Next week I’ll be in China for our second annual customer meeting. One of the things that makes this event special is we didn’t try to export the US version to China but rather built an event ground up for China. As Chinese consumers gain affluence, we expect them to act like Westerners and are puzzled when they don’t. It’s why Western marketing efforts often fall short in China.
Tom Doctoroff, head of advertising giant J. Walter Thompson’s China operations, has just published a book called ‘What Chinese Want: Culture, Communism and China’s Modern Consumer.’ A Westerner trying to characterize 1.5B people is a tough challenge but Doctoroff has the right pedigree; he was a recipient of the Magnolia Government Award, the highest honor given by the Shanghai government to expatriates.
In a WSJ article, Doctoroff makes the case brands have to follow three rules to win a following among Chinese buyers:
1. Leverage conspicuous consumption
Luxury items are desired more as a display of status than for their inherent beauty or craftsmanship. As such, products used in public command large price premiums compared to ones used in private. High-priced foreign cars are relatively common but the most popular household appliances are inexpensive domestic models.
According to a study by the U.K.-based retailer B&Q, the average middle-class Chinese spends only $15,000 to fit out a completely bare 1,000-square-foot apartment.
Häagen Dazs leveraged this concept to become the most popular ice cream brand in China. While it is difficult to sell a $5 carton of ice cream to be eaten at home, Chinese consumers flock to their high-profile downtown location stores.
2. Promote external benefits
Product messaging should not emphasize the benefits to the person himself but rather to how others see the person. Beauty products don’t make a woman ‘feel prettier’; they must help her ‘move forward.’ Parents don’t take kids to pizza parlors so they can enjoy the food; parents reward their children with academic “triumph feasts.” Even beer can’t be marketed as refreshing to the drinker,
… in China, pilsner must bring people together, reinforce trust and promote mutual financial gain.
De Beers’ successful repositioned their global slogan, “A Diamond is Forever,” from celebrating eternal romance to representing a covenant between families. The diamond itself is a visual reminder of the obligation.
3. Stand out but fit in
Luxury buyers want to show they have succeeded but remain understated. Audis and BMWs are preferred over flashy Maseratis. Mont Blanc’s six-point logo is popular because it is conspicuously discreet.
Successful brands appeal to Chinese parents by promising “stealthy learning” for their children; this is intellectual development masked as fun. McDonald’s has this figured out:
Happy Meals include collectible Snoopy figurines wearing costumes from around the world, while the McDonald’s website, hosted by Professor Ronald, offers Happy Courses for multiplication.
Even peanut butter has to combine “delicious peanut taste” with “intelligent sandwich preparation.”
The so-called American dream seems to be alive and well in China, but brands that miss the fundamental difference in emotions and motivations are not likely to be successful.
Hi Jonathan,
Great posting! Thank you! It reminds me my Global Executive MBA Program at Duke. Why Duke calls this program “Global” is exactly because of what you mean below: you need to understand local history, business culture and consumer behavior. To lead in a global economy, we must be able to not only identify and interpret, but also reconcile the various drivers shaping regional complex business environment.
When we were in St. Petersburg with the program we learned from P&G that Russian consumers don’t save money and spend what they make. One of the main reasons for this characteristic was the instability this country had over the last few decades. The mentality is more “live the moment.. you never know what tomorrow brings”. P&G was one of the few global companies that survived the instabilities in Russia. Dedication to the region, a good understanding of the regional business and consumer characteristics and executing a marketing strategy based on this understanding helped them to survive and prosper in Russia.
– Yuecel
This is a great example of marketing locally, and being sensitive to cultural differences. Anyone have others they want to share?
Excellent piece — reminds me of the stories about luxury brands failing to market certain beauty products because they neglected to understand beauty definitions for women (and men for that matter) are different over there. Skin tones, colors, direct eye contact, and traditional Western beauty/sex-appeal codes are not usually valid in China.
In the world of dog shows, my hobby, Chinese fanciers have changed the game. Several top winning dogs in USA and Europe are bought for extraordinary sums by Chinese folks who will never compete in the ring. They strictly use the purchase as a status symbol.
The side effect is that US and Europe lose the gene pool of the best dogs, and the buyers in US and Europe are not able to afford the best dogs any more.
I have seen this for at least 10 years in dog show world – and now variants of this is playing out in other aspects, including the enterprise world.
Thanks for the post Jonathan
I wonder if this sort of things means the Chinese would be especially interested in various forms of gamification. Badges, awards, etc. I might try reconsidering your customer event badges to CIOs can “compete” with each other by having the most live product deployment badges on their nametag.
Obviously the design should be muted and tasteful.
Jamie,
This is really intriguing. I’ll ask Mark to consider it for TechEd.
Thanks for the idea!
Very Interesting Jonathan. How important is to take in account the cultural understandings and motivations of foreign lands to be really successful on global business.
Surprises me that Chinese seem to be priorizing so much on self-image and knowledge, given that their so very ancient history brings a lot of wealth and wisdom about living… but surely these relates to their last decades of economic incredible growth and social progression.
So my belief is that to know more about a foreign culture (with their actual motivations and needs) I should understand better their actual/recent circumstances, besides their history and “folklore” that can be easily found even on high-school books.
Teamworking with local peers and leveraging their rich knowledge about what happened (and is happening) on the field is for sure critical to have the right and complete picture.
Thank you for the post!
1 word: BRILLIANT!!!
Just like the man who wrote it. I feel blessed to call you a friend.
Interesting insights…thanks for evangelizing this work
Reblogged this on The Notebook.