If you are interested in my article here, I guess you are either willing to market your business in China or eager for a better marketing solution. Anyway, here are some questions you should ask yourself before any further marketing action. What do China’s consumers want today? What do brands really mean to them? What qualities do China’s growing consumer groups seeking in the brands they choose?
To better understand the challenges facing companies that want to establish and better manage a brandin China, my company Easywei searched into the Chinese consumer market to learn how they decided what to buy and which brand they choose. Here I start with the first chapter in my branding series: positioning.
Do we really understand the Chinese market?
As we all know, China is a rapidly growing consumer market. It is predicted that China’s consumer economy will expand to $6.5 Trillion 2020. Besides, China is also one of the biggest e-commerce markets in the world, with sales reaching more than $680 billion by 2016, which will reach the ridge in just three years. Chinese E-commerce sales channel represents 20% of the total sales of the country and will represent a quarter within 5 years.
What a boon for brands! That is why both big and small overseas brands are looking for ways to develop their markets in China. Data by Ali Index (data analysis platform by Alibaba.com) shows that the most famous E-commerce platform in China have brought in 14500 overseas brands from 63 countries and areas, among of which 80% are new comers. Just in the last two months in 2016, a number of well-known international brands settled in Tmall, such as Webber Naturals, DM, Rossmann, and SPRAYGROUND.
But apart from what we know about the huge market share, what we might not know about this market is, Chinese consumers are completely different from the Western population. In a few words, the Chinese populationhas its own culture which leads to different ways of thinking and consumption behavior. Besides, Chinese are very specific in its own language, and that might cause more complex market penetration, even on the digital platforms. For example, translating word-by-word may not necessarily give you the right meanings. I will talk more on how to create proper brand content for the Chinese market in the next chapter.
Another vital difference we should bear in mind when branding, is that China market is governedby information counterfeiting. Therefore, Chinese consumers are alert enough and sensitive to dishonest brands or brands that they have never heard of. This experiential alert mind somehow creates defense for new brands to enter, and therefore new marketers should never think it is too easy for a foreign brand towin market popularity in China!
See, the Chinese market is not as easy to brand in as you think! Although the extraordinary huge market demandsin China are large enough for all brands to have a finger in the pie, not all brands are doing a great job, especially under the context of the special Chinese consumption behavior. Here I look into brands with higher marketing efficiency and market popularity.
By country, the Chinese market have shown enthusiasm for US products in recent years as US brands represent the largest market share in terms of foreign products purchased in China, ahead of Japan and South Korea. Thanks to its heavy invest on the Chinese market!
Since the reform and opening-up policy and the booming E-commerce, China is in constant evolution and its markets are highly competitive. These factors have forced American brands to innovate. This investment in Chinese markets goes even more complex and systematic, through a full understanding of the environment and the different markets of the country.
Take US’s century-old brand Starbucks as an example. Starbucks gets used to carry out full-scale market studies when entering into new markets. This habit allows the brand to own ability in paying attention to all details and dealing with market difference when launching.Chinese has its special culture on hot drinks, and it seems not easy to develop a branding campaign for a coffee maker. To learn how to convert the aggressive coffee resisters into lovers is vital for Starbucks. After market research, the brand played on the Glocal “Think Global but act Local” strategy. And experience shows that its market studieshave worked to allow the brand to more or less adapt to the cultural differences of the country.
How to win quick recognition among competitors?
Here we talk about why brand positioning is important. Let us check a seriesof data first!
As known, Chinese people might be the most diligent people in the world, the average leisure time for Chinese people is only 2.27 hours per day, and it is about 300 pieces advertising crossing individual Chinese people’s life per day. Harvard psychologist Dr. George A. Miller says the average mind cannot deal with more than SEVEN units at a time. That may explain why most of the items remembered only have 7 units: 7 digits of phonenumbers, 7 days of a week, 7 notes on the musical scales, 7 wonders of theworld... Grab someone randomly, ask him or her the brands of a certain categoryand you may find out that seldom people can name more than seven brands.
That is why positioningis important in marketing and promotion battles. Sharpening our brand message to cut into the mind, it encourages us to be seen and heard in the overcrowded marketplace.
Have understood the importance of positioning in relation to win quick recognition among themarket, let us look intoanother aspect, brand trust. I believe brand marketers all know that it is crucial to establish a relationship of trust with consumers in the China market as this country is governed with information counterfeiting. As I mentioned before, due to this social phenomenon, Chinese consumers are easy to be mistrusted if a brand has a bad mark, even it is unreal. On the bright side, people tend to buy a brand because they recognize it and even create a strong commitment to it when showing the interest of the brand. Therefore, to win quick recognition among competitors means we need to wintrust first.
Furthermore, to winbrand recognition also means you cannot “take the usual path”. What does it mean? Simply speaking, companies with global brands can win recognition very quickly innew markets, thank god to their excellent brand gene. However, you can still see that some companies have tended to focus on narrower market segments to winmarket recognition effectively. Take a Chinese local spirit brand Jiangxiaobaifor example.
(Picture: Expression Bottle - the representative product by Jiangxiaobai) Jiangxiaobai is a light Kaoliang spirit produced by Jiang Chateau in China. The spirit product ispositioned in the new youth groups to meet the needs of simply and absolute life style.The brand slogan for Jiangxiaobai consists of these keywords: sprit, Chicken soup for soul, and self-expression. And the slogan is the hidden secretof its branding success. There is no lack of spirits in the China market. However, what could spirits connect us inmind? High-end? Passion? Or business talks? For almost all spirit products in China, the brand positioning are similar. But do market demands remain thesame? The market study by Jiangxiaobaitells us the answer. For youngsters, spirits may not just be some alcohol to sorrow in, but might be comfort andcompanion in a late night. The “accompany bottle” of Jiangxiaobaiallows us forself-expression and fuels for ourselves. That is why the “spirit for soul” winsits craze by market.The case of Jiangxiaobai more or less gives us a clue on how to win market recognition byraveling out the relationship between brand position and market awareness. Inother word, competitive positioning is the key for what sets your product, service and company apart from your competitors and what value you provide and how is it different from the alternatives. But how to position your brand competitively? Mind that competitive positioning is all about defining how you’ll “differentiate” your offering and create value for your market.Therefore, “special” is the key for your brand being known as “something”. It’s vital to notice that positioning focuses on getting into the human mind of customers rather than the product itself. Because the only defense of peoplealive in the over communicated society, is the over-simplified mind. What really matters are the perceptions that exist in the mind.Either your offering is special or your target groups. Here I conclude some steps: 1. Carve out your USP(unique selling point). 2. Analyze your market profile precisely and find thespecial need or target a niche market segment. 3. Match your USP with yourtarget groups. 4. Choose a proper method for delivering brand value. That is to deliver value to your market at the highest level. Andyour positioning is done!
The survival of the fittest!Marketers all know that products have their own life cycles. So do brands! In marketing philosophy, it means that we have to adjust branding strategies in keeping pace with the brand performance and market demands. More importantly, brand positioning strategy needs a better adaption when entering an entire new market, simply because the new consumers are totally different from the previous ones.That explains why branding masters often call brand positioning an experiential viewpoint. The image of a brand within the consumer's mindhas never been a fixed impression! Instead, what we position our brands in consumers’ mind are often dynamic and changing, and more importantly differentiates across countries and cultures, and specific consumer needs.A common sight in international brands, differentiated brand positioning strategy is adopted overseas and in China. Take the well-known fast brand KFC for example. Needless to say, this brand is an internationally known for its brand slogan “we do chicken right”. When it firstly entered in China, this brand concept worked well, and the Chinese market is addicted to this tasty foreign fast food brand, just like in other countries. However, Chinese people have their own eating habits, which seem healthier, and we more often eat out as a family. What makes KFC clever than other fast food companies is that they noticed these special market demands and soon adjusted their brand position to come closer to a Chinese style and have shown us “they do chicken right also in China”, by bringing as a new fast food brand concept, which is more about health and family gathering! Along with the new localized menu, such as family meals, vegetable soup instead of soft drinks, steamed rather than deep fried, and etc, the new KFC worked out and there are more than 3000 outlets across China, which is twice more than its biggest competitor – the McDonald’s. This perfectly explains the theory of the survival of the fittest.To conclude, what I mostly want to point out in this article is that China is a totally different market to position our brand! It is well worth to conduct market research before working out any branding plans. For example, we need to study the younger generations who are bursting with enthusiasm for "new", "cool" and "fun" branded products, or the typical urban Chinese consumer who have reached a level of maturity and feels a desire for change.In my next chapter, I will further work on the study for the Chinese market, hopefully to help you better shape the brand message based on a proper positioning strategy. See you soon!
The copyright of this article is belonged to Easywei Marketing & Consulting Co, Ltd. Easywei is a leading integrated marketing consulting firm in China specialized in fruit business, and used to work for ASOEX and OXEC Beijing to promote fruits from Chile and fruits from Peru. For more information about Easywei, please look up our website: www.easywei.cn
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