文献出处：Maria E, et al. Internationalization strategies of luxury firms in China: the role of design and marketing capabilities[J]. Dipartimento di Scienze Economiche\，15（6）：35-41. 外文原文
Internationalization strategies of luxury firms in China:
the role of design and marketing capabilities
Maria E
1. Business internationalization in emerging markets: theoretical premises
Emerging markets are characterized by high level of entrepreneurship, where scholars observed the rise of a new wave of firms able to affirm their business proposal at the international levels. Those “emerging giants” as defined by Khanna and Palepu (2006) are firms born and developed in the specific institutional context of the emerging markets that are able to compete globally. Compared to Western countries, such firms benefit from a higher knowledge about the structural characteristics of the emerging markets in which they are based and can capitalize on them to define their value propositions. EMs have been described in fact as very different from the traditional advanced markets due to their peculiar institutional, cultural as well as consumer behavior characteristics. Moreover, they also show internal differences and therefore a product, process or organizational solution developed for one country may not necessarily be replicated in another one. Hence, firms interested in addressing those markets have to cope with high uncertainty that requires a proactive firm?s approach toward internationalization and dynamic capabilities to face a dynamic competitive environment (Teece et al., 1997). Furthermore, the complexity of these EMs is increased by the high geographical, cultural and institutional distance of these areas from the domestic markets, where Western companies are used to operate (Meyer et al., 2009). Hence, the marked differences between EMs and advanced economies often force Western firms to
develop new strategies and capabilities (Arnold and Quelch, 1998).
2. Firm?s capabilities and internationalization strategies of luxury firms: open issues in China
Research focused on luxury brands (e.g. Fionda and Moore, 2009) has in fact specifically highlighted how it is important for luxury firm?s performance to develop an integrated global brand identity, by leveraging on communication and retail to reinforce the message. On the one hand luxury firms invest in creating customer experience during the product use and in the purchasing process. On the other hand, customers collaborate to co-create the meanings related to brands (Tynan et al., 2010). The role of design in nurturing the exclusivity and experience for luxury products is specifically important (e.g. Ravasi and Lojacono, 2005).
From an internationalization point of view, Swan et al. 2005 showed that robust design capabilities can sustain the development of global products, not only from a technological or functional, but also aesthetical perspective (global brands). As a fundamental element of design and marketing, aesthetic is able to differentiate the product and to create intangible value for customers. According to Swan et al. (2005) research, firm?s robust aesthetic capabilities are not negatively correlated with speed-to-market in high-uncertainty environments, such as those characterizing emerging markets. Nevertheless, the firm with robust design capabilities is more ready to eventually balance the trade-off between standardization and adaptation (flexible products tailed also for smaller customer niches).
Moore et al. (2010) analyzed internationalization strategies of 12 luxury companies by focusing on flagship stores as a market entry method. Luxury companies conceive international flagship stores differently from other stores in terms of scale, design, location, set-up and operating costs: flagship stores represent the brand identity and the world proposed by the company and the locations are selected not only to generate turnover, but also for prestigious goals. While the international sale networks has managed also through department stores and boutiques, luxury companies have to enter into new markets through direct investments for strategic reasons (Moore et al., 2010). Shanghai and Beijing are mentioned among the most important locations in emerging markets.
First studies on luxury in China (e.g. Saviolo, 2006) have pointed out how luxury firms
approached the Chinese. Firms such as Louis Vuitton or ErmenegildoZegna that invested inChina at the beginning of the ?90s has settled the trends for other luxury companies, i.e. building the brand through localization. However, recent studies have depicted the growing internal variety of the Chinese luxury market, where Chinese customers approach luxury products with very different attitudes. According to Zhan and He (2011) China?s luxury consumption is about 25% of the global share, transforming China in the second market for global luxury products, after Japan. More important, not only the upper class but also China?s middle-class consumers are becoming important targets for luxury. In his book on Chinese luxury consumer behavior, Xiao Lu (2008) identified four segments of customers based on psychographic segmentation approach (luxury intellectuals, lovers, followers and laggards).
According to this research it emerges how it is fragmented and dynamic also the luxury niche, usually approached by firms through a global approach as stated before. Moreover, we can observe also the rise of Chinese offering in the luxury market, such as in the case of the company Shanghai Tang – founded in 1994 by David tang and acquired in 1998 by Richmont, the Swiss luxury group – aiming at rejuvenate the Chinese fashion.
On the one hand, design and marketing capabilities are crucial for luxury markets, but on the other hand they are also relevant for approaching emerging markets. Coupling those perspectives, in the case of dynamic and uncertain markets such as China, the firm has to develop dynamic capabilities (Teece et al., 1997) to approach those markets and the need of adaptation of the marketing variables (i.e. products) can involve also global luxury firms.
In our view robust design and marketing capabilities of a luxury firm positively influence the performance in the Chinese market and may offer the opportunity for an adaptation of the global strategy at the national – Chinese – level even in the case of luxury offering.
3. Entering and managing the luxury Chinese market: the Bisazza case study
In order to confirm this position we explore the role of design and marketing capabilities though the analysis of the case study of an Italian company – Bisazza – specializing in luxury home products.
Founded in 1956 in a small town in the Vicenza province (Alte – Montecchio Maggiore, inthe North East part of Italy), Bisazza is now a global leader in the production of glass mosaic and high-quality covering for private and public buildings. Bisazza distinguishes itself because of its orientation to the culture of design-based products and its international vocation, by transforming its products into luxury ones (Di Maria and Paiola, 2012).
Bisazza strategy is oriented to position its offering on fashion and luxury, through an upgrading process that involve design and culture as key assets of the new brand strategy. Bisazza, in fact, developed collaboration with an international network of designers that reinvent the product, followed by a direct investment in internal design competences with the Bisazza Design Studio. Based on the mix of aesthetics, distribution and interaction with opinion leaders, as well as co-marketing, Bisazza wants to offer a memorable experience totheir customers, interested in buying an atmosphere and quality of living instead of a simple product. Bisazza invested in commercial sales networks, also participating in the most famous design fairs.
The Chinese market is particularly interesting for Bisazza not only because of its growth of demand for luxury products, but also for cultural reasons. Compared to other luxury products, there is a long tradition of mosaic in China for building covering and Bizazza has been favoured from this point of view. Hence, Bisazza did not face particular problems related to the cultural distance that may affect other Western products in emerging markets. Even if there are Chinese mosaic producers, they offer cheaper products not conceived for luxury and hence Bisazza did not face intense competition in its target market.
However, this process of selection has faced higher difficulties compared to other foreign markets Bisazza was used to address. At the beginning local dealers were contacted through
Bisazza?s fair participation and market research of Bisazza area managers. Despite this initial effort, only through a targeted communication strategy oriented to present the product characteristics and peculiarities Bisazza was able to skim within possible dealers. In fact, interested Chinese dealers reacted to communication inputs by offering their collaboration to Bisazza and signal their intention to distribute such a luxury product in the Chinese market.
Bisazza have in fact heavily invested in communicating the Made-in-Italy origin of the product, by leveraging the country-of-origin positive effect that Italy has in the Chinese market and worldwide (Aiello et al., 2009). Marketing effort was addressed to augment the visibility of the brand through the management of relationships with key opinion leaders and influences in the Chinese market based in selected cities. In few years Bisazza has been able to increase its market share in China, by controlling directly the distribution channel (stores located in Chinese first and second-tier cities).
Initially, the Chinese customers have accepted the Bisazza product, offered as in other countries, since they appreciate its innovativeness as design-driven mosaic product (not just covering, but also a way to create experience in luxury home). After a first period of market expansion based on communication of global brand and direct sales management, Bisazza perceived the need to change its offering in order to cope with the opportunities of the Chinese market. While on the one hand, Bisazza had in its product portfolio a mosaic inspired to China (“China Birds”) before its entrance into China, on the other hand, the company perceived new market chances interacting with Chinese designers and local architects for specific projects. By leveraging on its design capabilities Bisazza started to develop tailored offering conceived for the Chinese market, in addition to the standard collection “prêt-àporter”.
4. Implications and future research
The Bisazza case study shows how the peculiarities of the Chinese market can shape the internationalization strategy of luxury companies. On the one hand, by leveraging on its marketing capabilities related to communication and distribution management Bisazza has been able to rapidly enter into the Chinese market and modify the customers? perception of the product. On the other hand, the robust design capabilities of the firm – in terms of Bisazza design studio as well as its experience to manage international networks of designers (and projects) – support the company in exploiting new opportunities offered by the Chinese market. Based on the interaction with Chinese designers Bisazza understood the potentialities of offering bespoke products to Chinese customers, overcoming the global approach proposed
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