Infant formula in China: assessing consumer impact from a country of origin perspective

Aim: This thesis comprehensively analyses the phenomenon of infant formula multi-brand crisis in China from the perspective of the Chinese consumers. <br> <br>Context: The thesis elaborates on a chronological sequence of descriptive market data from 2008 to 2018 on the consumer confidence in the dairy industry following the multi-brand crisis and show that despite the awareness of the crises, the effect on the local dairy industry was not as catastrophic as expected. In fact, in recent years the rate of decline in the market share of Chinese dairy formulae has not only slowed, but that many local manufacturers have regained their lost market share from foreign competitors.<br> <br>The objective of this thesis is to examine this phenomenon from the lens of consumer ethnocentrism, nationalism and forgiveness.  <br>Research gap: The studies on industry confidence in multi-brand crisis are still few. Although Grayson et al. (2008) have claimed that industry confidence is a result of trust not only in the company but also for the industrial environment (imported and domestic environment), there is still no comprehensive study on the influences of multi-brand crisis on industry confidence recovery.<br>Methodology: The first phase uses qualitative methodology to understand the drivers of infant formulae purchase decision process amongst Chinese consumers. The insights from this study is used to develop a conceptual model for further investigation. The second phase is quantitative in nature, where a questionnaire is administered to actual users of infant formulae at the point of purchase.<br><br>Key findings: 1) The influence of forgiveness on consumer trust among Chinese consumers who purchase domestically produced infant formula is significantly higher than that among Chinese consumers who purchase imported infant formula. 2) Consumers who buy domestically produced infant formula pay more attention to perceived quality than those who buy imported infant formula. 3) The influence of ethnocentrism on consumer trust among Chinese consumers who purchase domestically produced infant formula is not significant. 4) The country of origin has a significant impact on the purchasing behavior of Chinese consumers. <br>Implications: 1) The two major contributions of this research are its qualitative approach to studying, testing and modifying a model of consumer trust and its use of the modified model to explain and analyse differences in consumer trust and brand loyalty based on consumers¿ actual purchase behaviour. The results of this study represent a stepping stone for understanding the features of the consumer trust mechanism. 2) The current study also have major practical implications, particularly for enterprises and government public policy.