Chinese have no Brand Loyalty

 

Introduction

 The Chinese consumers have become more demanding as well as pragmatic than ever before with their horizons expanding beyond the basic product features. Besides, their willingness to pay a premium for better value and quality has made them spend more time researching and exploring products nuances (Atsmon, Dixit, Magni, & St-Maurice, 2010). The Chinese consumer is a brand conscious but focuses more on the value making the brand loyalty a secondary point of concern. For example if they need to order from a writing service they check out the list of the best writing services.

 Entry into the Chinese Market

 Given the above description of the Chinese consumers’ behaviour, it remains prudent for companies planning to enter this market to perform the necessary strategic analysis and always take a strategic direction. Having such a market means that an entity must chart a plan on how it will manage to make the consumers like its brands, gain a competitive advantage, sustain the business, and increase its profitability. This paper uses the Porter’s Five Forces Model and the strategic choice of competitive analysis to help the companies wishing to enter the Chinese consumer market on what it means to them and how they should get prepared.

Porter’s Five Forces

 The Porter’s Model remains critical and very useful in conducting a competitive analysis using its framework of five forces that are believed to be shaping markets, industries, and the competition. Indiatsy, Mucheru, Mandere, Bichanga, and Gongera (2014, p. 77) noted that the intensity of these forces should be monitored since they greatly affect the expected profitability level in an industry and influences the decisions on whether to enter it.

 The bargaining power of customers is the first force proposed by Porter to indicate the relationship between an entity and its buyers. The buyers seem powerful when they are small in number and concentrated or when they are many but substitute products exist, especially where the switching costs are minimal (Haapalainen & Skog, 2011, p. 11).

 The Booz & Company, and the American Chamber of Commerce in Shanghai (2013, p. 4) report on how the local and multinational companies went about winning in the transitional China, the two groups found that the changing behaviour of the Chinese buyers was a significant driver for the changes being experienced in that market. Consumers are affluent, more technologically savvy, have more purchasing options now than ever before, not price sensitive, and are always willing to extra for quality and features as well as the products integrity they seek, an issue that might improve on their loyalty to the brands they trust and know (Booz & Company; American Chamber of Commerce in Shanghai, 2013, p. 4). Booz& Co. and the American Chamber of Commerce in Shanghai (2012, p. 4) study on the Chinese consumers trend reported that this market had changed from the price-driven market to a greater value, integrity and quality seeking market.

 The second force comes from the availability of substitutes which can fulfil the same purposes. According to Haapalainen and Skog (2011, p. 10), substitutes influence the products’ price elasticity since these substitutes make the demand to become more elastic. Atsmon, Dixit, Magni, and St-Maurice (2010) note that, “The Chinese buyers prioritise purchases across several product categories by trading off among them.” It is important that companies appreciate that the Chinese buyers are value seekers, and they search for the best deals that would make them realise value for their money (Wang, 2012).

 The lack of a brand loyalty by the Chinese customers should make corporations wary of how to ensure that their products remain strong and liked by customers. For instance, a study by the BCG to establish the brand loyalty of the car owners in the China interviewed 2,400 interviewees. 85% of the respondents owning the least expensive vehicles stated that they would change their car brands when making the next purchase, 70% of the mid-priced cars’ owners said they intend to switch brands (Gerrits, Zhang, Klotz, Xu, & Xie, 2014).

 The third force is the suppliers’ bargaining power and is concerned with the relationship that subsists between an entity and its suppliers. They may pressurize an industry through variables such as quality reductions or price increments (Indiatsy, Mucheru, Mandere, Bichanga, & Gongera, 2014, p. 78). In the Chinese case, an entity must ensure that it conducts a good research to establish the consumption behaviour of buyers, and then identify those suppliers that offer a wide range of items to ensure that they must make sales on some brands.

 The fourth force is the entry barriers and describes how easy and quickly an entity can enter a market and increase the competition amongst the existing companies. Companies wishing to enter China have several ways and include: exporting, licensing and franchising, selling online, having a representative office, or through investing (EU SME Centre, n.d, pp. 2-27). However, investors face restrictions and the common ones include the government policies and regulations, patents, tariffs and quotas. For instance, figure 1 below shows the restrictions on products that foreign retailers trade in.

 The fifth industry force is the rivalry among competitors. Companies joining the Chinese market should appreciate that there exists competitors who offer the same line and range of products as they plan to do. They should understand that a customer will always switch to the competitors whenever the brands they are offering fail to please them. In the car business, for instance, Gerrits, Zhang, Klotz, Xu, and Xie (2014) advices that the best starting point is having an understanding of the target customers’ needs and perform objective health checks so as to establish how well one’s brands are satisfying the customers. Such a move would help an organisation to keep its customers and also lure customers from its competitors.

 Generic Strategies/ Strategic Choice

 Given the five forces discussed above, Porter developed some strategies to be used by an organisation depending on the force at play.

 Cost leadership strategy that entails the production of services or products at the least price in the industry (Oxford Learning Lab Ltd, 2015). Companies joining the Chinese market can adopt this technique, though it may not be the best since the buyers are always willing to pay a premium for brands they value and trust (Frog, 2013; Wang, 2012).

 Differentiation strategy – a technique through which an entity designs its products with unique features and qualities making the buyers perceive them as superior that those of competitors (Oxford Learning Lab Ltd, 2015). As noted by Booz & Company and the American Chamber of Commerce in Shanghai (2013, p. 6) companies in China use value as the differentiator. Therefore, companies joining this market should focus on offering unique brands.

 Focus strategy – Oxford Learning Lab Ltd (2015) notes that this is the strategy where an entity does niche marketing and focuses on a given segment with an aim of offering products to it. This strategy can be adopted by companies wishing to enter the Chinese market, since such a focus might help them in getting dedicated to a given market segment and earn a brand loyalty.

 Conclusion

 The nature and behaviour of the Chine consumer will eventually weed the weaker brands out of the market while the stronger ones will flourish. Companies that need to survive in this market should focus on front loaded ventures in developing differentiating brand values that will meet consumers’ needs. Companies must also plan their brands bearing in mind that some market segments will mature rapidly and customers might become loyal.

 

 

 

Assessment – Human Dignity and the Temporary Skilled Workers Visa

In the assessment of human dignity and the Temporary Skilled Workers Visa, it is crucial to understand what is implied by human dignity. Human dignity can be interpreted as the need to protect against mistreatment and brings about matters that include the right to fair wages and better working environment, the right to be a member of a trade union, the development of fair bargaining power and protecting employees from unfair dismissal from work (Lebech, ). This study focuses on the respect for dignity of human beings and the Temporary Skilled Workers Visa, which was nicknamed the 457 Visa or the Business Long Stay Visa, in which the inadequacy of labor in Australia in 1996 led to the creation of 457 Visa. The Visa457 was set up to allow multinational corporations to import high-level employees and specialist team into Australia to work on a temporary and renewable basis in the management roles (Birrell & Healy, 1997).

 

The 457 Visa scheme was introduced as a result of a shortage of skilled laborers in Australia because there were falling numbers of workers taking up training in relevant fields and inadequacy in the skilled labor of the new graduates in the country (Bahn, 2013). However, the policy of Visa 457 saw the Australian company under fire for the allegations from the overseas workers that they are exploited their human dignity is not respected by the crooked employers and migration agents.

 

 

As a human being, every person has the right to be respected and not humiliated in the workplace or anywhere else. To respect human dignity means that one person must recognize another person’s presence and relate to them in a manner that enhances their personal being. In the ordinary circumstances, the work individuals engage in usually takes up a colossal percentage of their entire lives. Thus, their self-image can be profoundly affected by the work they do and how they are treated in the workplace. The 457 Visa policy saw the foreign temporary skilled workers streaming in the Australian companies and taking the local jobs (Maslen, 2007). Their streaming in Australia also saw the local citizens complaining that 457 Visa scheme has pushed down the wages of the local employees, thus leading to their detriment (Bahn, 2013).

 

The employers treated the migrant temporary skilled worker as a source of cheap labor and making them dependent on their employer for their needs. The employers undermined the human dignity of the temporary skilled workers as seen in the case of Anbalagan Rajendran, which was detailed by Michelle Bissett and Ingrid Landau showing the patterns of abuse and mistreatment of the migrant. Brought into the Australian labor industry by the owner of four Indian restaurants in Australia, Bissett and Landau argued that during the stay of Anabalagan Rajendran, his human dignity was disrespected. First, the employer made him dependent on him for food, money, accommodation, and even transportation. Second, the employer never showed him any work roster, and he would be taken from his place of residence and driven to the restaurants of work. Thirdly, Rajendran was made to work at least 14 hours a day, seven days a week and for duration of straight 40 weeks without any work leave.

 

Furthermore, Rajendran was not even given off-to-work when he was sick. In exchange for all the job he did, Rajendran was not paid any wage. He was only paid until when the Workplace Ombudsman inquired and investigated into his treatment in the workplace restaurant. Rajendran’s employer claimed that he would give him wages for duration of one year claiming that he must compensate his airplane ticket to Australia. It is evidenced that in each and every circumstance of Rajendran’s mistreatment, an element of human dignity was violated. Additionally, the Visa 457 scheme has abused the labor market of Australian, as it necessitated the discrimination against Australian laborers.

 

Considering the Perspective 1; The 457 visa scheme allows businesses to value overseas workers for contributing to the business and the wider Australian economy. These laborers as a result feel valued by their companies and their society for their contribution. According to the information, one may find reading through, the issue of migrant puts into criticism the forms through which the sphere of the public sensibilities on mobility and sociality are faked. Bissett and Landau (1997), the Australian labor industry is mandated to respect and promote the rights of workers as outlined in the ILO, which identified four core labor standards that are contained in the Declaration of Fundamental Principles and Rights at Work of 1998 (Maslen, 2007).

 

These principles define the social attitudes, values, and the circumstances involved in the perspectives illustrated in this paper. They include freedom of association and the right to be involved in bargaining collectively; the freedom from forced labor; freedom from biases in employment that includes equal remuneration corresponding to work of equivalent amount; and lastly the freedom from harmful child labor. Since Australia is a member of ILO, it must promote and realize the four principles (Bissett and Landau, 1997).

 

In perspective 1, since the workers under 457 Visa are valued by their employees for the work they do, they should be treated fairly and remunerated well. The social norms involved include fair treatment at places of work, commensurable remuneration and the freedom of fair bargaining since the workers contribute a lot to the economy of Australia. It means that workers’ dignity should be respected, and their work should be recognized and receive fair remuneration. However, most employees have not respected the concerns in perspective 1. The human dignity element violation is seen when Rajendran’s employer denied him his wages for duration of one year, claiming that he was compensating the air ticket. According to Bahn (2013), the decision to be employed in another nation creates a greater apprehension of the social transfer for both the laborers and their families. The laborers together with their families often make critical decisions to relocate to another country. Therefore, it is the mandate of the employers to cater for all costs incurred during the processing f the the visa for the workers.

 

The migrant laborers have always found it challenging to work in a foreign country but rewarding as well. It implies that the employers should also respect the sacrifices the migrant workers make to add value to the economy of Australia. Bahn (2013) believes that the overseas investments support vast Australian projects. Therefore, the Australian economy and the employers have the advantage of using the 457 Visa laborers with the required skills since they bring the security of completing the project stages and on time within the stipulated budget. It, therefore, help the economy in moving towards subsequent production stages with ease. This is a clear indication that the migrant workers contribute a lot to the economy of Australia and, thus their dignity should be respected.

 

Another element of that shows the violation of human dignity is the instances where Rajendran’s employer made him depend on him for food, money, accommodation, and transport. This is violation of the norms of the dignity of human beings. According to Bissett and Landau (2013), the Article 8 of the UDHR provided that everyone is entitled to an adequate remedy for any competent national tribunal for acts that violates the fundamental rights given to them by the constitution or law. The 457 Visa has tied employees to a particular employer leaving them with no or little bargaining power (Maslen, 2007).

 

There is a clear indication that the 457 Visa scheme contributes to the detriment of the migrant workers (Maslen, 2007). It has paved the way for the employers to intentionally mistreat their migrant employees through making them dependent on them for any financial need. Again the threat of deportation discourages workers from speaking out their grievances against the employers (Bissett and Landau, 2013). Furthermore, the obliteration of unfair dismissal laws for the small businesses by the Work Choices legislation of the coalition government further worsened the problems 457 Visa workers faced in their attempts to redress for the abuse of their human rights (Bissett and Landau, 2013). In this perspective, the circumstance of allowing employers to value overseas worker can be jeopardized by the employers allow them to underpay their migrants employees. This is clearly seen when Rajendran’s employer intentionally denied him his wages for a year forcing him to depend on him for food, transport, money and accommodation. There was nothing he could do as in this perspective; the employer is allowed to value him and pay him whatever amount he felt like.

 

In Perspective 2: The 457 visa scheme allows unscrupulous employers and migration agents to exploit overseas workers with pay and conditions below Australian standards, and even to treat them in a way not befitting their dignity. According to Velayutham (2013), there are disturbing cases of exploitation and maltreatment of the temporary work visa migrants which are reported continuously. The cases cannot be consistently dismissed as they pinpoint the inherent systematic problems of relying heavily on temporary work visa scheme, in which vulnerable employees are dependent on their employers for their ongoing visa status (Velayutham, 2013).

 

The social attitudes involved in this perspective include mistreatment and forced labor. Bissett and Landau (2013), argue that the laborers on 457 Visa program raised complaints about the unlawful employment circumstances. Their complaints include harassments and pressurizing them through the denial of shifts and wage payments; they were threatened with violence; they were not allowed to make telephone calls to their families back at home, and evicting them from the accommodation they were provided for by their employers. These circumstances are clearly demonstrated through the mistreatments of Rajendran by his boss.

 

According to Bissett and Landau (2013), Rajendran was under circumstances that he was never shown a work roster, but rather, he would just be picked up from home and taken to the successive workplace. This act violated the dignity of Rajendran since he was not given the right to choose a place of work and be assigned a specific job that is good at. Further, he was forced to work for a minimum of 14 hours every day for seven days a week and straight 40 weeks. This act is dehumanizing and completely violates human dignity (Cover, 2015). Every individual has the right to a shift of work and a considerable duration of working time (Velayutham, 2013). In case the working hours are extended, the employee should be paid overtime, of which Rajendran was never paid even a cent for a whole one year.

 

Another circumstance in which Rajendran’s dignity was vulnerable was the time he was sick, and the employer forced him to go and work. According to Velayutham (2013), the migrant laborers go through a lot of difficulties in Australia. They are vulnerable engendered by the process of recruitment, the circumstances under which they receive their visas, the unlawful malpractices of the employers and the disorganized and living arrangement and living conditions (Cover, 2015). In the case of Rajendran, his boss dictated for him where to live. This maltreatment is not accepted by an organization as they can dictate to their employees what they can do and what they should not. In the event that the employee disagrees with the ideas of the boss, he is evicted and deported. These conditions made Rajendran suffer in silence. The employer compromised his dignity.

 

The actions of human dignity that could be jeopardized by any actions arising from perspective 2 include the putting the lives under 457 Visa vulnerable to mistreatment and harassments by greedy employers and migration agents. The companies would pay their workers’ wages below the standards of the Australian wages and would pay them as little amount as they could. The dignity of the workers would be jeopardized and mistreated.

 

In conclusion, it is clearly seen that the introduction of the 457 Visa scheme brought a lot of detriments to the migrant laborers in Australia. The employers took advantage of the position and mistreated them by underpaying them, thereby making them depend on their employees for food, transport, money, and accommodation. There is the need for the Australian government to review the policies under the scheme and enact laws that protect migrant workers, as these workers contribute a larger percentage of the country’s economy.