Editor's note: Hy Mariampolski is managing director of QualiData Research Inc., New York. Pat Sabena is a principal of Sabena Qualitative Research Services, Westport, Conn.

The authors visited China this fall to deliver workshops on qualitative research on behalf of the China Market Research Association and Beijing Pan-Asia Market Research Institute. This article is drawn from materials presented at their workshops and from their discussions with Chinese researchers.

Qualitative research is growing rapidly in mainland China and has the potential to continue advancing at a rate of 20 percent each year for the rest of the decade. Many sociology and psychology graduates, some at the Ph.D. level, and numerous alumni of newly established university-level marketing programs are being drawn into qualitative research by opportunities stimulated by both multinational and local companies.

The development of qualitative research in China is being supported by 10 forces that are channeling both the underlying need for research as well as the complexion of studies being completed:

  • the communications revolution;
  • urbanization;
  • the growing middle class;
  • the consumer in motion;
  • the service economy;
  • social diversity;
  • tension between individual and community;
  • the tight-fisted consumer;
  • education;
  • internationalization of style.

Marketers are betting on China because this country is at the forefront of worldwide economic, technological and demographic trends. Qualitative research lubricates entry into the new consumer-driven economy by pointing strategists to necessary adaptations in product features and benefits. It helps marketers brand and position their offerings in powerful, culturally meaningful ways. It can help identify new targeted markets and segments and standards for customer satisfaction.

Now a member of the World Trade Organization (WTO), mainland China's total market size is over one billion. It is already the world's largest consumer of TVs, refrigerators and mobile phones. China's late arrival in telecommunications and broadcasting has helped it pass over the analog stage and migrate straight to widely-accessible cellular and satellite technologies.

The country has officially moved from an "equitable distribution" system to an "efficient distribution" system, which boosts wealth and promotes individual achievement. China's middle class is leaping forward; it already stands at 100 million and is growing at 20 percent a year. Since a relatively low proportion of household income is currently spent on housing, there is lots of room for discretionary spending and accumulation of personal assets. Five to six million Chinese have a net worth in excess of $100,000. Ten thousand mainland citizens have assets over $1 million.

These forces also have implications for the entire Chinese market research industry. They are leading indicators of emerging methodologies and research approaches. For example, it is obvious that Chinese analysts will be ready adopters of phone-based and Web-based techniques. China is also set to adopt database marketing efforts more readily that its Western counterparts.

The challenge for Chinese researchers, however, is to acquire the value-added skills that will make them important assets in worldwide marketing efforts. They need to move from being responsible for just fieldwork on behalf of global companies to being strategic consultants on Chinese consumers. The success of the qualitative research industry in China will be based on their ability to offer clear insights into the psychological and cultural factors that motivate their customers.

Chinese researchers will also be able to apply their skills to expanding areas of focus as the industry grows. It is easy to anticipate that they will move from import studies for multinationals to export studies for local clients. As Barton Lee, managing director of East Market Research points out, Chinese researchers are moving from everyday products to specialties, such as, medical, automotive and new technologies. As in the West, qualitative research will find new applications responsive to social needs including public health studies to deal with China's growing HIV/AIDS crisis, social policy research, work in support of the informal sector and NGOs, and research supporting the arts and culture.

A closer look at the forces shaping the growth of qualitative research in China demonstrates opportunities for research agencies and clients alike:

The communications revolution - Chinese researchers are proving their value in developmental studies for the Internet, cellular telephones and television. These media are offering both familiar and innovative marketing vehicles. China, already surpassing Japan, is now No. 2 after the U.S. in Internet and PC usage. Pervasive media such as 24-hour news channels and global satellite broadcasts will enhance the reach of Chinese marketers and turn local brands into international powerhouses.

Urbanization - China's cities are booming and qualitative research offers insights into to how consumers are responding to changing lifestyles. While in 1980 the country's urban population totaled just under 20 percent of the population, by 1997, the percentage of city dwellers reached almost 30 percent. Urban people are wealthier than their rural counterparts; the ratio of per capita disposable income is almost 3:1. City dwellers are more reachable by mass communications and advertising. This movement to the city is spurring sales of home improvement products and opening up opportunities for new distribution models including the introduction of supermarket chains and discount stores such as Wal-Mart.

The growing middle class - As Chinese consumers' lives improve, their psychology moves up Maslow's hierarchy of needs, i.e., from basic survival to seeking incremental lifestyle enhancements and higher-order pursuits. Family cohesion and staying in touch with loved ones becomes a major social need. Moreover, the pursuit of leisure through domestic and international travel, family entertainment and the introduction of new foods into the diet create opportunities for marketers and product developers. It is no surprise that upgrading of lifestyles through fashion, personal care products and fine foods, such as wine and cheese, are creating parallel opportunities for qualitative research.

Like emergent middle classes all over the world, Chinese citizens are looking for symbols of achievement and developing a brand consciousness that pervades their choices. They also seek security so that their gains acquire a sense of permanence.

Consumers in motion - All over China, consumers are not just concentrating in urban centers. They are buying cars to be used along the mainland's brand new expressways; they are taking advantage of the country's expanding airline system. Over the 1994 to 2000 period, car sales grew by 3,400 percent, primarily among households. In 1999 alone a 44 percent increase in volume sales was registered. The Chinese are also chasing opportunities: a "floating population" of some 80-120 million workers migrate between agricultural and construction jobs. Chinese marketers are challenged to catch its increasingly mobile population as it passes through airports and along the road.

The service economy - The service sector is becoming the growth engine of China's consumer economy. Dong Tao, an economist with Credit Suisse First Boston, has predicted that by the end of the decade services will account for fully half of China's GDP vs. 38 percent today. Deregulation of the telecommunications and financial industries in harmony with WTO standards will stimulate much of the growth.

As the middle class expands, there will be opportunities for consumer banking and insurance products delivered by both domestic and global institutions. Personal services such as beauty care and domestic services will expand in response to the growth of leisure lifestyles and expanding employment of women. Business services such as those offered by Kinko's, which recently opened in Beijing, will parallel the boom in small services businesses. Qualitative research will be the key to discovering how to adapt offerings to the tastes and needs of Chinese consumers.

Social diversity - Qualitative research will truly demonstrate its value in guiding marketers to understand the increasingly diversified and segmented Chinese market. As the social scale differentiates into a range of income segments, marketers will be challenged to create appropriate new products for all components of the social system - downscale as well as upscale. China is already an exceptionally diversified society, with major divisions occurring along the north-south partition and among regional, ethnic and religious minorities. International and local marketers will soon stop seeing China as a vast undifferentiated mass market and look for opportunities in segmentation.

Tension between individual and community - All economic systems produce a creative dialogue on the relative responsibilities of the state vs. the individual consumer. Even though the mainland's government is officially Communist, three-quarters of its economy is now in private hands. Discussion of the relative roles of government vs. citizens will provide opportunities for policy researchers using qualitative methods. China's government is currently active in major infrastructure projects and these are likely to continue at least through the Beijing Olympics in 2008. The private market will find opportunities in new communities and institutions stimulated by this public investment.

The tight-fisted consumer - Although stores and malls are filled with browsing shoppers, the newly arrived Chinese consumer remains a notoriously hard sell. Owing partly to overproduction in China's booming industrial economy and the absence of an entrenched consumer culture, Chinese are saving, not spending, and looking for value in their purchases. Qualitative inquiry can guide marketers to ways of moving beyond price promotion and discounts.

Education - Learning is highly valued in Chinese culture and the country's citizens are famously curious about trends and information from the world outside its borders. Universities are booming and the desire to explore the rest of Asia, Europe and the Americas is tantalizing. Education is the key to enhancing knowledge and tastes among Chinese consumers. There is an emerging global consciousness among its youth and an intense wish to share knowledge across borders.

Internationalization of style - Chinese history and culture is old and complex. The country remains proud and defensive about its traditions and habits of thought. China has much to offer the rest of the world in connection with its aesthetics and health care sensibilities. As China's consumer economy develops, marketers will be challenged to overcome any tension between its own culture and the internationalization of style prevalent throughout the world.

Uniqueness and value

Researchers must guide global marketers to ways of leveraging China's uniqueness and value. Even though world brands will be adopted as global styles and tastes become pervasive, marketers will have to customize their products and messages to China's unique demands. They will be challenged to make the traffic of ideas and commerce a two-way street so that China's own production can be converted to world brands. The key to the emerging market is China's youth culture, the consumers in their teens and twenties for whom the Cultural Revolution is ancient history and whose tastes in fashion and popular culture are similar to their counterparts in Tokyo, London and Los Angeles.

Thorough understanding

China's emerging economy indeed offers many opportunities to marketers; however, entry into this fast-changing environment must be guided by a thorough understanding of the cultural, social and psychological forces that are stimulating needs and preferences. Qualitative research offers the perfect method for gaining that understanding.


ARTICLE SIDEBAR

10 tips for doing qualitative research in China

1. Markets
Although most global marketers focus on the major cities of Beijing, Shanghai and Guangzhou, it may be easier to encounter the "real" emerging Chinese consumer in secondary markets such as Chengdu, Chongqing, Tianjin, Wuhan, Hangzhou, and Xian.

2. Venues
Unlike the U.S. with its vast networks of independent focus group facilities, full-service market research companies tend to dominate fieldwork. Each has its own modern one-way mirror set-up complete with audio, video and translation equipment and an on-site staff of trained staff to recruit prospective respondents.

3. Collaboration
It is essential to collaborate with a local Chinese partner in conducting any research in China in order to be alert to cultural differences as well as to government regulations. In multi-city studies, expect that research companies will partner with each other in order to provide local one-way mirrors and on-site recruiting.

4. Specialization
Some market research companies in China are more specialized than others, having divisions for automotive, technology or pharmaceutical research. If those are your categories, make sure you select a company that specializes in these areas in order to achieve the best context and expertise for your research.

5. Experience
While perhaps 1,000 women and men are conducting qualitative research in China, only about 100 to 200 of them are reasonably experienced. When negotiating with a Chinese market research company for qualitative research, make sure you discuss moderator credentials and obtain a partner that is devoted to this specialty.

6. Language
Although there are eight major dialects and many more sub-dialects in the People's Republic of China, most of the mainland reads and writes Mandarin using characters simplified from the 1950s onward. Those in Guangdong province and Hong Kong speak Cantonese. Make sure your stimuli and all other written materials are executed in Mandarin, which is the official national language.

7. B2B populations
Busy business executives, physicians and professors are very hard to recruit. Extra effort and investment will be required to obtain respondents who are not overused.

8. Politeness
Chinese citizens, like many Asians, are unfailingly polite. In order to break this "politeness trap," encourage the moderator to use deep elicitation and projective techniques. Make sure to listen carefully to the moderator's own interpretation of responses that may sound favorable but may be merely polite.

9. Immersion
China is both far more modern and more primitive than you expect. Learn all you can about China before attempting research there (read Zhu Rongji & The Transformation of Modern China by Laurence J. Brahm, John Wiley & Sons, 2002). Work closely and respectfully with your collaborative Chinese partner to make sure all instructions are understood or modified as culturally necessary.

10. Presence
There is no substitute for on-site observation and management of an international research project. Send your own project coordinator to manage the details, to capture the nuances of cultural differences, and to provide continuous interaction with local research partners from city to city.