Eight rules for brand marketing in China
A common theme from the Economist's Fifth China Branding Roundtable in Beijing last month was that China's consumer marketplace is maturing at great speed, and that marketers who clearly understand the rules of product branding will benefit most from what is expected to be nearly double-digit economic growth during 2009.
According to Professor Sun Baohong, associate professor of marketing from Carnegie Mellon University and visiting professor from Cheung Kong Graduate School of Business, "It used to be good enough just to put Western products on store shelves in China. The pent up demand was so great that consumers were excited just to learn about and find new choices. But those days are over for good."
A new breed of consumer Today's Chinese consumer is smart, sophisticated, demanding, inquisitive, engaged, connected, and above all very busy. They see an average of more than 230 marketing messages every day, and there is the risk that they will grow numb to these messages.
At the same time, these consumers have more disposable income than ever before, but paradoxically they have far less time to enjoy their earnings. Professor Sun also noted that Chinese consumers are also "a little jaded", with many thinking they have been slighted by marketers who care more about short-term money than long-term loyalty.
Branding discussed 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.
Marketing companies Landor Associates and Cohn & Wolfe summarised the perspective that attendees shared by compiling a simple list of eight new rules that marketers in China should consider when developing new branding strategies.
Eight marketing rules The rules developed as a result of the discussions are as follows:
- Quality is now assumed, but watch out for service High quality products are viewed as a basic need today. If the product doesn't perform, don't bother marketing it. But Chinese consumers today also want to know about added value. What additional services are you offering to enhance the user experience, to make life easier, or just to demonstrate that you not only you value their relationship but that you will continue to work hard to earn and keep their loyalty?
- Use celebrity endorsements wisely China loves its celebrities as much as anywhere in the world, and the 2008 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 the credibility of brands and the faces they pay to sell their products.
- Demonstrate genuine care for 'Green' The China Green Brands study showed that 69% of Chinese consumers would pay a premium for products that demonstrate true environmental sensitivity. That's higher than in both the US and the UK. China has a population that cares about the environment, and they care about clean air, clean water, climate change, and the future they are leaving to their children. Consumers are showing more than ever that they want the companies and brands that they use to share their values.
- Be ready for a new era of innovation Innovation has traditionally been tied to China's cultural desire to always demonstrate humbleness and to follow the models of success from those who paved the way beforehand. But companies such as Hair, Lenovo, Taobao, Baidu and China Mobile (which in recent years has ranked among the most well known brands in the world) are proving that you can be true to your heritage and belief system, yet still build powerful and meaningful brands.
- Don't talk at consumers: talk with them China has the largest internet population in the world, with more people spending more time online than anywhere else in the world. Consumers want to be engaged in internet-based brand conversation, and they want to be engaged in creative ways through which they can experience brands on their terms.
- Make use of word of mouth The power of word of mouth in China means that companies need to pay more attention to crisis communications. Digital media and social networking have created an environment where word spreads through consumer communities as quickly in China as anywhere else in the world, if not more quickly. Companies that ignore problems, respond too slowly to consumer concerns, or even mislead the market are likely to be punished heavily online. The lesson is that if you are genuine and honest, Chinese consumers will forgive a lot. They understand that companies, like people, sometimes make mistakes - but it's what you do after you make those mistakes that reveals the company's true character.
- Don't blindly follow intuition: Learn about the consumer The opening up of the Chinese market has presented marketers with much opportunity despite the fact that there is still very little established consumer data to work with. Intuition may have worked in the past, but solid data could be invaluable in an environment where competition is fierce and both margins and budget are shrinking. Marketers who are willing to go against intuition, to study and understand the unique dynamics of regional and cultural consumer groups, and to apply that knowledge to new market development strategies will be the ones who will win in China's new economy.
- China is changing, and companies must change with it There appears to be a trend forming among Chinese consumers showing a new-found preference for local brands. For Chinese companies, this provides new opportunities to establish powerful brands both within and beyond China. But for multinationals it presents a challenge: to establish a genuine, credible brand image with Chinese consumers. This trend is also creating opportunities for multinational companies to create partnerships with Chinese SMEs, where those partnerships demonstrate a genuine commitment to enhancing communities and growing together (rather than just growing on the back of China's massive economy and draining its resources).