Why Chinese College Students Consume American Luxury Food Brands Starbucks And Haagen-Dazs

This paper seeks to gain further insight into the reasons why Chinese college students consume such foreign luxury food products like Starbucks and Haagen-Dazs when these items should be outside of their available disposable income due to their high prices. I have a personal interest in the food industry and offerings, and have long been focused on brands that exist in the United States but have yet to come to China, so I wanted to explore this topic further. The current studies have shown there is a desire to understand Chinese students’consumption compared to that of Westerners, and also a long look at luxury goods in general, but none of the current research is that which focuses on foreign luxury food establishments. The key to the "luxury" aspect of my study is to distance the products I am concerned with, from KFC or McDonalds, since their successes have been studied extensively and become commonplace, whereas I want to understand the students consumptions of items that are more’rare.’Luxury products have a much higher profit margin, and have proven to be a lucrative area of business to focus on.As China is becoming more open to the rest of the world, more foreign goods will come to China. The food industry is huge, and a better understanding of why college students consume foods outside of their budget would enable future foreign food companies who want to enter China’s food market to have a better understanding of what they may need to consider when setting up business in China. People are creatures of habit, so there has to be something good about new products in order for people to try them and even more so, adopt them. Introducing foreign foods is always a challenge since the products challenge flavors people have become used to over the course of their entire lives. For example, a Chinese person is much more familiar with various flavors of tea than the flavor of coffee, due to the exposure they have received growing up and living in the Chinese culture. The focus on college students primarily stems from the idea that they will be strong future consumers, as their incomes will increase in the future, so being able to establish an early brand loyalty is extremely useful in ensuring a brand’s success and therefore survival.The research for this paper was conducted by reading papers and publications that tackle the ideas relating to luxury goods consumption, both in developing and developed, Asian countries. Economic development and shifts in consumption due to economic development were also looked at more closely. With the background of what has already been studied, I furthered my research with the conduction of a survey.312students were surveyed across two university campuses in Shanghai (Shanghai Normal University and Tongji University.) The survey’s main purpose was to allow me to find out basic information about college students; primarily their total monthly and food budgets, if they have visited either of these two establishments (Starbucks or Haagen-Dazs,) permanent residence, and whether they work while in school. The assumption is that these elements would have an effect on their consumption of luxury goods, and allows for a deeper understanding of this demographic. Due to the specificity of such information, it was easier to obtain this information via my own surveys as the information could not be found elsewhere.Choosing Shanghai was done purposefully because it is the most developed city in China, and as such, where early adoption of foreign goods happens. The students in Shanghai have had a greater chance of being exposed to these brands, and thus their adoption of these brands creates a good basis of understanding the underlying reasons why other people in China may also adopt these goods. The college campuses were chosen out of convenience due to my ability to access more students at Shanghai Normal University and Tongji University.To further supplement the information gained from the surveys, semi-formal interviews were conducted on the college campuses, both in English and Chinese. This gave the students a chance to actually discuss with me their views on these brands and why they buy such pricey goods.One of the hypotheses is that the reason why they consume such goods is due to the Chinese idea of’face.’However, the research conducted does not support such a claim, as students never insinuated in any way that they go because of how it appears to others.To the students’own admissions, I conclude that students visit Starbucks primarily for spending time with friends and resting when they are passing by. It seems that the convenience of having so many locations makes Starbucks a very desirable choice when they are out shopping. Haagen-Dazs seems to gather people for meeting up with friends, celebrations, and because people just like the ice cream. To summarize, students would attribute their choice to go to such places because they like the atmosphere for socialization among known friends.Both brands bring to mind, for the students, the idea of luxury. The people who consume these products on a’fairly’regular basis, say they go once every few months. Starbucks seems to have more students that visit it more frequently. Most students who have been to Haagen-Dazs tend to have gone only a couple of times, total. Of the students who either indicated they have been to Starbucks or that they have been to Haagen-Dazs, most say they have been less than seven times in their life time. Given the average age of the students surveyed (21.4years old), if we assume they went during college, they have been around two times per year.