The Effectiveness of Joint Venture and Local Lifestyle Magazines in China

EXTENDED ABSTRACT - Advertising professionals have indicated in a survey that a medium’s ability to efficiently reach a specific target audience remains the single most important criterion in media decision (King, Reid, and Morrison 1997). Recent market trends, such as growing market fragmentation and increasing media proliferation further complicate an advertiser’s media decisions. In short, the need to justify better media decisions, in particular, in linking media habit with product or brand choice continues to mount.

Citation:

Flora Fang Gu, Kineta Hung, and David K. Tse (2005) ,"The Effectiveness of Joint Venture and Local Lifestyle Magazines in China", in AP - Asia Pacific Advances in Consumer Research Volume 6, eds. Yong-Uon Ha and Youjae Yi, Duluth, MN : Association for Consumer Research, Pages: 284-285.

Asia Pacific Advances in Consumer Research Volume 6, 2005      Pages 284-285

THE EFFECTIVENESS OF JOINT VENTURE AND LOCAL LIFESTYLE MAGAZINES IN CHINA

Flora Fang Gu, The University of Hong Kong, Hong Kong

Kineta Hung, The University of Hong Kong, Hong Kong

David K. Tse, The University of Hong Kong, Hong Kong

EXTENDED ABSTRACT -

Advertising professionals have indicated in a survey that a medium’s ability to efficiently reach a specific target audience remains the single most important criterion in media decision (King, Reid, and Morrison 1997). Recent market trends, such as growing market fragmentation and increasing media proliferation further complicate an advertiser’s media decisions. In short, the need to justify better media decisions, in particular, in linking media habit with product or brand choice continues to mount.

Among conventional media, magazine is commonly regarded as the medium that could best pinpoint a specific audience to match the targeted consumers of an advertising campaign. However, because of the relatively inefficient market conditions in China, there is a general lack of target audience information and media decisions are relegated to a circulation-driven function.

The current study argues that there is a need for magazines in China to optimize the media-market match. In 2000, magazines accounted for just 2.7% of the media adspend in China, while magazines enjoyed a share of 12.0% in the U.S. even after excluding business-to-business adspend (Zenith Media 2000/2001). Further, Chinese magazine operators have to rely heavily on circulation as their main source of revenue (Lu 2002). This is in contrast to the U.S., where advertising accounts for almost 60% of the revenue in the magazine industry (Sumner 2001).

Magazines in China can be categorized into local (LC) and joint venture (JV) magazines because of historical and political backgrounds. Our study is designed to include both types of magazines and we examine the effectiveness of these magazines in reaching the emergent segment of hedonic consumers in China, including their usage of products and brands. In short, this is a 2 (magazine: JV versus LC) x 2 (product: value-expressive versus utilitarian) x 2 (brand: local versus foreign) study. Specifically, we hypothesize that relative to LC magazines, JV magazines would be more successful in reaching the segment of hedonic consumers defined in terms of their demographics and psychographics. Further, we propose that magazine readership would indicate the extent to which the consumer would engage in hedonic consumption. Specifically, we hypothesize that relative to LC readers, a significantly higher proportion of JV readers would consume value-expressive products (VEP), given their higher propensity for hedonic consumption. And because utilitarian products (UTP) mainly serve as necessities, we propose no significant difference between the proportions of LC and JV readers who would use UTP.

We also extended our study to examining the consumption of local and foreign brands. To date, foreign brands remain the preferred brands for many consumers in China, especially for fashionable products such as cosmetics and apparel. The Chinese consumer’s passion for foreign brands is lower for utilitarian products, since utilitarian products do not serve a social signaling function. We hypothesize that regarding VEP, a significantly higher proportion of JV lifestyle magazine readers would consume foreign brands of these products than their LC equivalence. Conversely, regarding UTP, there would be no significant difference between JV and LC lifestyle magazine readers in their consumption of foreign/local brands of these products.

The data reported in this research was collected between 1999 and 2001 as part of a larger survey commissioned by China Central Television (CCTV), the largest and the only nation-wide television station in China. The survey involved 48,000 subjects in 15 cities that included the major urban centers of Beijing, Shanghai, and Guangzhou. To ensure that the subjects under investigation had prior experiences with either JV or LC lifestyle magazines, we included in this study only those subjects who have read the selected titles (3 JV, 3 LC) at least once during the past 12 months. This reduces the size of the sample to 4,265, including 1,886 JV readers and 2,379 LC readers. The questionnaire began with questions relative to the subjects’ product and brand consumption habits, followed by questions relative to the subjects’ media habits. The questionnaire ended with questions on the subjects’ demographic and psychographic information.

Results of the study supported the hypotheses outlined earlier. Regarding the profile of magazine readers, JV readers were significantly younger than LC readers. Also, when compared to LC readers, a significantly higher proportion of JV readers were female, better-educated and working in the private sector. As well, JV readers were less conservative and were less into utilitarian buying. Instead, they were more motivated to buy things that could improve their living standard and status. Regarding the consumption of VEP, a significantly higher proportion of JV readers when compared to LC readers have used cosmetics and jeans during the past 12 months. Finally, regarding the consumption of brands, a significantly higher proportion of JV readers have used foreign brands of VEP than LC readers. There were however no significant differences among JV and LC readers’ consumption of foreign or local brands of UTP, as hypothesized. The implications of these findings were discussed.

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