The importance for retail market segmentation of price, sales, and cultural variability: evidence from Chinese cities for processed food purchase

Abstract

This study provides empirical support for the theoretical expectation that the Chinese retail market is made up of heterogeneous segments for processed foods. Analyses of primary survey data on the purchases of over 3,900 customers from 16 supermarket retail outlets in three representative Chinese cities reveal significant inter-city differences in price levels, quantities purchased (sales), and cultural factors. These differences exist both at the aggregate level and for particular product types. The empirical evidence supports the need for geographical market segmentation analysis as a basis for target market selection and strategy formulation for retailing particular processed food and beverage products in urban China.