Research Proposal for initial product testing in Chinese's market and

the factors that influence the Chinese wine consumer

By

Saad Anjum

Student of University Of Hertfordshire

8th September 2012-09-08

(saadanjum@outlook.com)

Electronic copy available at: http://ssrn.com/abstract=2143673

1. Abstract
Purpose – the purpose of this Proposal is to conduct a research for initial product testing in
Chinese's market and the factors that influence the Chinese wine consumer.

Design/ Methodology/ approach – the study applies qualitative and quantitative methodology,
together with question developing measures, sampling techniques, and instrument for data
collection.

Findings – wine associated activities; the way of communication, quality and price are the
major factors that can influence the buying and consumption behavior of Chinese's
consumer.

Keywords - China, initial product testing, Competitors, Wines, Customer behavior, emerging
markets, China's wine consumption, Consumption determinants, Wine marketing strategy

Paper type - Research Proposal

2. Introduction

Market research is conducted to comprehend the people; market research will give the
researcher a broader perspective of the customer how they think of the product or
advertisement's Churchill (2001). The purpose of market research is to help researchers
develop and support marketing decision; it can be understood in terms of carrying of
activities like methods of data collection, research objectives, methodology, and issues for
inclusion of research, etc. (Hague & Jackson, 1999).

Orth et al (2007) states that global wine business as “a complex and fruitful field of study." In
business, everything that is produced must be sold to make a profit. Thus, there is a need to
conduct research to see how this principle can be applied in the wine market, especially in
this era, where wine represents one of the most profitable drinks of the total drink's category
sold to the hospitality industry.

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Electronic copy available at: http://ssrn.com/abstract=2143673

During the last few years Windsor wines United Kingdom wine manufacturer and distributor
based in Kent have been successful in selling premier quality of alcoholic and non-alcoholic
sparkling wine, and due to the success now company is looking forward to expanding their
business into Chinese's market, this research will support Windsor's wines in future decision
making. Furthermore, Bretherton & Carswell (2002) states that China is nearly one-fifth of
the total world population and is one of the most fastest-growing economies around the
world, and represents a market that western business can no longer ignore this fact as
Chinese's market is undoubtedly the world‟s most important emerging market.

3. Research Objective
The purpose of this research is to help Windsor‟s wines expand their business into China and
help them, how to carry out initial product testing in a non-European market. Furthermore,
this Proposal will also help the company to develop the price and promotional strategies. The
Proposal outlines the research approach, methodology and the analysis.

4. Terms of Reference

The terms of reference are as follows:

• To help Windsor Wines develop effective positioning strategies for China

• To identify the current consumer buying behavior of Chinese‟s wine consumer

• To do the comparison between United Kingdom wine market and China's wine market.

• To identify the alcoholic and non alcoholic sparkling wine positioning strategy in China.

• To identify the competitors who are currently operating in Chinese's wine market.

• To make recommendation as appropriate.

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5. Approach
The research will, firstly, emphasis on agreeing a joint understanding between the top-level
management and the research team on the specific aims of the research and following on
from that the researcher will identify the key issues and areas which would need to be
included on the survey.

Generally, most of the research projects contain an element of desk research in establishing
and evaluating the types of data that have been composed in the earlier research project.
Initially, the research started from a desk research which is also known as secondary
research, which can identify the key issues and problems gathered by other researchers or
research agencies. According to Gratton & Jones (2010) secondary data or secondary
research refers to research where no such original data is composed, but the research project
use existing source of data, for example census or archive data. Once the clear picture of the
problem has been identified then we will conduct a primary research to further elaborate the
research problems in order to do initial product testing in China. According to Bradley (2007)
primary data are the information that has been collected for a specific purpose; the same
information has not been available before. This is the gathering of information, which is
undertaken at first hand by the researcher, data that has been gathered personally.

5.1 Type of Research

The type of research which we are going to use in this research would be descriptive
research; reason for using descriptive research is intended to provide data for the composition
and characteristics of the relevant group of interest. As the name implies, descriptive research
can provide a clear picture or snapshot of a particular group at a particular time. According to
Burns & Bush (2008) descriptive research is done to describe answers to questions of who,
what, where, when and how. When we wish to know who our potential customers are, what
brands they usually buy and in what quantity they buy that brand, from where they buy those
brands, when they shop and how they found out about our product, we turn to descriptive
research.

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Descriptive research is also popular when we want to conduct a study‟s findings to a larger
population. If a descriptive study‟s sample is representative, the findings may be used to
predict some variables of interest such as sales.

A questionnaire will be designed in order to collect qualitative and quantitative information,

although the design of it will only be undertaken once clear agreement about the issues has
been achieved.

5.2 Qualitative Research

According to Kotler & Keller (2009) in order to find out about the consumer behavior,
motivation and attitude, qualitative research is used and results are obtained from a small
sample of customers view by doing elicitation interview, focus group interview, etc.

5.3 Quantitative Research

According to Kotler & Keller (2009) quantitative research is one, which consists of data
collection by personal interviews or by mail from a large sample of customers.

6. Issues for Inclusion in the research

 Culture plays a vital role in conducting a research and expanding a European
premium product into Chinese‟s market.
 Whether a researcher is a psychologist or educator, the initial responsibilities to
participants are clear: obtain consent, protect from harm, and ensure privacy.
 The primary task as a researcher is to make sure that participants should have a
complete understanding about the purpose and methods to be used for the research;
the risks involved, and the demands placed upon them as a participant (Jones &
Kottler, 2006).
 Privacy attached while conducting research has carried throughout history, and
enormous differences are still obvious from one country to another. Privacy has,
however, became a “right” that is highly precious on modern countries.

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  Many products must be registered, certified or licensed by the relevant Chinese
authority before they can be sold in China. In addition, China passed a law in 2009
according to that law every foreign food and beverage's manufacturers to register with
the associated authority before the product can be imported into the country
(Blackwell, 2012).
 China has relatively strict foreign exchange regulation. Moving currency in and out
from the country may require a settlement, registration or approval depending upon
the transaction (Blackwell, 2012).
 Import duties are very high initially it was 17 percent, but now it has been reduced.
 A new Labour Law has been implemented on January 1, 2008 aimed at providing
better protection to employees in China. The law applies to both domestic and
foreign-owned firms hiring employees in China (Blackwell, 2012).

7. Methodology
This study investigates the wine consumption behavioral characteristics of Chinese
consumers. We propose to carry out Mall-intercept interviews through judgement and
convenience sampling, where customers in the malls are approached and asked to take part in
the survey, and product can be placed in the shops, and questions will be asked from the
customers buying that product and the shopkeepers about the feedback for the product.

Another method that will be used in order to collect data is the Computer-assisted telephone
study using a questionnaire, with computer-assisted telephone interviews the questions are
programmed for a computer screen, and then the interviewer reads off. Responses are entered
directly into the computer program by the interviewer, often the supervisor has the ability to
listen in to interviews and to check that they are being conducted correctly. This has been
chosen as a cost-effective way of contacting relevant respondents.

We have not proposed a postal study or online approach because we feel that the telephone
and mall-intercept interview give us the opportunity to select appropriate and accurate
people. This gives an assurance of achieving the desired number and type of respondents.

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7.1 Questionnaire Development and Measure

This study investigates the buying behavior of alcoholic and non alcoholic sparkling wine
consumer in Chinese‟s wine industry. Quantitative data will be collected through a self-
administered questionnaire from customers residing in different parts of China. Target
population was reached through the personally administered survey in universities, offices
and Shopping malls.

We will use a structured questionnaire for our survey. As the respondents for this research
would be consumer having alcoholic and non alcoholic sparkling wine so the questionnaire
will pilot tested initially among a judgement and convenience sample of wine consumers.
Judgement sampling will be used in the consumer of 22 and above consuming alcoholic
sparkling wine and convenience sampling will be used for non alcoholic sparkling wine
customers. Pilot testing is a formal practice of study actions, which attempts to reproduce the
whole flow of operations in a uniform sample to study participants. According to Burns &
Bush (2008) the researcher use his or her judgement or that of some other knowledgeable
person to identify who will be in the sample, subjectivity enters in here and certain members
to the population will have a smaller chance of selection of the sample than will others.
Furthermore, Burns & Bush (2008) states that, convenience samples are a sample drawn at
the convenience to the researcher or interviewer. Based on feedback from pilot tests; we will
make minor changes to the questionnaire as per requirement.

The questionnaire will consist of 25 items, including yes or no, scaled, closed-ended and
open-ended question. Since the questionnaire would originally be written in English, it will
be translated to Chinese and then back translated into English to avoid language biases and
make certain that the intended meanings of the items were delivered (Temple & Young,
2004).

7.2 Sampling Technique

According to Proctor (2005), sample is a subset of the population that should represent that
entire group. Researchers should use the sample which represents populations.

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Population for current study is the alcoholic and non alcoholic sparkling wine customers
living in mainland China of age 22 years and above for alcoholic sparkling wine, 16 and
above for non alcoholic sparkling wine belonging to social-economic classes. An and B.

According to David & Eric (2009) social class is defined as being of a different class,
involves the difference in culture, economic circumstance, educational preferences, housing
conditions, property, ownership and power in other words social class is the fundamental to
the distribution of life-chances in industrial and post industrial societies.

7.3 Instrument of data collection

A close ended, and Likert scale based questionnaire will be administered to collect
quantitative data. A 5-point Likert scale with the range of 1 (strongly disagree) to 5 (strongly
agree) is to be used in the measurement. According to Bertram (2009), likert scale is defined
as psychometric replies, mainly used in questionnaires to obtain participant's first choice or
degree of agreement on a statement or set of statements. In Likert scale, respondents are
asked to point out their level of agreement on a given statement by way of an ordinal scale.

Whereas the questionnaire will also include open-ended question for customers to express
their ideas and thoughts regarding different brand and the reason of choosing that brand. The
questionnaire covers the demographic profile of respondents and items to measure the
constructs.

8. Analysis of Data

According to Saunders et al (2008), before the invention of personal computer researchers

used to analysis the data either by hand or by using mainframe computers. The use of these
techniques was extremely time-consuming and lead to errors. Fortunately, the by-hand or
calculator „number-crunching‟ and „charting‟ element of quantitative analysis was
incorporated into relatively inexpensive personal based computer analysis software such as
Excel, SPSS, E-Viewer and SAS.

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Analysis of the closed-ended questions will be done in Excel where as the analysis of open-
ended questions will be carried out manually by our Project Manager. In addition, the
summaries of these responses will be included in the final report for management. A full
transcript of all open-ended responses could be provided to management if they required this
will not include those responses where inclusion could result in identification of the
informants.

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