Changing consumer markets and marketing in China

China's enormous population and rapidly increasing consumer spending are attractive to many multinational corporations (MNCs) to supply products to the Chinese markets. Yet MNCs continue to struggle to find ways to serve this diverse and culturally unique market. This article reviews and integrates existing knowledge on Chinese consumers' responses to marketing efforts, and specifies and empirically tests several propositions. Chinese consumers are found to have higher brand consciousness, brand loyalty, lower price sensitivity for visible goods, and to be less responsive to sales promotions compared to Western consumers. We also find indications that the influence of face considerations (i.e., prestige earned in a social network) cause Chinese consumers to have higher emphasis on prestige in their channel choices and advertisement evaluations than Western consumers. By outlining these implications, our study can help MNCs better understand how Chinese consumers behave and that understanding can help MNCs adapt their marketing efforts.

The role of national culture in advertising's sensitivity to business cycles:an investigation across continents

The authors conduct a systematic investigation into the cyclical sensitivity of advertising expenditures in 37 countries, covering four key media: magazines, newspapers, radio, and television. They show that advertising is considerably more sensitive to business-cycle fluctuations than the economy as a whole. Advertising behaves less cyclically in countries high in long-term orientation and power distance, but it is more cyclical in countries high in uncertainty avoidance. Furthermore, advertising is more sensitive to the business cycle in countries characterized by significant stock market pressure and few foreign-owned multinational corporations. The authors provide initial evidence on the long-term social and managerial losses incurred when companies tie ad spending too tightly to business cycles. Countries in which advertising behaves more cyclically exhibit slower growth of the advertising industry. Moreover, private-label growth is higher in countries characterized by more cyclical advertising spending, implying significant losses for brand manufacturers. Finally, an examination of 26 global companies shows that stock price performance is lower for companies that exhibit stronger procyclical advertising spending patterns.

Accommodating energy price volatility in life cycle cost analysis of asphalt pavements

Energy price is related to more than half of the total life cycle cost of asphalt pavements. Furthermore, the fluctuation related to price of energy has been much higher than the general inflation and interest rate. This makes the energy price inflation an important variable that should be addressed when performing life cycle cost (LCC) studies re- garding asphalt pavements. The present value of future costs is highly sensitive to the selected discount rate. Therefore, the choice of the discount rate is the most critical element in LCC analysis during the life time of a project. The objective of the paper is to present a discount rate for asphalt pavement projects as a function of interest rate, general inflation and energy price inflation. The discount rate is defined based on the portion of the energy related costs during the life time of the pavement. Consequently, it can reflect the financial risks related to the energy price in asphalt pavement projects. It is suggested that a discount rate sensitivity analysis for asphalt pavements in Sweden should range between –20 and 30%.