Winning in China and Going Global

Chinese companies have a resource coveted by many other companies the world over:  the largest and most prosperous market on earth. They also have something else that companies in the rest of the world may never have: a thorough understanding of this vast market place. Even so, we’ve observed multinational companies entering China and achieving outstanding results year after year. This has led us to ask the questions: How are these multinational companies overcoming cultural differences and continuing to perform well? And how should Chinese companies confront this same challenge when going global?

Global consumers do not have an entirely positive understanding of “Made in China”, companies have developed into relatively mature entities, and the whirlwind of globalization is increasingly intense. When facing these three powerful, interrelated challenges, every Chinese company must reconsider what makes up a sustainable and robust growth model.

The concept of building a brand is already widely embraced by Chinese companies as it is an important step for Chinese companies to take in achieving their global goals. Brand management and innovation and the promotion of brand value are winning moves for future Chinese companies in meeting the challenge of globalization. But how do you establish a brand that surpasses the value of the product itself and one which is full of good intentions and promises? What important role will the brand play in the future development of the company?  

What role does Brand Value play in Company Value?

Brand value represents the consumers’ trust in a brand. Only by having this trust can we expect consumers to be loyal to a brand. In previous times of material shortage, the meaning of a brand was nearly equal to fame. Fame almost meant owning a share of the market. At that time, “brands” were a way in which to open consumers’ pockets, create taste, or generate sales success. Today, brands have a more important role in helping to maintain a customer base, creating repeat purchases and even PR.

Companies should return to brand basics and recover consumer “trust” in a brand. Aside from “trust”, the building and maintenance of “relationships” cannot be ignored in the creation of brand loyalty and public approval. The object with which we must communicate is not just the brand’s target consumers, but also real, living people. The process of establishing brand value is the establishment of a relationship between brand and consumers and the process of gradually making that relationship closer. Having this understanding is the first step to building a brand.

Media Resource Management and Brand Value Marketing

With the need to establish a “relationship”, a company’s brand marketing department faces more complex challenges than before. Chinese companies are traditionally oriented towards the media. This one method resolved several types of problems for companies. For example, the marketing strategies and media resources are the same when a new product comes on the market or when a brand continues advertising an existing product.

Currently, the methods by which consumers may access information are increasingly fragmented, the costs of traditional mainstream media are increasing, and the use of new media does not yet have the maturity of traditional media. These factors all cause consistent increases in brand marketing budgets without a noticeable increase in results. Therefore, the issues companies need to face must be resolved in a focused way and this is more important today than ever. 

From a media management perspective, Chinese companies in the past usually created special work groups with specialists managing different kinds of media resources. In a time with a rather narrow media environment, this method was relatively effective. But today, this method ignores the true form in which consumers receive information. For example, do TV and online media affect each other? Can these effects be managed? Who manages them? The “relationship” differs between consumers and the different media platforms. Therefore, we think that differentiation in contact methods and the management of different media resources and marketing content will be highly effective now and in the future. 

How do you find and establish a relationship between a Brand and a Consumer?

As described above, in today’s extremely complicated and competitive environment, a brand or a company must permanently establish itself in an unassailable position. It is extremely important to establish a long-term, stable relationship built on trust with a consumer, but establishing this kind of relationship is also extremely difficult. Simply put, the establishment of a successful relationship is based on three things. Find the “right” person at the “right” time and say the “right” things. In marketing or media jargon, that is finding the “right” target audience and communicating the “right” message at the “right” opportunity.

Opportune consumer communication allows brands and companies to get twice the reward with half the effort. However, the establishment of a good relationship cannot be achieved overnight. The brand and its communication content and methods should be different for consumers at different stages in the relationship in order to communicate effectively and allow the relationship between a consumer and a brand to advance and last.

In the process of judging what is “right”, an understanding of the brand, market and consumers is especially necessary. This can help Chinese brands better understand consumers, build deeper, longer relationships with them, and create more effective communication plans. Every year, Maxus and GroupM invest heavily in surveys and research to achieve this. As more advertisement-based brand strategies start to reach small and intermediate markets, communicating and establishing brand relationships with China’s vast market of consumers becomes a topic of interest for many company executives striving to expand their Chinese market. Their understanding of China’s market, however, is far from complete. In addition, the people with whom companies must communicate are increasingly dispersed. For example, the increasing number of internet users requires that we have sensitivity and insight into the “digital natives”. GroupM’s special study named Digital Tribes was developed precisely for this purpose. Such studies allow us to catch up with the pace of internet users and imitate how they transmit information, which gives reliable, definite objectives to a media strategy.

We are also gradually stepping into an interactive age. The development of technology and media gives consumers more choice and greater autonomy. In an age of digital/mobile media, we face the challenge of how to communicate brands to consumers. For example, the development and influence of microblogs quietly rose and appeared quickly, so we should know how to use them. Here, companies under the WPP umbrella, including GroupM agencies, have already begun studies to show the lively prospects in China’s microblog usage behaviour and find hidden marketing opportunities that brands can exploit.

Surveys and research are not the goal; they are the tool. We are still working hard to draw from more far-sighted research to provide assistance for brand communication strategies. We use lively and diverse consumer insights to stimulate more influential communication plans.

How Chinese brands go global

Following the increasingly rapid development of the Chinese economy and continuous globalization, going global has become an aspiration for many Chinese brands; it is a goal that many brands have worked hard to pursue. But we must sadly say that we have not seen many Chinese brands receive acceptance and approval on a global scale and become true global brands thus far. Disregarding products, costs, human resources, and other factors and speaking only about brand and marketing, Chinese brands still have a long way to go.

Of course, for many Chinese companies, foreign markets are completely unfamiliar. Starting a marketing campaign in any market requires great insight into local consumers. For these companies, learning this lesson in a short period of time is easier said than done. Right now, they need to draw support from outside. Through cooperation with experienced and professional agents, the companies and their partners can open new markets together. When many multinational companies entered the Chinese market, they made the same choice, and the results were extraordinary. Thus, for many Chinese brands that want to enter the global market, how to select and manage a professional marketing partner and how to work with this partner in the context of global communication becomes the primary challenge.

Annie.Hsiao@maxusglobal.com

Please see www.maxusglobal.com/relationshipmedia for more information on the Maxus planning process. We combine the principles of communications planning and CRM to deliver deeper relationships with consumers.