Educating Chinese Consumers : A case study of IKEA & Absolut Vodka

Abstract: ABSTRACT China has gone through rapid change the last decade, which has opened up possibilities for many western companies. The consumer market is booming and consumers are getting more open to western brands and values, especially in the metropolitan regions. Due to the rapid change in today’s China, it is difficult to be enough updated. This is the main reason for why we have chosen this subject, to be able to contribute to a better understanding concerning western companies’ interaction with the dynamic contemporary urban China. This thesis investigates specific marketing tools used by two successful Swedish companies, IKEA and Absolut Vodka, in their quest to reach modern Chinese urban consumers. To answer this question we also found it necessary to examine how IKEA’s and Absolut Vodka’s brand values interact with the Chinese culture. A qualitative multiple-case study approach is used and has resulted in two separate cases: ”The creative vodka” (Absolut Vodka) and ”Design for the many people” (IKEA). The cases are mainly based on interviews with representatives from IKEA, Absolut Vodka and Eastwei in Shanghai. Documentation as well as observation has assisted in complementing and verifying the empirical findings we gathered from the interviews. The subject is introduced by a chapter that supplies relevant background information concerning China, in terms of the market, consumers and cultural aspects. Our theoretical framework consists of two interdependent areas: culture and global marketing, which include Chinese culture-, value- and branding theories. Our conclusions have mainly one focus, which we call ”educational marketing”. When entering the Chinese urban market, the companies have to learn about the Chinese culture and the consumers, but they do not have to fully adapt to the new environment. We found that when IKEA and Absolut Vodka market themselves on the Chinese market, they modify their marketing efforts slightly to be able to communicate with the Chinese consumers. This does not mean that they change their brand values in their adaptation, though, but rather that they use different communication tools to get the consumers to consume the brand with its original core values. With the information gained from marketing research, they learn what the consumers lack in terms of knowledge and then the educational process starts. They help the consumer to understand how to consume the brand. Absolut Vodka has to for example, teach the consumers how to make drinks, which is something that is rather new for Chinese people. Before gaining this knowledge, it is difficult for them to consume the product and furthermore the brand. In IKEA’s case, they help the Chinese consumers to understand the advantages of the concept of DIY (do-it-yourself), but they also teach them how to use interior design in their homes. Another conclusion concerns the dynamics of culture. When these companies enter the Chinese urban market and start to communicate with the consumers, something happens. Instead of fully adapting to the needs and demands of the Chinese consumer, they educate them and furthermore change them. The consumers start to consume in a somewhat different way with the values of the western companies, which in its turn contributes to a change in the values of the Chinese culture. Our empirical findings have resulted in a theory that explains this dynamic process of educational marketing on the contemporary Chinese urban market.