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Creating room for Norwegian quality: in the competitive Shanghai skin care market

Andreassen, Espen H.; Johansen, Jeanette; Egeland, Torild; Flottorp, Brita
Bachelor thesis
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Fudan - Thesis Lilleborg Hand Cream .pdf (2.855Mb)
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http://hdl.handle.net/11250/94686
Utgivelsesdato
2009-10-16
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  • Kina [33]
Sammendrag
This thesis summarizes the work completed on an explorative research study of

the Chinese hand cream market. It has been written on behalf of the Norwegian

company Lilleborg, with the aim to find a suitable position for the company`s new

hand cream in this market. The thesis gives recommendations regarding the

Shanghai market as the primary findings, due to limited resources, concerns this

city only. The findings are not to be generalized as this is not in the scope of the

thesis.

The Shanghai skin care market is growing and it is highly fragmented. The many

different players, both foreign and local, are generally positioned as either

luxurious; utilizing high- end distribution channels like exclusive specialty stores,

pharmacies and department stores, or positioned as medium- to low- end;

conveniently placing the products in a broad range of super and hyper markets.

Moreover, the competition is fierce and the industry is extremely brand driven.

Chinese young, urban consumers are getting more affluent and constitute the main

force of the beauty economy. They are becoming more discerning in their tastes

and making greater efforts to understand the heritage of individual brands. Many

high- end consumers in Shanghai perceive quality as the most important element

regarding hand cream, followed by price and brand. A high price symbolizes high

quality, as do a foreign branded product. Additionally, many consumers have a

relatively low brand loyalty towards their preferred products.

Lilleborg should enter the Chinese market by establishing a representative office

in Shanghai and tie up with a local distribution partner. The main focus should be

on brand building by creating a story behind the company and product, based on a

Nordic lifestyle and a “made in Norway” signature. Lilleborg should utilize

alternative, low- cost media channels and encourage to a positive word of mouth

effect.

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