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Marketing to Brand China

“Made in China” appears on virtually everything we buy these days, from underwear to vacuum cleaners to heavy-duty machinery.

The authors.
The authors.

China’s pool of inexpensive manpower has made China the outsourcing favorite for every type of product marketed worldwide.

But branding and packaging professionals have a new and challenging target: The development of new brands and the renewal of old ones marketed within China itself.

In a recent report, Bernstein Investment Research & Management states: “Foreign firms may continue to shift production to China and increasingly look to China markets for growth. However, they will not go unchallenged in their pursuit of Chinese customers. China will produce world-class brands and they will challenge incumbents in China and around the world.”

How will this affect the need for branding of goods produced and marketed in China, as well as goods imported from the United States and other countries into China? How can marketers in the United States and other western countries succeed in offering well-established brands to the 1.3 billion people who inhabit the China Republic? How can brand and package designers help these companies to prevail?

The meteoric growth of the China market cannot be ignored by anyone with responsibility for developing and maintaining brands that are offered, or are about to be offered, worldwide. The fact is that China is a marketing target for an increasing number of manufacturers around the world. According to the McKinsey Quarterly, packaged foods alone constituted a $47 billon category in China in 2004 and are expanding by 8% a year. That’s a much faster rate than we see in developed markets. It will require marketers and consultants to listen and learn from the experiences of those familiar with the complexities and incongruities of the Chinese market.

One thing is clear: Simplistic views held by anyone involved in marketing brands in China will kill any brand that ignores the realities of the Chinese consumer’s mind-set. A “one size fits all” mentality will not work in China.

This evolution will challenge the ingenuity of marketers and those involved in branding and package design. They will need to explore and adjust their normal thinking to the complexities and differences of trading in China.

“Foreign firms typically come to China with superiority in the “softer” skills of capitalism, namely marketing, advertising and brand management” says the Bernstein report. “But these superior soft skills have not always translated into competitive advantage for foreign firms in China…Chinese are an entirely new set of customers and even within China tastes often vary by region.”

For one thing, China has many of its own brands. A number of well-known brands dominate local markets. For example, according to Forbes magazine, China’s Haier brand covers, among a large variety of consumer and industrial products, 250 models of home appliances. These include dishwashers and microwave ovens that are available not only within China, but at major retail chains and appliance dealers in the United States and elsewhere.

Other well-known Chinese brands rely on the history of many years of use in that country. Examples are Maotai wine, Beijing Tongrentang pharmaceuticals, and Quan Ju De, a restaurant famous throughout the world for its Peking Duck.

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