Women Consumers in the China Cosmetic Surgery Market

CASE DESCRIPTION The case is designed for a marketing research course or a general marketing management course. It has the difficulty level of 5 (appropriate for first year graduate level) and 6 (appropriate for second year graduate level). The major issues discussed in the case include: * Judgment on how income influences purchase intention and price sensitivity * Judgment on how age and marriage status affect consumers' interest in the cosmetic surgery * Recommendations on marketing communication strategy * Judgment on the effectiveness of advertisement * The case is designed to be taught in 2 class hours and does not require outside preparation. CASE SYNOPSIS The case is about a Korean businessman who has conducted a market research in Shanghai before he builds up a cosmetic surgery clinic. The survey has investigated many consumer parameters. Therefore the first task for students is to learn how to analyze the relationship between marketing variables, such as consumers' purchase intention, demographics, price sensitivity, and so on. More importantly, students should be able to identify the business implications behind the data. This case is deliberated kept sufficiently simple to direct students' attention to the use of research findings, not to the intricacies of research design and execution. Information in the tables is displayed in a way that reflects how research is often presented in practice, in less than optimal ways, forcing students to come to an independent interpretation, including some recalculation of the data. Therefore, this case is suitable for a marketing research course, or for a general marketing course. BACKGROUND Mr. Yanhoo Li has decided to set up his first cosmetic surgery clinic in Shanghai, China next year. As an owner of five cosmetic surgery clinics in South Korea, Mr. Li has already been very successful in this industry. But Mr. Li will be only 40 years old next year, and he has much ambition left. Mr. Li could invest to build up the sixth clinic in South Korea, but the economy there does not seem to be that promising. He has been thinking about international expansion for a couple of years now, and he has decided that next year shall be the right time and China shall be the right place. Several South Korean cosmetic surgeons already work in Shanghai hospitals and customers are lining up for their services, paying a 30% higher price than for surgeries performed by local doctors. Some affluent Chinese consumers even flight to South Korean to have the cosmetic surgery. Cosmetic surgery has become increasingly popular in the West over the last two decades, and Mr. Li believes that China, as has happened in so many other markets, will exhibit a similar development. Thousands of Chinese women, and some men, are turning to surgeons for cosmetic enhancements they can now afford thanks to a prosperous economy that expanded by at least 8 percent a year even during the global slump in 2007 and 2008. Analysts see the rise in cosmetic surgery as yet another example of how the once cloistered nation has opened up to Western businesses - and influences. "People here tend to believe that good looks may bring them good luck with their career and marriage," said a marketing director of a famous Chinese cosmetic surgery clinic. "There is a long history in China of craving beauty. In the Book of Verses, completed more than 2,000 years ago, there is a line that goes, ? slender lady is the perfect marriage partner of a gentleman'." It seems that many Chinese consumers cannot wait to undergo cosmetic surgery to better their self-esteem. Statistics from the China Plastic Cosmetology Committee show there are more than 10,000 medical institutions carrying out procedures throughout the country. Revenues close to 2 billion RMB (US$240 million) have accumulated since the cosmetic surgery was first offered in the country. …