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IHAVEANIDEA.ORG > articles >  It’s All About Character, Roots and Characters: Marketing in the Middle Kingdom

It’s All About Character, Roots and Characters: Marketing in the Middle Kingdom

Posted on March 21, 2013 and read 3,775 times

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Bilbert Its All About Character, Roots and Characters: Marketing in the Middle KingdomWilbert Kragten
Managing Partner
BSUR Shanghai

China is moving more toward the middle of the world and it is living up to its authentic Chinese name. The Middle Kingdom continues to grow at a nice 8 points per year, it is the largest automotive industry by now, it has a new president (this week) for the next 10 years ,and the losses made elsewhere in the world are recovered by the profits made in China.

Welcome to the Middle Kingdom where consumers are positive, growth continues and where status and money continue to drive the purchasing power beyond parity. And with many companies going East (or West, if we talk about the USA), there are some obvious marketing and brand rules to follow for those who are still considering the move. Joining the growth in China is very attractive, but it will require a concerted and long-term effort. So, let me make the start a bit easier, as it will be difficult anyhow.

The first 10 rules (of a long list):

1. Your roots are important. It’s half the brand story.

The best beers and cars are from Germany (who said drinks and driving don’t go together?), luxury is from France and Italy, and best baby products are from The Netherlands. Germany represents solidity, reliability and technology, France is sophisticated, Italy stylish and the Dutch tend to be simple and reliable. Chinese consumers appreciate origins and where brands come from—as most products were imported at first—and much of that story can be translated into the brand world or brand story. Imported BMW’s are more expensive than locally-produced models, and rank higher on the status ladder. Locally-made or purchased Louis Vitton bags are less preferred than from its original place in Paris. Who you are is equivalent to where you are from, and it’s very relevant for the marketing of brands.

2. Brand name…it’s all about character and characters.

To state the obvious, the vast majority of Chinese consumers don’t speak or read any Latin or Anglo-Saxon based language. It’s Mandarin (or Cantonese and the likes) so it’s the characters, not letters. The major difference with name exercises is that the brand name cannot be translated directly but should be created through a combination of characters and with meaningful concepts. Each character represents a sound and combined it can sound like Gucci or Nike, for instance. But more importantly, it’s about the meaning of name. To us, Nike or BMW in English does not mean anything (ok, Nike is a Greek god), but the meaning of BMW in Chinese is beautiful. Bao Ma (宝马) means Treasure Horse, as the ultimate in driving. Coca Cola (ke kou ke le 可口可乐) means ‘nice to drink and it makes you happy.’ How’s that for a name for a sugar syrup?

Since we came to this point, take note! Register your brand and trademark. Apple paid a high price for not doing this (around $60M). It’s well worth it to register the Chinese trademark when entering China and claim the legal right for using the trademark for the years to come. Otherwise somebody else might do it for you.

3. The real deal is real, not fake.

Within 10 years (or sooner) China will be at the same level as the USA in purchase parity power. Today it stands at $4.8 trillion and claims the number two place in terms of consumer market. And China will grow more. With a stable political environment and a positive consumer attitude, consumers will spent more and up-trade.

4. Aim high for margin.

Fish where the fish are, one of those old-timer marketing statements is back in swing. The money is in the premium segments as consumers are up-trading. Look at the beer market. Heineken recently announced that they will leave the mid-price segment and concentrate fully on the premium segment with Heineken and Tiger, as the real growth is currently in the Premium beer segment. With brand margins are 4 to 5 times higher, it makes the long-shot much more bearable. Especially as the number of brands shot through the roof too (today you can easily find 300 or 400 international beer brands available in China).

5. Sell = Online.

China has around 600 million internet users, and within the next 2 years it will grow to 700 million. Internet usage is intense; on average 3 hours per day is used for social purposes like Weibo and Youku, whereas Taobao, 360Buy and the likes are the place for shopping. Be informed that 85% of the users see the Internet as a reliable source of information for purchase decisions. One can only conclude that online is essential for brand building and sales.

6.  Sell on Taobao.

Looking for a product to buy? Then it is Taobao. A webshop/platform which handles 80% (4 out of 5) of all internet purchases in China. Let me repeat this in other words: 600 billion RMB turnover (better get used to the RMB conversion rate sooner than later) and 30 million products in the shop. The company behind Taobao has ambitious plans as they announced a delivery service throughout China within 8 hours. China is big, Taobao is big and it’s all online. Sales are online and online is Taobao. Some brands actually use these new platforms in a new way. The Smart car was launched in 2012 online and sold the 399 cars online within 48 hours. How smart.

7. Set up shop in Tmall.

Setting up shop in China is a shop in Tmall, the dedicated brand section on Taobao. With 30 million products or SKUs, it’s hard to be noticed, especially when you are the real deal amongst some fakes or less genuine. Tmall will deal with this and offers consumers a genuine and often special product portfolio with a guarantee that these products are genuine. Shop in Shop online. Offline thinking goes online. Even Lamborghini has a shop on Tmall, although sales records have shown that zero cars have been sold through this site. Brand presence and engagement, however, are crucial in every corner of the sales world in China.

8. Offline is essential for the brand experience.

While consumers buy online, it doesn’t mean one can forget about offline, trade marketing and visibility in the retail sphere. Offline brand experiences are still crucial for consumers as they want to see the products, compare, feel and touch them, whilst having unique moments hanging out with friend and families. 50% of the brand purchases are made based upon off-line experiences.

9. Make China a priority.

Entering China should take place with China-relevant products. That means one needs to understand the consumer and consumer behavior. Like Audi did by changing the backseat into a business seat, as successful managers sit in the back not in the front. In Western markets, consumers use anti-aging products to de-mark wrinkles and spots, generally starting around the age of 25. In China girls use the products at a much earlier age to avoid getting wrinkles and secondarily, to look nice and whiter. Clarins and Lancôme made popular whitening products in China, even though we not have seen such as in Europe.

10. Ride the wave of the rapidly evolving digital lifestyle of Chinese consumers.

By now, WeChat is taking over the USA and soon it will replace Whatsapp, Viber and other apps on the smartphones also available in other parts of Europe or Latin America. WeChat, known as Weixin (微信) in China, is one of those brands developed in China and created for the world. Like Huawei or Lenovo, it takes the world by storm. Forget what you know about online and start from scratch, as China is rapidly evolving its digital landscape. WeChat is already the next powerful tool considered by many premium and top brands as a more intimate and exclusive communication platform. For our brands, big or small, the potential of this mobile app is vast and to be explored.




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