China 2015: HIGHLIGHTS | Take Aways
DEFINE CLEAR BRAND BUILDING PRACTICES
1. DEVELOP MEANINGFULLY DIFFERENT BRANDS
Chinese consumers now perceive many Chinese and multinational brands in China as almost comparable in the three BrandZTM aspects of brand equity, the consumer predisposition
to choose one brand over another. Consumers see Chinese brands as salient (coming quickly to mind) and meaningful (having affinity and meeting needs). But consumers see Chinese brands as less different (unique and trend setting). Chinese brands need to become more meaningfully different, which is the essential ingredient for increasing brand value.
2. INNOVATE AND CREATE
Brand China, the summary perception of Chinese brands, no longer suggests only inexpensive merchandise of questionable quality. Youth outside
of China already associate Chinese products with innovation. Chinese brands have an opportunity to combine their reputation for affordability with innovation and creativity, a competitive value-for-money proposition.
Lack of consumer trust is a worldwide issue that cuts across categories.
The erosion of trust has stabilized in China. The rebound of trust is now up to brands. Chinese consumers place
high importance on trust. They want products made with quality and safe raw materials and concern for the environment. Brands that build and sustain trust will accrue an enduring competitive advantage.
4. ADVANCE THE CHINESE DREAM
The Chinese Dream is about building a more equitable and prosperous modern nation that draws strength and from its 5,000-year-old civilization. Chinese and multinationals can advance this dream
with products and services that help individuals live healthier and more comfortable lives. Serving the Chinese Dream strengthens a brand by linking its mission with national and individual aspirations. This is a high level mission that companies need to pursue holistically, aligning all departments – not only the marketing and brand teams – behind its fulfillment.
DIGITIZE BRAND BUILDING TOOLS
5. ANALYZE, STRATEGIZE AND EXECUTE – QUICKLY
As the key driver of China’s economy shifts from production to consumption, it’s not possible to succeed without understanding consumers in depth. Big data and analytics will yield important insights that require rapid execution. And rapid is the operative word. In the west, analyze, strategize and execute describes a linear process. In China, these functions often happen simultaneously, and on the run.
6.DIGITIZE PRODUCTS AND SERVICES
Brands need to digitize their products and services. It’s a necessary step for meeting consumer expectations for product and service functionality and for effectively communicating with consumers. Digitization crosses all categories, from the smart products in the home appliances and technology categories to the Internet finance products and services, which are found primarily in the banks, technology and the telecom provider categories.
7. ENGAGE CONSUMERS O2O
Seamless online-to-offline consumer experience is a prerequisite of brand success. Consumers are mobile, ecommerce is sophisticated, and Internet players are competing to build the most useful ecosystems. Regardless of category – from alcohol to banking to retail – brands need to provide well-executed O2O programs that engage consumers conveniently and efficiently all the time.
8. ALIGN DIGITAL MEDIA WITH CHANGING CONSUMER HABITS
Chinese are watching mobile devices not just when they’re out and about, but also at home. Multiscreen users are online about eight hours a day. Two- thirds of that time is divided roughly
between smartphones and laptops. TV occupies about an hour-and-a-half. For the first time,
TV comprises less than 50 percent of media budgets. Internet makes up about one-third. Brands need to devise media plans that match where the consumer is paying attention.
EXPAND BRAND BUILDING INITIATIVES
As the Chinese market matures, brands face the opportunity – and sometimes the necessity
– to add new lines or enter
new categories. Whether taking this action proactively or in response to encroaching competition, Chinese brands have the ability to act nimbly in ways relevant to their consumers, and they should.
10. PURSUE PREMIUMIZATION
Premium is no longer the exclusive realm of luxury brands. As Chinese consumers become more prosperous
and discriminating, there’s a segment of the market that is prepared to pay for products of greater perceived quality and difference. Meeting the needs of these consumers holds the potential for more sales and higher profit margins.
11. GO GLOBAL
For decades consumers have purchased products made in China and branded in the West. Chinese brands increasingly are earning recognition and profit for the brands they create.
The publicity surrounding
the Alibaba IPO (Initial Public Offering) widened the window of opportunity. Alibaba’s fame can help raise the profile of other Chinese brands, when they need to firmly establish themselves in overseas markets.
The rules of engagement are changing for all types of brands: SOEs (State Owned Enterprise), MNCs (Multinational Corporations), and market-driven brands. The more market-driven economy and open policy forces SOEs to be consumer-responsive. MNCs are learning when to partner with Chinese brands to more rapidly penetrate China and when to retain the multinational brand name for its premium appeal. Meanwhile, market-driven Chinese brands across most categories, and especially in technology and retail, are among the world’s most valuable brands. Being a strong competitor in China’s changing economy sometimes means being strong enough to collaborate, when working together, rather than acting alone, creates a superior product or service.