Marketers identify 8 rules for success in China's changing branding environment

23 September, 2008


SHANGHAI – A common theme from the Economist’s Fifth China Branding Roundtable in Beijing on Sep 18th and 19th was that China’s consumer marketplace is maturing at warp speed. But the game is changing both for multinational and Chinese companies, and marketers who get on board with the new rules for product branding and sales will have the greatest opportunity to take advantage of what is still expected to be at or near double-digit economic growth in 2009.

“It used to be good enough just to get Western products on store shelves here. The pent up demand was so great that consumers were excited just to learn about and find new choices. Those days are over for good,” said Professor Sun Baohong, associate professor of marketing from Carnegie Mellon University and visiting professor from Cheung Kong Graduate School of business. “Today’s consumer is smart, sophisticated, demanding, inquisitive, engaged, connected and very busy. They see an average of more than 230 marketing messages blasted at them every day and they can easily grow numb to it. They have more disposable income than ever before, but far less time to enjoy it. And they are also just a little jaded, having seen what they perceive as being slighted by marketers who care more about their short-term money than their long-term loyalty.”

Professor Sun joined Steven Xu, director of advisory services in China for the Economist Intelligence Unit and chief representative in China of the Economist Group, as co-chairs of the annual branding conference this week. Companies participating in the event included Accenture, Adidas, Bank of Communications, China Business Network, Coca-cola, Dow, Little Sheep, LVMH, McKinsey, Mercedes-Benz, Nokia, P&G, Qatar Airways, Samsung, TNS, and many others.

Marketing companies Landor Associates and Cohn & Wolfe summarized the perspective attendees shared through these 8 New Rules marketers in China should head when developing new branding strategies today:

8. We expect quality products. Now, how is your service?
High quality products are viewed as table stakes today. If it doesn’t perform, don’t bother. But what else do you have? Chinese consumers today want to know where you are adding value. What additional services are you bringing to the table to enhance user experience, make life easier or just demonstrate that you not only you value your relationship but you will continue to work hard to earn and keep their loyalty.

7. Yes, I love Yao Ming. Remind me again why I should care he uses your product?
Zheng Jie made world news, not just as the first Chinese tennis player to make a Grand Slam semifinal, but also for donating her Wimbledon winnings to earthquake relief in Sichuan Province, her birthplace. The progress of Yao Ming’s injured foot was the subject of BBS and blogs for months leading up to the Olympics. And has any injured athlete and their value to a brand been scrutinized more than track star Liu Xiang? Yes, China loves its celebrities as much as anywhere in the world, and the Olympics really put a marketing spotlight on use of athletes and celebrities to endorse products. But it also put a spotlight on the right and wrong use of celebrity endorsements. It got consumers talking about credibility of brands and the faces they pay to hawk their products.

6. If green is more than a color and a marketing message, prove it!
The numbers are staggering. The new China Green Brands study shows 69% of Chinese consumers would pay a premium for products that demonstrate true environmental sensitivity. That’s higher than both the US and UK. This is a population that cares about the environment. They care about clean air, clean water, climate change and the future they are leaving to their children. Consumers are showing more than ever they want the companies and brands that they shop to share their values. And they will reward those that do with price premium and brand loyalty. But don’t even try greenwashing in this market. Throwing a recycled logo or sponsoring bag give-aways doesn’t cut it any more. Companies who aren’t serious about their commitment are taking a big brand risk by marketing green and are better off taking another route to reach this market.

5. Are you ready to lead in new era of innovation?
The Olympic opening ceremony celebrated China’s rich history of innovation with contributions so significant and game-changing that they continue to impact our lives every day. But many in today’s world of fast product development and global branding might ask: Where did that innovation go? For years the answer has been tied to the cultural desire to always demonstrate humbleness and to follow the models of success from those who paved the way for us. But Companies like Haier, Lenovo, Taobao, Baidu and China Mobile, which in recent years has ranked among the most well known brands in the world, are showing that you can be true to your heritage and belief system and still build powerful and meaningful brands. And literally thousands of SMEs emerging in the new economy are starting to demonstrate the new China will return to its roots of innovation with the power to change the world. For multinational companies, that’s a new competitive challenge. Or is it an opportunity to find new partners and a new competitive advantage?

4. Don’t just talk at me. Talk with me.
It’s hard to ignore the numbers. The largest internet population in the world. More people spending more time online than anywhere else. More bloggers, forums and bulletin boards. How are companies tapping social networks to better engage consumers on their terms? How are they addressing one of the fundamental changes of brand building in China: Consumers want to be part of the conversations. They want to be engaged! And they want to be engage in creative ways where they can experience your brand on their terms. Turn them on and cut them loose, and you will get that all-powerful social network WOM so many marketers are struggling to achieve.

3. The power of word of mouth in China means companies better pay more attention to crisis communications
Digital media and social networking have created an environment where word spreads through consumer communities as fast in China as anywhere in the world. Companies caught ignoring issues, responding slowly to consumer concerns or worst of all misleading the market are getting pummeled online. If you are genuine and honest, Chinese consumers can forgive a lot of misdeeds. They understand companies, like people, make mistakes. It’s what you do after you make those mistakes that tell people about your true character. That’s what tells Chinese consumers whether or not your company, your brand and your leadership respects them. It’s also what they believe tells them whether or not you deserve their loyalty. And that’s why crisis communications and rapid-response planning is more important than ever in today’s marketing environment.

2. Don’t blindly follow your intuition. Take the time to learn about me.
The opening of China presented marketers with a country long on opportunity but short on consumer data. Intuition ruled the day. In today’s maturing market more and more good data is available, which could be invaluable in an environment where competition is fierce and both margins and budget are shrinking. But what happens when new data flies in the face of trusted intuition? China has as many or more distinct regions with historical pride and significance as well as indigenous ethnicities as any other country in the world. And the unique nature of consumers in those regions, their lifestyles, purchase preferences and buying habits vary greatly from region to region. Marketers willing to go against their intuition, to study and understand the unique dynamics of consumer groups, whether by geographic, demographic or psychographic differences, and apply those learnings to new market development strategies are the ones who will win in China’s new marketplace.

1. China is changing, Have you?
Are we experiencing a resurgence of nationalism? Or are Chinese consumers no longer enamored with products just because they are Western? Either way, there appears to be a trend taking shape with local consumers showing a newly found preference for local brands. For Chinese companies, it spells new opportunities to establish powerful brands both within and beyond China. For multinationals, it means the bar is raised on the challenge to establish a genuine, credible brand image with Chinese consumers. It’s also creating opportunities for smart multinational companies to create partnerships with Chinese SMEs, partnerships that demonstrate a genuine commitment to enhance communities and grow together rather than just growing on the back of China’s massive economy and draining its resources. Whatever position you find yourself in, the message to marketers is clear … don’t just tell consumers you care about China and its people … show them you care in everything you do! China is changing, have you?


About Landor
Landor Associates is one of the world’s leading strategic brand and design consultancies. Founded by Walter Landor in 1941, Landor pioneered many of the research, design and consulting methods that are now standard in the branding industry. Partnering with clients, Landor drives business transformation and performance by creating brands that are more innovative, progressive and dynamic than their competitors.

Landor’s holistic approach to branding is a balance of rigorous, business-driven thinking and exceptional creativity. Its work spans the full breadth of branding services, including brand research and valuation, brand positioning and architecture, naming and writing, corporate identity and consumer packaging design, branded experience, brand equity management, brand engagement and digital branding.

With 24 offices in 18 countries, Landor’s current and past clients include some of the world’s most powerful brands, including BP, Cathay Pacific, Citi, Danone, Delta, Diageo, Emaar Properties, FedEx, Frito-Lay, the City of Hong Kong, HSBC, LG Group, Marriott Hotels & Resorts, Microsoft, Procter & Gamble and PepsiCo.

Landor is part of WPP, one of the world’s largest global communications services companies.

For more information, please visit http://www.landor.com


About Cohn & Wolfe
Cohn & Wolfe is a strategic marketing public relations agency dedicated to creating, building and protecting the world’s most prolific brands. With offices in North America, Europe and Asia, the agency creates and implements powerful communications programs that help clients build their brands and their bottom lines.

The core areas of expertise include consumer, healthcare, technology and corporate communications. Cohn & Wolfe ranks number one by clients for creativity, media placement, client service, senior management and strategic counsel. Cohn & Wolfe also consistently ranks among the top “Best Agencies to Work For” in an annual, industry-wide employee survey. For more information, visit: http://www.cohnwolfe.com. Cohn & Wolfe is part of WPP one of the world’s largest communications services group.

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