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Innovative brand experience adds to differentiation, competitive edge

Innovative brand experience adds to differentiation, competitive edge

Market share growth, premiumization accelerates

Lynn Zhang

Managing Director

Kantar TNS China

Lynn.Zhang@kantartns.com

Building brand equity to accelerate market share and the ability to command a price premium depends on three components: being Meaningful (meeting customer needs in relevant and emotional ways); being Salient (coming to mind quickly when the consumer is considering a purchase); and being Different (being seen as distinctive, event trend-setting).

Here’s the challenge: Most Chinese brands are stronger at being Meaningful and Salient than they are at being seen as Different. However, in the intensely competitive Chinese market, Difference increasingly provides the competitive advantage for increasing market share.

Innovation is key to building Difference. Product innovation is an important way to achieve Difference, but it is not the only way. Difference in marketing communication, customer experience, and business model are just a few of the other ways that brands can increase Difference and competitiveness.

Although creating more products and services is important, it does not guarantee incremental growth. Instead, delivering a holistic experience that extends beyond the core functions of the product/service, creates better differentiation and expands growth opportunities. Today, it is vital to find new ways to excite consumers by offering new experience that seamlessly links the core product/service to significant components of a broader consumer ecosystem to create simplicity and subsequent consumer excitement.

It is necessary for brands to understand how customers engage with the brand and how it fits into their lives. Then, with innovation, it is possible to delight consumers with a new brand experience that integrates the brand into their world in a relevant and memorable way, which leads to a new brand promise. Across all categories, brands have the opportunity to differentiate by creating great experience.

For example, with its Reserve Roastery concept, Starbucks is creating a completely new brand experience for Chinese consumers. These large exhibition-like locations combine the drama and educational experience of seeing an actual coffee roasting operation with the warm atmosphere of a coffeehouse and retail shop.

Consumers can start from hearing the unmistakable sound of beans being freshly ground, to inhaling that rich aroma and sipping the perfect blend, brewed just right. The entire new customer experience strengthens Starbucks’s differentiation. Chinese consumers view Starbucks as a more advanced, digital, and premium brand, rather than just a coffee shop chain.

The Starbucks Roastery responds to a challenge that most Chinese brands face: Difference.  Difference enables brands to command a price premium in a market where more consumers seek higher quality products and have the money to pay for them.

Innovate across touchpoints

Being seen as Different in market communication increases brand competitiveness and accelerates brand growth. Particularly in China, the brand Difference and experience needs to be communicated coherently and seamlessly across online and offline touchpoints.

Brands need to understand how best to use social media as it evolves from platforms for sharing information to platforms for also finding expert advice; from platforms purely for communication to platforms linked to T-mall, Taobao or other commercial opportunities.

A recent Kantar whitepaper about the centennial generation (people born between 1994 and 2010), found that social touchpoints play pivotal roles in all stages of centennials’ shopping journey. Compared with older generations, centennials are 1.5 times more likely to know a brand through a social touchpoint and eventually buy it. More than 30 percent of centennials will do research of a brand/product to know more about it. They trust the information they obtained through their social interest groups, where there are a lot of active Key Opinion Leaders (KOLs) of specific areas. Centennials are eager to share their shopping result or/and experiences because sharing contributes to their identity-building efforts.

Celebrities and KOLs are commonly used in marketing in China. However, the Kantar whitepaper also has found that celebrities and mega KOLs are useful only in the early stage of Chinese centennials’ shopping journey, as 30 percent said they would be influenced by celebrities and mega KOLs. During the later stage of shopping journey, mini KOLs or amateur influencers have more meaningful impact on centennials because their narratives are closer to everyday life. Brands should consider the innovative ways in multiple touchpoints to build brand difference.

Brand Building

Action Points

  1. Link brand experience with brand purpose

Start with the brand purpose, what the brand stands for, and make sure that all aspects of the brand ecosystem and experience fit with the core purpose in a meaningful way.

  1. Personalize the experience

Deliver a personalized connection between the brand and the individual customer across the ecosystem.

  1. Integrate experience across all experience points

Engage with consumers well before they typically engage with the brand offer. Make them familiar with the brand by consistently delivering at all points of interaction (decision points, touchpoints, experience points).

  1. Create opportunities to share

Millennials and centennials, especially, love to share experiences with others, and this naturally provides brands with an opportunity to spread advocacy. The experience should first be share-worthy and, second, easy to do. Make it easy to share across digital platforms.

  1. Build on the halo effect of the experience

Consumers love happy experiences, and happy/positive experiences become memorable experiences. Find ways for the brand to leverage the halo effect of the positive emotions associated with the experience.