China is known for its luxury goods market and the Chinese customers are attracted towards purchasing the luxury goods. The research was to determine whether the social media networking had an impact on the purchase intentions as well as brand loyalty of the customers in the international market. Literature review provided information related to the different marketing strategies adopted by the managers of luxury goods selling companies in China. Social media advertising of the products is considered to be the best way for the companies to reach the target customers in the global market. The researcher has chosen quantitative analysis because the data can be tested easily using the SPSS statistical tool. The customers were provided with the questionnaires and their responses were analysed to determine the effect of social media. The regression analysis indicated that social media advertising has a strong impact on the purchase intentions and brand loyalty of the customers in China.
Chapter 1: Introduction
1.1 Background Statement
Globalisation has led to the growth of Chinese market and there is growth in the fashion industry that has attracted large number of customers from the global market (Kim and Ko, 2012). The firms have tried to bridge the differences among the cultures by manufacturing the apparels that are suitable for all types of cultures (Kim and Ko, 2012). The market stimulants such as the fashion shows conducted on the television and the fashion events held in the urban shopping malls increases the customer base for the fashion brands in the global economy (Knight and Young Kim, 2007). China has acquired a large market share by manufacturing the luxury brands and the luxury retailers across the globe have focused on the Chinese market (Shi, et al., 2012). The luxury goods manufacturers have focused on the rich young Chinese customers as they have a fascination for the purchase of the Chinese brands. The social media has played a key role in attracting the young generation of China towards the purchase of the products.
The market for fashion brand has become more diverse in China with the introduction of the designer brands, ethnicity and personalisation of the brands (Reinach and Wu, 2010). The demand for the fashion brands has also increased in the global market and the luxury brands are mainly demanded by the high income groups (Low and Lamb Jr, 2000). The social media is used by many of the customers in order to gather information regarding the newly launched products from the customers in the global market. The use of the social media marketing in creating the brand awareness in the Chinese market has began in the year 2009. The technology has helped the customers to know more about the brands and they can take up their decisions based on the information collected.
1.2 Significance of the Research
The luxury fashion market has gained its reputation in the Chinese market and therefore the research is conducted on the factors affecting the purchase intention as well as the brand loyalty of the Chinese customers (O'Cass, 2004). There is large number of fashion brands such as Gucci, Mont Blanc, Primark, Zara etc that has satisfied the customers in the international market and the customers demand more innovative products related to these brands. Moreover the marketers have been using various means to satisfy the customers that includes the internet marketing as well as the social media marketing.