A company that manufactures and exports dolls and their accessories advertises “good quality products with affordable prices." They have a global presence and claim to sell high quality products that are extensively researched and passed through a quality inspection and control system. The company is now planning to enter the Chinese market. After many years of research they've created the first brand named doll “Xian” oriented to the Chinese market. Young, intelligent, trendy, “Xian” is for girls of confidence and good taste. The company opened a large doll store in Beijing. Yet the skinny plastic dolls were seen as too frivolous of a pastime for Chinese children. Chinese parents who emphasize education felt the toys were an unnecessary indulgence. Disney, for example, only managed to succeed in China by tying its entertainment to a chain of English learning centers.
Research is an important factor, especially when a business is considering entering a different market. Cultural understanding is key. Analyze the importance of this aspect of market development, keeping cultural understanding in mind.
Research, especially with respect to culture and habits, is a key to business success. This is especially relevant when entering a new market, especially with different cultural dimensions. Asian countries such as Japan, China, and India place a much higher value on education and respect of heritage than many other countries. The fact that China is an emerging global power, both economically and militarily, only adds to the complexity of markets and consumer behavior.
As seen in the present case, the Xian dolls failed to get much traction in the Chinese market owing to the fact that single-child families place a lot of emphasis on the success of their only child, and success is strongly correlated to education. Hence these dolls were considered a waste of resources. The case study also mentions how Disney succeeded by relating their products to English learning, thus parents saw an advantage to providing such products to their children.
In economies like China's, a company that has achieved success in America and Europe will need much more focused research than just great quality and an Asian-looking doll. The market research needs to focus not only on the demand for the item but on cultural acceptance, consumer preferences, and acceptance of western brands. Similar failure might be expected if the dolls were sold in Africa; people may or may not accept dolls as relevant and essential to their child's growth.
Hence cultural understanding needs to be a part of market research if a product is to succeed in a new market.
Hope this helps.