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Transnational corporations’ localization strategies via retail attributes: Focus on Chinese market

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  • Shin, Sanghyup
  • Kim, Hyun
  • Kim, Woohyoung

Abstract

We explored the localization strategy of the transnational corporations (TNCs) in China by employing retail store attributes within the fast-changing Chinese retail market to select stores. We applied the multinomial logit (MNL) model based on McFadden’s (1974) random utility theory to proceed with this study. A questionnaire survey was conducted in nine areas in China. Surveys targeted people who had used Tesco, Walmart, and RT-Mart. 950 questionnaires were distributed, and 909 valid samples were obtained. The analysis results indicated that RT-Mart and Walmart, top players in the Chinese distribution industry, showed higher customer satisfaction in all sectors than Tesco, and statistically, all variables were significant. Customers of RT-Mart and Walmart were more satisfied compared with Tesco's customers in all variables, such as product quality, price, location, convenience, atmosphere, and staff service. In comparison to RT-Mart, Walmart had lower prices, fewer branches and convenience facilities, and lesser brand awareness, but the model estimates indicated that customer satisfaction was high regarding product quality, atmosphere, and employee service. In this study, various behavior factors were reviewed in consideration of consumer selection of stores; this aspect is significant because we have added attributes pertaining to the brand in our study.

Suggested Citation

  • Shin, Sanghyup & Kim, Hyun & Kim, Woohyoung, 2020. "Transnational corporations’ localization strategies via retail attributes: Focus on Chinese market," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    • Handle: RePEc:eee:joreco:v:55:y:2020:i:c:s0969698919311944
    DOI: 10.1016/j.jretconser.2020.102088
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    References listed on IDEAS

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    Cited by:

    1. Quach, Sara & Barari, Mojtaba & Moudrý, Dann Vit & Quach, Ken, 2022. "Service integration in omnichannel retailing and its impact on customer experience," Journal of Retailing and Consumer Services, Elsevier, vol. 65(C).
    2. Assarzadegan, Parisa & Hejazi, Seyed Reza, 2021. "A game theoretic approach for analyzing the competition between national and store brands by considering store loyalty," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    3. Kim Woohyoung & Hyun Kim & Jinsoo Hwang, 2020. "Transnational Corporation’s Failure in China: Focus on Tesco," Sustainability, MDPI, vol. 12(17), pages 1-11, September.

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