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A recent Nielsen Global Brand Origin Report revealed that 91% of Chinese consumers consider a brand’s country of origin as important as or more important than buying drivers such as price, choice, selection, quality and function

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A recent Nielsen Global Brand Origin Report revealed that 91% of Chinese consumers consider a brand’s country of origin as important as or more important than buying drivers such as price, choice, selection, quality and function.

Fifty per cent choose a global brand and thirty eight per cent choose a local brand for safer ingredients and processing. Similarly, 38% choose local brands and 30% global brands when it comes to price or value; 34% for global brands and 24% for local brands when it involves better product benefits, 28% or global brands and 27% for local brands for previous positive experience and 28% for global brands and 24% for local brands when it comes to overall nutrition. All of these were the top reasons behind selecting a product.

Overall 32% of respondents “agree” and 45% “somewhat agree” that global brands are mostly more expensive when compared to local brands. Twenty seven per cent of respondents “agree” by 27% and 45% “somewhat agree” that global brands offer latest product innovations compared to local brands. Similarly, 25% “agree” and 42% “somewhat agree” that global brands offer better quality.

In China, for baby food and formulas, 54% prefer global brands compared to 30% who prefer local brands. A similar trend is seen for beauty and personal care products, of which 47% prefer global brands in comparison to 28% who favour local brands. Chinese consumers prefer local fresh food. The responses for local vs global brands for vegetables is 71% vs. 9% for meat is 67% vs. 11% for fruits is 66% vs. 10% for yogurt is 58% vs. 16% and for seafood is 58% vs.

16%.

In the food and beverages categories, again local brands are preferred as 48% of Chinese consumers seek local brands and 28% want global products. A similar trend is found for packaged food. For instance, preference for ice cream is 38% local vs. 29% global, for crackers is 36% local vs. 28% global and for canned vegetables is 52% vs. 10% global.

Brand origin can be very important consideration in the current retail world. However, the brand sentiment varies in categories. Thus, the presence of a powerful brand has greater leverage regardless of the fact that it is a local or global brand. In the end, only brands that better fulfil the needs of customers and deliver strong value propositions will have an advantage in any market.

QUESTION 1

Discuss the factors that make some global brands are more expensive than local brands.