Introduction
Business has been conducted across national boundaries for long time, but the increasing internationalization of business has become one of the most significant phenomenons in the contemporary world. Normally companies pay little attention on the oversea market if the home market is big and offer great potential because the home market seems safer. However the business environment is changing and companies Dissertation is provide by Custom Thesis http://www.400190.com/cannot ignore the international markets. Due to many factors such as face saturated at home market, many companies have realized the importance of oversea market and increased a wide range of activities in overseas. As Kupfer (1988) described, leading corporations around the world have increasingly turned their attention to international business in order to maintain a competitive edge in today’s dynamic economic scene. Starbucks is a good example to illustrate this situation. Starbucks is the world’s largest coffee shop chain and one of the world’s top 100 global brands. The company’s objective is to establish Starbucks as the most recognized and respected brand in the world. To achieve this goal, the company plans to continue to rapidly expand its retail operations by increase its market share in existing markets and to open stores in the new market (www.Starbucks.com). In 1999, Starbucks opened a new store in Beijing and now it has over 120 stores in China. The company felt that there is great potential offered by China because of the consumers’ disposal income is increasing as the economic growth as well as a low base of coffee drinkers. But only this factor is not enough to reflect the Starbucks’ prospects in China, many factors also should be considered.
Developing countries are becoming important markets. According to the concept of international product life cycle, more and more developing countries may become significant markets. For many reasons, the Chinese market was not been considered as viable market until recently. Now China has not only become one of the major trading nations in the world, it has also considered as a market with great potential for many businesses. This research stems from an interest when many studies stated that there are many international businesses are operating in China, obviously this can be seen in the food and beverage industry. It is true that American food chains and beverages are everywhere in mainland of China particularly in some big cities such as Beijing, Shanghai and GuangzhouDissertation is provide by Custom Thesis http://www.400190.com/, for example Pizza Hut, KFC, Haagen-Dazss, and of course McDonald’s. However there are many studies concentrate on the economic and business conditions that influence on investment in China; but not many research has focused on the Chinese consumers. Therefore, knowledge about the Chinese consumer still remains quite few. In particularly, there are few studies have explored the Chinese consumers’ attitude and behavior toward foreign food and drink service outlets. This research could give ideas to understand the consumer attitude and behavior toward Starbucks, hopefully this study would be helpful for marketers seeking to enhance their knowledge on the Chinese market and especially foreign foodservice enterprises increase insights into how Chinese consumer behave and market their product more effectively when they want to set up the business in the similar situation.#p#分頁標題#e#

Aim
The overall aim of this research is to investigate the possible impact of Chinese consumer behavior on Starbucks’ performance in China.
Objectives
Objectives are the stages need to be achieved in order to meet the aim. In order to understand the relationship between consumers’ attitude and behavior and Starbucks’ performance in China, the follow objectives could be useful. These objectives are including:
? To provide an overview of what factors can influence consumer behavior
? To critically discuss how the changing economic and political conditions can impact on consumer behavior in China
? To evaluate how culture can influence Chinese consumer behavior to western food and drink
? To examine the motivations of Chinese people for visiting Starbucks
? To assess the suitability of Starbucks in the Chinese market
Literature Review
Liberalization and deregulation of world markets have driven many companies to internationalize their marketing activities to survive and grow. Success internationally clearly depends on the acceptability of products by consumer in different countries (Kaynak et al, 2000). In other words, although a good product or service may be offered to the public market, one key to success or failure in business is to determine whether there are enough customers willing to buy. In order to be successful in long term, companies have to design effective product, promotion, pricing and distribution strategies to meet customer needs. For this purpose successful companies have to know what the customers need and want, also how they make decisions about buying the products. Therefore it is necessary understand consumer behavior. According to Sheth et al (1999), consumer behavior can be defined as the mental and physical activities undertaken by household and business Dissertation is provide by Custom Thesis http://www.400190.com/customers that result in decisions and actions to pay for purchase and use products and services.
However, the study of consumer behavior can be very complex, because consumer behavior can be impact by various factors (e.g. cultural influences, social class influence, motivation, attitude etc.). Generally these factors can be divided into two categories: External variables and individual determinants, and all these factors tend to interrelate and influence each other.
When a company wants to expand its business in the oversea market, they must understand that country’s economy and its influence on consumer behavior. Because economic influence is one of major factors can impact on consumer behavior. According to Cullen (1997), economy is term to describe the patterns of economic activity in a country, including production and employment, population and income, consumption and living conditions. #p#分頁標題#e#
Jain (1990) suggested that different countries provide varying market potential with respect to population. To some extent it is true because people are the most fundamental element that constitutes the market. However, large population does not always mean there is great potential for companies. As Jain (1990) described that population figures alone provide little information, since people must have the means in terms of income to become viable customers.
In brief, the economic environment of a country largely defines the marketing opportunity for international business. As Inkeles (1983) and Tse et al. (1989) Stated that the economic conditions of market in terms of income, mobility, media access etc. significantly affect consumer behavior. Kotler et al. (2001) also offer a similar view, he suggested that there are two economic factors can reflect the country’s attractiveness as a market: the country’s industrial structure and income distribution.
With the world’s largest population (1.25 billion) and decades of 7-8 percent annual GDP growth, China is an economic behemoth (NBS China, 2004). As mentioned before China has been considered as a market with great potential and many American food chains are operating their business there. According to Marshall (1995) the main economic influences on food purchase are the general economic environment, but very specifically price and income. The relationship between income and food consumption was first investigated by Ernst Engel in the 1850s. As incomes grow consumers are able to buy more luxurious and expensive products and services.
In the past 10 years, the government of China has implemented many policies to develop economy and improve the living standards of Chinese citizens. According to a research conducted by Euromonitor, China achieved dynamic economic growth of 9.5%. As China becomes more developed, standards of living and levels of disposable income are both increasing, especially in the urban area. Due to these factors, the rate of growth in consumption in China was approximately 9 percent annually-the biggest in the world consumers and the greatest proportion of consumer spending nearly 50 percent was allocated to food (Beijing Review, 1998). This partly contributed to increase demand for foodservice outlets. According to China Statistics Bureau, from January to November 2004 China’s overall consumer foodservice industry record strong growth of almost 22%. In China the averages eat out spending in 2005 was about 140 times more than what it was 30 years ago. In addition Shanghai has left behind Guangzhou in the total spending on food in restaurants and hotels. These studies have clearly point out there is great market potential for foodservice sector.
The case above clearly indicated that economic variables can impact on consumer purchase behavior. Undoubtedly there is a strong relationship between money and consumer behavior, because the amount of money a person has can direct affect whether he or she able to buy a product or service. Per capita income and disposal income have been observed as good indicators of the amount of resources allocate to consumer goods (Johansson & Moinpour, 1997). For example, when consumers have limit resources in terms of money, they may focus more heavily on price when evaluating products and making purchase decisions. However, as more resources become available, consumer may desire more hedonic or emotional image attributes in products or brands, often foreign brands or goods imported from advanced western countries are desired for those reasons.#p#分頁標題#e#
However the relationship between income and consumption is not always perfect because there many other factors can influence consumption, such as taste, availability, individual preferences and so on. Besides income, the other major factor influencing purchase is price. The simple relationship between price and purchase behavior is obvious and applies to all product and service. Moreover, even a country has been perceived as a good potential market, companies might still have to face other difficulties such as culture different. Therefore it is necessary understand how consumer behavior can be influenced by culture.
It is widely accepted that there are differences in consumer values, behavior and attitude in different countries. Many studies (e.g. Allport) suggested that the concept of attitude is one of the most important concepts in social psychology. There are no other single influence is as important to the study of consumer behavior as the concept of attitude. Attitudes can be defined in many different ways. The definition of attitudes is useful for this study was written by Hughes. He defined attitudes as an individual’s favorable or unfavorable inclination toward an attitude of an object (Hughes, 1971 in Engel). Attitudes are important to advertisers because they can be used to predict behavior and influence how consumers evaluate and choose products and purchase intention.
Consumers often evaluate imported goods differently than they do identical domestic products (Herche, 1992). According to many studies on country-of-origin effect (e.g. Damanpour, 1993; Elliott and Camoron, 1994), consumers have a general preference for domestic-made products over foreign products in more developed countries. But in less developed countries consumers may have a preference for imported brands as opposed to domestic brands (Li et al., 1997; Wang et al., 2000).
Traditionally Chinese consumers have favorable attitudes towards western product because in China imported products or foreign brands are often associated with the concept of high fashion or high social status. As Sin (2000) described, Chinese consumers have a strong preference for foreign products and those products are mainly western based, although a large proportion also come from some countries in Asia such as Japan. However, people from different city in China might have different attitude toward western products. Li & Gallup (1995) suggested that urban Chinese consumers differ from those which are rural on a wide range of consumer attitude and behavior, and currently urban consumers are more likely target for foreign products. Other studies (e.g. Cui, 1999 & Dickson et al., 2004) also indicated the consumption of foreign brands is high for Chinese consumers who living in the major cities and who are relatively affluent, young and educated. Cui & Liu’s (2000) study has reinforce this point, their study found that 28 percent of Shanghai consumers favored foreign products and over 36 percent of Guangzhou consumer reported favoring foreign products. These studies have point out both Shanghai & Guangzhou can be regard as the best potential market for foreign products. However, attitudes are not always synonymous with behavior. For example, a person may hold a favorable attitude toward a Gucci handbag but may not buy it due to it is expensive for that person. #p#分頁標題#e#
Understanding attitudes is essential to marketers because there is strong link between consumers’ attitude, consumers’ perceptions and their actual behavior. In addition, marketers have to understand that people are not born with attitudes, Bareham (1995) indicated that attitudes are obviously learned and build up through experience or through information acquired from others, including the mass-media. It is necessary to understand culture plays an important role at this stage, more detail about the relationship between culture and attitude will be discussed below.
Culture exists in the every society, it is around us and affects everything we do. Doing business in different countries requires interaction with people in different cultural environments. According to Kotler et al. (2000), culture and people’s general behavior influence the customer’s actions in the marketplace which in turn impact upon the firm’s marketing decisions. In addition, Jain (1990) suggested that although the performance of a product depends on a variety of factors, in many cases failure is directly traceable to cultural blunders. For example, a product that has been success in one country does not mean it can achieve the same success in another country, because the product desired in that country may not always mean be desired in elsewhere. Thus, an understanding of culture enables the marketer to interpret the reaction of consumers to alternative marketing strategies.
It is widely accepted that there is strong link between culture and the way people behave. Cultural differences deeply affect market behavior. The studies of consumer behavior historically focused on individual decision making-how consumers buy and use products to reflect their concept of self. It is clear that consumers are shaped by their environment as they live. As mentioned before culture plays an important role in our everyday life,Dissertation is provide by Custom Thesis http://www.400190.com/ therefore an understanding of what constitutes ``culture'' is a good starting point. Culture as a topic cannot easily be defined and in fact the concept of culture is broad and very complex. Culture can be defined in many different ways. Different definition can reflect a different orientation to culture. The Longman Dictionary of the English Language (1999) defines ``culture'' as: The typical behaviour, customary beliefs, social forms and material traits of a racial, religious or social group. However, the follow two definitions provided by Tylor and Kluckhohn are relevant to understanding consumers. Tylor (1913) described culture as the complex and interrelated set of elements that including knowledge, beliefs and values, arts, law, manners and morals and all other kinds of skills and habits acquired by a human being as a member of a particular society. Kluckhohn (1951) defined culture as the distinctive way of life of a group of people, their complete design for living.#p#分頁標題#e#
Culture exists in the society and has great influence on what people do. On one hand, culture is about share assumptions, values, norms, beliefs and perceptions. It provides people with a sense of identity and an understanding of acceptable behavior within society. Moreover, culture can reflect customers which distinguish societies one from another (Capon, 2000). For example eating and drinking are obvious distinguishing features of a culture.
According to Edles (2004), food is a one of the cultural symbol, and it is one of the cultural traits that human learn first from childhood (Gabaccia, 1998, Cervellon&Dude, 2005). Consumers have to make choice every day, but when ask consumers why they eat particular food and the answer normally is simple-they like the taste. In fact except taste, consumers often make particular food choices that are dependent on other different factors. McCorkindale suggested that the notion of taste should be to include social and cultural perspectives, individual differences in taste are acknowledged but accepted only if they do not exceed the parameters of social acceptability. Leclerc et al. (1994) also suggested that taste is ``coloured'' not just by the gustatory properties of the food itself, but its smell, sound and appearance as well as by expectations generated by marketing communications and even country of origin.
China is the largest nation in the world. China has a reputation as a challenging country for overseas organisations to explore. Its long history and unfamiliar culture make China difficult to understand (Zheng& Melewar, 2004). Therefore cultural factors will continue to affect the development of foreign foodservice outlets. Culture can affect for instance the acceptability of what food will be eaten and whether new food products will become part of a consumer’s diet. Many previous study showed that China is the smallest coffee market and in the world because drinking tea is a traditional culture and this culture has been last over five thousand years already. Compare to the coffee consumption in Taiwan people drink 38 cups each year, in Hong Kong 44 cups, in Japan 330 cups, in the UK 440 cups, 463 cups and 1100 cups in Sweden, the coffee consumption in main land of China is one cup a person, a year (Financial Times, 1998). Before the entrance of instant coffee brands such as Nescafe and Maxwell House into China, consumption of the coffee was even unknown. But this has changed. According to the Xinhua News Agency, total coffee imports have rose 75 percent in 2001. Another study also shows the total volume sales of coffee in China grew by nearly 90% between 1998 and 2003 to 6504.5 tonnes (China agriculture yearbook report). All these studies showed that there is increase demand for coffee.
According to Usunier & Lee (2005), not all nation territories hold homogeneous ethnic, linguistic and religious groups. Therefore the cultural variable is more complex, and the way in which it influences behavior is difficult to analyze. China is good example. #p#分頁標題#e#
China has many diverse cultures and regional differences. Wright (2001) suggested that the geographical contexts of a culture all shape its food preferences. Different tastes and habits represent an obstacle for foodservice companies to operate across different regions, so to some extent this will discourage the development of foreign foodservice outlets.
For marketers it is necessary understand that culture is not constant, in fact cultures are changing gradually and continuously. As Loudon et al. (1993) stated that culture in some societies are quite static, with a very slow rate of change, while others are more dynamic, with very rapid changes taking place. For example, Keynote Ethic Food Report (2003) indicated that the growth of foreign travel and increase media coverage of foreign cultures increase ethnic diversity in the UK and their eating habits have served to increased demand for more authentic, specialized products. As the effect of globalization, the attitudes of Chinese consumer also can be changed.
Apart from the impact of external variables, individual differences such as motivation, personality and self-concept also have great impact on consumer behavior. Customers make purchases in order to satisfy needs, some of these needs are basic and must be filled by everyone. Meeting consumers’ need is the fundamental goal of every company. According to many studies (Park et al., 1986, Keller, 1993), consumer products/services are generally marketed to appeal to three basic types of consumers’ needs: functional, social and experiential needs.
Generally people in a country where the living standard is high, they will spend a large portion of their income on desires rather than on basic needs. Social images satisfy social needs such as social approval, affiliation or personal expression (e.g. status, prestige) and outward directed self-esteem. Consumers higher in social needs may value a socially visible product or brand that provides prestige and exclusively (Soloman, 1983, Keller, 1993). For example, western brands or imported goods may be use to convey social status in non-western consumer markets. Kim et al. (2002) also offer a similar view and they stated that consumers may choose particular products not only because these products or service provide the functional needs benefits, but also because products can be used to express consumer’s personality, social status (symbolic purpose) or to fulfill their internal psychological needs.
However, as mentioned before Custom Thesis，Custom Dissertation，consumer behavior is very complex and can be influence by various factors, understand what consumer do and why they do can be a big challenge for most companies. But understand consumer behavior is critical for every company, because they can design marketing programme more effectively to target their customers.

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