1. report is to analyze current conditions in

1. REPORT INTRODUCTION
Companies around the world are entering a new era of global competition. In this fast-changing environment,
effective business-to-business and business-to-customer relationships are essential to the survival and
success of an international enterprise. However, building and maintaining profitable relationships, raising
brand awareness in huge overseas markets, and earning customer loyalty is becoming increasingly difficult.
This research report will explore a number of global marketing perspectives for the Danish furniture and
home interior brand House Doctor and consider potential strategies for how the brand can successfully
increase its presence on the Chinese market. The primary objective of the report is to analyze current
conditions in China to determine how House Doctor can strengthen its positioning within this market.
House Doctor was established in 2002 and operates on an international scale in many European countries as
well as in America and Asia. House Doctor is a Scandinavian furniture and home interior brand that
manufactures the majority of its products in China. The brand’s vision is specific and focused: “Together we
will create an inspiring lifestyle universe.” Its mission is to continue to extend its vision to new markets and
advance its presence globally. House Doctor values honesty, passion, and innovation (Rhétier, 2017). This
can be observed in the way the company communicates these values through the House Doctor brand, its
products, services, and attitudes towards its customers.
2. DELIMITATIONS
The research report is limited to the analysis of China to aid House Doctor in determining the possible
opportunities for further international expansion of the company among Eastern countries. There will be a
focus on broader conditions in China (such as government, demographics, culture, and politics) and a more
specific focus on conditions on the Chinese market relating to furniture and home interior.
The BMC model is not utilized, as the primary purpose of the report is to not to conduct an in-depth analysis
of House Doctor and the company’s innerworkings, but rather to identify effective marketing strategies the
company might be able to implement internationally on a new or unfamiliar market, in this case China.
Furthermore, budget data about costs and revenues are not publicly available, therefore the model cannot be
used to an acceptable degree of accuracy.
The data in the research report is mostly qualitative, as there is limited internal information made available
about the brand. The report does not focus in depth on listing definitive competitors to House Doctor on the
Chinese market, as the marketing strategies proposed will be based on the company’s unique selling points
that already distinguish it from many other companies on the market that have their basis in China. However,
the report does include research on competitors in terms of consumer behavior.
3. TARGET MARKET
Defining House Doctor’s customer segmentation in China is based out of understanding the consumer’s
needs, wants, demands, and values.
3.a. DEFINING THE CUSTOMER SEGMENT
According to an interview conducted with House Doctor’s digital and ecommerce manager Mickael Rhétier,
House Doctor considers the consumers of its products in China to be both women and men aged 25-50 who
prefer minimalistic, simple, yet high-end Scandinavian style (Rhétier, 2017). The brand is positioned to
attract younger people who have just moved away from home and are living for the first time on their own,
as well as slightly older individuals who might simply be looking to redecorate or renew their place. House
Doctor offers a diverse range of high-quality products that could prove attractive to an even broader
spectrum of Chinese consumers upon further expansion into the market.
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3.b. CUSTOMER SEGMENT SIZE
Social media statistics gathered under the research period indicate that Chinese users of social media consist
of 43% women and 57% men. The age group 19-25 make up 19% of all users, while the age group 26-30
makes up 30%, 31-35 makes up 21%, 36-40 makes up 12% and 40+ is 18%. Most Chinese consumption of
high-quality, European-style furniture stems from bigger cities, such as Beijing, Shanghai, Shenzhen, and
other urban areas with high per-capita income and strong purchasing power (Kemp, 2014).
According to an overview of the government’s 13th Five-Year Plan, it’s estimated that 60% of the Chinese
population will live in urban areas by 2020, meaning that more than 100 million additional people will
become urban consumers and thus have better access to brick-and-mortar boutiques, shops, and fairs. These
new consumers living near or in large cities will also be exposed more frequently to different forms of media
and advertising, representing a great opportunity for House Doctor to market its products to this growing
section of the target market.
In 2015, there was an estimated number of Chinese online networking users that reached 650,000,000, which
is twice the total population of the US. In 2014 alone, the volume of social sharing in China went up by more
than 65%, indicating an overwhelming growth pattern in relation to social media interest among Chinese
consumers. Furthermore, the average Chinese adult spends up to 90 minutes a day on social media sites. This
figure is almost double for individuals under the age of 25. 400 million people in China use mobile devices
to access social networks (Spencer, 2015).
3.c. CUSTOMER BEHAVIOR
Due to accelerated advancements in technology, the evolution of consumer behavior nowadays is more
pointed than ever. Increasing interest in foreign market goods, government regulation improvements, and
social media integration in people’s daily lives play a significant role in this rapid change. While overall
living conditions are still improving in China, there are more and more people willing to invest in quality
home furnishings and well-designed home decoration. In 2016, the total sales of furniture manufacturing
enterprises grew 8.6%, while total profits grew 7.9% (Liang, 2017).
Modern Chinese consumers have a penchant for minimalistic and simple styling in their furniture and home
decor, abstaining from too many details or colors. This is in stark contrast to historical / traditional Chinese
interior design trends, which were highly colorful and detailed. This is the reason why customers usually
seek Western style products, especially items originating from the Scandinavian market. When moving into a
new home, there is a trend in China for the individual to refurnish the home completely, meaning that old or
existing furniture is rarely kept. The individual is attempting to start a new chapter in their lives by creating a
totally new atmosphere. In China, up to 40% of all new builds purchased in desirable, high-income areas are
occupied upon completion. The remaining 60% are kept empty and regarded as pure investment properties
by the owners, who often make no attempts to rent them out (Wei Wang, 2016).
In past decades, product function and price were the principal factors Chinese consumers cared about.
Nowadays, consumers have become more intelligent and more selective about their spending and usually
take a variety of criteria into consideration before deciding to make purchase. The modern Chinese consumer
is trading up, from mass market products to premium products, as living standards improve and people have
the ability to focus more on high quality and good-taste items (Zipser, et al. 2016). A lot of the consumer’s
attention is based on personal preference and the value of the item, not necessarily the popularity of the
brand. However, the emotional connection with the brand or product being considered is often extremely
relevant
China is a highly relationship-based society. To be successful in this market, House Doctor will have to build
a strong relationship with buyers and research diligently to establish the needs and expectations of each
customer segment. Chinese consumers want to feel special and indispensable. They want to be able to
experience this through their product choices. Brand awareness and sophisticated advertising are beginning
to play a major role in attracting Chinese consumers.
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In China, social recommendations often serve to be the most powerful influence on the consumer’s buying
process, over concentrated marketing efforts and traditional methods of advertisement. The individual spends
a lot of time researching the product before purchasing it. Reviews from other consumers play a critical role
as well. Buyers depend highly on product recommendations from online reviewers, and they are often
willing to spend large amounts of time in the comments section of an online purchase or review page, where
they have the opportunity to find out more about the product or service from other people’s points of view
(Spelich, 2017).
The price a customer in China is willing to pay for a product has increased in recent years, especially if the
product is foreign. As more possibilities for business and commerce present themselves on the global market,
Chinese consumers increasingly seek out higher quality products and services. A large majority of them care
more about the shopping experience as a whole and the availability of an item than they do about the item’s
price (Youku, 2017). Buyers in China are willing to part with some extra money to ensure that they are
satisfied with their purchase.
As e-commerce opportunities continue to expand in China, consumer companies race against each other to
create new ways to integrate online and offline marketing elements. Designing meaningful touch points that
might allow for a deeper level of engagement with consumers could help House Doctor attract members of
this new, international market, proving the company’s interest and willingness to invest in the wants and
needs of Chinese buyers.
E-commerce appears to have taken off in China. There are more than 700 million monthly active social
media users, and 300 million of them shop online on sites such as TaoBao, Tmall, or Xiao Hong Shu (Wei
Wang, 2016). Although e-commerce is growing, traditional shopping in China is far from dead. Shopping in
malls and standalone stores is still very popular, especially in non-urban areas, and many people even make
the trip to showrooms in-person to buy luxury goods. Shopping makes the modern Chinese consumer really
happy (Spelich, 2017).