Chapter 1
Introduction
For several years, the selected foreign company had been recognized as a successful international manufacturer and distributor of luxurious bags and accessories. The company’s brand has always been associated with quality leather items, luggage and travel products. A few years ago, the company diversified its product lines by offering shoes and ready to wear fashion, which have been successful as well. The company had been a recognized name for years all over the world, allowing it to expand to other countries. One of which was China. Realizing the opportunities the Chinese market has to offer, the company then decided to operate in the country during the early 1990s. During its initial operations, the company had concentrated on the market and soon became one of the known luxury fashion brands in China. The company had been successful allowing it to establish multiple stores including those found in Shanghai, Dalian, Beijing, Guangzhou, Chengdu, Xian, Shenzhen, Qingdao, Hangzhou and Xiamen.
The success of the company in China is strongly attributable to the growing domestic economy. This positive outcome allowed local consumers to have enough finances to purchase luxurious products. The development of luxury sales in Chinese market had been driven more by the improved marketing campaign opening of the luxury-producing industries in China. With these initiatives, more and more luxurious products have been available in the Chinese markets, which allows
The study shall be divided into five chapters in order to provide clarity and coherence on the discussion of the topic. The first part of the study will be discussing the problem uncovered by the researcher and provide ample background on the topic. The chapter shall constitute an introduction to the whole study and the statement of the problem in order to present the basis of the study. Moreover, the chapter shall also have a discussion on the scope of its study as well as the significance of the study to society in general and specific effects on individuals.
The second chapter shall be discussing the relevance of the study in the existing literature. It shall provide studies on luxury products in China, piracy and others. After the presentation of the existing related literature, the researcher shall provide a synthesis of the whole chapter in relation to the study.
The third part of the study shall be discussing the methods and procedures used in the study. The chapter shall comprise of the presentation of the utilized techniques for data collection and research methodology. Similarly, it shall also contain a discussion on the used techniques in data analysis as well as the tools used to acquire the said information or data.
The fourth chapter shall be an analysis on the tabulated data. After the said tabulation, the data are statistically treated in order to uncover the relationship of the variable involved in the study. With the said data, the chapter seeks to address the statement of the problem noted in the first chapter.
The last chapter shall comprise of three sections, the summary of the findings, the conclusions of the study, and the recommendations. With the three portions, the chapter shall be able to address the verification of the problems and objectives stated in the initial chapters of the study.
1.1 Background of the study
The opening of the Chinese market to foreign investors as well as the modification of some of its business policies contributed greatly to the country’s currently booming economy. Having a large and diverse market, major international companies, particularly those carrying branded products, have been driven to establish their businesses in China. The fast-growing domestic economy on the other hand, enabled the Chinese people to have sufficient finances to purchase these high-end and luxury goods. As a result, foreign brands and their respective companies have been enjoying high profitability; some even have expanded greatly.
However, while this outcome had been beneficial in supporting China’s further economic growth, foreign companies operating in the country are facing a major business issue on piracy. Despite the economic boom and the activeness of the market, luxury sales in China are greatly affected. To investigate more about this issue, the case of a foreign company in carrying luxury bags and accessory products was taken into account. This study was conducted in order to identify how piracy affects the selected company as well as cite its efforts to resolve the problem. The status of the company’s luxury sales and the obstacles the organization is encountering to prevent the piracy of its product lines was also determined in this study. This organizational investigation was carried out mainly to increase the awareness on the effects of the piracy issue and the ways its can be addressed. Highlighting this business problem may contribute to the continuous economic growth of China as well as the increase expansion of foreign trade in the country.
1.2 Aim and Objectives
The main objective of the study is to determine the impact of piracy issue in China to a selected company, particularly in terms of production and sales of luxury goods. Specifically, study aims to achieve the following objectives:
1.3 Research Questions
Piracy has been a major issue in China and affects the effective operations of most local and international businesses. In terms of luxury sales and consumption, this can possibly lower the profitability of foreign luxury brands and products. The continuous rise of the issue can likely affect the entry of other foreign investments in the country as well. This study is then necessary in bringing about awareness over the issue, stressing the need to address it and developing ways on how this could be resolved. The follow questions then served as the guide for the researcher during the investigation process:
1.4 Scope of the Study
This research study will be quantitative and qualitative in nature. Thus, the framework of this study will be based on the Input-Process-Output Model; a process is viewed as a series of boxes (processing elements) connected by inputs and outputs. Information or material objects flow through a series of tasks or activities based on a set of rules or decision points. Flow Charts and process diagrams are often used to present such process. Basically, what goes in is the input (what causes the change in the process) and output (the result). See Figure 1.1 (Basic IPO Model).
Figure 1.1
Input – Process – Output Model
The IPO model will provide the general structure and guide for the direction of the study. Substituting the variables of this study on the IPO model, the researcher came up with the following:
Figure 1.2
Conceptual Framework
INPUT PROCESS OUTPUT
For this research, the study will focus on assessing the luxury sales, high-end consumer buying and the issues on piracy in Chinese markets. The study will give emphasis on identifying the status of the selected company in luxury sales; determine the effects of piracy to the chosen company and to cite efforts and obstacles of company in relation to piracy elimination. For this study, the researcher will only have respondents from China to make sure that pertinent data will be gathered.
1.5 Significance of Study
The growth of luxury sales in the country implies a number of positive outcomes. One of which is the improving standards of living among the locals. This is one sign of the increasing strength of the country’s economy. In addition, having a strong luxury market can help attract foreign investment in the country, which in turn can strengthen both international relations and trade. Thus, by increasing the awareness of the negative factors that affect these economic results, such as piracy, the study could then support the continuous stabilization of China’s economy. In addition to awareness, this study could benefit organizations encountering a similar issue; the results of the investigation can provide them of the possible means of addressing piracy and protecting intellectual property. This study may also encourage local consumers to support original goods offered in the market.
1.6 Limitation of Study
As stated before, this study provides significant role to the society since it depicts the future of a certain luxury sale business in China. Furthermore, this study provides qualitative analysis and quantitative analysis for the findings. Additionally, every data was addressed through interpretation and in-depth evaluation. Furthermore, the number of respondents was only limited to 30 individuals. As the research was completed in a relatively short period of time other factors and variables are not considered. This might have an impact on the results of the dissertation study.
1.7 Definition of Terms
- Luxury Goods – are goods sold in the market at the highest end level in terms of price and quality. These goods are considered superior that their comparable substitutes due to their durability, quality, performance or design. In some cases, despite the practicality and better features of less expensive alternatives, luxury goods are purchased to display the consumers’ wealth or purchasing power. Classic luxury items include cars, accessories, perfume, clothing and even food ( 2006).
- Luxury Brand – also known as prestige brand used to represent luxury goods. These brands are associated with the goods’ high quality and high price. Examples of which are Gucci, Burberry, and Louis Vuitton ( 2006).
Chapter 2
review of relate literature
2.1 Introduction
Several published literatures had cited the increasing status of luxury sales in China. Mainly due to the country’s current booming economy, more and more foreign businesses carrying luxury brands have been coming in to China. While the population of the country itself is a typical target of investors, the rising consumer trend and interest of the locals on luxury goods made China even more attractive to business operators. This section will discuss various publications relevant to the rise of luxury good consumption among the Chinese. In addition, the significance of the piracy issue on this economic matter will also be included.
2.2 Luxury Good Consumption
Hostility towards an increase in consumption has been expressed in different ways in different periods. But there is one point which is common to all periods: the distinction between consumption that satisfies necessary needs (defined as ‘natural’), and consumption that satisfies artificial needs (thought as harmful and in general called luxury consumption).
In the modern age hostility towards the new consumer goods was expressed as a criticism of ‘luxury’. The word ‘luxury’ could refer either to real luxury or to comfort. Consumer goods, in their turn, can be ‘new’ in two senses. Either they are new for everybody, or they are new only for the lower classes, who acquire the habit of consuming goods that were previously reserved for the higher classes. However, in the modern age the consumer goods that were new for everybody, such as goods imported from the New World, or goods created by technical progress, were criticized only when they were consumed by the middle to lower classes.
Consumer choice is liable to trace out definite patterns across the population, in which variables such as social class and household composition in terms of gender and age will be of importance (, 2002). The various patterns of consumption that do or do not arise by different socio-economic classifications give rise to corresponding norms of consumption. Crucially, a consumption norm in this sense is not to be interpreted as a common level, whether some measure of average or not, although this is what one aspect of a norm can be. Rather, the norm is supposed to reflect the presence or not of patterns of consumption that differ systematically across the population. For some goods, a TV or a lottery ticket for example, consumption is so common as to represent a norm in the sense that more or less everybody has one. For other, luxury goods, the norm is for those to have them only if they are wealthy and of a particular socio-economic class – as in a country estate (, 2002)
2.3 Luxury Good Consumption in China
Based from a survey conducted by the CMR or the China Market Research Group, about 60% of the respondents claimed that they purchase luxury goods. Majority of these respondents (89%) belong to the 20 to 30 age group whose assets are typically less that ,000 USD. This finding clearly implies that while Chinese millionaires are the usual buyers of luxury products marketed in the country, young and average consumers are also buying these goods. Reports in 2003 also noted that about 45 million Chinese have more that ,000 USD worth of purchasing power. About 175 million Chinese locals are also said to afford luxury products as stated by the China Branding Strategy Association ( 2006).
The level of luxury sales in China had been marked by the rise and expansion of several foreign luxury brands operating in the country. Mainly brought about by the new and improved Chinese economy, the business and work sectors in China were enhanced considerably, enabling most consumers to become aware of high standard living and purchase luxury goods. Prestigious brands such as Christie’s, Davidoff, Vacheron Constantin, Hennessy, Dom Perignon, Chivas Regal, Giorgio Armani and Ferrari appeared to be the most preferred luxury brands among Chinese millionaires ( 2006).
Recent reports have stated that the Chinese market is already recognized as the third largest in the world for luxury goods consumption. This in turn made luxury product companies to find China an appealing target for business investment. It has been projected that from the billion USD worth of luxury goods market worldwide, Chinese consumer account 12% of this figure, totaling to billion USD worth of market. Guangzhou, Shanghai and Beijing are considered as China’s first tier cities and are the designated centers for luxury goods ( 2006).
Aside from the actual sales increases among various luxury-producing companies, the behavior of the consumers also stresses the growing consumption level for such products. Previous studies had in fact described Luxury good consumers in China and their attitude towards these products. For example, a survey result stated that two-thirds of the young Chinese urbanites were prone to buying high-end goods in order to enjoy life. A survey from a number of Chinese provinces also concluded that more than half of the total respondents (56.7%) had once saved during a particular period of time in order to buy luxury goods. Some executives even follow new dietary practices not to lose weight but to save money for luxury purchases ( 2005). Luxury good consumption and sales in China have indeed increased for the past years. Several factors had driven this trend.
2.4 Reasons behind the Increased Consumption
One of the major contributors of the growing level of luxury sales in China is its booming economy. During the old times, the country observed the command economy where the administration is the one in charge of controlling all economic-related issues and activities. The constraining economic policies implemented by the government on the other hand, made the Chinese economy stagnant and ineffective. In addition to limited profit incentives, the inefficient economic system also reduced business competition to nothing, making progress unattainable. This system also made the living standards in the country lower than other developing nations. The outcome of the traditional economic system then encouraged the Chinese government to come up with effective reforms that will augment the people’s living standards and the overall economic state.
The transformations in the Chinese economy led to several positive outcomes. In general, the economic status of the country was uplifted mainly through the increased openness of the country towards foreign trade and investment, presence of well-trained workforces, enhancement of the ownership and incentive structures as well as the high investment and saving rates of the country that is around 35% of its gross domestic product ( & 1996). The enhancement of the Chinese economy through reforms also made the state more legalistic, entrepreneurial and flexible ( 1991). It became more open to other business opportunities and means of economic development. (1994) also stated that these economic reforms in China increased the essential role of local women in the work sector. In particular, as tourism and foreign investment rise in the country, the ability of women to be well-represented among tourists and foreigners had been recognized. All these important advantages helped in improving the living standards of the locals, giving them the opportunity to spend on luxurious items.
An article by (2005) stated that the country’s economic growth had given birth to wealthy and elite local consumers, resulting to the increased number of designer stores in China, particularly in Beijing and Shanghai. A survey by and even noted that China has the potential to be the second largest consumer of luxury products in the world; it is even expected that the country will obtain a major percentage share for luxury sales by 2015.
While the number of wealthy locals in China has increased through the country’s economic development, average consumers even students also own these luxury goods and considered important consumer groups. Although these luxury goods are more than they could regularly afford, the purchasing trend for these products appear to be supported by consumers in general. This suggests that the changing consumer behavior and preference of the people can also be considered a possible reason for the rise of luxury sales and consumption in China.
(2005) cited that an employee with a good-paying job really does have more disposable cash to spend on luxury items. Nonetheless, there are consumers who also buy luxury goods as status symbols in spite of impracticality. For instance, a consumer working in Shanghai, have a Porsche for a car in spite of the city’s congested roads. This however, can show how wealthy the owner is.
It is said that about 30 million locals in China can afford to buy luxury goods. The number of millionaires in the country is growing significantly; specifically, there about 300, 000 locals with more than a net worth of million ( 2006). Though most consumers do not regularly buy these products, many work hard in order to achieve such a lifestyle. Young women working as regular secretaries for example will save up for months in order to own a Louis Vuitton bag. Being able to give the impression that they came from a wealthy family or have a well-off boyfriend appears to be worth the trouble ( 2005).
The growth of luxury sales in China had been stressed further by the increased marketing campaign launches of the luxury-producing companies in the country. As foreign companies carrying luxury brands are realizing this consumer trend in China, operators optimized this opportunity by investing on extensive promotion and marketing. Magazines and other fashion-oriented publications during this time became full of advertisements promoting various expensive and luxurious foreign products. Companies who had been operating within the country’s billion-a-year luxury market had plans for future expansion even in less prominent Chinese cities ( 2007). A number of luxury companies had effectively made their way to the Chinese market and successfully expanded.
2.4.1 Company Examples
There had been a number of luxury producing companies that have successfully entered the Chinese market and captured the locals’ attention. Their successes have been indicated by their astounding sales growth, marketing strategies and plans for future expansion. In 2005 for example, more than twenty thousand BMWs were sold within the Chinese mainland. This figure indicates a 52% increase in sales compared to 2004. For the first six months of 2006 nearly 17,000 BMWs had already been sold, indicating a major increase of 78.4% in sales ( 2006). The Chinese market is considered as the third largest in the world for Bentley. In 2004, 56 Bentleys had been sold in China, amounting to million USD in revenue. Other brands such as Land Rover and Jaguar also benefited from the booming luxury vehicle market in the country. Specifically, Land Rover obtained a 107% increase in revenue in 2005. Jaguar on the other hand achieved a 220% increase in sales for the same year. This made China the British luxury brand’s second largest global market. International statistic forecast also noted that about 8% or 5.2 million locals have the potential to buy luxury cars in China ( 2006).
In addition, there are several companies that had been successful in China not only through sales growth but also through their effective business strategies. Hugo Boss for example, had recently celebrated its tenth year in China, indicating a major business success. The success of the business is mainly attributed to its target markets, which is comprised of middle-aged businessmen and younger fashion enthusiasts. The company also maintained its global collection rather than produce Chinese-specific product lines; this had been due to the locals growing recognition and appreciation for European design ( 2004). By knowing the preference of the local consumers, Hugo Boss was able to introduce its products to new markets and eventually develop strong relations with the Chinese consumers. The success of the company is further emphasized through its plans for expansion by increasing the number of stores in the country in the coming years ( 2004).
Louis Vuitton is another company that has successfully operated in the country. Being profitable since it has first entered the country, the company has plans of expanding and increasing the number of stores in China every year. The business strategy of the company is dependent on investing on aggressive marketing. Some of the marketing activities of the company include the 1998 rally of 50 vintage cars between Beijing and Dalian, also referred to as The China Run; a Sun Chuan designed scrapbook in 2002; and its participation in a luxury good exhibition ( 2005).
2.5 Intellectual Property: Piracy in China
As is well known, intellectual property is the largest legal minefield in commercial international relations with China, and is probably the most difficult legal issue to solve. Part of the problem is that there was no history of patents or copyright; what was in print was freely available. This does not mean, as some journalists have written, that the Chinese do not see anything wrong with piracy. Piracy is wrong, and it is illegal in China. However, enforcing anti-piracy laws is taxing the powers of the legal and enforcement systems to the limit.
In the mid-1990s, industry sources in Beijing claimed that software piracy in China was costing the USA (with Microsoft being one of the largest victims) 0m a year and that fifteen pirate CD plants were producing 50 million CDs a year (as opposed to 3 million produced by the legitimate plants)(, 1994). In terms of sales, pirate CDs and cassettes had shares of 83 per cent and 44 per cent respectively. These figures have certainly risen since then. The authorities have scored some successes; in 1994, Disney won a historic case of copyright infringement in Beijing, and the same year there was a crackdown on pirated video games. A number of pirate CD makers were put out of action in 1996. But the problem is, if anything, getting worse. According to some reports, only half the Nike branded goods sold in China are genuine; the rest are counterfeit. There are other luxury products that has been pirated and sold in the Chinese market.
China’s legal protection of intellectual property rights is, in theory, now only slightly weaker than in other Asian countries. Two specialist courts in Shanghai hear intellectual property cases. In 1992, China signed a wide-ranging intellectual property rights agreement with the USA and a similar one with the European Union in order to facilitate its entry to the WTO. Under these agreements, China has joined the Berne and Geneva copyright conventions, passed a new patent law affording greater protection to chemical, drug and food makers, and revised its trademark law to cover service markets. In 1998, China established a Copyright Protection Centre with the specific aim of protecting foreign copyright and stamping out piracy. But even with these new laws and institutions, foreign companies are not secure from infringements of intellectual property rights.
2.6 Impact of Piracy
Although the increased consumption and sales derived from luxury goods had been beneficial for the business operators and the Chinese economy, luxury producing companies appear to be encountering similar issues with the worsening case of piracy in the country. The article by (2006) stated that pirated luxury goods in the country have been affecting the operations of the foreign companies.
Hugo Boss for example noted that piracy is indeed a major issue faced by the company as well as its competitors. Though the company stated that Hugo Boss products are not common targets for piracy due to its less recognizable logo, the problem of piracy in China endangers big luxury brands in general ( 2004). The Armani also faces the same problem. Similar to Hugo Boss, Armani products are less blatantly pirated as compared to other brands; nonetheless, Armani imitations are readily available in the country. The company tries to combat this problem by working with other companies and the local government ( 2004).
Other companies such as Prada, Gucci, Burberry, Chanel and Louis Vuitton had taken on the novel approach in order to address the problem on piracy. Considering that most of the companies producing these imitations are owned by Chinese military officers with high positions, the team of luxury brand companies attempted to obtain the support of the country’s new justice system in order to solve the issue. Though there had been developments in this action, luxury brand owners do not really expect to have the issue totally eliminated soon ( 2006).
Experts however noted that combating this issue seemed hopeless due to the country’s ignorance on intellectual property infringement. The country had been indifferent towards the intellectual property and piracy issue, giving foreign businesses and governments much frustration. Various foreign parties had then attempted to increase the pressure of piracy eradication in the country especially in its prominent cities. The United States for example, had coordinated with the World Trade Organization in order to encourage China to address the issue and take it seriously. Specifically, the American party demands the country to create a detailed plan that will resolve or at least reduce the level of piracy ( 2007). These reports clearly emphasize the issue of piracy in China and how it has affected luxury producing companies.
Chapter 3
methodology
Referring to the aim and objectives set for the dissertation, the author will now demonstrate the methodology of the means of obtaining data for analysis and coming to the conclusion to meet the aim and objectives. Though it does show ethnic concerns to those out there, survey-questionnaires will be tied with the primary data research collection of this dissertation and the secondary research will be supported through the use of the research of other scholars as mentioned in the literature review.
3.1 Research Design
The descriptive method of research was used for this study. (1994) noted that the descriptive method of research is to gather information about the present existing condition. The emphasis is on describing rather than on judging or interpreting. The main purpose of descriptive research is to confirm formulated assumptions which refer to the present situation in order to expound or clarify it. The descriptive approach is quick and practical in terms of the financial aspect. Moreover, this method allows a flexible approach, thus, when important new issues and questions arise during the duration of the study, further investigation may be conducted. The purpose of employing this research method was to identify the effects of piracy to the luxury sales of the selected company as well as describe its efforts to resolve this business issue. Moreover, the descriptive method is also used for researches that aim to identify and explore the cause or causes of a certain situation. The researcher opted to use this research method considering the objective to obtain first hand data from the respondents.
The data for this study was based on both primary and secondary sources. Primary information was gathered through the survey questionnaire distributed to the selected respondents as well as the interview conducted. Secondary sources on the other hand were based from printed references; these had been used mainly to support the data analysis. In terms of approach, the quantitative and qualitative approach was used for this research.
3.2 Respondents of the Study
In order to determine the impact of piracy on the luxury sales of the selected company, a total of 30 respondents were asked to participate. Twenty-five of the total participants will come from the sales and marketing department of the company while the remaining 5 respondents will come from the management division. The 25 sales and marketing employees were selected to answer the survey questionnaire prepared by the researcher. The 5 managers or superiors on the other hand were asked to participate in the interview using the schedule prepared by the researcher.
While there were no age or specific position required for the participants, it is essential that the participants are regular employees of the company. Moreover, the managers and employees should have been employed in their respective companies for at least one year. These selection criteria had been used to ensure that the participants have enough information and experience in line with the company’s issue with piracy.
Simple random sampling was done for the sample selection. This sampling method is conducted where each member of a population has an equal opportunity to become part of the sample. As all members of the population have an equal chance of becoming a research participant, this is said to be the most efficient sampling procedure. In order to conduct this sampling strategy, the researcher defined the population first, listed down all the members of the population, and then selected members to make the sample. For this procedure, the lottery sampling or the fish bowl technique was employed. This method involves the selection of the sample at random from the sampling frame through the use of random number tables (, & 2003). Numbers were assigned for each employee in the master list. These numbers were written on pieces of paper and drawn from a box; the process was repeated until the sample size was reached.
3.3 Interview/Questionnaire Structure
The survey questionnaire was one of the data-gathering instruments for this study. The questionnaire was divided into two sections: a profile and the survey proper (See Appendix A). The profile contains socio-demographic characteristics of the respondents such as age, gender, civil status, the number of years they had served the company as well as their assigned job position. The survey proper explored the perceptions of the employees regarding the impact of piracy to the company’s luxury sales, the efforts of the company to resolve it and the obstacles hindering its resolution. The questions were structured in Likert format. In the Likert technique, the degree of agreement or disagreement is given a numerical value ranging from one to five, thus a total numerical value can be calculated from all the responses. The equivalent weights for the answers will be:
Range Interpretation
4.50 – 5.00 Strongly Agree
3.50 – 4.49 Agree
2.50 – 3.49 Uncertain
1.50 – 2.49 Disagree
0.00 – 1.49 Strongly Disagree
The Likert survey was the selected questionnaire type as this enabled the respondents to answer the survey easily. In addition, this research instrument allowed the research to carry out the quantitative approach effectively with the use of statistics for data interpretation. The management employees on the other hand went through the interview using the interview schedule prepared by the researcher (See Appendix B). The aim of using this instrument is to gather more information regarding the items asked in the survey. This helped in obtaining specific answers that cannot be achieved by the questionnaire alone.
3.4 Data Presentation and Analysis
After gathering all the completed questionnaires from the respondents, total responses for each item were obtained and tabulated. In order to use the Likert-scale for interpretation, weighted mean to represent each question was computed. Weighted mean is the average wherein every quantity to be averages has a corresponding weight. These weights represent the significance of each quantity to the average. To compute for the weighted mean, each value must be multiplied by its weight. Products should then be added to obtain the total value. The total weight should also be computed by adding all the weights. The Total value is then divided by the total weight. Statistically, the weighted mean is calculated using the following formula:
Or
3.5 Locating the Secondary Data Used
Accordingly, finding relevant secondary data involves two interlinked stages. The first stage is identifying whether or not the data that a researcher looks for are available as secondary data, while the second stage is finding the precise data that is needed for the study. (, 2003)
For this study, the researcher was able to establish that the pertinent data needed for the fulfillment of this research’s objectives are available through the literature review previously conducted. Because of the review, the researcher was able to gather full references to the sources of the needed data. After determining the availability of the data, the next step for the researcher was to locate them. As a result, the researcher had gone to several libraries within the researcher’s area of vicinity in order to locate the books, journals and magazines that are needed. But more importantly, the researcher utilized the Internet. Through the Internet, the researcher was able to gather the websites of numerous organisations and institutions that have provided the pertinent secondary data needed. The keywords used for the search include the customer complaints, customer relations and management strategy.
3.6 Validation of the Instrument
For validation purposes, the researcher pre-tested a sample of the set survey questionnaires. This was done by conducting an initial survey to at least five respondents from the chosen respondents of the companies. After the respondents answered, the researcher asked them to cite the parts of the questionnaire that needs improvement. In addition, the researcher of this dissertation even asked for suggestions and corrections from the respondents to ensure that the survey-questionnaire is effective. Automatically, these five respondents were not included as respondents for the study.
In addition, the validity of the secondary data was also considered. Accordingly, the use of secondary data is advantageous for a researcher since one can already evaluate the suitability of a data as it is already in existence, thus, much time can be saved. Needless to say, an evaluation of potential secondary data is very important before one incorporates it in his/her study. In this study, the researcher adopted the three-stage process devised by ( (2003, ) :
The first stage is assessing the overall suitability of data to research questions and objectives. During this stage, the researcher paid particular attention to measurement validity (measuring / estimating whether the secondary data will result to a valid answer to the research questions and objectives) and coverage (this includes ensuring whether or not the data is wanted and can be included, as well as making sure that sufficient data remain for analyses to be undertaken once unwanted data have been excluded).
The second stage is evaluating precisely the suitability of data for analyses needed to answer and meet the research questions and objectives. In this stage, the researcher made sure of the validity and reliability of the secondary data by assessing how it was previously gathered, who are its sources, and the likes. Also, the researcher was cautious not to commit measurement bias (which can occur due to deliberate distortion of data or changes in the way data are collected) had been paid close attention. Finally, the researcher judged whether to use data based on an assessment of costs and benefits in comparison with alternative sources.
3.7 Administration of the Instrument
The researcher excluded the five respondents who initially used for the validation of the instrument. In addition, the researcher also tallies, score, and tabulate all the responses in the provided survey questions. Moreover, the self—survey questionnaire used is a self-administered questionnaire. It is consisted of a list of specific survey questions and the researcher does not deviate from the list or inject any extra remarks into the interview process. It is consisted of a list of specific questions and the interviewer does not deviate from the list or inject any extra remarks into the interview process. The interviewer may encourage the interviewee to clarify vague statements or to further elaborate on brief comments. Otherwise, the interviewer attempts to be objective and tries not to influence the interviewer’s statements. The interviewer does not share his/her own beliefs and opinions. The structured interview is mostly a “question and answer” session.
3.8 Statistical Treatment of the Data
When the entire survey questionnaire have been collected, the researcher will used statistics to analyze all the data; and will be assisted by the SPSS in coming up with the statistical analysis for this study. For the survey-questionnaire, a content analysis will be drawn in order to identify factors pertaining to the impact of piracy on the luxury sales of the selected company in China. Comparisons were drawn between the overall responses to the questions and the differing responses (, 1994) the following statistical formulae will be also used:
1. Percentage – to determine the magnitude of the responses to the questionnaire.
n
% = ——– x 100 ; n – number of responses
N N – total number of respondents
2. Weighted Mean
xt
The researcher will be assisted by the Statistical Package for the Social Sciences (SPSS) in coming up with the statistical analysis for this study. SPSS is one of the most widely available and powerful statistical software packages that covers a broad range of statistical procedures, which allows a researcher to summarize data (e.g., compute means and standard deviations), determine whether there are significant differences between groups (e.g., t-tests, ANOVA), examine relationships among variables (e.g., correlation, multiple regression), and graph results (e.g., bar charts, line graphs) ( and , 2003).
Chapter 4
Findings and analysis
4.1 Introduction
This part of the study shall be discussing the findings based on the provided survey-questionnaire that were sent by the researcher. The primary objective of this dissertation is to know the on the luxury sales of the selected company. The study intends to investigate the perception of the respondents about the implications of piracy in luxury sales in Chinese market.
For this study, primary research and secondary research was used. Primary research will be conducted using structured questionnaires that will be sent to the chosen participants. The questionnaires will be used to collect qualitative and quantitative data. The conduct of this study entails the level and position of the respondents. It is assumed that the attributes of the respondents influence their behaviour and answers on the survey questions. The first part shall provide the profile of the respondents, the personal. The second part will be the discussion of the respondents’ perception or answers to the given set of questions.
4.2 Presentation of Data Analysis 4.2.1 Socio-Demographic Profile of the Respondents
This part will be the discussion of the socio-demographic profile of the respondents who have been chosen in this study. The description of the respondents includes their age, gender and length of service in the company and position in the company. It is noted that the respondents of the composed of 25 sales and marketing employees and 5 managers or superiors.
Age of the Respondents
Table 1
Age in Years
Frequency
Percentage
Below 20
0
0%
20-25
0
0%
26-30
2
6.67%
31-35
9
30%
36-40
10
33.33%
41-above
9
30%
Total
30
100%
Figure 1
Table 1 and Figure 1 show the age range of the respondents. Ten (33.33%) of the respondents’ age ranges from 36-40 years old, showing that most of them were already an experienced person in the job. Respondents of ages between 231-35 and 41 years old and above over all compromised 30% of the total respondents. These also shows the percentage of the ages of the respondents compromised to the following distribution; ages between 36-30 (6.67%), 20-25 (0%), and ages below 20 (0%).
Gender of the Respondents
Table 2
Gender
Frequency
Percentage
Male
18
60%
Female
12
40%
Total
30
100%
Figure 2
The sample populations’ gender depicts an unequal distribution of the sexes. The above table and the figure shows the total respondents based on their gender. The survey results indicate that 18 (60%) of the respondents are male and 12 (40%) are female which indicates that men are more likely to have a position in organization.
Length of Service
Table 3
Number of Years
Frequency
Percentage
Less than a year
0
0%
1-3 years
0
0%
4-6 years
3
10%
7-9 years
5
16.67%
10-12 years
9
30%
13-15 years
7
23.33%
More that 15 years
6
20%
Total
30
100%
Figure 3
The table and the figure above illustrated the number of years of the respondents in their respective companies. It shows that most of the respondents are providing services in 10-12 years (30%) with their respective companies. This means that most of the managers are knowledgeable enough to answer these queries. Further, 7 (23%), 6 (20%), 5 (17%) and 3 (10%) out of the respondents handle managerial position for 13-15 years, 10-12 years and 7-9 years and 4-6 years respectively.
Position in the Company
Table 4
Position in the Company
Frequency
Manager
5
Employee: Sales Department
25
Total
30
4.2.2 Research Findings and Discussion
This part of the dissertation presents the results and discussions of the data gathered from the survey-questionnaires sent to the employee of sales department and the conducted interviewed from the managers. In order to ensure clarity, this part has been divided into two parts. The first part is the analysis of the data from the employees and the second part is the analysis of the collated information from the managers.
The proceeding sections will present the results in accordance to the Likert technique. It will be remembered that the respondents of the study were presented a set of attitude statements so they can express their agreement or disagreement with the use of a five-point scale, wherein 5 is equivalent to an answer that merits a strong agreement and 1 as showing a strong disagreement (see chapter 3). This will provide a greater understanding about the observations of the following respondents towards the impact of piracy of luxury products sales in China. As mentioned, there are 25 employees who were chosen from the study.
Table 5
Luxury Sales and Consumption
Luxury Sales and Consumptions
5
4
3
2
1
Weighted Means
Interpretation
1. The production level of luxury bags and accessories in the company has dropped significantly due to piracy.
8
17
0
0
0
4.32
Agree
2. Piracy affects the level of sales and profitability of the company.
12
13
0
0
0
4.48
Agree
3. Significant consumer groups had been lost due to the piracy issue in the country.
0
9
0
7
9
2.36
Disagree
4. Major reduction in consumer support has been observed for luxury goods because of the problem on piracy
0
8
6
9
2
2.8
Uncertain
Table 6
Efforts and Obstacles
Efforts and Obstacles
5
4
3
2
1
Weighted Means
Interpretation
1. Programs or strategies had been done by the company to address the issue.
19
6
0
0
0
4.76
Strongly Agree
2. Significant developments in the level of luxury sales had been observed since the implementation of these programs
0
6
10
9
0
2.88
Uncertain
3. There had been obstacle preventing the efficacy of anti-piracy efforts.
14
11
0
0
0
4.56
Strongly Agree
4. The company has plans of combating the issue further in the future.
21
4
0
0
0
4.84
Strongly Agree
Credit:ivythesis.typepad.com
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