China 2016: INTRODUCTION | TAKE AWAYS
12 Prescriptive ideas for building brand strength in today’s China
Mobile is ubiquitous in China, a way of life, not only a medium of communication. Brands need to be present on mobile not simply as purveyors of products and services, but as partners helping consumers with daily living. The brand in all its aspects needs to be represented on mobile: advertising and marketing, social communication, shopping, shopper marketing, purchasing, and payment. The brand question in the West might be, what is our strategy for mobile? In China, with some overstatement, mobile is the strategy.
2 Communicate Difference
Chinese brands have rapidly increased market share across most fast moving consumer goods (FMCG) categories. They accomplished this feat at the expense of multinationals. Several factors drove this change, not least of which was heavy media spending to raise awareness. But now that many Chinese brands have become well known, sustaining sales requires also being Diferent in a Meaningful way. Chinese brands have been less efective at explaining how they are functionally or emotionally unique. That is the critical next step.
3 Build Trust
Trust is an efective way to build Diference in China. Rebuilding brand Trust has been a global issue since the financial crisis of 2008 and 2009. In China, product performance and safety issues over the past several years eroded Trust. But Trust is an important diferentiator in China. For consumers worldwide, brands that are seen as creative and desirable are mostly likely to be viewed as Diferent. In China, Trust strengthens Diference.
4 Advance the Chinese Dream
Brands that focus exclusively on their products or services operate from too narrow a vision. Consumers believe in the pursuit of what the government has called the Chinese Dream, the efort to create a China that is more prosperous and equitable at home and more highly regarded abroad. Brands play a role in the realization of this Dream. Consumers are likely to feel more favorably toward brands that contribute to the national welfare with products and services that are genuine, safe, and exist in harmony with the environment.
(For more information, please see the BrandZ™ report, The Power and Potential of the Chinese Dream.
Innovation does not necessarily mean total reinvention. Innovation means introducing something new, a product or packaging, for example, which did not exist before. Innovation is not simply an update, and it is not a one-of. Innovative brands introduce new ideas with enough regularity to create a sense of anticipation among customers. Innovation helps build brand value and it correlates with market penetration.
6 Raise the profile
The BrandZ™ China Top 10 grew 3 percent year-on-year in value, while brands ranked 11-to-100 increased over 30 percent. Because of their size and impact, Top 10 brands draw a lot of the media’s attention. But with additional investment in creative messaging and efective activation, energetic brands lower in the ranking have an opportunity to greatly raise their profile among consumers and investors, which is increasingly important.
7 Be best in class
For a while, Chinese brands prospered by creating products that were good enough for the local market or somewhat better for export. Those days, for the most part, have past. Chinese consumers want, can aford, and are willing to pay for more than good-enough products. Global consumers are becoming more familiar with Chinese brands, and purchasing them.
8 Be global, sell local
Except for traditional Chinese medicine (TCM), or Baijiu, the Chinese white alcohol, Chinese provenance is not of primary importance to overseas consumers. In overseas markets, Chinese brands need to raise awareness and build positive impressions. They need to ofer products of global quality, while adjusting for local desires and preferences. Prominence abroad earns a dividend at home when Chinese consumers regard the brand as global rather than local.
9 Seek premium when justified
Despite the economic slowdown and the stock market fluctuations, consumers are willing to pay a premium, when it is justified, especially for FMCG categories like personal care or heathcare. Outside of FMCG, more Chinese brands are adding premium-priced oferings, often less expensive than equivalent items from multinationals. This opportunity for local Chinese brands presents a challenge for multinationals. It is another example of the increasing parity of Chinese and multinational brands in the mind of the Chinese consumer.
10 Expect pragmatic shoppers
More pragmatic now, Chinese consumers expect promotional pricing in certain FMCG categories like household cleaners. In these categories, when they find little diferentiation, consumers treat products like commodities and select the brand that’s on promotion. Brands need to find and communicate a valid point of diferentiation.
11 Mix media effectively
Chinese consumers spend the greatest portion of their screen-watching time on their mobile phones. Many FMCG brands are shifting investment to digital for more targeted and efective reach. In other categories, where mass appeal is still paramount, brands maintain spending levels in TV and other traditional media. TV continues to be a central source for trusted information in smaller cities, and media there is more afordable than in large markets like Shanghai or Beijing.
12 Marry great creative with effective media
Chinese brands have invested heavily to increase Salience, or awareness. And that investment has paid of. In BrandZ™ research, Chinese brands exceed multinationals in Salience. In other words, when a Chinese consumer is considering a purchase in a particular category, a Chinese brand is now more likely to come to mind. At that moment, being selected for purchase depends on having a compelling point of Diference, preferably sufcient to command a price premium. Chinese brands still lag multinationals in Diference. Building Diference requires the right strategy, expressed in a creative big idea, and communicated with a well-conceived media plan.