How to Sell in China: Three Golden Rules

by Tom Doctoroff, JWT, 13 November 2009

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topics:
Management

tags:
brand management Changhong DeBeers face Haier Handycam JWT Nokia Sony Stabucks TCL Tom Doctoroff

The Chinese worldview, not to mention its brandscape, is profoundly different from Western -- indeed, all -- markets. In my eleven years on the mainland, I have not encountered a single instance where significant modifications to positioning and marketing mix are not necessary.

This, of course, does not preclude the feasibility -- yes, desirability -- of consistency with a global Brand Idea. Nike should breathe a “Just Do It” spirit, everywhere. Apple should celebrate “Think Different,” everywhere.

But, to maximize relevance and trigger loyalty that results in a sustainable price premium, global brands need to be brought into alignment with Middle Kingdom cultural imperatives and operational realities. This begs the question of what these differences are.

At the risk of dramatic oversimplification and indulging in sweeping generalizations, here are a few “golden rules” marketers must be sensitive to before landing on the mainland:

Maximize public consumption to justify price premiums;
Simplify communications/benefits to enhance comprehension;
Extend brands downwards to generate both scale/affordability and margin.

Maximize Public Consumption

In China, a Confucian society torn between stifling regimentation and trenchant ambition, consumers regard brands as tools for success. “Face,” the primary currency of upward mobility, is rooted in status projection, generating societal acknowledgment for one’s ability to scale the socio-economic hierarchy.

This is why brands that, directly or indirectly, are publicly consumed are able to command huge price premiums relative to goods used in private or within the house. All leading mobile phone brands, for example, are international. Even in Tier 5 cities and the rural fringe, Nokia commands a 40% market share, despite significantly higher retail prices relative to local competitors.

Sony’s Handycam, a product brandished outside the home, is a brand leader. However, its televisions, albeit highly aspirational, struggle to transcend niche penetration levels. The leading household appliance brands are, without exception, cheaply priced domestic brands such as Haier, TCL and Changhong.

Internal vs. external benefits. The “public display” imperative leads to fundamental positioning differences versus what works in Western markets. As a general rule, benefits should be “externalized,” not “internalized.” Even for luxury goods, unadulterated individualism -- reinforcing “what I want, how I feel” irrespective of societal consequences -- does not work.

Bath gels should not promote “sensorial indulgence” in the shower. They should “stimulate” the user to begin the day with a kick, ready to conquer the world. Beauty products must help a woman “move forward” -- with quintessential Chinese feminine understatement, of course -- and enhance her ability to “open doors” professionally or “control” her man.

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