problem of Investigation

The aim of this research is to study how consumers' perceptions affect the image of foreign products and the role of modern technology in the international business. This is mostly focused on the marketing procedures that international organizations apply in the various foreign markets. In this case, the focus of the study will be on China because it is the market that most major organizations seek to introduce their products to. This is because the country has a huge potential for profit for the international companies' products or services. Foreign products influence the perception of the buyers as well as their evaluation of the product and this is something that has been studied widely especially when it comes to international business, consumer behavior and marketing (Etzel & Bruce, 2005).

The perception of the consumer has a major effect on the technology that will be applied to improve the international business so that the product choice of the consumer is influenced (Greimel, 2014). This study is among the most researched factor internationally especially when it comes to the study of the behavior of the consumer. Moreover, globalization has increased its pace hence this has led to the rise of diversity especially in the international manufacturing activities. However, more research has to be conducted so that marketers can get to know more about the consumer behavior and attitudes with regards to foreign or international products. This research will base major focus on the Chinese consumers perceptions when it comes to foreign products and how the foreign product influence the behavior of the consumer and the technological advancements that have been applied in the international business as a result.

1.2 Objectives

The major objective of this research is to examine the Chinese consumer preference when it comes to the foreign product by investigating the effects of the foreign product preference as well as the behavior of the Chinese consumer. First, the extent to which the consumer preference on the foreign product has an effect on the Chinese consumer as compared to factors such as technological quality and prowess will be determined. Second, this research will try to answer how a Chinese consumer links product quality and the origin of the product whereby the respondents will be asked to rank various countries in relation to their preference on the products which have originated from the countries.

Many studies have been carried out to know the effect on the preference of the consumer when it comes to foreign products especially in developed countries; however more studies have to be carried out on the developing countries (Kaynak & Cavusgil 2006). This research however will seek to understand how the Chinese consumers preference foreign products. Moreover, the result of the research will have great impact to the foreign multinationals who are currently marketing products in China market.

1.3 Hypothesis

A study introduced two different brands were chosen from two different categories of products that is men's shoes and sweater. The sweater brand name was Alpha and it was handmade while Beta was made by a machine. The men's shoes brand names were Kappa that was handmade while Zeta was machine made. The shoe and sweater products selection were selected on the basis of:

Both machine-made and handmade technologies and in similar product category

Consumers may recognize both products

Products are of importance to the consumer such that they locate COM information

Brand names that were hypothetical were used due to the research topic

Similar hypothetical brands that were Italian were applied to all the brands so that effect of the CO was constant

It was found that the process technology perceptions influenced the preference of the consumers when it came to the technology used in the process of manufacturing of the mentioned brands. This study therefore, showed that consumer preferences were also influenced by the technology that was applied to the manufacture of the product. However, the evidence that was given in this study did not sufficiently explain the process. This is why this research will seek to be specific in finding out the details of the research question.

1.4 Variables and Method of investigation

A specific scale that was adopted from Spreng and Mackenzie was used to evaluate the study, whereby items like good/bad, favorable/unfavorable and excellent/poor were present. As a result, the measure became one-dimensional for all the products. Therefore, the intention of purchase was evaluated by using items like strong need to buy/ weak need to buy, more unlikely to purchase/ more likely to purchase, and motivated to purchase/no motivation to purchase. As a result, the exam came to a solution that was based on a single factor.

Consumers in China who showed probability and were in a cross-section were taken so that they can be surveyed so that the intentions of purchase with regards to sweaters and shoes are determined. This research used techniques that were conjoint and then foreign products were put into considerations that the hypotheses could be tested. The method of conjoint analysis refers to predicting choice. This process uses survey procedures whereby Chinese consumers are selected of sweaters and shoes. Moreover, each of the products has fixed amounts of aspects as well as an aspect-level mix which may differ.

In this research, Chinese consumers were given the option to choose their favorite from the various features of the products and products that are multi-attribute. The products only showed a difference when it came to origin country, quality indicators and pricing. In the beginning, the products to be used were selected for the purpose of conjoint study. In order to select products the buyers were surveyed for impressions of different consumer products with regards to the importance it has on competitiveness of Chinese manufacturing so that the capability of the Nigerian manufacturing for the product could be maintained.

120 respondents became interviewed that is 67 women and 53 men in random samples in a Chinese shopping center. Beijing is a commercial city in China therefore it is a representative of Chinese consumer behavior for sweaters and shoes. The amount of respondents that were used in this study had a significant impact on the results of the research. The type of interview that was used was computer aided because it was seen as an easier way to reduce the workload of the respondents as well as impose internal consistency.

This research used both secondary and primary information. However, the theoretical part of this research mainly used secondary sources like scholarly journal review while on the other hand quantitative interpretations and findings used primary data. The design process that was used in the sampling was:

Target population. The individuals were focused on as the elements to be used for sampling because they make the decisions of purchase and they also have individual income. Moreover, the fact that they are categorized as dependents will present minimal competency when it comes to consistencies in price-utility, COO implications, and brand name, as well as general biases related to purchase. Therefore the unit of sampling was commercial offices because all of the members were earning an income hence they were likely to make the decisions of purchase.

Chapter Two

2.1 Referential Framework

Consumer preferences have been used by various businesses who distribute their work in foreign markets so that an evaluation can be carried out on the purchase decisions of the consumers (Lawlor, 2007). This variable is quite powerful and it has been put to use so that the competitive positioning can be influenced especially when it comes to the international market. The construct of consumer preferences is based on an assumption that the manufacturing company is similar to country itself in which product brand is developed (Marsh, 2013).

In recent times, there have been technological advancements and development as well as an increase in communication (Pirouz, 2012). Therefore, various companies have embraced the idea of expanding into the global market. There are several international brands that have been formed and as a result preferences of the consumers are affected. Moreover, the companies have also taken an advantage of the low wage rates as well as operation costs in developing countries hence they have moved locations for assembling and manufacturing to the developing countries (Pratt, 2006). Furthermore, outsourcing various components has become popular, engineering tasks and designs whereby collaborations are created with the foreign firms or design centers are established overseas.

Extrinsic cues like country of origin and brand name have an effect on the perception of the buyers when they want to purchase foreign products (Vitez, 2015).

The increase of globalization and internet usage has made foreign products more exposed especially in countries like China (Collier & Zhao, 2010). The internationalization trend has encour...