Market Research on Luxury Watches Essay Example for Free

Market Research on Luxury Watches Essay Market Trend There was a slow-down in the growth in sales of premium and luxury watches in India in 2008-’09. It prompted the market leader Titan industries to enter the economy market. Following the footsteps, luxury watch brands like Tag Heuer and Rolex introduced low-price models. But in recent years, mobile phones may also have dampened growth in the penetration of watches in India, as they provide a time read-out as well as alarm and other time-related functions. Watch industry experts believe that their product’s original function is increasingly losing importance, and that wristwatches are now being bought as fashion accessories. Owning more than one watch is like owning different pieces of jewellery. Competitive landscape The economy watch demand is being met for the most part by the unorganised sector and by direct imports. The premium segment is increasingly being peppered by fashion brands such as Esprit, Swatch, Fossil and Tommy Hilfiger. There has also been strong value growth for these brands, with growing demand from middle- and upper-income groups in urban India. Titan, HMT and Maxima are the leading Indian players and Timex, Casio and Swatch are now the strong multinational players in the market. More multinationals are entering the retail market, but no new domestic companies have done so, and the multinationals’ share of value sales has increased over the review period. Premium Brand Product Perception With the watches market in India now becoming fashion and style driven, especially at the premium end, companies now launch models and designs every six months. International brands such as Fossil launch spring/summer and winter ranges. Titan, on the other hand, times its launches to fit in with the Indian festive season – Deepavali and weddings. Companies like Casio and Swatch and luxury brands like Rolex are exploring a niche market for chronographs, but this is currently negligible. Companies also need to respond to product innovations. The Citizen eco-friendly watch has been well received in India and is reportedly selling well in its price bracket, eliminating the trouble of replacing batteries and encouraging the use of multiple watches. Apparel brands such as Esprit, Tommy Hilfiger, Benetton and Levi’s have all gained familiarity among India’s urban youth, who may become more willing to try these brands’ premium watches. Affluent, urban Indians may feel more comfortable about buying premium watches, while continuing to regard luxury watches as examples of overindulgent or insensitive spending. ‘New’ Rich India : The ‘New’ rich India is now indulging into the experience of owning Luxury Brands. Indias rapidly growing high-end retail market is expected to increase from the around $3. 5 billion in 2008 to $30 billion by 2015. Luxury clothing, fragrances, premium wine, high-end watches have achieved good penetration among male Indian consumers. Among women, jewellery and cosmetics can already boast high levels of awareness, followed by categories such as handbags and mobile phones. These items, while not necessarily being better (in quality, performance, or appearance) than their less expensive substitutes, are purchased with the main purpose of displaying wealth or income or status symbol of their owners. There is a distinct shift from ‘Old luxury’ to ‘New luxury’. Old luxury is defined by the attributes, qualities and features of the product, whilst ‘New luxury’ is defined by the consumer’s point of focus on the experience that their purchase stimulates and not in ownership or possession of the product itself. † The customers Redefined luxury as they believe it to be a sign of self worth They are worth it; it authenticates the buyers success and status; it is a signal to others that the owner is a member of an exclusive group; They require flawless performance in this application, the cost of product malfunction is too high to buy anything but the best. Motivation of Study: The matter of wearing and enjoying fine timepieces is a passion that these days must be justified. We like nice expensive watches even though cheap watches exist to do the same thing. Hence like any other luxury good , today modern shoppers buy luxury goods to reward themselves, to satisfy psychological needs or to make themselves feel good to show off their personality or to boost their self-esteem. Contribution of the research: This study aims to understand the above said consumer buying behaviour which will help the present marketing Managers to better reposition their branding and advertising strategy to capture the correct target market for luxury products to boost the sales in times where economy are at a challenge. Literature Review: Research Objective: This study intends to find out if consumer buying behaviour of young purchasers are influenced by factors such as premium price of luxury watches, perceived quality of luxury watches, societal status and brand loyalty associated with the consumption of luxury brand. This study also intends to evaluate whether perceived qualities of the luxury branded watch have influence on the buying decision of consumer. It is also intended to determine whether the high quality standards of luxury watches are the reasoning consumers opt for the luxury watches. Affiliations of social status of acquiring certain luxury branded goods will also be studied to understand whether consumer buying luxury branded goods just for the matter of being affiliate with certain quarters of people having the same luxury brand of goods. This study also will also evaluate whether brand loyalty of luxury brand will influence the buying decision of consumer. This study also aims to uncover whether a person who has been abroad is a reason for the consumer purchasing a luxury watch Research Question: The purpose of this study is to evaluate what motivational factors encourage consumers into purchasing luxury brand watches . In evaluating this statement , this study aims to answer the following questions : †¢ †¢ †¢ †¢ †¢ †¢ Is it the price or the type of users of the brand that drives the buying behaviour of the consumer for luxury branded goods? Is it the strong emotion of discriminating themselves with the lower class consumers that drives higher class consumers to turn to luxury brands? Is it the tag name of a mega brand that drives the long term demand for that luxury brand? Is gender a deterministic factor in deciding the purchase of a luxury brand? If yes then what factors are important gender wise ? Is it the product utility or the brand perception that is key for luxury watch brands? Will a person’s visit abroad influence his decision to purchase a luxury watch? Previous Research contribution : Findings of overall previous research indicate that individual’s preferences plays a key role in purchasing luxury goods. Individual’s preferences may be based on desire and non-desires, which are based on experience in purchasing luxury items from their satisfaction, or nondesire such as bias towards brand products. Leibenstein (1950, p. 188) classified demand of goods and services consumption in relevant to motivation into two main aspects: functional and non-functional. Functional demand is â€Å"demand for a commodity which is due to the qualities inherent in the commodity itself†. On the contrary, demand of goods consumption that comes from other factors, which is not the product quality, is defined non-functional demand. The outcome from Leibensteins (1950) study especially stresses the role of interpersonal effects towards luxury brands consumption, and derived three main effects; Veblen, Snob, and Bandwagon INTERPERSONAL EFFECTS Perceived Conspicuous Value Perceived unique Value Perceived Social Value Ostentation Non-Conformity Conformity VEBLENIAN SNOB BANDWAGON Interpersonal effects (Vigenron Johnson) (1999 p. 7) Veblen Effect: The Veblen effect can be explained through conspicuous consumption in which people feel that it is necessary to purchase luxury products because they have a high price tag (Leibenstein, 1950). Conspicuous consumption is use by people to show wealth, power and status (Veblen, 1899). Prices of product have a significant aspect in consumers’ opinion of quality (Vigneron Johnson, 1999). Studies by Erickson Johansson (1995) have shown that price is used to judge quality of luxury products between a range of brands. Usually people would associate high prices with better quality. Additionally, those who do associate high prices with better quality would also suggest that high prices show a considerable amount of prestige (Lichtenstein et al. , 1993). Snob Effect: The snob effect takes into account personal and emotional desires (personal effects), and the influence of other people’s behaviour (interpersonal effects) towards the purchasing of luxury brand products (see Figure 1). The snob effect can be further explained through two circumstances. Firstly, the launch on new products which creates exclusivity in which the snob would purchase the product immediately because a minor amount of consumers at that particular time would have acquired it. Snob consumers only purchase limited items that have a high value, whereas those readily available are less desirable. Rare items demand respect and prestige (Solomon, 1994,p. 570). Products that are viewed as unique, popular, and expensive causes a higher demand for consumers (Verhallen Robben, 1994), especially snob consumers. Snyder and Fromkin (1977) support the statement by Verhallen and Robben (1994) suggesting that people have the desire to be unique. India:The Affluent Masses: Luxury volumes have been spurred by a significant growth in the rich in recent past. The new rich come in varied shapes, sizes and style quotients. Exporters, multinational bankers, college kids earning plum salaries at call centers or BPO operations, well-heeled corporate wives, and successful entrepreneurs. What they have in common is that they have very high purchasing power Bandwagon Effect : The bandwagon effect represents consumers who purchase luxury products because they wish to fit in with a particular group. For example, people would consume products that are fashionable and stylish to associate themselves to similar people (Berry, 1994). Dubois Duquesne (1993) explains that the snob and bandwagon effect are not alike. Although the similarity between the bandwagon and the snob effect is that people wish to enhance their self-concepts, the differentiation is that they purchase luxury items for different reasons. Bandwagon consumers purchase items to be fit in with others, whereas snob consumers purchase items to be unique and stand out. Individuals who fit in with groups that purchase luxury brand products and/ or wish to differentiate themselves from people who do not purchase luxury brands are influenced by the bandwagon effect (Vigneron Johnson,1999) Luxury is reward :First time/New Purchasers :They use luxury goods as a status symbol to say â€Å"I’ve made it! †. They are motivated by their desire to be successful and demonstrate this to others. Luxury brands that have widespread recognition are popular; however they don’t wish to appear lavish or hedonistic in their appearance. They want to purchase â€Å"smart† luxury that exhibit importance while not leaving them open to criticism. Personal Effects : Consuming luxury products can also be from personal desires and taste. PERSONAL EFFECTS Perceived Emotional Value Perceived Quality Value Self-Actualization Reassurance HEDONIST PERFECTIONIST Personal effects (Vigenron Johnson) (1999 p. 8) Hedonic Effect The hedonic effect occurs when consumers purchase luxury products and value the item. People who purchase items for self-fulfillment (e. g.inner direct consumers, Riesman, et al. , 1950, or role relaxed consumers, Kahle, 1995), and those who are not affected by interpersonal influences (e. g. conforming to group norms,Bearden, et al. , 1989) represent the hedonic effect. Dichter (1960) explains that motivation of noncognitive and unconscious is able to persuade consumer preference of products. Products that are consumed are known to have an emotional value that is added to their character (Vigneron Johnson, 1999). When consumers purchase luxury products they expect that the item will offer benefits such as exclusiveness. Dubois Laurent, (1994) stated that if products create an emotional value for consumers, it represents that the product is beneficial and holds an important characteristic. Perfectionist Effect The perfectionist effect exists when consumers purchase luxury items and expects superior products and performance as well as quality (Vigneron Johnson,1999). People who represent the perfectionist effect are those who are associated to personal values and judge a product according to their value of a luxury band product. An example of the perfectionist effect is when consumers are purchasing a luxury watch they expect it to be accurate. According to Groth and McDaniel, (1993, p. 10) stated that â€Å"high prices may even make certain products or service more desirable†, because people view products with high prices with great quality (Rao Monroe, 1989). Additionally, consumers may assess the level of how luxury a product is by its quality (Vigneron and Johnson, 1999). Methodology Research Method: Quantitative data consists of closed end information that includes numerical figures. The study has collected quantitative data by applying closed-end questions towards a questionnaire. Focus Group Discussion to understand attributes both physical and emotional that influence the purchase of a luxury watch. The group comprised of 7 individuals , 3 female and 4 male participants who have been users of luxury watches. Data Collection: Primary Data collection: Gathering information from consumers of luxury watches through online questionnaire survey Secondary Data Collection: Research insights and hypothesis design with the help of previously published research work on luxury goods buying behaviour. Sampling: Non-probability sampling method is adopted. Since the target audience or respondents of interest are consumers of premium or luxury watches, the sampling method adopted here is convenience sampling and snow-ball sampling. Measurement Scaling: Measurement Techniques used ? Perception map : ? Utility of features in the watch : Chronograph, Double dial, Indicator light etc. ? Stylish Designs that make the watch a fashion statement Respondents were asked to rate the 10 different brands in order to obtain their perception of these brands on the above defined dimensions Based on two predefined dimensions i. e ? ? ? Exploratory Factor Analysis : To understand the underlying factors influencing the purchase behaviour of luxury watch for men women and overall Regression: To understand which interpersonal personal effect is critical when consumers make a luxury watch purchase decision Discriminant Analysis: To understand the group behaviours based on the following discriminating variable ? Gender ? Trip abroad ? Work Experience:Purchasing power ? AMOS : Confirmatory Factor analysis to ascertain the Exploratory Factor Analysis RESULT AND ANALYSIS 1. Discriminant Analysis: Work-Ex Fresher Inference: Wilk’s lambda (0.627) is more than 0. 4 which is not significant; Box M test is also insignificant However based on analysis top 5 attributes discriminating work ex fresher are Attributes Q5_7_attribute_analog Q5_2_attribute_alarm Q5_12_attribute_torch Q5_9__attribute_calculator Q4_8_attribute_celebrity_endorsement Variable weight of discriminating function -. 366 . 361 . 331 . 271 . 262 2. Discriminant Analysis: Gender Inference: Wilk’s lambda (0. 578) is more than 0. 4 which is not significant; based on analysis top 5 attributes discriminating males females Attributes Variable weight of discriminating function. Q4_3_attrifashion_statement Q5_3_attribute_dualclock Q5_13_attribute_barometer Q5_8_attribute_motionsensor Q9_2_buy_in_store .329 -. 285 -. 269 -. 259 -. 255 3. Discriminant Analysis: Abroad Visit Inference: Wilk’s lambda (0. 573) is more than 0. 4 which is not significant; however based on analysis top 5 attributes discriminating foreign visited and not visited people Attributes Q5_9__attribute_calculator Q5_6_attribute_color Q5_16_attribute_warranty Q5_11_attribute_straptype Q4_9_attribute_brand_image Variable weight of discriminating function . 228 . 225 . 221 -. 207 -. 205 3) Exploratory Factor Analysis-(Male Female) Research Question:- Is gender a deterministic factor in deciding the purchase of the luxury watch. If yes what factors are important gender wise? Hypothesis:- Women while making luxury goods purchase give more importance to emotional factors whereas Men go for Physical Utility features Factor analysis for male respndents(58 males) Results:? ? ? ? ? ? ? ? Fac1(Ostentation): o o o o o o o o ? ? ? ? ? ? Sth to remmeber, hand gesture, to be unique Fac2(value added feature) Calculator,digital,compass. Fac3(Generic requirements) Shape, water resistance Fac4(Economic requirements) Discounts Fac 5(Tech savvy) Compass, Motion sensor Fac 6(basic) Analog,water resistance Fac 7(Wrist suitability) Strap type Fac 8(extra feautres):Date and day display, brand image Exploratory factor analysis female Respondents (23 females):Fac1(Economical): o o o o o o Warranty, after sales, analog, emotional satisfaction Fac2(Style) Social status, to be unique, fashion statement Fac3(Special requirements) Alarm,altimeter, digital,dual clock Fac4(value added feature) Calculator,compass,barometer, torch Fac 5(Tech savvy) Hand gesture,discount Fac 6(Exclusivity) Motion sensor,alarm,brand image Result Analysis:? Men:o Attach importance to Ostentaion, value added feaures and style(veblenian effect and perfectionist effect are dominating) ? Women:o Style, Economic attributes an generic requirements ( Hedonist and snob effects dominate 4. Checking the Interpersonal and personal effects shown by males and female while purchase of luxury watch in Store Research Question:o Is it the price or the type of users of the brand that drives the buying behaviour of the consumer for luxury branded goods? o Is it the strong emotion of discriminating themselves with the lower class consumers that drives higher class consumers to turn to luxury brands? o Is it the product utility or the brand perception that is key for luxury watch brands? Hypothesis:-Luxury watch purchase is primarily to show off and as an indicator of status symbol: veneblian effect. Users also buy luxury watches due to perceived emotional value or for hedonist reasons Veneblian Effect:- Snob Effect Bandwagon Effect Hedonistic effect Type of effect Veneblian snob Bandwagon Hedonistic Coefficient 0. 517 0. 499 0. 274 0. 305. Inference:- As we can clearly observe from the above table that the veneblian effect is very prominent in all cases of interpersonal or personal effects. That means People tend to buy Luxury watches to show off of their Public and Social Status. Snob and Bandwagon effect follows Veneblian effect. 5. Regression Analysis to check whether long term demand for luxury watches is driven by brand image Research Question : Is it the brand image that drives the long term demand for that luxury brand? Hypothesis : Brand Image for lucury brands is responsible for the long term demand of these watches. Inference : Regression is insignificant with respect to the variables that drive brand image. Even the R^square value is 0. 071. Hence we can infer that brand image is not a good factor to explain the long term demand for luxury watches. 6. AMOS The default model is created based on exploratory factor analysis and taking research literature into account. Model Fit Summary Check: Cmin/DF 2-5 OK GFI 0. 9 Not OK PGFI0. 5 OK NFI,TLI,CFI0. 9 Not OK RMSEA max 0. 1 Not OK Model is comparatively fit as such But Goodness of fit index is not holding well. Validity Construct Reliability S No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Attributes Q4_1_attribute_social_status Q4_3_attribute_fashion_statement Q4_2_attribute_to_be_unique Q4_6_attribute_emotional_satisfaction Q4_9_attribute_brand_image Q5_9__attribute_calculator Q5_10_attribute_compass Q5_12_attribute_torch Q5_13_attribute_barometer Q5_3_attribute_dualclock Q5_4_attribute_altimeter Q5_2_attribute_alarm Q5_5_attribute_digital Q5_7_attribute_analog Q5_8_attribute_motionsensor Q5_16_attribute_warranty Q4_10_attribute_secon_time_brandpurchase Q4_4_attribute_premiumwatch_collection Q4_8_attribute_celebrity_endorsements. Constructs Error e1 e2 Delta 1. 028 1. 079 0. 608 0. 635 1. 282 1. 323 1. 687 1. 473 1. 793 1. 816 1. 032 2. 133 1. 407 1. 074 2. 078 0. 179 1. 402 1. 367 2. 019 Lambda 1 0. 67 0. 922 0. 884 0. 997 1 0. 912 0. 971 0. 774 1 1. 135 1. 005 1. 258 1 0. 876 0. 84 0. 403 1. 231 1 AVE CR Exclusivity e3 e4 e5 e6 e7 0. 81 0. 81 Tech_Savvy e8 e9 e14 0. 84 0. 68 Value_Added _Feature e15 e16 e17 e21 1. 22 0. 75 Reliability e22 e23 e26 0. 82 0. 69 Brand_Perce ption.

Immigration and the U.S. :: Legal Issues, Illegal Immigration

Since 2001, when September 11th happened, many people in the United States have had a fear of allowing immigrants into the U.S. It went to levels of border control and more. Therefore some judge that immigration is a threat to the U.S. They should not consider that because everything that occurs is not due to immigrants, it is just â€Å"The Realities of Immigration† (Chavez, 46). The government can stop illegal immigration right now but would it not affect the U.S. more to do so? â€Å"Restrictionists claim that large-scale immigration-legal and illegal-has depressed wages, burdened government resources, and acted as a net drain on the economy† (Chavez, 47). Thus, if immigration was eliminated, the U.S. would have fewer workers. With a reduction of workers, money would be less therefore, causing the economy to plunge. People come to the U.S. to work and make a living, why would the government want to stop that? â€Å"If Americans would simply cut their own grass, cle an their own houses, and care for their own children, there would be no need for immigrant labors. But even if this were true, the overall economy would hardly benefit from having fewer workers† (Chavez, 47). Without immigrants, the economy would not flow smoothly because the workers make the jobs and economy better. Third world immigration is not a threat to America’s way of life because immigrants work, immigrants participate, and â€Å"illegal immigration already responds reasonably well to market forces† (Chavez, 50). Immigrants that come into the U.S. are not coming to harm anyone; they come to work and make a living. Hispanics and other races usually want to find a job and the U.S. has good quality jobs. â€Å"Despite the presence in our workforce of millions of illegal immigrants, the U.S. is currently creating slightly more than two million jobs a year and boasts an unemployment rate of 4.7 percent, which is lower than average in each of the past four decades† (Chavez, 47). Therefore, the U.S. consisted of several illegal immigrants that worked. That shows that they’ve done no harm. Just worked and made a living a majority of the time. They are good workers and as the U.S. generate more than two million jobs each year, the population of immigrant’s increases. It increases because the jobs increase thus, more immigrants come to the U.S. and work. The more people work, the more new jobs are prepared and the better the economy gets. Immigration and the U.S. :: Legal Issues, Illegal Immigration Since 2001, when September 11th happened, many people in the United States have had a fear of allowing immigrants into the U.S. It went to levels of border control and more. Therefore some judge that immigration is a threat to the U.S. They should not consider that because everything that occurs is not due to immigrants, it is just â€Å"The Realities of Immigration† (Chavez, 46). The government can stop illegal immigration right now but would it not affect the U.S. more to do so? â€Å"Restrictionists claim that large-scale immigration-legal and illegal-has depressed wages, burdened government resources, and acted as a net drain on the economy† (Chavez, 47). Thus, if immigration was eliminated, the U.S. would have fewer workers. With a reduction of workers, money would be less therefore, causing the economy to plunge. People come to the U.S. to work and make a living, why would the government want to stop that? â€Å"If Americans would simply cut their own grass, cle an their own houses, and care for their own children, there would be no need for immigrant labors. But even if this were true, the overall economy would hardly benefit from having fewer workers† (Chavez, 47). Without immigrants, the economy would not flow smoothly because the workers make the jobs and economy better. Third world immigration is not a threat to America’s way of life because immigrants work, immigrants participate, and â€Å"illegal immigration already responds reasonably well to market forces† (Chavez, 50). Immigrants that come into the U.S. are not coming to harm anyone; they come to work and make a living. Hispanics and other races usually want to find a job and the U.S. has good quality jobs. â€Å"Despite the presence in our workforce of millions of illegal immigrants, the U.S. is currently creating slightly more than two million jobs a year and boasts an unemployment rate of 4.7 percent, which is lower than average in each of the past four decades† (Chavez, 47). Therefore, the U.S. consisted of several illegal immigrants that worked. That shows that they’ve done no harm. Just worked and made a living a majority of the time. They are good workers and as the U.S. generate more than two million jobs each year, the population of immigrant’s increases. It increases because the jobs increase thus, more immigrants come to the U.S. and work. The more people work, the more new jobs are prepared and the better the economy gets.

Joint Venture in China

————————————————- Topic: Joint-Venture – China – Wall Panelling Once a foreign investor is put into the mix, a wealth of legal, administrative or operational violations that a solely-owned Chinese firm may have been able to survive with, will most likely not be tolerated by the local authorities (Devonshire-Ellise & Hoffman, 2010; Norris, 2011). Therefore an array of legal and contractual issues may arise for which a foreign party should be prepared. Some of these are outlined below.Environmentally Friendly Wall Panelling: ————————————————- As the product involved is classed as building materials the company should make note of Austrade’s guidelines on industry standards for building materials in China (Austrade, 2012). For this environmentall y friendly wall panelling the GB/T 50378-2006 regulations will apply (GCiS, 2012). The Issue of Stabilisation: ————————————————- Protection measures should also be stipulated through the creation of a Joint-Venture Contract.One of the biggest issues may be found through the difference in law between China and Australia; China having civil law and Australia having common law. Therefore in order to have the Joint-Venture contract protected from future changes in the Chinese civil law system a stabilisation clause is highly recommended (Coale, M. T. B, 2001-2002). Types of Joint-Ventures in China: What makes the selection of a joint-venture so important is that even though China’s Choice of Law provisions follow international practices; this doesn’t apply for Joint-Ventures.The only time a foreign party within a Joint-Venture may have a choice of law is when set tling disputes (Gao, 1989, p. 560; Wei, 2000, p. 40; Sino Foreign Joint-Venture Law Article 2). Types of Sino-Foreign Joint-Ventures in China: Refer to Appendix 1. Equity Joint-Venture (EJV): An equity Joint-Venture in China takes the form of a limited liability company (JVL Article 4 and Article 2 RICJVL; Kluwer Law International, 2005; Nee, O. D, 1992, 83-101). In this type of Joint-Venture both parties contribute to the registered capital and risks; profits and losses are all taken in regards to the proportion of that contribution.Four Basic attributes (Kluwer Law International, 2005; Wei, 2000, p. 74-75): 1. Established in accordance to the law of the People’s Republic of China. 2. Necessary Property or Capital 3. Possesses its own name, structure and premises 4. Assumes civil liability independently. Cooperative (Contractual) Joint-Venture Creating Chinese Juristic Person (CJVCJP): Also a limited liability company which assumes responsibilities for the ventures total ass ets however can have a separate internal arrangement on debt liability of each party (Articles 11,12, 14 of RICJVL; Wei, 2000, p. 5-76). The structure and status of this type of venture is a lot more flexible than for EJV’s, with precise aspects being able to be defined by contract (Kluwer Law International, 2005; Nee, O. D, 1992, 83-101). It also has liberty of negotiation of product or profit distribution method while still being a separate legal person with the parties’ liability limited to their capital contributions (Article 14 of RICJVL; China Business Law Guide, 2005; Cooperative Joint-Venture Law and Cooperative Joint-Venture implementing Law).Cooperative (Contractual) Joint-Venture Not Creating Chinese Juristic Person: (CJVWCJP): Does not create a Chinese juristic person (Article 52 of RICJVL) and parties take unlimited liabilities for the debts of the Joint-Venture jointly and severally. All investments are administered in a unified manner and consent is need ed for the disposing of a party’s investment (Nee, O. D, 1992, 83-101). ————————————————- It has loose structure, high risk and low degree of control and cooperation (Nee, O. D, 1992; Wei, 2000, p. 176). ————————————————-As all Chinese JV’s are controlled under the P. R. C law (Article 5 of the Foreign Economic Contract Law (FECL); Lewis, 1996, p. 31; Wei, 2000, p. 73), the ability to create their own contractual clauses and have more freedom in the contractual relationship is necessary, especially in regards to topics such as intellectual property; that is why a Contractual Joint-Venture Creating Chinese Juristic Person is the best choice. Also, in relation to management and liability and the production of manufactured goods this type of Joint-Vent ure is ideal (China Business Law Guide, 2005; Gomes-Casseres, 1990; Wei, 2000, p. 68). The Issue of Intellectual Property: From the 6th China International New Wall-Building Materials, Equipment and Technology exhibition held in Beijing in May 2012, it can be seen that green building is becoming increasingly popular in China (GCiS, 2012). In fact the 12th Five-Year Plan states that by 2015, at least one billion of these should be built with eco-friendly building materials, and by 2020, green buildings will account for more than 30% of new construction (ACBW, 2012; Appendix 6; GCiS, 2012).However, with this novelty in green building rising and a lot more foreign producers developing products and technology in China so comes the problem of protecting intellectual property. Intellectual property protection is relatively new in the People’s Republic of China but its importance continues to rise (Wheare, 1998, p. 1) and it is often cited as an issue of concern for foreign parties in China (Ding, 1997; Liesch & McGaughey, 2000, p. 1; Massey, J. , 2006-2007; Vanhonacker & Pan, 1997). Traditionally the concept of protecting intellectual property did not have a strong hold in Chinese culture (Wei, 2000, p. 9), but China’s reformation of its national IP system to comply with the international standards set out through the WTO’s Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement has been a leap for the development of China’s view in regards to intellectual property (Wheare, 1998, p. 1). However, despite China’s accomplishments in IP protection and indications it will not become a â€Å"haven of piracy† it still considered one of the most risky places to do business (Folsom & Minan, 1989, p. 792; Liesch & McGaughey, 2000 p. 2).This is due to its relative novelty in the People’s Republic making certain segments of the population have only a rather vague understanding of the concept (Cohen et al. , 1996, p. 7). In the P. R. C the problem isn’t that they don’t have laws regulating IP protection. In fact they have laws for the protection of Patents, Copyright Infringement and Trademarks. However, the problem comes when trying to implement these laws (Yuan, 2004, p. 1) as Chinese civil enforcement procedures make it very difficult to protect high technology patents (Appendix 5; Kennedy and Clark, 2006; Zhang: 2010: 7).In addition an interesting fact to note is that People’s court may accept oral evidence but in practice they rarely accept or put weight on this type of evidence (Kennedy and Clark, 2006). Therefore, when dealing with foreign parties it is important to develop and implement a comprehensive strategy for protecting their technology interests (Greguras, 2007, p. 3; Norris, 2011, p. 58; Wheare, 1998, p. 159). If it is assumed this wall paneling company has already patented their product in Australia, under Australia’s Patent law the patent will las t for 20 years (ALRC, 2012).As the product is already being produced in Australia it can’t be patented in China. However, as China is part of WTO and is a signee on the TRIPS agreement, therefore they are politically and morally bound to recognise the Australian patent (ALRC, 2012; Article 27. 1 of TRIPS Agreement; WTO; 2012). As the producers in China will need to have the production know-how for the wall paneling, therefore there is risk of intellectual property theft. To try and protect the IP a license agreement for technology transfer could be considered.When setting up a technology transfer agreement, the Technology Transfer Regulations as stipulated in the China Laws for Foreign Business outlines in Article 2 six ways of technology acquisition (Appendix 2; Kluwer Law International, 2005). ————————————————- If licensing is chosen for the transfer of the patent and its technology in the Joint-Venture the usual licensing agreement is 10 years. However this is usually permitted to extend to the life of the Joint-Venture (Lewis, 1996, p. 67). The agreement involved will allow the Chinese producers to use the technological know-how with it returning to the licensor (the Australian side) once the Joint-Venture is terminated. However it must be noted that the general consensus in China is that technology and know-how belong to the licensee at the end of the term and the licensor should not be able to restrict the licensee in its use of this information (Jianhua & Williams, 1998, p. 167; Lewis, 1996, p. 167).Therefore despite many ways one can try and protect IP in China, the most important factor is to carry out due diligence and make sure that the knowhow has been protected as good as possible. The Issue of Dispute Resolution: Due to a difference in legal system, cultural values and business practices, China can be seen as a high risk business environment. In the case of any disputes a clear and understandable dispute resolution method and clause should be formed and included in the Joint-Venture contract (Wei, 2000, p. 154).It is crucial for JV parties to specify dispute resolution methods, applicable law and venue for resolving disputes (Chan & Suen, 2005). Under the law of the P. R. C, Sino foreign Joint-Ventures are allowed to select applicable law and the venue for the dispute resolution in their contractual clause and Chinese law is only an option in this case (Dobkin, 1988, 79-80; FECL 1985; Lewis J. 1996, p. 256; Wei, 2000. p. 156). However Article 25 of the Law on Sino-foreign Cooperative Joint-Ventures (2005) provides that if a dispute arises, the dispute should be in first instance settled through friendly consultations to the extent possible.If such consultations fail then the dispute may be settled by arbitration or be referred to the People’s Court (Lewis J. 1996, p. 255) Therefore it is recommended that in light of any breaches of contract or party disputes the first step should be negotiation. Negotiation is not legally binding and can preserve the guanxi between both parties, whilst being the cheapest ADR method (Cheung and Suen, 2002; Dimatteo, 2003 p. 109). Also given the law states that friendly consultation should be the first step it should be the first method tried.However if not successful a relevant arbitration can be included in the contract. The P. R. C has a flexible approach regarding dispute resolution and it can take place in China or abroad according to Chinese rules or an international arbitration body (Lewis, 1996, p. 256). However, for this wall paneling company it is still recommended to have the arbitration carried out in China as cost is lower and it is more convenient and is enforceable (Dimatteo, 2003, 109). Many parties scared of using mainland Chinese arbitration rules have decided on arbitrating in Hong Kong.This is a great option for the wall panel ing company as Hong Kong has adopted the UNCITRAL model law on arbitration and is considered an international arbitration centre with highly developed infrastructure (Brandt & Tomson, 2012, p. 18; Dobkin, 1988, 79-80; HKIAC, 2004). In addition, Hong Kong will able to give better advice on foreign related matters in English making the process a lot smoother (Lewis, 1996, p. 257; Srivastava, 2002, 197). A possible dispute resolution clause that could be included in the contract can be viewed in Appendix 3. ————————————————-If Arbitration still has not produced any results litigation can be considered (Wei, 2000, p. 154) but in China it is usually viewed a s a last resort due to possible bias present in the courts and due to court proceeding being very lengthy and expensive and it’s also difficult to find lawyers competent to advise on foreign matters in English. Usual ly foreign parties will endeavour to ensure their disputes are resolved without Chinese courts as they are still unconfident because of the reported local protectionism (Bersani, 1994; Chan, 1997) The Issue of Language: ————————————————-Which language should be used in the Joint-Venture contract? When dealing with foreign parties there can sometimes be large language barriers. This problem can often be solved by having a clear language agreement stipulated in the contract. It is common practice to have the contract in both acting languages. Although this can be rather expensive, it may avoid some major problems that could arise in the future (Lewis, 1996, p. 31). The Issue of Termination: Chinese parties may be averted to agreeing with the public and formal ending of a Joint-Venture, not wanting to discuss the end before even beginning (Xu, 2008).However, sometimes, as the Chinese saying goes, the foreign party might find themselves in the ‘same bed’ as the Chinese but ‘with different dreams’. This is why a termination clause is very important. Despite the conventionality of this clause, it is still a grey area; the general practice is that foreign investors buy their way in and then buy their way out if the situation turns bad. Chinese parties have been known to play corporate blackmail with foreign investors as to block potential exit of the foreign party or to hold them liable for all losses (Xu, 2008).A Joint-Venture contract should have a detailed termination clause which outlines the events allowing parties to terminate their involvement. It should also state the duration of the Joint-Venture. (Dimatteo 2003) Some grounds for termination are as follows (Lewis, 1996, p. 257): 1. Expiration of the Joint-Venture term; 2. Inability to continue operations due to heavy losses; 3. Inability to continue operations due to the f ailure of one of the contracting parties to fulfill its contractual obligations; 4. Inability to continue operations to heavy losses caused by force majeure or; 5.Inability to attain the desired objectives of operations and the lack of future for development. Some other terms that may be included are set out in Appendix 4. *It is proposed that the tenure for this Joint-Venture should be set at an appropriate time so as to avoid the transfer of intellectual property. This time should be before the patent protection runs out and before the licensing agreement runs out. —————————————————————————————————————————————– AppendicesAppendix 1: Business Structures in China (Yu wa Wei, 2000, Investing in China. p. 169) Appendix 2: China Business Law Guide 2005 a) The assignment of patent rights; b) The assignment of the rights to apply for patents c) The licensing of patent exploitation; d) The assignment of technical secrets; e) The provision of technical services; and f) Other forms of transfer of technology. Appendix 3: Dispute Resolution Clause In the event of any dispute arising under this contract, the parties shall first make all necessary efforts to settle the dispute through friendly consultation.If it is impossible to settle the dispute in this way then the matter shall be submitted to arbitration before the Hong Kong International Arbitration Centre (Lewis, 1996, P. 255). Appendix 4: Grounds for Termination (Frenkel, 1998) 1. Failure of a participant to make require capital contribution; 2. Failure of a participant to obtain necessary government approvals; 3. Failure of the venture to reach a pre-agreed level of profitability; 4. Management dead lock; 5. Failure of one partner to purchase the shares of another. (Buy-Sell agreement); 6. An adverse and debilitating change in the law; 7.Bankruptcy or insolvency of the Joint-Venture. In relation to IP even if there is a clear termination clause and licensing agreement relating to the breach for the use of IP and know how as mentioned before the general consensus in China is that licensed IP will be able to be used once the license agreement has ended by the licensee. This means that despite efforts to protect IP, there is still a possibility of a breach and this should be understood as China’s cultural view is different and they still have a developing legal system in relation to this problem. Appendix 5: Key Issues in Enforcing IP Law (Kennedy, G. amp; Clark. D, 2006) The key issues are: 1. Civil procedure law puts a strong burden on plaintiffs to prove their case. There are no rules specifically shifting the burden of proof if a plaintiff makes out a prima facie case. This can make it very difficult to prove that a high technology patent has been infringed, or a trade secret has been misappropriated. (Article 125, Contracting Law) 2. There is no discovery in civil proceedings. Parties are only required to submit evidence that assists their case. Without discovery, it can be extremely difficult to prove a case. Article 125, Contracting Law) 3. Oral evidence is very rarely accepted in civil proceedings (63 and 72 of Civil Procedure Law) – oral evidence of misbehaviour by an employee will thus be very hard to use. Appendix 6: Expected Growth of China Green Buildings (MOHURD, GCiS). Reference List 1. Austrade, 2012, Building Materials to China, Available at . Accessed on 22/10/2012. 2. Australian Business Forum (ACBW), 2012, China to Boost construction of Green Building. May 7th. Available at . Accessed on 23/10/2012. 3. Australian Law Reform Commission (ALRC), 2012, Duration of Patent Protection, Australian Government. Available at . Accessed on 25/09/2012. 4. Brandt, M. & Tomson, K. , 2012, Hong Kong's state and crown immunity: immunity for state-owned enterprises? Published by SNR Consulting and Legal Services, Hong Kong. 5. Chan, E. H. W ; Suen, H. C.H, 2005, Dispute resolution management for international construction projects in China, Management Decision, vol. 43, no. 4, pp. 589-602. 6. Cheung, S. O, and Suen, C. H, 2002, A multi-attribute utility model for dispute resolution strategy selection. Construction Management Economy, Issue No. 20, 557-568. 7. Chinese Civil Procedure Law 1991. Available at ;http://www. China. org. cn/english/government/207343. htm;. Accessed on 16/10/2012. 8. Chinese Contract Law of 1999, in The New Contract Law in the People’s Republic of China and the UNIDROIT Principles of International Commercial Contracts: A Brief Comparison by Zhang, Y.Q. ; Huang, D. H. Available at ;http://www. unidroit. org/english/publications/review/articles/2000-3-zhang-e. pdf;. Accessed on 14/09/2012. 9. Chinese Law on Sino-foreign Cooperative Joint-Ventures, 2005. Available at ;http://www. hecpb. gov. cn/english/news/display. php? id=1;. Accessed on 15/10/2012. 10. Chinese Patent Law 1984 as amended on 1 July 2001 and its Implementing Rules. 11. Coale, M. T. B. , 2001-2002, Stabilisation clauses in International Petroleum Transactions. Denver Journal of International Legislation and Policy, 222. 12. Cohen, M. A. , Bang, A. E. , Mitchell, S.J. ,1999, Chinese Intellectual Property Law and Practice. Kluwer Law International. The Hague, The Netherlands. 13. Dimatteo, L. A, 2003, The Law of International Business Transactions, Thomson Learning. USA. 14. Ding, D. Z. , 1997, Control, conflict and performance: A study of US – Chinese Joint-Ventures. Journal of International Marketing, 5(3): 31–45. 15. Dobkin, J. A. , 1988, International Technology Joint-Ventures in the Countries of the Pacific Rim, Butterworths, United States. 16. Frenkel, W. G. , 1998, Legal Protection ag ainst Risks Involved in Doing Business in the Republics of the Former U.S. S. R. International Quarterly (10), 395, 467. 17. Folsom, R. H. , ; Mina, J. H. , 1989, Law in the People’s Republic of China: Commentary, readings and Materials. Martinus Nijhoff. 18. Gao, Y. F, 1989, Economic Contract Law in China, in Ralph H Folsom and John H Minan (eds. ), Law in the People’s Republic of China: Commentary, Readings and Materials. Martinus Nijhoff. 19. GCiS China Strategic Research, 2012, Green and Eco Friendly Materials Are the Latest Spotlight in China’s Construction Market. Available at ;http://www. gcis. com. n/GCiS%20Commentary/Green%20and%20Eco%20Friendly%20Materials%20Are%20the%20Latest%20Spotlight%20in%20China%27s%20Construction%20Market. htm;. Accessed on 22/10/2012. 20. Gelatt, T. A, 1989, China's New Cooperative Joint-Venture Law, Syracuse Journal of International Law and Commerce. 15, 2; p. 187. 21. Gomes-Casseres, B. , 1989, Ownership structures of foreign subsidiaries: Theory and evidence. Journal of Economic Behavior and Organization, 11: 1-25. 22. Greguras, F. , 2007, Intellectual Property Strategy and Best Practices for R & D Services in China, Published by Compensation Law & Securities. 3. Hong Kong international Arbitration centre (HKIAC), 2004, Hong Kong International Arbitration Centre Home page. Available at . Accessed on 25/09/2012. 24. Jianhua, Z. & Williams, M. , 1998, Foreign Trade and Contract Law in China, Published by Sweet & Maxwell Asia Hong Kong. 25. Kennedy, G. & Clark, D, 2006, Outsourcing to China – Risks and benefits, Computer Law & Security Review, Volume 22, Issue 3, Pages 250–253. 26. Kluwer Law International, 2005, China Business Law Guide (First Edition), The Hague, The Netherlands. 27.Law of the People's Republic of China on Foreign-related Economic Contracts(FECL), 1985, Available at ; http://www. fdi. gov. cn/pub/FDI_EN/Laws/GeneralLawsandRegulations/BasicLaws/P020060620319304687511. pdf;. Accessed on 24/10/2012 28. Lewis, D. J, 1996, The Life and Death of a Joint-Venture in China. Asia Law ; Practice Publishing Ltd and Euromoney (Jersey) Ltd. Hong Kong. 29. Liesch, P. W ; McGaughey, S. L, 2000, An Unconventional Approach to Intellectual Property Protection: The Case of an Australian Firm Transferring Shipbuilding Technologies to China. Journal of World Business 35(1). 30. Massey, J.A. , 2006-2007, The Emperor Is Far away: China's Enforcement of Intellectual Property Rights Protection, Chicago Journal of International Law, 231 (7). 31. Nee, O. D. , 1992, Chapter in Joint-Ventures in East Asia: Legal Issues by Jacques Buhart, Graham and Trotman, London. 32. Norris, J. T. , 2011 – January, China Foreign Direct Investment: Greenfield, Mergers & Acquisition, Or Joint-Venture. The International Business and Economics Research Journal (10) (1). 33. Rules for Implementation of Chinese Joint-Venture Law (RICJVL), 1995. Available at http://www. asianlii. org/cn/legis/c en/laws/drftiotscjv805/.Accessed on 03/10/2012. 34. Smith, J. IP Protection in China – Practical Strategies (Second Edition), 1998, Asia Law & Practice Publishing Ltd and Euromoney (Jersey) Ltd. Hong Kong. 35. Srivastava, D. , 2002, Business Law in Hong Kong, Published by Sweet & Maxwell Asia Hong Kong. 36. Vanhonacker, W. R. , & Pan, Y, 1997, The impact of national culture, business scope and geographic location on Joint-Venture operations in China. Journal of International Marketing, 5(3): 11–30. 37. Wei, Yuwa, 2000, Investing in China: The Law and Practice of Joint-Ventures, The Federation Press, Sydney.

Jeremy Lin s Cultural Identity - 1961 Words

Linspirational: Jeremy Lin’s Renegotiation of Cultural Identity In December 2011, Jeremy Lin a graduate of Harvard University was signed to the historic NBA franchise of the New York Knicks. Not many people paid attention to this signing as there was a strong likelihood that in two months he could be waived and no longer have a spot on the team. Yet, just two months later Lin would go on to lead the Knicks to numerous victories, including a 38 point performance against the Los Angeles Lakers and legend Kobe Bryant. The unheralded prospect revitalized a floundering organization in a matter of weeks; though this prosperity was short lived, it started a conversation that had not been talked about before. In some eyes this was seen as a†¦show more content†¦Each of these shifts regularly and rather rapidly in Lin’s case. The two dialectics that have the most impact in Lin’s situation are security and inclusion. Security and inclusion or fear of the lack of the two can cause people to accept these contracts, whether they believe them to be true or not. I will address later in this paper how exactly both security and inclusion impact Lin. Equally as important is how and why we negotiate our identities. One’s identity is constantly changing due to the negotiations we have with ourselves and others. These negotiations take place every day and are instigated either by those who are culturally different from the dominant culture or even ourselves (Jackson 360). Whether they are instigated by an individual or oneself it is a need as humans to reduce uncertainty (ibid.). There is this instinctual need to know what something is, or in this case who someone is, even if it is as trivial as their racial background to identify and differentiate that person from the rest. 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