I
找
ZHĂO
A Research of Chinese University Students
BI Norwegian School of Management
Fudan University Bachelor of International Marketing
15.05.2011
Jan Eirik Jakobsen, Kristine Keathan & Ka Xuong Lay,
This paper is done as a part of the undergraduate program at BI Norwegian Business School. This does not entail that BI Norwegian Business School has cleared the methods applied, the results presented, or the
Executive Summary
The aim of this thesis is to study the Chinese university students’ lives and needs.
The purpose of this is to help Zhǎo, a company in an entrepreneurial stage, with their product development. Zhǎo is a newly established company in the year of 2010. Zhǎo is going to be an Internet website for the Chinese university students.
Zhǎo originated from a bachelor thesis by former students of the International Marketing program of BI Norwegian School of Management and Fudan University. The founders of Zhǎo have a vision to become a highly attractive webpage with solutions that will benefit Chinese students free of charge.
The Internet industry in the Chinese market is becoming the world’s biggest market. More people have become involved with the internet as part of their daily lives. As of December 2010 the number of Internet users is 457 million in China and the numbers are still growing.1
1 (CNNIC, 2011)
Acknowledgments
The authors of this thesis wish to extend their acknowledgements to everyone who contributed to the making of this thesis. The authors want to thank and express their appreciation for the opportunity of the educational and rich experience it has been writing this thesis. For this the authors want to take the opportunity to thank the educational institutions of BI Norwegian School of Management and Fudan University for arranging this experience and supporting them throughout the process. The authors would like to thank the lecturers and professors who inspired them and made contributions to this thesis through their wisdom and sharing of knowledge.
The authors wish to extend an acknowledgement and thank to the original authors and founders of Zhǎo (2010), Christian Andreassen, Tor Darneshmand Kashani, Henrik Sætre and Yinyin Zhang. The authors would like to thank Yinyin Zhang for his assistance in discussions with the authors about the thesis as well as his significant contribution of translating the questionnaires. A special thank and acknowledgement to Henrik Sætre, who employed the authors and assisted them throughout the process of making this thesis.
The authors wish to express their thank and gratitude for the constructive and critical comments from their opposition group, Regine Hagen, Margrete Iversen, Michelle Mikkelsen and Susana Pham.
They want to express their gratitude for the guidance and wisdom of their supervisor, Jinsong Gao, who greatly inspired them.
And lastly the authors wish to thank the people who were interviewed and responded to the questionnaires.
Shanghai, China.
May 16th 2011
_________________ _______________ _____________
Jan Eirik Jakobsen Kristine Keathan Ka Xuong Lay
Abbreviations
BBS Bulletin Board System BCG Boston Consulting Group CA Customer Attribute CCP Chinese Communist Party
CNNIC China Internet Network Information Center COO Chief Operating Officer
CSF Critical Success Factors EA Engineering Attribute GDP Gross Domestic Product
IHIP Intangibility, Heterogeneity, Inseparability, Perishability IM Instant Messaging
NPC National People’s Congress
NPDDP New Product development Decision Process OCG One-Child Generation
PEST Political, Economical, Social, Technological PRC People’s Republic of China
QFD Quality Function Deployment R&D Research and Development ROI Return On Investments SPD Strategic Problem Definition
SPSS Statistical Package for the Social Sciences SWOT Strengths, Weaknesses, Opportunities, Threats WOM Word Of Mouth
Index of Figures
Figure 1: Thesis Aim Model... 2
Figure 2: Model of Research Aim and Questions ... 4
Figure 3: Zhǎo's Business Model... 7
Figure 4: China Funding and Enrollment in Higher Education ... 10
Figure 5: Research Overview Model ... 14
Figure 6: Tangibility Spectrum ... 25
Figure 7: Five Product Levels ... 26
Figure 8: GAP Model ... 31
Figure 9: PEST Model ... 33
Figure 10: Porter's Five Forces Model ... 34
Figure 11: SWOT Model ... 38
Figure 12: University Dividing ... 40
Figure 13: Gender ... 41
Figure 14: Degree ... 41
Figure 15: China GDP Growth Rate Model ... 74
Figure 16: Recommended Strategy Model ... 96
Table of Content
Executive Summary ... II Acknowledgments ... III Abbreviations ... IV Index of Figures ... V
Part 1 Introduction ... 1
1.0 Introduction ... 1
1.1 The initial idea ... 1
1.1.1 Changing the research aim ... 1
1.1.2 Deciding the research aim ... 3
1.1.3 Research questions ... 3
1.1.4 Research limitation ... 5
1.2 Background ... 5
1.2.1 Company background ... 6
1.2.2 Founders of Zhǎo ... 8
1.2.3 Market background ... 9
1.2.3.1Chinese universities ... 9
1.2.3.2China’s Internet market ... 10
1.2.3.3Zhǎo’s target audience ... 11
1.2.3.4Competition ... 11
Part 2 Research Process ... 12
2.0 Method ... 12
2.1 Research Questions ... 12
2.2 Research Overview ... 12
2.2.1 Explorative design ... 14
2.2.2 Descriptive design ... 15
2.2.3 Qualitative research ... 15
2.2.4 Quantitative research ... 15
2.2.5 Mixed Methods ... 15
2.2.6 Primary Data ... 16
2.2.7 Secondary Data ... 16
2.2.8 Deductive approach ... 17
2.2.9 Inductive approach ... 17
2.2.10 Validity ... 17
2.2.11 Internal validity ... 17
2.2.12 External validity ... 18
2.2.13 Reliability ... 18
3.0 Information Gathering ... 18
3.1 Reports ... 18
3.2 Questionnaires ... 18
3.3 In depth Interviews ... 20
3.4 Interviewee selection ... 21
3.5 Potential errors ... 23
4.0 Theory ... 24
4.1 Internal analysis ... 24
4.1.1 IHIP ... 24
4.1.2 Five Product levels: The customer-value hierarchy ... 25
4.1.3 New Product development Decision Process (NPDDP) ... 27
4.1.4 GAP ... 29
4.2 External analysis ... 31
4.2.1 PEST ... 31
4.2.2 Porter’s five forces model ... 34
4.3 Internal and External Analysis ... 36
4.3.1 SWOT ... 36
4.4 Terminology and explanations: ... 38
Part 3 Data findings ... 40
5.0 Findings on research questions ... 40
5.1 Interviews ... 42
5.1.1 The four prior in-depth interviews ... 42
5.1.1.1Professor 1 ... 42
5.1.1.2Prof. Fan Xiucheng ... 43
5.1.1.3Jessica Ginger White ... 44
5.1.1.4Sina Farzaneh ... 45
5.2 Research question 1: ... 48
5.2.1 Chinese universities ... 48
5.2.2 In-depth interviews with students ... 49
5.3 Research question 3: ... 52
5.4 Research question 2: ... 54
5.6 Summary of key findings ... 65
5.6.1 In-depth interview results ... 65
5.6.2 Questionnaire results ... 66
Part 4 Analysis ... 67
6.0 Analysis ... 67
6.1 Internal Analysis ... 67
6.1.1 IHIP ... 67
6.1.2 GAP ... 68
6.2 External Analysis ... 71
6.2.1 PEST analysis ... 71
6.2.2 Porter’s five forces model ... 78
6.2.3 SWOT ... 80
Part 5 Strategy ... 86
7.0Strategic problem definition (SPD) ... 86
7.1 Goals ... 86
7.2 Critical success factors (CSF) ... 88
7.3 Implementation of strategy ... 88
7.3.2 Creating customer value: ... 91
Part 6 Recommendation ... 93 9.0Appendix ... IX 9.1 Questionnaire format in English: ... IX 9.2 Data from SPSS ... XI 9.3 Reliability analysis ... XV 10.0References... XVI 10.1 Books/Articles ... XVI 10.2 Internet list ... XVI
1
Part 1 Introduction
1.0 Introduction
1.1 The initial idea
The authors’ initial idea for this thesis came from the founding partners of the website company Zhǎo. The founding partners of Zhǎo will from here on be referred to as Zhǎo’s founders. They will be introduced in the background section of the thesis.
Zhǎo is a newly established company. In this early stage finding the right product for Zhǎo’s target audience is critical as an introduction of the company. Further analysis will be conducted in order to fully understand the needs and desires of Zhǎo’s target audience.
In the authors’ first meeting with Zhǎo’s founders the authors had the following impression of the problem assignment:
“The purpose of the research is to find attractive internet webpage products that can attract the target audience and generate traffic on Zhǎo’s webpage.”
The initial idea was to find products to Zhǎo’s Internet website. By products the authors imply contents and services Zhǎo can offer to the users on their website.
Understanding Zhǎo’s target audience is essential for Zhǎo’s product
development. The authors will analyze the target audience to fully understand the target audiences needs and wants and then develop suitable contents.
1.1.1 Changing the research aim
After consequential meetings between the authors and Zhǎo’s founders, and guidance from the bachelor thesis supervisor, the research aim of this thesis changed. The authors also realized that the research aim should be changed after conducting early in-depth interviews.
The authors understood they had to focus more on analyzing Zhǎo’s target audience rather than rush to the analysis of products suitable for Zhǎo’s target audience.
The research aim therefore changed its focus to making a more complete analysis of Zhǎo’s target audience. The research will analyze the target audiences needs, habits, preferences and attitudes.
The result of the analysis will be a basis for finding opportunities for Zhǎo’s product development. In this way the authors will participate in the process of the product development of Zhǎo. The design and creation of the products will not be a part of the thesis and will be carried out by others with the sufficient knowledge and competence.
Figure 1: Thesis Aim Model
The thesis aim model illustrates how the authors focus their research in a step-by- step progression.
1) The first step is to gain knowledge about China and what is relevant for Zhǎo. This is mainly China’s internet development and competition in China.
1 China
2 University Life 3 Student
4 Products
New thesis aim Previous thesis aim
2) The next step is to gain knowledge about the university life in China, where the authors focused on university life in general.
3) In the third step the authors researched the student needs, attitudes and challenges.
4) The fourth step is researching which products Zhǎo should offer to its users.
The purpose of the thesis aim model is to illustrate on which area the authors will focus on. The areas that will be focused on are China, university life and students, excluding the products.
1.1.2 Deciding the research aim The final research aim:
“The aim of the thesis is to research the Chinese university student’s life, the life of students and the students’ needs in order to create a
basis for Zhǎo’s product development.”
1.1.3 Research questions
To answer the research aim the authors have focused on four categories in which they have created research questions from. Each research question take into account one major matter in the student life. Together the research questions will give a holistic understanding of how the student life, the university life and the student needs are.
Student life
1. How is the student life on campus?
Students biggest challenges in university life Students’ attitude
2. What are the students’ attitudes towards different aspects of the university life?
Student satisfaction
Student’s preferences
3. What are the student’s preferences for an internet website?
What are the students’ preferences for a student related website Students’ habits
4. What are the most common student habits on the internet?
What are the most frequently used websites by the Chinese university students?
Figure 2: Model of Research Aim and Questions
Research Questions Research
Areas Research
Aim
Research the Chinese university students life,
the life of students and the students needs in order to create a basis
for Zhao’s product development
Student life How is the student life on campus?
Students' attitude
What are the students’
attitudes towards different aspects of the
university life?
Students' preferences What are the students' preferences for a student
related website
Students' habits What are the most
common student habits on the internet?
1.1.4 Research limitation
In the process of the research the authors will face predicaments and barriers that will limit the research.
The main challenges expected to occur in the research are the cultural differences, especially the language barrier. Many of the Chinese students have been taught English since secondary school. However, the average English ability of Chinese people is low.2 Misunderstandings can occur when the students interpret the authors’ questionnaires and interview questions. Several Chinese students do not practice their English and are uncomfortable with communicating the language.
Problematically the language barriers may cause student bias such as avoiding the interviewers.
Another limitation encountered in the research process while gathering primary data is non-students that are attending classes for personal interest and are present at the school premises. The authors have attended a class at Fudan University and noticed several of the attendants are not actual students.
The limited time and resources the authors had available posed a limitation to the thoroughness of the thesis. Because of this, the amount of samples for the research and the amount of different research methods for the thesis are limited.
1.2 Background
The website company Zhǎo was established in the year 2010 and has yet to start operating. For this reasons the authors have a limited amount of company background information and company history.
The founders of Zhǎo created the outlines of the company in their bachelor dissertation of 2010. The founders are working on creating a website for university students in China. No comprehensive research of the target audience has been carried out yet. This is the authors’ assignment in this thesis.
2 http://blogs.wsj.com/chinarealtime/2011/04/14/china-struggles-with- english/?mod=WSJBlog&mod=chinablog 23.04.11
1.2.1 Company background
Zhǎo was founded by four bachelor students from BI Norwegian School of Management in 2010. These are Henrik Sætre, Christian Andreassen, Tor Darneshmand Kashani and Yinyin Zhang.
Their bachelor project consisted of a market analysis of the Chinese internet market, a business plan for Zhǎo and a feasibility study on the project. After the thesis they decided to make Zhǎo a reality.
Zhǎo was founded summer 2010 in Oslo, Norway, financially aided by the founders themselves. The founders will in the future apply for financial support from Innovation Norway.
Zhǎo’s founders are currently developing their market analysis and product development in China.
The company is in its start-up phase. Its target audience is Chinese university students. Zhǎo is based in Norway, but will have its primary activities in China.
The founders wish to use Shanghai as a start-up point for Zhǎo. The concept of Zhǎo is a “by students for students” service and provides a free-of-charge service for the users. The company’s profit will come from advertisers. It has low
financial assets, a low level of experience and is driven by entrepreneurial spirit.
Zhǎo is going to be an Internet webpage for students in China. It will specialize in interests for students, such as information about universities, blogs, BBS, “how- to” lists and so on. The founders of Zhǎo want to develop products to make information searching easier for Chinese students on their website.
Currently there are no services that offer Chinese students a website were their interests are gathered. This is going to be Zhǎo’s goal to provide to their target audience. They want to use a position where there is no competition, and thereby be first-movers. There are websites, i.e. www.51job.com, www.sina.com.cn and the universities own websites, but no single website that gathers these services directly targeted towards Chinese students.
Nonetheless, competition can arise. Because of this the authors will analyze the market for potential threats that Zhǎo members might have overlooked.
Figure 3: Zhǎo's Business Model
Zhǎo’s Business Model3 shows the relationships between Zhǎo and the other entities Zhǎo will actively interact with. Zhǎo is called Xuéshēng Zhăo in this model because this is one of the previous ideas for the name of the website.
Xuéshēng Zhăo is mandarin. “Xuéshēng” translates to “student” and “Zhăo”
translates to “search”.
The other entities are:
1) Students 2) Universities
3) Other infomediaries 4) Advertising
In this model Zhǎo’s business idea is a search engine for students. This model does not incorporate the other products Zhǎo could offer to its target audience, such as blog, dating, job hunting, entertainment etc.
3 Model made by Zhǎo’s founders
Zhǎo would gather, filter, organize and in some cases create content for its users.
One of the key points in this model is the user-generated content the users of Zhǎo would create. Another is that Zhǎo’s main source of income would come from advertisements on Zhǎo’s website which would be driven by the traffic on the site. The more traffic on Zhǎo’s site, the more income Zhǎo can demand from the advertisers. The last key point of this model is that Zhǎo will collect content from other infomediaries such as other websites that facilitate information for its users.
These could be the universities content and content from for example www.wikipedia.com, www.123hao.com and www.51job.com.
1.2.2 Founders of Zhǎo
The information about the founders of Zhǎo is from the previous Zhǎo thesis of 2010.
Henrik Sætre
Henrik Sætre is characterized as an outgoing and energetic person. He is
persuasive of nature and has work experience in sales. Sætre speaks Norwegian and English fluently, and Chinese at a beginners level.
Yinyin Zhang
Yinyin Zhang, the only person with Chinese origins of the founders, has
experience from trading on the stock market, and take pleasure in subjects such as finance and investment. Zhang speaks Chinese and English fluently, and
Norwegian at a high level.
Christian Andreassen
Christian Andreassen has experience working with institutionalized children. He has good skills interacting with people. Andreassen speak Norwegian and English fluently, and Chinese at a beginners level.
Tor Daneshmand Kashani
Tor Daneshmand Kashani has experience as a Brand Manager Assistant, Chief Correspondent for the Press Association and by managing a Café in Oslo.
Daneshmand speak Norwegian, English and Persian fluently. He also speaks Chinese and German at a beginner’s level.
All of Zhǎo’s founders are graduates from BI Norwegian School of Management with a Bachelor Degree in International Marketing.
1.2.3 Market background
The market background’s purpose is to give an overview of Zhǎo’s market in China. It will include general information about Chinese universities and Chinese students and also the internet development and usage in China.
1.2.3.1 Chinese universities
The majority of the higher education institutions in People’s Republic of China are subsidized by the state. There are approximately more than 2000 institutions for higher education in China with over 20 million undergraduate and
postgraduate students.4
These institutions can be divided into 790 universities and 1600 other institutions of higher education in China. Universities in China can be divided into general university, technical university, specialized university such as medical, foreign language and teacher-training university. The majority of the age of the students at universities in China is between 18-22 years old.5
The top universities in China are Tsinghua University, Peking University, Zhejiang University, Shanghai Jiao Tong University, Nanjing University and Fudan University. This ranking was performed by Netbig, and only includes university in mainland China.6
China’s education reform 2010 to 2020 objectives for higher education in China:7
Accelerate the development of internationally renowned colleges and universities with a number of universities at or near the world-class level
Improve quality of teaching
4http://en.wikipedia.org/wiki/Education_in_the_People%27s_Republic_of_China#Higher_ed ucation 24.04.11
5 http://www.chinaeducenter.com/en/university.php 24.04.11
6http://en.wikipedia.org/wiki/Chinese_university_ranking_(Chinese_Academy_of_Managem ent_Science 24.04.11
7 http://www.chinaeducationblog.com/ 24.04.11
Raise level of scientific research
Further develop higher education for graduates to become more
diversified; increase support for higher education in Central and Western regions; encourage the eastern regions to take the lead in the development of higher education
Figure 4: China Funding and Enrollment in Higher Education
1.2.3.2 China’s Internet market
The latest counting of the Chinese internet users was conducted by China Internet Network Information Center (CNNIC). 8 As of December 2010, the number of Chinese internet users counted 457 million, the biggest internet market in the world. According to Boston Consulting Group (BCG) this number is expected to be more than 650 million by 2015. Much of the growth will come from rural China, which, from CNNIC’s 27th survey report, counts for 27.3 % of China’s total internet users.
The average time surfing on the net for Chinese internet users counted 18.3 hours per week and 2.6 hours per day.
The largest age group of Chinese internet users is 10 to 29 years, which counts for 57.1 % of the total number of Chinese internet users. The age group 10 to 29 years can be split into two age groups: 10 to 19 and 20 to 29. The age group 10 to 19 counts for 27.3 % of the total number of Chinese internet users, while the age group 20 to 29 counts for 29.8 %.
8 (CNNIC, 2011)
The biggest group of Chinese internet users is students who count for 30.6 %.
Net citizens with the educational background of undergraduate and above counted for 11.4 % of all Chinese net citizens.
The number of Chinese university students who use internet is 15.8 millions. This number is derived from taking the number of the total Chinese net citizens and calculating how much the percentage of net citizens with the educational
background undergraduate and above is. This number can be considered the total market size for Zhǎo.
1.2.3.3 Zhǎo’s target audience
Zhǎo’s target audience is Chinese university students from 18- 25 years of age.
This generation is known as “the little emperors”. The little emperors grew up as an only child.
Due to the One-child policy the internet population is made up overwhelmingly of only children. Of young age Chinese parents give their child PCs to emphasize on education. Chinese parents view PC as an important education tool and the
students are often expected to study when they are at home. As a lonely child growing up alone they often use PCs to entertain themselves mostly through computer and online games. Using PCs for schoolwork also gives them a chance to keep themselves socially engaged and entertained by chatting, using social networking sites, playing online games, downloading different media and using search engines.9
A research by BCG in 2009 showed that Chinese university students spend an average 3.6 hours a day online. According to the report university students use Internet for information, entertainment and community. Their motivation for online using in spare time is to seek friends.
1.2.3.4 Competition
The competition for Zhǎo is broad and can be divided into categories such as search engine, BBS, IM, entertainment etc. Websites such as www.sina.com and www.sohu.com are two of the biggest information sites in China.10 These
9 (Michael & Zhou, 2010) page 10
10 http://chineseculture.about.com/od/mediainchina/a/topchinesesites.htm 14.05.11
websites offers internet users information, entertainment, microblogs, BBS and many other applications. Information websites such as www.wikipedia.org or university’s own website could also pose as Zhǎo’s competitors. The competition will depend on which products Zhǎo decides to provide to their target audience.
Part 2 Research Process
2.0 Method
In the following part of the thesis the authors will elaborate what kind of research methods approach that has been used in order to answer the thesis aim.
2.1 Research Questions
The research questions are defined in the introduction.
2.2 Research Overview
This is a summary of the methods and approaches the authors have used in the thesis. It will be explained why these methods and approaches have been used and later in the thesis explain what they are.
The authors applied explorative design and qualitative research because of their lack of knowledge in the field. Implementation of qualitative and quantitative research, or a so called mixed method research, has been applied in order to get a more valid primary data collection.
With the quantitative research the authors applied descriptive design to the assignment. This was done by using an explorative design to discover basic knowledge about the students. The authors used questionnaires to describe the student’s opinions toward some particular aspects of the university life as well as their habits on the internet.
The research process started with searching, gathering and analyzing secondary data. The authors did not start with collecting primary data. The reason for this was to avoid collecting primary data that could be easily found in secondary data research.
After gathering secondary data the authors used qualitative research to begin the primary data collection in order to gather data that would help shape the
quantitative research.
In the qualitative research the authors conducted in-depth interviews in order to gain insight in the field. In the quantitative research the authors created
questionnaires in order to answer the research questions.
The authors have decided to use an inductive approach to gather information and advance in the studies. The authors applied inductive theory due to the use of an explorative design. The goal is to explore the Chinese university students’ life, attitudes, preferences and habits in order to acquire valuable information.
After the initial inductive theory the authors applied deductive theory to solidify their findings through quantitative research. A deductive approach is a result of the in-depth interviews. The interviews formed the basis for the premise of the target audience. Applying a deductive approach allows quantitative research methods, utilizing questionnaires to map preferences and attitudes.
The use of both an inductive and a deductive theory is justified by this sentence:
“However, just as deduction entails an element of induction, the inductive process is likely to entail a modicum of deduction.” 11
The following research overview model displays the methods and theories applied throughout the research process:
11 (Bryman & Bell, 2007) page 14
Figure 5: Research Overview Model
2.2.1 Explorative design
If the researchers know little of the field they are going to research, they can make the primary objective to gain more knowledge about the field and study it further.
The researchers may not know the relations that can exist in the field or know the relevant theories or definitions.12
With an explorative design the researchers can make it their primary objective to understand and analyze the research field or phenomena to better understand it.
Typically with an explorative design the first thing to do is to research if there is any literature on the subject and other secondary data. Afterwards the researchers start the primary data collection. Sometimes in a research project it is sufficient to only gather secondary data.
An explorative design can help generate hypothesizes which can further be researched with another research design.
12 (Gripsrud, Olsson, & Silkoset, 2008) page 59
Inductive Theory
Qualitative Research
In-depth
Interviews Findings
Deductive Theory Quantitative
Research Questionnaires
Findings
Analysis and recommendation
2.2.2 Descriptive design
In a descriptive design, the researcher(s) usually has a basic understanding of the research field. The purpose of descriptive design is to describe a situation in a certain area. This can be for example the level on a single variable or the correlation between two or more variables the researchers wants to map.13 Descriptive design can help test hypothesizes.
Typical for descriptive designs are the use of structured questionnaires and a representative choice of respondents from a target group.
A downside with descriptive design is that it can hardly explain why there is a correlation between variables, only that there is a correlation.
2.2.3 Qualitative research
Qualitative research is a research method that results in descriptive data, for example descriptive sentences and expressions. 14 One of the key objectives with qualitative research is getting completeness.
Qualitative research and data is usually used for analytical descriptions and understanding of correlations.
Qualitative research has its strength in the use of the questions “what?”, “why?”
and “how?” These methods focus more on understanding than measuring.
2.2.4 Quantitative research
Findings from in-depth interviews cannot be generalized since the purpose of in- depth interviews is explaining why certain the students behave as they do. A quantitative research measures numbers rather than words and thoughts. The findings from a questionnaire can be generalized for a population.
2.2.5 Mixed Methods
Mixed Method can be explained as “research that integrates quantitative and qualitative research within a single project.”15
There are two arguments against using a mixed method research:
13 (Gripsrud, Olsson, & Silkoset, 2008) page 61-62
14 (Gripsrud, Olsson, & Silkoset, 2008) page 98
15 (Bryman & Bell, 2007) page 643
1) Different research methods carry different epistemological commitments 2) Quantitative and qualitative are viewed as two different paradigms.
Theorists argue that mixed method research is not feasible or desirable. This is because the epistemological positions in which the two methods are grounded constitute irreconcilable views about how social reality should be studied.
One author argues that each of two research strategies has different procedures and therefore advices researches not to accept the unfounded assumption that the methods are complementary. However, the idea that research methods carry with them epistemological and ontological implications is difficult to sustain.
The paradigm argument implies that quantitative and qualitative researches are paradigms in which epistemological assumptions, values and methods are
inextricably intertwined and are incompatible between paradigms. When the two research methods are combined the integration is only at a superficial level and within a single paradigm. Then again, it is not clear that quantitative and qualitative researches are paradigms.
2.2.6 Primary Data
Primary data is data gathered by the researchers. This data can be in various forms gathered by various methods and techniques.
Some examples of methods used for gathering primary data are questionnaires, interviews, focus groups and observation.
These methods have different techniques in how they are carried out, for example questionnaires can be done automatically over email or phone or manually face- to-face. Interviews can be done over video-conference or face-to-face and can be with structure or without structure.
2.2.7 Secondary Data
Secondary data is data published and gathered by others. It can be in the form of books, articles in magazines and newspapers, rapports, tapes, statistics and so on.
Much of the secondary data has been digitalized and published on the internet, which makes it easily accessible.
2.2.8 Deductive approach
“Deductive theory represents the commonest view of the nature of the relationship between theory and research” 16
In a deductive approach, hypotheses and theories are formed based on known facts. These certain facts provide premises. The process of deductive approach:
Theory observation/findings.17 2.2.9 Inductive approach
An inductive approach is often utilized when the necessary insight of a problem or a research object is missing. Observations must be made in order to form
hypotheses and theories. The process of inductive approach:
Observation/finding theory 2.2.10 Validity
Validity can be explained as “if whether or not measurement of a concept actually measures that concept.”18
To verify the validity of this thesis the authors will determine if the questions in the in-depth interviews and questionnaires answers the research aim and research questions through this thesis assignment. Acting in accordance with the research aim and questionnaires is critical when developing the questionnaires and in- depth interviews. Validity can be divided into internal and external validity.
2.2.11 Internal validity
Internal validity is concerned in the extent of “whether a conclusion that contains a causal relationship between two or more variables is consistent.”19
Although the interviewees understood English, the authors took notes and used audio recorder equipments under the in-depth interviews to prevent
misunderstanding and mistakes.
16 (Bryman & Bell, 2007) page 11
17 (Bryman & Bell, 2007) page 14
18 (Bryman & Bell, 2007) page 165
19 (Bryman & Bell, 2007) page 41
2.2.12 External validity
External validity is concerned of “whether the result of study can be generalized beyond the specific research context.”20
The authors pre-tested the questionnaires to assure if it is valid. To assure that the findings are valid generalized the authors have handed out questionnaires to different university and students with different majors and backgrounds.
2.2.13 Reliability
Reliability is concerned in the extent to “which a measurement will have the same result after repeatable times.”21
Through reliability analysis the authors ensure the measurements of the data findings are consistent with measure of the concept.
3.0 Information Gathering
Here the authors will elaborate about the sources and the research methods used for information gathering.
3.1 Reports
The survey conducted by CNNIC22 provided useful information about the Chinese internet users, however, not all information could be applied to the purpose of the thesis. Data from CNNICs survey was used as indicators for the development of the Chinese internet market.
The article “China’s Digital Generation 2.0” by Boston Consulting Group23 (BCG) provides insight in trends on the Chinese digital landscape.
3.2 Questionnaires
“Questionnaires that are completed by respondents themselves are one of the main instruments for gathering data using a social survey design” 24
20 (Bryman & Bell, 2007) page 42
21 (Bryman & Bell, 2007) page 41
22 http://www1.cnnic.cn/uploadfiles/pdf/2011/2/28/153752.pdf 16.03.11
23 (Michael & Zhou, 2010)
24 (Bryman & Bell, 2007) page 240
Questionnaires are a form of research method where the researchers gather data by getting answers to written and standardized questions. Questionnaires can cover large populations and data is easily gathered. It is effective and cost
efficient, however, questionnaires have disadvantages. The disadvantages are: the disability to probe deeper outside the questions, the unawareness of who the respondents are, disability to collect additional data, and a greater risk of respondents not finishing the questionnaire.
There are different aspects of a questionnaire that has to be considered, such as scale, design, form of the answers, format and how to analyze it.
Likert scale
“The Likert scale is originally used for measurement of attitudes for a subject as a one-dimensional term.”25 Respondents can choose the answers that support their view toward a statement in an answer-scale, usually ranging from 1 to 5. The researcher often outlines a set of questions to measure one statement. Respondents are asked to respond to the questions by marking their answer in the scale
according to their own personal view.
Design
To create a clear questionnaire when presenting it to the respondents, the researchers have to choose a design that is appealing. The attractiveness of the layout is likely to enhance the response rate. 26 In order to encourage thorough answers the questionnaire has to appear less time consuming to answer. The answers can be ordered in a vertical or horizontal way depending on their length.
A vertical design positions the answers in a downward fashion while horizontal design position the answers in a straight horizontal line.
Fixed answers
Most questionnaires contain fixed answers to limit the answers. As the Likert scale contains a limited range it automatically limits the possible outcome from the respondents.
25 (Gripsrud, Olsson, & Silkoset, 2008) page 128
26 (Bryman & Bell, 2007) page 247
Practical use of the Likert scale
The Likert scale was applied in a self-completion questionnaire in order to measure the students’ satisfaction toward various topics. The authors chose a design for the Likert scale that would appear appealing in order to generate as many responses as possible.
The authors outlined only one question for each topic as the nature of the questions gave the answers needed for the whole picture.
The intention for utilizing the Likert scale was to measure the students’
satisfaction level for each topic.
The format
The authors chose a closed self-completion questionnaire containing a set of fixed answers with a horizontal format. 27 The language of the questionnaires is in Mandarin Chinese.
The answer scale in the questionnaire ranged from 1 to 6, with 1 standing for not satisfied and 6 standing for very satisfied. There is also included a section for the answer I don’t know in case the respondents were incapable or indecisive when answering the question, and to get more accurate results.28
Analysis
There are several methods to analyze the answers from the Likert scale. The authors summarized the answers into a bar-chart to make clear the most frequent answers. The most frequent response is an indicator for the students’ summarized satisfaction level on the topic. 29
3.3 In depth Interviews
In-depth interviews are commonly used in qualitative research methods. It enables the researchers to study individual perceptions, experiences and thoughts toward a particular subject. The respondents can express themselves in a matter that
standardized questionnaires cannot, and their subjective opinion is easier to
27 Appendix 1
28 Appendix 1
29 http://www.ehow.com/how_4855078_use-likert-scale-statistical-analysis.html 07.05.11
understand. A downside with in-depth interviews is the amount of time it takes to conduct them. Given that the duration of an interview is usually between 30 minutes to an hour, it will require the researchers a considerably amount of time to conduct all the interviews.30
Semi-structured interviews
Semi-structured interviews are a type of qualitative interviewing where the researcher has a list of research questions on specific topics.31 The list can be referred to as an interview guide. The interviewer has room to change the way he or she approaches the questions and how to reply. The questions may not follow the outlined schedule accurately. The interviewer may ask questions outside the interview guide if the interviewer desires to delve deeper. All the questions, more or less, will be asked with a similar wording between the interviewer and
interviewee.
The interview process is flexible. The emphasis of the interview is the frames and understanding of issues and events and what the interviewee views as important in explaining and understanding. Semi-structured interviews can be performed on individuals as well as small groups up to five people. It is preferable if more than one person carry out the fieldwork to use semi-structured interviewing. This way the interviewing style can contain a modicum of comparability.
3.4 Interviewee selection
The authors have selected two different interviewee selections:
First interview selection
For the first in-depth interviews the authors have chosen two professors, a student and a COO that is familiar with marketing in China. These were chosen by the authors in order to explore and gain knowledge within the research area and to gather information on how to find primary and secondary data. Background information about these interviewees is given after the second interview selection.
30 (Gripsrud, Olsson, & Silkoset, 2008) page 108
31 (Bryman & Bell, 2007) page 474
Second interview selection
The authors conducted in-depth interviews with students at Fudan University and Tongji University in Shanghai. The interviewees were selected by randomization to secure a random selection and to have a more valid data finding. By conducting in-depth interviews with students the authors will get a deeper understanding and knowledge about their habits and levels of satisfaction.32
Professor 1
The interviewee is a professor from Fudan University at Fudan School of Management. The professor wished to remain anonymous.33
Professor Fan Xiucheng
Fan Xiucheng is a professor at the department of Marketing at Fudan University.34 His research field is marketing and service management. Professor Xiucheng has given lecturers in Europe and USA. He has won several awards for teaching at Fudan University.35
Jessica Ginger White
Jessica Ginger White is a 21 years old student from Fudan University.36 Ms.
White is originally from Hong Kong, but lives in Shanghai to enroll in her undergraduate years with a major in public relations, and to work as an intern.
Ms. White is familiar with Chinese students’ daily life and their life on campus as she is spending her time with her Chinese classmates and friends.
Sina Farzaneh
Farzaneh is the COO of the company Advocacy.37 The company Advocacy is the only Word Of Mouth (WOM) in China. His company offers a complete end-to- end WOM marketing solution that includes WOM insights, WOM message development, WOM campaign execution and WOM return on investment (ROI) modeling.
32 (Bryman & Bell, 2007) page 209
33 Interview 08.03.11
34 Interview 08.03.11
35 http://www.fdsm.fudan.edu.cn/en/teacher/preview.aspx?UID=56189 05.05.11
36 Interview 11.03.11
37 Interview 17.03.11
Sina Farzaneh has been with the WOM advocate since 2003 when he helped generate award winning WOM in the consumer electronics industry through influencer marketing. He has been working for Paris, Palo Alto in Shanghai since 2005, has 7 years of WOM experience from tech start ups to Fortune 500 cos.
Mr. Farzaneh is also a former professor of Marketing Intelligence at Fudan University.38
3.5 Potential errors
Errors may occur during both the in-depth interviews and questionnaire.
Samplings errors that can occur under an in-depth interview can be, for instance, poorly structured questions, the way the questions is asked by the interviewer, misunderstandings on both part of the interviewer and interviewee, and also the way interviewees interpret information and how the interviewer record the information.
Language barriers can occur under the interviews. The authors will interview interviewees with another native language than English. This may cause difficulties for the interviewers.
Samplings errors that can occur under survey questionnaires can for instance be poorly worded questions or surveys with a complicated structure which can make it difficult for the interviewee to interpret the information.39
Misunderstandings when interpreting the questions can take place. Memory problems on the part of the interviewee could appear.
As mentioned in research limitations about the in-depth interviews, language barriers may occur. This can be a challenge for the authors when sampling data through quantitative questionnaires. The authors got help from one of Zhǎo’s founder to translate the questionnaires to Mandarin Chinese. Errors may also occur under the process of uploading the data in to SPSS and analyzing the answers after the process.40 An error can be caused by for example the respondents skip questions in the questionnaire.
38 http://advocacy.asia/about.html 05.05.11
39 (Bryman & Bell, 2007) page 204
40 (Bryman & Bell, 2007) page 211
In the secondary data collection the authors collected data from various sources, such as internet articles and books. While gathering the secondary data, the authors did not always have the opportunity to check the reliability of the data because of lack of references and the sources on the respective data locations. To avoid using misleading and incorrect data the authors have been critical to sources.41
4.0 Theory
4.1 Internal analysis
The authors will employ theories to analyze the internal factors of Zhǎo. The internal analyses the strengths and weaknesses and focuses on internal factors and resources that give an organization advantages and disadvantages in meeting the needs of its target market.42
4.1.1 IHIP
IHIP theory explains the traits of a service in comparison to a product. The authors will use this model to describe the services Zhǎo can offer to the market.
IHIP stands for Intangibility, Heterogeneity, Inseparability and Perishability.
Intangibility implies that a service is not in a material or physical form.43 The Tangibility Spectrum displays how different products and services are tangible or intangible. The tangibility spectrum model can be used to argument how services are not either completely intangible or tangible, but rather a varying degree of both.
41 (Bryman & Bell, 2007) page 661
42 http://mystrategicplan.com/resources/internal-analysis/ 11.05.11
43 http://services.byu.edu/sw/doku.php?id=ibm:ssme:articles:marketing 11.05.11
Figure 6: Tangibility Spectrum44
Heterogeneity implies that the services are different from each time they are consumed. No two times are the service produced and consumed the same way.
The inseparability aspect of the IHIP theory implies that the production and consumption of the service is inseparable as the two processes occur at the same point of time. For example teaching and consulting is both produced by the service provider and consumed by the customer at the same time. The service provider does not produce the service and later sell it to the customer for them to consume the service later. The production and consumption of the service is inseparable.
The inseparability aspect of services is reinforced in the fourth aspect perishability, which implies that services cannot be stored or saved for later consumption.
4.1.2 Five Product levels: The customer-value hierarchy
This model shows five levels of which a product is offered to the market. Each level adds more customer value to the product45.
44 Zeithaml, V.A. and Bitner, M.J. 2000 Services Marketing: integrating customer focus across the firm. 2nd edition. York: McGraw-Hill. page 23
45 (Kotler, Keller, & Lu, 2009) page 286
The authors used this model to explain how Zhǎo can offer its users and viewers value through Zhǎo’s website with different products. This model is applied in the strategic part.
Figure 7: Five Product Levels
1. Core benefit:
Is the fundamental level of the hierarchy. This level focuses on the service or benefit the customers are really buying.
2. Basic product:
On the second level, the core benefits have been turned into basic products which contain attributes and features necessary for it to function. 46
3. Expected product:
Is the set of attributes that consumers usually expect when they buy a product.
4. Augmented product:
Is the product offering that exceeds the consumers’ expectations.
Marketers must consider the user’s total consumption system; the whole
46 http://www.provenmodels.com/16/five-product-levels/philip-kotler 06.05.11
process from acquiring to usage of products and related services. This level is expected to add extra cost for the company.
5. Potential product:
The fifth and last level of the customer-value hierarchy includes all the possible augmentations and transformations the product might undergo in the future. On this level the company must search for new ways to satisfy the customers and differentiate its offers.
4.1.3 New Product development Decision Process (NPDDP) The New product development decision process (NPDDP) is defined as “a process of bringing a new product to the market.”47
Zhǎo can implement this process to find a suitable product for their users. This model is used in strategic part in this thesis.
The NPDDP has the nine following steps:
Idea Generation
This process is where the company search for ideas.48 The company can do a research within the company itself, in the company’s target segments or the market to find ideas. Basic research such as the SWOT analysis can be performed in this process to look for opportunities in the company or to the market.49
Idea Screening
The second process is the process of sorting out the weaker ideas. The company should ask itself several questions such as: will the target audience benefit from the product? Does the product meet a need and offer superior value?
Each idea is described by the product idea, target market and competition, along with estimates of market size, product price, development time and cost etc.
47 (Kotler, Keller, & Lu, 2009) page 295
48 http://en.wikipedia.org/wiki/New_product_development 12.05.11
49 (Kotler, Keller, & Lu, 2009) page 295-305
Concept development
“A product concept is an involved version of the idea expressed in consumer terms”. A product idea can be turned into several concept ideas by asking: who will use this product? When will people consume or use it?
A company can create several product concepts, select the single most promising concept and create a product-positioning and/or concept cards for it.
Concept testing
In the concept testing process the company present the product concept to their target audience and read their reaction. The company in this process measure the consumer preferences.
Marketing strategy
After a successful concept test, the company employs a strategy to introduce the product to the market. The marketing strategy involves three parts and forms a basis for the business analysis:
Analysing the target market’s size, structure and behaviours and the market share and profit goals in the first few years.
The planned price and marketing budget for the first year
Long-run sales/use and profit goals and marketing mix strategy over time.
Business analysis
In the business analysis step the company evaluates the business attractiveness of a proposed new product. This is done by preparing estimates of sales, costs and profits to see if these satisfy the objectives of the company. If the estimates satisfy company objectives the company moves on to the next step in the NPDDP.
Product Development
At this stage the company examines if the product idea can be transformed into a technically and feasible product. This can be done by using a set of methods known as Quality Function Deployment (QFD). QFD takes a list called Customer Attributes (CAs) generated by market research and turns it into a list of
Engineering Attributes (EAs). EA is a list containing information which enables engineers to implement CAs into the product.
Afterwards a prototype of the product will be created to undergo functional tests and customer tests.
Market testing
In the market testing process the new product is introduced into the market to see how the consumers and dealers react to handling, using and repurchase. In testing consumer products, the company search to estimate four variables: trial, first repeat purchase, adoption, and purchase frequency.
Commercialization
The commercialization stage is where the company decides how to launch the product by using the market strategy. This process involves promotion, timing, geographic strategy and target-market prospects.
4.1.4 GAP
With the GAP model the authors can analyze and see the needs that Zhǎo will have to be aware of to satisfy their users the best way they can.
The GAP model maps the different pitfalls of a service and is used as a tool to analyze a service provided by a company.50
This model explains the two different types of service marketing, namely the customer gap and the provider gap. The GAP model displays the difference between consumer expectations and perceptions, which eventually depends on the size and the direction of four gaps concerning the delivery of service quality on the company’s side. The model helps predict, and identify key factors that cause the gap to be unfavorable to the service firm in the meeting customer
expectations.
The extent and the direction of each gap will affect the service quality. For
instance, Gap 3 will be favorable if the delivery of a service exceeds the standards
50 (Kotler, Keller, & Lu, 2009) page 329
of service required by the organization and will be unfavorable when the specifications of the service delivered are not met.
Explanations of each gap:
Customer gap:
The customer gap is the difference between the customer expectations and perceptions – the service quality gap.
Provider gaps:
Gap 1:
The difference between what the customers expect and what the management perceives the customers expect.
Gap 2:
Gap 2 is the difference between the management’s perceptions of customer expectations and the translation of those perceptions into service quality specifications and design.
Gap 3:
The difference between specifications or standards of service and the actual service delivered to customers.
Gap 4:
The difference between the services delivered to the customers and the promise of service quality by the firm.
Figure 8: GAP Model51
4.2 External analysis
The external analysis examines the opportunities and threats that exist in a market.
The authors will analyze the threats and opportunities for Zhǎo. This will help the company to get a broader understanding of the situation it will face.
4.2.1 PEST
The authors have used the PEST analysis to analyse Zhǎo’s current market position as the changes in environment will appear, as PEST analysis need to be undertaken regularly.
PEST is an acronym for political, economic, social and technological factors.52 It is important that a company considers its environment before beginning the marketing process. The PEST analysis describes a framework of macro- environmental factors that the company should take into consideration. It is a useful tool for an organization that considers entering a new market or for
understanding a markets growth. By understanding the market growth, PEST also helps a company to take action and control to avoid failure. The PEST factors can,
51 http://www.marketing.org.au/?i=mhOLQLXYtU8=&t=jZS6ngCVPug= 05.03.11
52 http://www.businessballs.com/pestanalysisfreetemplate.htm 14.05.11
similar to the SWOT factors, be used to review a company’s opportunities and threats in the market.
Political factors
Political factors refer to government policies such as degree of intervention in the economy. It also includes governmental regulations and legal issues in the
respective country that companies must follow. Political factors include areas such as:
Tax policy
Employment laws
Environmental regulations
Trade restrictions and tariffs
Political stability53 Economic factors
The economical part of the analysis is central in decisions made by the company and affecting a firm’s opportunity to grow. It influences the purchasing power of customers and a company’s cost of capital. Factors included in this area are:
Economic growth
Interest rates
Exchange rates
Inflation rate Social factors
Changes in social trends affect the demand for a company’s products and how that company operates. Social factors include the demographic and cultural aspects of the external environmental. These factors affect customer needs and the size of potential markets. Factors included in this area are for example:
Demographics
Class structure
Education
53 http://www.quickmba.com/strategy/pest/ 10.05.11
Culture (gender roles, etc.)
Entrepreneurial spirit
Attitudes (health, environmental consciousness, etc.)
Leisure interests Technological factors
New technology creates new products and new processes. Technology can reduce costs, improve quality and lead to innovation. These developments can benefit consumers as well as the organizations providing the products. On the other side these factors can also lower entry barriers, reduce minimum efficient production levels, and influence outsourcing decisions.
Factors included in this are for example:
R&D activity
Automation
Technology incentives
Rate of technological change
Figure 9: PEST Model
Political
Factors Economical
Factors Sociocultural
Factors Technological Factors
4.2.2 Porter’s five forces model
The authors will use Porter’s five forces model to display Zhǎo’s competitive situation depending on what products Zhǎo chooses to launch.
Porter’s five forces model incorporates five entities called forces that influences an industry which a company operates in. The model gives an understanding of the competition a company competes in. The five forces are:
1. Rivalry
2. Threat of substitutes 3. Buyer power
4. Supplier power
5. Threat of new entries and entry barriers
Figure 10: Porter's Five Forces Model
Rivalry
The force “rivalry”, or the intensity of the competition, is a force that can affect the profitability of a company significantly. With a high competition companies are forced to for example lower their prices to a competitive level, which leads to a lower profitability. High rivalry also means that the share of the market is
Rivalry
Threat of new entries
and entry barriers
Buyer power
Threat of substitutes Supplier
power
limited, and the struggle to gain more share is tough. The level of the rivalry is based on the firms' aggressiveness in attempting to gain an advantage.54
Threat of substitutes
The force threat of substitutes is referred to as substitute products in other industries. When customers have more alternatives to choose between, the threat of substitutes increases. With a high threat of substitutes the price of a company’s product can be forced down in order to compete with the substitute(s).
Buyer power
The power of buyers is the influence of customers on the industry. The power of buyers increases when the number of buyers is low. In an industry with few buyers or only one buyer, the buyer sets the price. The buyer can also influence other areas than price, such as specifications and attributes of a product. However, the buyer power is weak if the buyer cannot easily switch to another company, or if the company can threaten to buy the buyers company. The buyer power is also weak if the buyers are many and different, such as buyers of most consumer goods.
Supplier power
The supplier power originates from a company’s dependency of a supplier. The more dependent a company is of a supplier, the more power the supplier has. The supplier can use this power to capture profits from the industry by selling the supplies at a high price. The suppliers also gain power if the suppliers are
concentrated. The suppliers are weak if there are many competitive suppliers and the supplies are standardized. The suppliers are also weak if the customer’s power is weak.
Threat of new entrants and entry barriers
The threat of new entrants and entry barriers to an industry affects the competition. The market equilibrium plays a vital role in this. If the industry profits increase, it is expected that more companies will enter the market to take advantage of the high profit levels. If this happens it will over time lead to lower
54 http://www.quickmba.com/strategy/porter.shtml 11.05.11
