Global marketing brand strategies show effective results,
but in most of cases, they cannot be applied on local
markets...Especially when focusing on the Chinese
environment. China is widely viewed as being one of the
world's fastest growing markets. In pursuing this rapid
economic expansion, Chinese companies have now begun to
recognize the importance of brands, and their development.
Brand capital is one of the key drivers of growth and
wealth in the business world. Creating and managing brands
in China has become a crucial component to success in the
China market. We will try, focusing on example of different
nature, to reach a recipe that both limits the level of
risks that can occur when setting up a brand in China, and
that actually adds value to any kind of business.
In industries going from food retailers to luxury emerging
products such as wine, China's "brand war" is on. We all
are consumers, and as consumers living in cities such as
Shanghai, Beijing, Hangzhou, Hong Kong, Guangzhou... try to
count the amount of brand communication you are confronted
to, in your daily routine. Bus, subways, taxis, boats,
trains, construction sites, roads... every mean is good to
catch the eye of a potential customer for a glimpse of a
second. May it be global brands or small to medium
enterprises, all have a good card to play in this
advertising game.
Why does localization matter? The answer lies in a unique
combination of market characterists; the product, the
competition, and a few other factors. The rapid and dynamic
pace of the market environment in China since 1978 is well
known. So one could understand the need of topicality when
working on brand management in China. Let's take the KFC
example. In 2007, KFC had just over 1,800 restaurants
serving in China. KFC's overwhelming and unexpected success
was the result of combining the right timing and location
plan, while leveraging their brand's position. We could
also mention their strong organizational implementation
capabilities, and a couple of well planned strategic
"hits". This to point out that, KFC's entry in 1987 was a
success because they did not attract Chinese people with a
custom made American product, but they opted for a more
flexible market approach.
If we now focus on another example, the Henry Wine Estate
based in the U.S, has had trouble launching itself at first
when wanting to export their red wine in China. However
after having requested local expertise, he found that he
hadn't developed his brand in the most "Chinese" effective
way. Wine, as one of China's new luxury products in vogue,
had to be marketed, packaged and branded in a very specific
manner. After having properly invested in that sense
($250,000 efforts with local partners), and having
repositioned its brand to a much higher profile of
customers, they finally managed to build solid foundations,
and quality partnerships. Implementing a comprehensive,
flexible, and localized business strategy seems to be one
answer to Brand relevancy in China.
The right mix is a big question in all big consumer goods
companies (i.e. the balance between what parts should be
global and what parts should be local). For Kodak in China,
new products, quality of products and services, brand,
value propositions and Kodak values are global while retail
concept, advertising, promotion and packaging are
localized. Knowing that when a brand owner seeks to appeal
a new local environment, he creates the risk of losing
previous brand consistency.
As western brands, Chinese brands are amazingly
competitive. Li-Ning's "Anything is possible"(sport brand),
has learned all about large-scale advertising, now
recognized by million of consumers. Lenovo (computer
technology) is one of the top Beijing Olympic sponsors.
Throughout all this excitement around brands in the market
place, we could ask ourselves, which brands will they stay
in the front seat, how long will they stay there, and what
will be the costs of them staying in power?
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Tim Lyons is Executive Director of Manage China. Manage
China is a company that helps foreign firms who are
interested in doing business in China.
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