Part 2: Innovating Your China Brand Strategy (360 approach)

03 Feb 2016|Added Value China

With the rapid pace at which the China market is changing and increased competition across many industries, implementing an effective brand strategy is vital for both global and Chinese brands. Instead of taking the conventional approach, using online and offline channels (digital/advertising/communications etc.) and targeted promotions, a brand should take a step back and spend time developing a solid entry strategy – in a nutshell a 360 approach that looks not only at the category in question but also combines valuable consumer insights with a strong cultural understanding. Being in tune with Chinese culture and consumers’ real needs and desires will help brands to fine-tune their positioning and better understand the market.

Market entry: where brands should play and key factors for success (*Content provided by CBBC)
According to the China-Britain Business Council, China will be the world’s largest ecommerce market for imported products in the next five years. Over 200 million Chinese shoppers are expected to purchase £163 billion’s worth of imported goods online in 2020 – a 12-fold increase from 2014 and light years beyond the £1.3 billion in 2010. With the rise of China’s discerning middle-income consumers, retailers stand to benefit from a strong desire for high-quality and niche foreign products. Chinese people are skipping the in-store experience for a virtual way of shopping via smartphone. Chinese e-tailers have a sophisticated offering on mobile which makes browsing easy and combining this with accessible payment methods like Alipay makes the purchase process smooth, helping with conversion. Singles’ Day is one prime example where companies have an opportunity to gain access to increasingly wealthy Chinese consumers, who make up nearly one quarter of online shoppers worldwide. Brands from around the world took RMB 91 billion on China’s Singles’ Day, the world’s biggest online sales promotion from Alibaba, China’s e-commerce giant. More than 5,000 international brands from 25 countries participated in the 11/11 “Global Shopping Festival”.

However, Singles’ Day is about more than just Alibaba. Brands need to be aware that marketing in China is about addressing a real need and not just flogging products to an emerging middle class. The challenge is keeping up with increasingly sophisticated shoppers who relentlessly research and solicit word of mouth before purchase. The Chinese market is evolving at breakneck speed, which makes it vital for brands to constantly innovate, keep abreast of the latest industry trends and adapt their marketing strategies accordingly.

Cultural Strategy: tap into the evolving cultural landscape to re-energize your brand positioning
In order to successfully enter the China market, an approach which combines both qualitative consumer research and a strong cultural strategy will win over conventional market research. In a nutshell, by tapping into the evolving cultural landscape in China, a brand will be able to inspire locally relevant expressions of the core positioning and uncover how the positioning could translate more effectively into local culture, thus making them stand out from the crowd.

Consumer insights help marketers understand what’s really going on in the subcultures where brands live. It focuses on the diverse social, cultural and linguistic elements which affect the interpretation of culture and ultimately the influence it has on the outcome of research projects. Culture essentially means the events, attitudes and experiences that form the object of the research and is an area that is often misunderstood. Brands need to pay more attention to the specific local cultural processes that help formulate the research process. The close relationship that exists between cultural understanding and consumer insights is very important when it comes to not only the methodology and process but also the eventual outcomes.

Culture constantly makes its presence felt in the research process from the initial planning stage through to analysis and interpretation. Consumer insight provides an in-depth understanding of the experiences and perspectives of consumers and therefore a basis for the development of new culturally relevant strategies. Merging both qualitative research and a cultural strategy will enable brands to rise above their competition.

Consumer Insight: deep dive into the hearts and minds of consumers to fine-tune your brand strategy
Consumer insight is a vital channel for establishing why a customer makes a decision and understanding the underlying thoughts and perceptions that drive your market. By getting under the skin of consumers’ real needs and desires you will be more able to fine-tune your brand positioning for maximum relevance; essentially understanding which expression is most powerful for consumers and how this can be developed most effectively.

Consumer insight not only enables you to create more effective strategies for your brand and overtake your competition but it also offers a number of other advantages. Firstly, it can help a brand to differentiate itself from the competition. This allows it to build loyalty and expand its market influence by uncovering what consumers find valuable and why they might choose your brand over another. Secondly, it allows brands to discover how their market determines the core values and quality levels so they can align their products and services accordingly. Thirdly, it will help to highlight brand weaknesses to provide easy ways to improve performance and defend from key competitors.

Written by Panos Dimitropoulos, Account Director of Cultural Insight, and Sam Woollard, Client Development Director, with support from the Added Value China team, Kantar Retail and the China-Britain Business Council.

Image source: Global Shopping Festival 2015

*Data collected from China-Britain Business Council (CBBC)

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