Chinese food marketing

Citation

Lindgreen, A. and Hingley, M. (2009), "Chinese food marketing", British Food Journal, Vol. 111 No. 1. https://doi.org/10.1108/bfj.2009.070111aaa.001

Chinese food marketing

Article Type: Guest editorial From: British Food Journal, Volume 111, Issue 1

About the Guest Editors

Adam LindgreenProfessor of Strategic Marketing at Hull University Business School. He has published in several journals, including British Food Journal, Business Horizons, Industrial Marketing Management, Journal of Advertising, Journal of Business Ethics, Journal of Business and Industrial Marketing, Journal of Marketing Management, Journal of Product & Innovation Management, Journal of the Academy of Marketing Science, and Psychology & Marketing, among others. His research interests include business and industrial marketing, consumer behaviour, experiential marketing, relationship and value management, and corporate social responsibility. He serves on the board of many journals.

Martin HingleyReader in Marketing, based at Harper Adams University College in Shropshire, the leading university in the United Kingdom specialising in agri-business. He has published in British Food Journal, Industrial Marketing Management, and Journal of Marketing Management, among others. His primary research interests focus on marketing and the applied areas of food industry marketing and supply chain relationship management. He has presented and published widely in these areas and serves on the editorial boards of several academic journals.

Containing approximately 20 per cent of the world’s population and enjoying annual gross domestic product growth of up to 10 per cent, China ranks high on the agendas of both business leaders and policymakers. And the industry in which Chinese households spend the greatest proportion of their income is the food industry. Urban and rural households spend, respectively, 40 and 50 per cent of their budgets on food. As a result of rising incomes and an expanding urban middle class, Chinese households also have changed their eating habits drastically during the past decade, cutting back on rice and wheat products and instead embracing the consumption of dairy products, meat (poultry and fish), soft drinks, and wine. The sales of processed foods also are increasing.

Although only 10 per cent of the world’s cropland belongs to China, the value of Chinese agricultural imports, which long seemed stuck at $8-12 billion, increased to $25 billion in 2005, making China one of the largest agricultural importers in the world of such items as soybean and vegetable oils, natural fibres, rubber, and hides.

Traditional food markets – those open-air, mom-and-pop shops tightly controlled by the authorities that relied on antiquated wholesale and supply chain systems – also are giving way to convenience stores, supermarkets, hypermarkets, and warehouse clubs. The “supermarketization” growth rate sits at approximately 40 per cent annually, and the tens of thousands of supermarkets in China achieved sales of $71 billion in 2003.

This special issue of British Food Journal seeks to examine the significant developments in Chinese food marketing. The six articles included herein together provide an in-depth understanding of the critical issues involved in Chinese food marketing.

For example, the first article after our guest editorial considers how Chinese pork processors are integrating information technology, logistics management, quality management, and firm performance. Jiqin Han, Jacques H. Trienekens, and S.W.F. (Onno) Omta, in “Integrated information and logistics management, quality management and firm performance of pork processing industry in China”, employ a stratified random sample of 229 pork processors in eastern China to undertake a partial least squares analysis and find that integrated information technology and logistics management improve the quality management practices of pork processors. Furthermore, by applying information technology, these processors attain integrated logistics management. Yet quality management practices, integrated information technology, and integrated logistics management have no significant impact on or relation to firm performance, though integrated information technology indirectly affects firm performance through quality management practices. Overall, this study highlights the critical role of integrated information technology and logistics management for quality management in a key industry in China.

“Which way forward for China’s vegetable exports?” by Xue Liu and Brian J. Revell, examines vegetables instead of pork, noting the patterns of China’s international export trade in vegetable products between 2001 and 2005, that is, since China’s accession to the World Trade Organisation (WTO). They also note how supply chain and food safety issues may affect China’s future export growth and assess its comparative advantage with an export specialization index. Using a trade-share accounting framework, these authors identify potential sources of change in China’s aggregate market shares, then estimate an import demand function. China retains a comparative advantage in vegetable production and exporting, despite negative structural changes in many of its major overseas markets, particularly East Asia, and its export share, both in those markets and worldwide, have increased since its WTO membership. However, little evidence indicates that this membership has enabled China to penetrate EU markets for its vegetable exports.

Moving from supplier to retailers, Martin Hingley, Adam Lindgreen, and Lan Chen describe the changing Chinese grocery retail market in “Development of the grocery retail market in China: a qualitative study of how foreign and domestic retailers seek to increase market share”. Since international retailers entered China ten years ago, profound changes have shaken in the Chinese retail sector, including the introduction of advanced retail techniques and managerial approaches and increasing sophistication of domestic retailers’ supply chains. By considering the strengths of foreign retailers (e.g., hypermarket and super centre formats, high-quality products, economies of scale), domestic retailers (smaller formats, good relationships with administrations and local communities), and formerly state-owned domestic retailers (few strengths; instead, they lack funds and suffer from a poor management style), these authors develop recommendations for each type of retailer. In-depth interviews with Wal-Mart, Bonjour, Wu-Mart, and Jingkelong provide insights into various features of Chinese retailing, including consumers, business relationships, distribution centres, product lines, store formats, quality systems, and competition.

The fourth article, “Chinese gatekeeper perceptions of genetically modified food”, by John G. Knight and Hongzhi Gao, investigates perceptions of food distribution gatekeepers in China and their likely acceptance (or denial) of genetically modified (GM). Key informants – including a sample of 20 companies in five commercial centres in both China and Hong Kong – suggest consumers currently have ambiguous attitudes toward GM food products and may accept them, assuming they provide some benefits and a price advantage and that the government confirms their safety. According to the authors, the Chinese government should take advantage of this window of opportunity to export to markets such as Japan and Europe that prefer to import non-GM food and develop China’s potential for growing GM crops, because the export barriers on GM food products appear short-term in nature.

To determine consumer perceptions of service quality, Ursula Bougoure and Bernard Lee investigate ‘Service quality in Hong Kong: wet markets vs supermarkets”. Their questionnaire-based, convenience sample study of consumers in shopping malls in Causeway Bay, Mong Kok, and Tsuen Wan reveals that supermarkets outperform wet markets on all SERVQUAL-P measures. That is, wet market vendors fail to provide the level of service quality demanded by customers, especially with regard to visual attractiveness, professional appearance, and modern equipment. These vendors – perhaps in conjunction with government representatives – should develop standards of service quality if they want to survive in the highly competitive food retailing industry; otherwise, the “supermarketization” of Hong Kong will continue unabated.

Finally, in “The effects of consumer preferences and perceptions of Chinese tea beverages on brand positioning strategies”, Cheng-Wen Lee and Chi-Shun Liao discuss the influence of Chinese tea beverage brands’ attributes on consumers’ evaluations of brand positioning. In pursuit of key beverage images – such as thirst-quenching, popular, good taste, and so forth – brands should consider consumers’ brand awareness, potential market demands, and brand competition. These results provide a useful source of information for managers, who must introduce new brands to the market carefully and deliberately and choose positions that are both appealing and sustainable over time.

Despite the breadth of research exemplified by these articles, several issues remain unaddressed by this special issue. For example, do Chinese consumers spend money on higher quality foods or on greater food quantities? Are the trends that appear in Europe, such as those related to branded products, processed foods, eating out, and organic food, common to China too? On which parameters do imported food products compete when compared with Chinese food products? How do Chinese consumers view foreign food products and Chinese food products? If they want to meet growing food demands, what developments should supermarket chains and food product distributors undertake? What are the advantages and disadvantages of the supermarketization of China? What strategies have Chinese businesses adopted in response to foreign competition? Are horizontal and vertical channel collaborations taking place in China? What has been, and what will be, the impact of Chinese governmental intervention and legislative control when it comes to investments and business operations in China? These questions, and others like them, point to the need to continue the research stream that this special issue hopes to catalyse.

We take this opportunity to thank all those who have contributed to creating this special issue of British Food Journal. First, we thank the reviewers who provided timely feedback to the authors, thereby helping them improve their manuscripts. The reviewing was a double-blind process. Second, we extend a special thanks to the editor, Chris Griffith, for giving us the opportunity to serve as guest editors of this special issue. Last but not least, we warmly thank all of the authors who submitted manuscripts for consideration. We appreciate and are grateful for their desire to share their knowledge and experience with the journal’s readers – and for putting their views forward for possible challenge by their peers. We are confident that the articles in this special issue contribute to advancing our understanding of Chinese food marketing. As well, we hope they generate the kind of dialogue necessary to enhance our understanding of this important area even further.

Adam Lindgreen, Martin Hingley