Consumers too segmented to classify clearly
Who is the Chinese consumer? There is no simple answer. But if one is required, China marketing expert Bernd Schmitt says the typical Chinese consumer is female, between 19 and 30 years old, lives in Shanghai in an average family of three, and buys on image rather than price.
Mr Schmitt of the China Europe International Business School in Shanghai - says the answer best represents the current and future buyer, one who loves to spend on consumer goods, and should be the target of most marketing campaigns.
Yet he is quick to emphasise that in China, as in other consumer-oriented societies, a typical consumer differs from market segment to market segment.
Market segmentation - the term for classifying consumers according to demographics, geography and other factors affecting spending habits - has recently arrived in China.
Mr Schmitt says: 'Less than 20 years ago, when China declared its open-door policy, segments hardly existed.
'Even in 1991, when I first taught in China, segments were not well developed and consumers were not as sophisticated and informed as they are today.' Whereas consumers in the past had to take what was produced, manufacturers today have to compete for the consumer dollar by satisfying what consumers want. To do that, marketeers have to take a hard look at market segmentation. The marketing expert says studies show the Chinese consumer market, while geographically immense, is fragmented. Premium-priced Western consumer goods which sell in big cities such as Shanghai, Beijing and Guangzhou, may not go down well in smaller cities, not to mention the countryside. Even among cities, there are many differences a marketeer has to take into account.
Mr Schmitt says: 'The major advertising firms visited in China I typically distinguish between five and eight city markets.
'More than that, for most product categories, it is necessary to segment and target certain demographic groups within cities - based on sex, age, income, education and occupation.' Factors such as consumer values, attitudes and lifestyles also affect spending habits.
So, who is the Chinese consumer? He says there is no one type of Chinese consumer. 'There are consumers in the city, there are consumers in the countryside, and consumers in one city are different from those in another.' Even within the same city, consumers are different in terms of income, education, and occupation.
A marketeer will have to find out how detailed the segmentation must be and then use one of the three strategies - which involve either a broad-based approach, focusing on a large and fast-growing segment, or targeting a niche segment.
