Attitudes of Practitioners in the Chinese Distribution towards Italian Quality Food Products

Transcription

1 Attitudes of Practitioners in the Chinese Distribution towards Italian Quality Food Products Sergio Marchesini 1, Huliyeti Hasimu 1,2, Maurizio Canavari 1 1 Alma Mater Studiorum-University of Bologna, Italy 2 Xinjiang Agricultural University, P.R. of China The present work was made in the framework of the BEAN-QUORUM project (TH/Asialink/006), co-funded by the EU, within the Asia-link Europe-aid Cooperation Programme.

2 Background and Motivations Increasing importance of China as a trading partner for EU companies, due to its rapid economic growth, but: China only ranked 9th in 2000 and 6th in 2005 among the non-european destination countries for Italian exports Italian products only represent 1.09% of China s overall imports In 2006 Italy ranked 30th among Chinese agri-food product foreign providers, with a share close to zero, just 0.32%. Growing interest of Chinese consumers for imported food and drink products, often perceived as stylish, elitist, status building, and of good quality

3 Background and Motivations Imported food products distribution channels are not as much specialized and diversified as for domestic products, mainly for 2 reasons: 1. Small quantities of products are delivered on the market compared to local products 2. People interested in imported products are limited in number and located in specific areas Trade of imported food products is concentrated in the hand of a small group of businessmen: international buyers, purchasing agents, retailers and representatives from large-scale distribution chains (powerful gatekeepers) Business is dependent on the type of relationships built with these operators

4 Background and Motivations Source: Knight et al., 2005 Many interrelated elements influences the gatekeepers decision to purchase, e.g.: Perceived value, Perceived Quality, Trust, Product-Country and Company image and reputation Distance (physical and psychic)

5 Background and Motivations Psychic distance The sum of factors preventing the flow of information from and to the market. These include difference in language, education, business practices, culture, and industrial development. (Johanson & Vahlne, 1977) Source: Knight et al., 2005

6 Objectives Gain insights on the opinions of Chinese operators towards Italian operators current communication and marketing strategies and practices, in comparison with operators from other EU countries This may help to: Identify critical factors for a better understanding of the demand and to meet the customers needs in the Chinese market, so as to improve the penetration of food products made in Italy Identify possible product categories perceived as most interesting and with best perspectives in the near future

7 Summary of the project Duration 5 months (January-June 2007) Objective Products Understand the point of view of Chinese distribution operators towards imported food products made in Italy processed agro-food products Methodology Qualitative research: personal semi-structured interviews administered to a convenience sample of key informants of companies that import Italian food products Areas Beijing, Shanghai, Guangzhou

8 Methodology Qualitative marketing research technique Exploratory approach Sampling: snowball sample (non-probabilistic), selected from directories of importers of Italian food and beverages Data collection: Personal interviews that have been administered as conversation-like dialogues, with the help of a semi-structured interview outline Data analysis: The responses have been evaluated in accordance with such framework, performing a qualitative content analysis, and providing basic elaborations for the description of the sample and for some side-aspects of the interviewed subjects

9 Methodology: Interview content information on the characteristics of the business of the interviews : degree of involvement with Italian companies source countries for agro-food products characteristics of the company s distributive network dimension of the business in term of geographical coverage general information relevant to definition of the business environment : customs and import-related issues general problems of the sector interviewee s preferences: attitude towards Italian products insights on the business relationship likes, dislikes, and complaints

10 Characteristics of the sample 25 interviews: 21 distributors 4 buyers Breakdown of the interviewed company s distribution coverage Geographical distribution of the interviewees 7 Beijing local 28% all china 44% 15 Shanghai 3 Guangzhou major cities 28%

11 wine N. of companies by product category pasta oil vinegar dairy water pickles bi coffee scuits, grocery dressings frozen ice-cream sweets product category

12 Italy s competitors Italy s most cited competitors in this sample are: For Wine France, Australia, Spain, Germany and USA For other products USA, France, Germany and Spain Wine Other sweets ice-cream frozen dressings biscuits, grocery coffee pickles water dairy vinegar oil pasta 0 USA France Germany Spain Chile Australia New Zealand Japan 0 Argentina USA France Germany Spain Chile Australia ew Zealand Japan Argentina Taiwan UK Belgium

13 Best sold Italian products At present, the best sold Italian products in this sample are wine, pasta and olive oil cold meat 1 1 product category wine sweets pickles cheese oil pasta citations

14 Italian products with best future perspectives The Italian products with best future perspectives are cold meat & ham, pasta, sweets (chocolate) and cheese product category cold meat wine sweets cheese oil pasta citations

15 Marketing strategies: promotion issues Italian companies do not invest in promotion and advertising (high incidence). It follows that Chinese consumers are not familiar with Italian products. Language problems: Italians do not translate the names and the labels of the products, not even in english (average incidence). Lack of innovation in terms of product range (average incidence). Italian companies export just for Italian people, not for Chinese. distributor of Shanghai

16 Marketing strategies: organizational issues Italian companies are uncoordinated and unorganized when they arrive in China (average incidence). They often stress on characteristics of Italian regions that nobody knows Italian companies are not concerned about what happens after the sale (average incidence) and rarely use long-term strategies When they fail, Italians return home, French come the day after with a new proposal distributor of Shanghai

17 Marketing strategies: cultural differences Chinese have a different taste and different consumption habits, especially with regard to those products that are not part of the traditional Chinese diet, such as wine. This problem is often neglected by Italian traders and producers, they assume their products are just of an absolute superior quality, so they do not adopt a country-specific strategy Foreigners love to argue about how different is Chinese food from that of their home countries, but when it comes to importing they behave as if we had the same taste distributor of Shanghai

18 Marketing strategies: signalling of quality Chinese consumers do not know the difference between the various italian wine appellations (average incidence), therefore it happens that IGT wines gain more prestige than DOC and DOCG wines Besides providing basic information, French arrange special courses to raise the awareness on their long wine production tradition and culture; Italians do not even insert a basic description of the product s characteristic in the label wine distributor of Guangzhou

19 Conclusions: positive feedbacks/strenghts Italian food is somehow far from Chinese standards, but it s not unknown In China western products enjoy a higher reputation than local ones, and Italy s reputation for food is very positive (Country of origin effect) There is a high interest towards some specific Italian products

20 Conclusions: negative feedbacks/weaknesses Price still represents a discriminating factor in purchasing decision, more than the source country, the market potential is still limited Imported products are too expensive for the vast majority of the population: they are purchased only by tens millions of consumers, which however do not represent a well-organized market given the dimension of the country Italian companies do not invest in promotion, therefore interest towards certain products is not converted into demand A local supply made up of less expensive high quality products may compete with Italian imported products by imitation and counterfeit.

21 Limitations and further research This study is exploratory in nature and reports only qualitative information Due to the problem s nature the focus is on main urban area and on a small segment of the population The information collected is one-sided, the exploration of Italian and non-italian exporters opinion could be also relevant Further research is needed to better quantify some of the phenomena emerged during the interviews

22 Thank you 谢谢你们的注意力!