Consumer Research in Hong Kong: an Overview

CONSUMER RESEARCH IN HONG KONG: AN OVERVIEW

Oliver H.M. Yau, The Chinese University of Hong Kong

ABSTRACT -

Consumer research in Hong Kong is carried out mainly by two groups of institutions : research companies and academic institutions. Of the two groups, the research companies mainly act to serve commercial companies in the private sector and satisfy their need in conducting consumer research, and the academic institutions are involved in basic and applied consumer research so as to expand the frontier of knowledge about consumers. This paper discusses these two groups of institutions and their consumer research. In particular, more emphasis is placed on the research work of the academic institutions.

INTRODUCTION

In the ever changing marketing environment, marketers need to collect information about con!;umers so that wise decisions can be made accordingly. In the U.S.A. and Europe, the role and usefulness of consumer research have received a lot of attention. This can be reflected by the number of articles in academic journals and books in this area, as well as the number of research houses which offer consumer research facilities.

Consumer research in Hong Kong began to receive attention from academicians and marketers at a very much later date. In Hong Kong, consumer research are conducted by two groups of institutions: private sector and academic. As in other countries, research by private sector is usually applied in nature and carried out by research companies. Academic institutions are involved in both applied and basic research (Wee, Tan and Kau 1985). This paper discusses these two groups: research companies and academic institutions, and the consumer research by them, based on the author's depth interviews with managing directors of two research companies in Hong Kong in 1985, his experiences as a marketing research consultant and a literature review on some available articles and reports in this field. In particular, emphasis will be made on the consumer research carried out by the academic institutions.

CONSUMER RESEARCH BY RESEARCH COMPANIES IN HONG KONG

Marketing Research Companies in Hong Kong

There are about twenty marketing research companies in Hong Kong. With Survey Research Hong Kong as the industry leader, the six most active companies which conduct consumer research for companies in the private sector are as follows:

1 . AGB

2. Survey Research Hong Kong (SRH)

3. Marketing Decision Research (MDR)

4. International Research Association (INRA)

5. Frank Small

6. Womsley

In fact SRH which belongs to the Survey Research Group (SRG) has become a member of AGB, one of the largest research group in Europe since September, 1982. However, SRH is still administratively independent and its still regards itself as a competitor of AGB. It was establish in 1965 and is now the largest research company in Hong Kong. It has thirty researchers and analysts, eighty full time interviewers and sixty back-up staff. It provides full consumer research services, such as ad-hoc studies, syndicated studies, omnibus services, and distribution check etc.

Due to its high involvement in consumer research concerning about TV viewing behaviour, AGB has been perceived as a company for media and advertising research. In fact, it also serves other commercial companies with full consumer research services as SRH.

MDR was established in 1983. It has about ten researchers and analysts, 20 full-time interviewers and 10 back-up staff. Despite its size, it is very aggressive and marketing-oriented. It has a growth rate of 200% in sales. It has now reached almost its full capacity in human resources and is at crossroad to decide whether to further expand the company. One thing that is worth noting is that MDR claims to offer the best consumer research reports with appropriate statistics of which reports of other companies are lacking.

INRA and Frank Small can be regarded as one company. They share research facilities with each other. INRA has more or less the same history of conducting consumer research in HOng Kong. During 1970s, INRA had once had a good reputation in adopting new analytical techniques for its research projects. It is one of the earliest companies which can be able to offer multivariate-analysis service in consumer research.

Womsley has been regarded as a fieldwork house more than a research company. Most of its activities come from fieldwork for commercial companies or other research houses which do not involve in training and maintaining a team of interviewers. At present, it is not big enough to offer most of the research services offered by the abovementioned five companies.

Consumer Research by the Research Companies

There are usually five kinds of services offered by research companies in Hong Kong. They are ad-hoc studies, syndicated studies, omnibus services, retail audits and distribution checks. In terms of syndicated and omnibus services, AGB and SRH dominate the market because of their long history in these areas. Retail audiLs and distribution checks are usually product-related, and not consumer-related. The scope of them usually includes the market size of the product under investigation, marketing opportunities, effectiveness of advertising campaign, selling prices, size of shelf facings, in-store location of stocks, sales promotion and stock levels.

Together with ad-hoc studies, syndicated studies and omnibus studies are the major sources of consumer research. A sample of products, which the companies are interested in conducting consumer research is as follows:

Sanitary products,

non-alcoholic packaged drink,

supermarkets,

wines and spirits,

fast food,

confectionery,

banks

electrical appliances,

household products,

over-the-counter pharmaceutical products, and

beer and stout.

Method of Collecting Data

In Hong Kong, almost all the six companies have experience in using the following methods in collecting data for consumer research:

personal interview,

depth interview,

focus group interview

telephone interview

diary method/continuous panel, and

self-completion (mail or not mail)

Among these methods, personal interview is most commonly used in ad-hoc studies. In recent years, telephone interview has begun to receive much attention and had a rapid growth rate in usage. However, at present no company has made use of computer-assisted telephone interview to collect and analyze data.

Focus groups interview is frequently used in consumer research to help design questionnaire. But it is also widely adopted as an end to collect data when budget for the consumer research project is tight.

Depth interview and self-completion are seldom used. Consumer panel using diary is more commonly used in media research than consumer research in Hong Kong.

Methods used in Data Analysis

Reports of consumer research projects by those research companies are usually very simple. Attitudinal and behavioral variables are often cross-tabulated by demographic variables, and if available, by life-style or psychographic variables. Furthermore, consumer research projects are often exploratory in nature. [fence, simple tabulation and cross-tabulation are the most commonly used data analytic techniques. Descriptive statistics can hardly be provided on research reports.

In late 1970s, factor analysis was employed for several times by some research companies to understand the psychographics of consumers/users of some consumer products. There has been an increasing demand for more sophisticated analyzing methods from the cigarette and service sectors. Due to keen competition, market positioning or perceptual mapping which call for more sophisticated techniques like factor analysis, multidimensional scaling and cluster analysis has been requested to perform. Surprisingly, causal analysis methods such as multiple regression analysis, which frequently appear on the textbook are still seldom used in consumer research in Hong Kong. During the past few years, discriminant analysis has been used to identify important variables which differentiate sandal buyers from sandal non-buyers, and smokers from non-smokers of a cigarette brand. Multiple regression has been used in predicting site locations in a bank location studies.

CONSUMER RESEARCH BY ACADEMIC INSTITUTIONS

The Academic Institutions

In Hong Kong, there are two universities, two polytechnics and three accredited colleges, which offer courses in marketing. Hong Kong University has the longest history but it was until recent years that a department called "Management Studies" was established and separated from the Economic Department under which the department was originally a concentration. In 1985, it formally introduced a part-time MBA program which offers a few courses in marketing.

The Chinese University of Hong Kong is so far the largest institution in Hong Kong in terms of academic staff as well as the number of students in marketing. The Faculty of Business Administration of the Chinese University consists of three departments and a MBA division with over one thousand students. They are the Department of Accounting and Finance, the Department of Marketing and International Business, the Department of General Business Management and Personnel Management, and the MBA Division. The Department of Marketing and International Business offers over 24 courses in marketing including those in its specialized Marketing and International MBA program. In the Department, there are about three hundred students and 14 academic staff, all specialized in either Marketing or International Business.

The Hong Kong Polytechnic and the City Polytechnic also offer marketing courses leading to professional examinations in the United Kingdom. Each of them has a department of business studies, which has about three to four staff specialized in marketing.

The Hong Kong Baptist College, the Lingnan College and the Shui Yan College are the only three postsecondary institutions recognized by the Government, besides the universities and polytechnics. Except for the Lingnan College which has a department of marketing, marketing courses are offered by the Department of Business Management. Surprisingly, Lingnan College and The Hong Kong Baptist College have more staff specialized in marketing and are offering more marketing courses than the Hong Kong University.

Consumer Research in the Academic Institutions

Due to the small size of academic staff in the above-mentioned institutions, consumer research activities are very limited. Since the three colleges and the two polytechnics are generally perceived as teaching institutions, it is until these two years that more emphasis was put on academic research. With its long history in management education and its large size of academic staff, the Chinese University of Hong Kong has been regarded as the leader in marketing research in the academic circle.

Literature review on consumer research shows that the Chinese University has the largest inventory of reports about Hong Kong consumers. Most of these reports are MBA thesis or working papers of the academic staff in the Faculty. As part of graduation requirement, each final-year MBA student (full-time or part-time) is required to complete a "thesis" or "research project" which is be under close supervision of a faculty member, and approved by both internal and external examiners. During the past seventeen years, 441 theses or projects have been accumulated. Among them, there are 115 theses or projects which are in the area of marketing. But only 25-out of 115 are-in the area of consumer research.

During the past few years, as part of graduation requirement, each fourth-year student of the Department of Marketing and International Business has also been required to complete a project called "senior project" under the supervisor of a faculty member. Unfortunately, no systematic record has been kept about these projects.

Based on these theses/projects and published research reports by academic staff in the abovementioned institutions, we can classified the literature into the following categories:

1. Consumerism

2. Consumer choice of products/services

3. Consumer satisfaction/dissatisfaction

4. Consumer attitudes towards products/services

5. Consumer buying behaviour

Consumerism

Li (1975) was amongst the earliest to investigate into the reasons for the rise of consumer movement in Hong Kong. A few years later, Mun (1975) advocates that consumer be protected in the marketplace. Using self-prescription of consumers and Chinese medicine as examples, he tries to point out that self-regulation is not sufficient to protect consumers. Chan (1979) further looks into the basic functions of the Consumer Council and concludes that the consumers still have doubts on the helpfulness and effectiveness of the Council. He recommends that owing to the limited power of the Council, the government play an active role in the future development of consumer movement. Along the same lines, Yau (1982a) elaborates the reasons for protecting consumers. Using economic principles, he explains how and when government should constitute laws to protect consumers.

At the micro-level, several studies were conducted to investigate how consumers view advertising. In a sample of 117 housewives, it is found that 81% of the respondents do not think that the objective of advertising is to provide information for consumers to make wise decision (Hung, Leung & Lo 1978). In the same vein, Sin and Yau (1985), in a random sampling of 1152 respondents, find that general public has a negative attitude toward advertising in general. Their results are coincided with Yau's criticism on Hong Kong advertisement (1983) and the content analysis of the Hong Kong Consumer Council, which shows that most of the advertisements in Hong Kong are deceptive (Consumer Council 1983).

Consumer's choice of products/services

In the choice of brands of cosmetics, Chan (1976) points out that Hong Kong ladies are sophisticated in cosmetic consumption. Consumers prefer cosmetics with good-quality, leading style, good sales service and attractive packaging, and Wong (1974) concludes that cultural factors, social group influences, and family influence are major factors influencing the decision on canned food purchase. Along the same lines, Siu (1976) also finds that most consumers drink beer to satisfy their social needs. However, when they choose a particular brand of beer, price and quality are the most important attributes. In a longitudinal survey using beer as an instrument to measure brand loyalty, Yau (1984) finds that only 50% of the respondents who said he intended to buy a particular brand of beer in the first phase of the research would finally purchase the same brand as recorded in the diary. Situational factors were found to be very important in influencing actual purchases.

From the above studies, it can be seen that there is one thing in common about Chinese consumers in choosing particular brand or product. Chinese consumers are highly situational and easily influenced by external environments, especially at the point of purchase.

Consumer Satisfaction/Dissatisfaction

In a pilot study, Yau (1984) attempts to measure consumer satisfaction of drinking a particular brand of beer as the discrepancy between the expected performance of an ideal brand and theactual performance of that particular brand. He also finds that the correlation between consumer satisfaction with intention to purchase a particular brand of beer is insignificant at a confidence level of 95%.

In the second attempt, Yau (1985) tries to build up a more sophisticated causal model which incorporates other factors such as situational factors, consumers' experience with the same type of product, consumers' experience with other products, attribution of dissatisfaction with the product in the past, and the Chinese cultural values.

Consumer Attitudes towards products/services

There are several studies in this category. However, there are two studies which are worth noting. The first is Lau 's study (1974) which tries to investigate whether the more favourable the attitude among users towards a particular product, the more users that the product can hold.

Using instant-noodle as a research instrument, he confirms that instant-noodle can hardly be accepted as a major foodstuff as the total effect of favourable and unfavourable attitude towards instant-noodle is negative.

Wong (1975) was amongst the first to find out the life styles of consumers. In a soft drink survey, he constructed forty AIO statements which were summarized into five life-style dimensions: active/sporty, traditional, economic, confident, and health-conscious.

In the same vein, Laurent (1978) attempts to find out some generalized life style constructs irrespective of product categories. Using 197 AIO statements in a large random sample of 2019 respondents, he succeeded in obtaining two sets of life style constructs for both males and females in Hong Kong. He finds that life style constructs are introverted, fashion conscious, peer group oriented, self indulgent, reserved, traditional family, brand skeptical, restless, reactionary, and maintain social structures. He further classified the respondents into eight segments for both male and female respondents. Product consumption for each segment was finally-found by cross-tabulation.

Consumer buying behaviour

Studies in this category are applied and exploratory in nature. There has been no attempt to build up a new buying behaviour model or to replicate those of Nicosia, Engel, and Howard. Hence, research findings in this area are extremely fragmented. Chan (1976) outlines the behavioral reaction of cigarette smokers to sales promotion activities while Pang (1975) finds out the favourable pack-size, buying outlets, and media of two groups of cigarette smokers in Hong Kong. Wong (1975) depicts the consumption patterns of soft drink users at both aggregate and disaggregate level. Tsui (1980) was particularly interested in how consumers sought their information for buying decision. Furthermore, he identifies the initiator, influencer, decision-maker, buyer, and end-users in the buying process of imported toys.

Assessment of Consumer Research Areas

The literature shows that there is a diversified interest in consumer research. However, the interest shown in different categories was largely a function of the kind of marketing faculty recruited and teaching by the academic institutions as well as the kind of courses offered to students during the past seventeen years. In recent years, there have been some other -emerging topics which are still under studies by academicians, such as information overload, consumer complaining behaviour, children's influence on family buying decision, evaluation of the Hong Kong Consumer Council, and reconstruction of consumer behaviour models in the Chinese context, and so on.

Applied research will continue to be conducted by both graduate and undergraduate students. Quite a few studies investigated the buying behaviour in fast food outlets, and the purchase behaviour of computer softwares.

Since 1978 when the open door policy was implemented, there has been a steady increase in research activities both in China and Hong Kong about Chinese consumers. Several research companies were also hired to conduct consumer research in Guangzhou, Beijing, and Shanghai. It is expected consumer research in Hong Kong will become more Chinese-oriented. More basic research will be conducted so as to lay down a better foundation for building consumer theories in the Chinese context.

SUMMARY

In summary, Hong Kong research companies offer a full range of services to their clients as their counterparts in the United States and Europe. Consumer research conducted by these companies is applied in nature. Topics generally covered a wide range of products with particular interest in understanding the profile of consumers as well as their attitudes and behaviour. One of the major problems in consumer research is that are encountered by these companies is that they are not able to handle sophisticated data analytic techniques.

With the Chinese University as the leader, consumer research among the education institutions has just began to gain momentum. Areas of interest include consumerism, consumer satisfaction/dissatisfaction, consumer attitudes towards products/services, and consumer buying behaviour.

The economic reform experiment and the implementation of open door policy of the PRC have bought Hong Kong research companies new business opportunities, and shown academicians a new direction for consumer research in a more Chinese context.

REFERENCES

Chan, K. Y. (1979). A Study of the Impact of the Consumer Council on Consumer Buying Behaviour, Research Report, FBA -Division, The Chinese University of Hong Kong.

Chan, Wai-tak (1976). "A Critical Study of Hong Kong Cigarette Consumers Attitudinal Responses to Alternative Promotion Techniques," MBA Thesis, University of Hong Kong. The Chinese

Hung, K.K., Leung, T.Y., and Lo, Y.L. (1978). Consumerism, unpublished research report.

Lau, Chan-sang (1974). A Study of the Buying Behaviour of Instant-Noodle Consumers in Hong Kong, MBA Thesis, The Chinese University of Hong Kong.

Laurent, C. (1982) Report on Life Style Research in Hong Kong, unpublished research Report, AGB.

LI, Ma-him (1975). "The Rise of Consumer Movement and Its Future in Hong Kong," MBA Thesis, The Chinese University of Hong Kong.

Mun, K.C. (1978). "Protecting Consumer's interests," Journal of The Chinese University of Hong Kong, 3:1.

Pang, Wang-kee (1975). A Consumer Study of Selected Chinese and Non-Chinese Cigarette Brands in Hong Kong, MBA Thesis, The Chinese University of Hong Kong.

Sin, Y.M. and Yau, H.M. (1985). "Attitudes towards Advertising: A Comparison of Executives from Hong Kong and China." Proceedings of European Academy of Marketing, Germany, April.

Sin, Man-kai (1976). A ' Study of the Consumers' Beer Buying Behaviour in Hong Kong, MBA Thesis, The Chinese University of Hong Kong.

Tsui Ka-hing (1980). Toy Buying Behaviour in ' Hong Kong, Research Report, MBA Division, The Chinese University of Hong Kong.

Wee, C.H., Tan, C.T., and Kau, A.K. (1985). "Marketing Research in Singapore: An Overview," paper presented at the 1985 Academy of Marketing Science Annual Conference, 1985.

Wong, Shiu-kwong (1974). A Study of Chinese Behaviour on Canned Foods Within Selected Areas in Hong Kong, MBA Thesis, The Chinese University of Hong Kong.

Wong, Yiu-chu (1975). A Consumer Study Of Selected Brands of Soft Drinks Sold in Hong Kong, MBA Thesis, The Chinese University of Hong Kong.

Yau, H.M. (1982a). "Why and How to Protect Consumers?" Hong Kong Monthly Journal of Economics, 59.

Yau, H.M. (1982b) "Deceptive Advertising in Hong Kong," Hong Kong Monthly Journal of Economics, 62.

Yau, H.M. (1984a). "Consumer Satisfaction and Intention of Purchase: A pilot Study," unpublished research paper.

Yau, H.M. (1984b). "The- Chinese Cultural Values and Consumer Satisfaction/ dissatisfaction: a Proposed Causal Model," paper presented at the Workshop of Consumer Satisfaction/Dissatisfaction at the Free University in Amsterdam, April.