IMacauStudiesinManagementSeriesNo.3]'CONSUMERVALUESandMarketSegmentationIssuesandImperativesforMarketingManagersAnExploratoryStudyMACAUFOUNDATION

MACAUSTUDIESINMANAGEMENTSERIESN0.3BYTHEFACULTYOFBUSINESSADMINISTRATIONUNIVERSITYOFMACAUEditor:NelsonJosedosSantosAntonioConsumerValuesandMarketSegmentationinChinaIssuesandImperativesforMarketingManagersAnExploratoryStudyLeonardoAnthonyNajarroDiokoPUBLISHEDBYMACAUFOUNDATION

TitleAuthorSeriesEditorPublishedby©MacauFoundationPrintedbyDistributedbyPrice:ConsumerValuesandMarketSegmentationInChina:LeonardoAnthonyNajarroDioko:MacauStudiesinManagementNo.3:NelsonJosedosSantosAntonio:MacauFoundation(Apartado3025,Macau)December,1995:TipografiaWelfareLda.:CulturalPlazaMacauLtd.:MOP$70ISBN972-8147-53-8

CONSUMERVALUESandMarketSe.gme.ntationCls!me.sandlmperntiue.sForMarketingManagersL\nExploratoryStudyLEONARDOANTHONYNAJARRODroKO

ToCrystal,mysoulmate,whoinspiritco-authoredthiswork.

PREFACEThisisatextthatrecommendsitselffornumerousrea-sons.Firstofallfortheapproachproposed.Consumerbehaviorisstudiedfromthestandpointofculturalfac-tors,suchasvalues;"lavoieroyale"foradeeperunder-standingofhumanchoices.Theoptionisnotstraightfor-wardandleadsusintointerdisciplinarianfieldsofan-thropology,socialpsychologyandthesciencesofmar-ketingmanagement.Butundertheguidanceoftheau-thor,everydifficultpathismadeeasy.Clarityandrigourare,infact,anothermajorfacetofthisessay,servedbyanelegantandfluidstyle.Forreadersmostlyattentivetothemethodologicalis-suesofmarketingresearch,thecontributionhereinad-vancedbyMr.Diokoisoutstandingbothbyitssophisti-cationandbytheclassicsimplicityofitspresentation.ForallthesereasonsIfeelveryhappyinbeingassoci-atedwiththisworkandwouldliketoexpressmygrati-tudetotheauthorformostofwhatIhavelearnedinread-inghisexcellentwork.VJorgeCorreiaJesuinoProfessorofManagementISCTELisbon,15-XII-1995

ACKNOWLEDGEMENTMydeepestgratitudegoestothemanyindividualswhohavehelpedmealongthecourseofthiswork.Amongthem:Prof.NelsonAntonioforhisdirectionandprompt-ing;Prof.RamonNasol,mysupervisor,myguide,whosemanyinvaluablelittlecommentariesresultedinseveralmajorcorrectivesurgeriestomywritings.TheformandsubstanceofthisworkIattributemostlytohiswisecoun-sels.Thereis,nowDr.,DavidShawwithwhomIsharedmythoughtsandideasonmanyoccasionsduringthecourseofmywritingandwhoseadmonitionsoncontent,references,critiquesandbeing"mainstream"almostscaredmetowritingtoperfection.MydeepestthanksalsotoZhaoPingChenforhisimportanthelpinsurveyingChinesestudentsinJiangrnen,China;toJackyHong,whoseroomandcom-puterImadethe"commandcenter"forthewholedura-tionofthiswork;tomyfriendAdnanRahmaniwhosecoffeeandcheershelpedmealong.Thereisalsotheselectmanagementmajorstudentsofclass1996,inparticularRebeccaZhangandDonnerChungandtheirgroupmembersforhelpingmeinthetranslationandmuchoftheexploratorywork.Mostes-peciallyIthankCrystalAo,hermorn,andfamily,forthemanydinnersanddiversionstheyinvitedmetoandwhichhelpedtokeepmesaneandlessobsessedwithwriting.AndtomycolleaguesandfriendsattheUniver-sitywhosepersistentinquiriesastotheprogressofmyvii

writing,madeforreasonsIdon'tknow,somehowactu-allyspurredmetoactioneachtime.Thanksforthepres-sure.Finally,IgivethankstoLeslie,mysister,andAllan,mykidbrother,whohavebeenmyconstantcompanionsinthetrialsandjoysoflifeandwork.Toalltheaboveandmanyothersunnamed,whosepersonalvalues,individualandcollective,expressedorinhibited,assistedinnosmalldealthecompletionofthisworkonvaluesandmadeitaworkofdiscoveryandworthwhilelearning,mymostheartfeltappreciation.AdmaioremDeigloria.viiiL.A.DiokoMacau,8-XII-1995

CONTENTSPreface...................................................................................vAcknowledgement...........................................................viiCHAPTERIINTRODUCTIONRelevanceoftheStudy.....................................................20Problems.............................................................................22ObjectivesoftheStudy....................................................23Overview............................................................................25CHAPTERIITHEORETICALFRAMEWORKMarketSegmentationanditsRoleinMarketing.........29ElementsofMarketSegmentation.................................31BasesforSegmentation............................................31SegmentationMethodsandProcedures................35DescriptorVariables.................................................39CriteriaforSegmentation................................................42Summary............................................................................46CHAPTERIIITHECASEOFPERSONALVALUESDefinitionandNatureofValues.....................................50UseofValuesinSegmentation.......................................52ChineseValueTypes.........................................................62ValuesandConsumerBehavior.....................................70Summary............................................................................79ix

CHAPTERIVCONSUMERSINCHINAGeneralDescription..........................................................85DifficultiesinMarketing..................................................88SegmentationWithintheChineseContext...................90TheMarketizationIssue..................................................93CHAPTERVRESEARCHDESIGNANDMETHODOLOGYConceptualFramework.................................................104ResearchHypotheses.....................................................109ResearchDesign...............................................................110StageI:ConstructDevelopment...........................111StageII:Survey.......................................................117StageIll:SegmentDetermination,......................120CHAPTERVIFINDINGSANDRESULTSFocusGroupsFindings..................................................123Limitations...............................................................126ResultsoftheRankingProcedure................................128Limitations...............................................................130ResultsofSegmentFormationfromRankData.........132Discussion................................................................133ValidationandLimitations....................................138ResultofLatentStructureAnalysis..............................139DiscussionandInterpretation.............:.................140Limitations...............................................................144ResultsofComparativeAnalysis.................................145X

CHAPTERVIIIMPLICATIONSANDCONCLUSIONSummary....................................:.....................................149Application......................................................................152Limitations.......................................................................154APPENDICES..................................................................157NOTES..............................................................................169BIBLIOGRAPHY.............................................................175INDEX..............................................................................183.xi

LISTOFTABLES1.NormativeBasesforSegmentation............................................332.Y.Wind'sClassicGuidetoBasesforSegmentation.................363.TheRokeachValuesSystem(RVS).............................................544.TheListofValuesSystem(LOV)................................................605.TheImpactofSocietalModernizationonChinesePersonality.......................................................................656.ExpressedParentalValuesinChina...........................................667.DescriptionofYau'sTypologyofChineseCulturalValuesandtheirPossibleMarketingImplications...................718.FactorLoadingResultsofAutoStudyShowingUnderlyingDimensionsofImportanceofBenefitsbyCarDrivers/Owners,HongKongSample................................989.FactorLoadingResultsofAutoStudyShowingUnderlyingDimensionsofImportanceofBenefitsbyCarDrivers/Owners,GuangzhouSample................................9910.SelectedMeans-EndChainConceptualModelsandtheirProposedRelationshipswithValues.......................108ll.SampleProfileofChineseStudentsintheUniversityofMacau....................................................................ll712.ExpressedImportantBenefits/ProductAttributesSoughtinVariousPurchases..................................12513.DistributionofRankingsofthe8CoreBenefitItems............12914.OverallandMedianRankingsofthe8CoreBenefitItems..13115.Segment1RankDistributionofthe8CoreBenefitItems.....13416.Segment2RankDistributionofthe8CoreBenefitItems.....135xii

17.Segment3RankDistributionofthe8CoreBenefitItems.....13618.FactorLoadingResultsofthe8CoreBenefitItems...............141LISTOFFIGURESl.ThreeModelsforSegmentation...............................................382.SampleDummyOutputofaSegmentationProcedure.......413.TheSRIInternationalVALSSegments...................................574.TheVALS2Typology.................................................................585.0.Yau'sTypologyofChineseCulturalValues......................686.Nicosia'sConsumerBehaviorModel.....................................737.TheEngel-Kollat-BlackwellModelofConsumerBehavior...................................................................758.TheHowardandShethModelofConsumerBehavior...................................................................769.HowTerminalandInstrumentalValuesGuideProductCategoryandBrandChoice......................................7810.TheSheth-Newman-GrossModelofConsumptionValues..................................................................8011.0.Yau'sModelonChineseConsumerSatisfaction/Dissatisfaction......................................................8112.AThree-LevelMeans-EndChainasAppliedtothePurchaseofaBicycleLock...........................................10613.ExpressedImportantBenefitsSoughtasPercentofTotalRespondents.................................................12714.ProposedConsumerValuesSegment-TypologyBasedonResearchFindings...................................................151xiii

LISTOFAPPENDICESA.SummaryofGarreau'sNineNationsofNorthAmerica......................................................................158B.Kahle'sDistributionofValuesAcrossCensusRegionsoftheUS...............,.......................................159C.SurveyInstrumentforChineseStudentsintheUniversityofMacau.....................................................160D.SurveyInstrumentforChineseStudentsintheUniversityofJiangmen................................................162E.ExcerptsfromFocusGroupDiscussionTranscripts...........164F.TransformationProcedureofRankingDatatoOverallRankMeasure...............................168xiv

LIKEMEN,ANIMALSCANHAVENEEDS,DRIVES,WANTS,ATTITUDES,ANDYES,EVENCERTAINLIFESTYLES.BUTONLYMANISCAPABLEOFLIVINGBYANDLIVINGFORTHETHINGSHEHOLDSTOBEGOOD,TRUE,ANDTHUSDESIRES.THESEAREHISVALUES.

apriorisegmentation,34attitudes,103INDEXattributes[product],105,108Baker,29belief[andvalues],51-52benefitsought/importance,35,93,95-96hierarcyof,110linktovalues,114partofmeans-endchain,104,110rankorderof,117segmentation,107Bettmanmodel,72CalantoneandSawyer,44China,18approachestosegmentationin,91consumersin,85-102consumerbehaviorin,86-88,94-95consumerresearchin,86-88marketdescription,85-86difficultiesinmarketing,88-90segmentingin,90-93valuedimensionsresults142Chinesepersonality,63,65cluster[hierarchical],132comparativeanalysis,121consumerbehavior,70-72constructused,55,111corebenefits,126EKBmodel,72end-statesofexistence,53183

EPS[ExtensiveProblemSolving],74,87,113andconceptformation,114factorinterpretation,142-143ofautostudy,100-101findings,123-147focusgroups,123,143framework[conceptual],104Garreau,20generalizability[insegmentationcriteria],53,44Guangzhou,consumersin,97-102Haley,107homogeneityofsegments,30HongKong,consumersin,97-102Howard,34,40,42,89,104,109,113andShethmodel,74Kahle,82,159Kotler,34,143latentstructureanalysis,139,141ofautostudy,97-100LeeandZhan,63-64lexicon[ofbenefitssought],124LoudonanddellaBitta,61LPS[LimitedProblemSolving],74theLOVtypology,56,77comparisontoVALS,56,59Macau,consumersin,97-100Mahatoo,105marketing,29marketization[levelof]inChina,93-96issueof,94184

operationalizationof,114-115Maslow,56means-endchain,50,93,95-96,104MichiganSurveyResearchCenter,56modesofconduct,53motives,104-105derived,107needs,105,107andvalues,109Nicosiamodel,72ninenationsofNorthAmerica,20,158positioning,29post-hoesegmentation,35-37predictorvariables,42psychographicvariables,34quasi-typologies,59questionnairedesign,117-120rankingresults,128medianrankings,130transformationintooverallrank,133,168researchdesign,110Rokeach,18,52,63-64,74routineresponsebehavior,74theRVSsystem,53,77,107segmentation,29-47approachesto,29-30basesfor,31-35benefitsought/importancevariable,107criteriaforeffective,42-45definitionof,17185

descriptorvariablesin,39-42elementsof,31methodsfor,35-38Sheth-Newman-Grossmodel,74socialadaptationtheory,59SRIInternational,20,55stability[insegmentingvariables],44surveysample,112Taiwan[studentsamples],62UniversityofMacau,95autostudy,95,114Chinesestudentsin;sample,115universality[insegmentation],23,26-27,110,154VALSsystem,55,77VALS2system,56values,49-83characteristicsandnatureof,51-52Chinesetypes,62-70implicationsinmarketing,64-70andconsumerbehavior,70-79consumption,77corevaluetypes,61-62enduringnature,64definitionof,50asindicatorofneeds,109instrumental,53influenceonconsumerchoice,74measurementof,118-119personalvalues,18predictivecapacity,82system,21,51-52terminal,53186

typologiesof,21,55useinsegmentation,52-62variables[forsegmentation],32descriptor,34expostfactoanalysis,109ofhigherabstraction,34,50kindsof,32"long-term",47forsegmentingChineseconsumers,46-47Yang,62Yankelovich,31Yau,64-70,79,92-93Chineseconsumerbehaviormodel,79,81Youngetal.,30,32187

MacauStudiesinManagementSeriesNo.IEditedbyProfNelsonSantosAntonioQualityManagement:100Questions&AnswersQualityResearchGroup,FacultyofBusinessAdministrationUniversityofMacauISBN972-8147-71-6164pages1995paperThefirstvolumeofajointinitiativeoftheMacauFundationandtheFacultyofBusinessAdministration,UniversityofMacau,underthetitle"MacauStud-iesinManagementSeries".Theworktakesa"questionandanswer"typeapproachforfirsthandreaderstoappreciatethevariousaspectofqualitymanagement.CoveredinthebookaremanydifferentapproachestoTotalQualtiyManagementsuchasStatisticalProcessControl,QualityControlCircles,Kaizenactivities,Cross-FunctionalManagement,QualityFunctionDeployment,organizationalchangeprocessforqualityandalsoISO9000certification.WhilepreparedmainlyfornewcomersinQualityManagement,thecomprehensivenessandconveniencebroughtbythispublicationshouldproveusefulforqualitypractitioners,researchersandtrainersaswell.Forfurtherinformation,pleasecontact:MacauFoundationP.O.BOX3052MacauTel:345977Fax:345979

MacauStudiesinManagementSeriesNo.2EditedbyProfNelsonSantosAnt6nioQualityManagement:Quality:TheoryandPractice(OriginallyPublishedinPortugueseas"Qualidade-Te6riaePratico")QualityResearchGroup,FacultyofBusinessAdministrationUniversityofMacauISBN972-8147-61-9100page1995paperTheoryandPracticedescribestheimportanceofqualityconsciousnessinanyorganizationstrivingforcompetitiveadvantageinthisever-changingworldofbusiness.Thetextexplainsthepracticesofqualitymanagementthroughemphasizingitsinteractionswithmanyimportantconceptsinmod-ernbusinessmanagementsuchasthelearningeffectphenomenon,groupdynamicstheory,systemtheoryofthefirm,competitivestrategicplanningandculturalinfluencesonmanagementpractices.Italsoexplainsthedoc-trinesofsomeofthemostinfluentialfiguresinthehistoryofqualitymanage-mentandisequippedwithaveryvividandreallifecaseillustration.TheoryandPracticeisnotonlyintendedfortheundergraduateandpost-graduatestudentsinmanagement.Anybodyfromthechiefexecutivetothelaymanwhoisengagedinactivitieswhichconcernqualityshouldfinditinterestingandcomprehensive.Forfurtherinformation,pleasecontact:MacauFoundationP.O.BOX3052MacauTel:345977Fax:345979

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