Branding Strategy Insider

Achieving Brand Success In Developing Markets

Almost 20 years ago, I first set foot in developing China, and into the early boom years of that country’s remarkable transformation. As the first Marketing Director for Procter & Gamble China, over the next 3 years I saw the incredible vibrancy, growth and opportunity of a developing market firsthand.

Since then, I’ve led organizations with businesses in virtually every major developing market around the world. While no two markets are precisely the same, they share many important features when it comes to Marketing success or lack thereof.

So, it’s natural to reflect: what have I learned as a Marketer from those experiences?

1. Walk the Street – When I arrived in China in 1994, it was like landing blindfolded in an emerging market. There were no TV ratings or market share data beyond Guangzhou, Beijing, and Shanghai—which collectively accounted for 5% of the Chinese population.

What to do?

Walk the street. Once a month, we would get on a plane and travel to a secondary provincial city and walk the streets, visiting 15-20 stores a day, talking to the merchants about what sold, what didn’t, and why.

Sometimes the best market research is simply getting out and talking to lots and lots of real people. That’s how we learned that sachets, or small 5-10g bags of detergent for once a week use, would never work like they did in shampoo.

Chinese Brand Naming Strategy

Someday, China will be the biggest consumer market in the world. No wonder marketers are increasingly interested in Chinese naming. 

With his training in classical and modern Chinese literature plus an advanced American psychology degree in bilingual memory research, Andy Chuang (pictured) is the first in his family’s 1,500-year history to master not only Chinese, but also English. 

His company, Good Characters Inc., founded in 2001 in Fresno, California, specializes in Chinese naming and linguistic and cultural evaluation. 

We sat down with Andy to talk about the rationale and the process of Chinese naming.

Q: Americans have a set of basic assumptions about how they name things. Is it true that the Chinese have a completely different orientation towards naming? 

Americans typically choose existing first names for their babies. For example, John, David, or Mary. However, the Chinese name their babies in the same manner you would name a company or a product. The Chinese pick some “good characters” and put them together to form a “good meaning.” 

Consider the Chinese president, Hu Jintao, as an example. Hu is his family name. His first name, Jintao, is the combination of two characters, Jin and Tao. Jin is “brocade” or “bright and beautiful.” Tao is “big waves.” By putting these two together, Jin-tao means “enchanting waves” or, metaphorically, “splendid success” since brocade is associated with richness and success and big waves are strong and unstoppable. 

Brand Building: The China Challenge

China is the “must win” market for global brands. The future potential offered by its vast population and strong economic growth has made China a magnet for multinational corporations. This potential has not gone unnoticed by the Chinese government and local brands. Competition that was once fierce has become white hot, and some of the things that risk getting burnt, are the brands themselves.

I have spent the last couple of weeks meeting with clients and colleagues in China. All have stated how difficult it is to create brand loyalty with consumers, many of who are relatively new to the concept of brands.

It is true that the Chinese consumer is on average more likely to be price driven than those in other countries, and often chooses between brands primarily on the basis of price. It is also true though that the Chinese consumer is less likely to be price driven than they were even five years ago. Instead, people are increasingly becoming repertoire shoppers, choosing between a set of acceptable brands. In this environment, the challenge to marketers is to ensure that their brand is the one chosen most frequently.

Creating loyalty of the sort seen in other countries requires a blend of two different disciplines: brand building and sales activation. The former requires the marketer to create a desire to buy the brand based on its functional and emotional benefits. The latter requires the marketer to make sure that pre-existing desire is fulfilled at the point-of-purchase. From what I have seen, far too many marketers here in China have become focused on activation to the exclusion of brand building.

Brand Strategy For The Chinese CEO

Chinese organizations have unique challenges and advantages in their home market. Here are 10-steps specifically designed for Chinese CEO's to successfully channel their resources to build powerful brands.

1.) Build a strong corporate board of directors: Board of directors can be one of the most important strategic resources for any company. By including directors who are well connected to different strategic resources such as investment banks (to help in funding), regulatory authorities (to obtain permissions), media (to create favorable perceptions), and politicians (to help in lobbying), Chinese companies can further strengthen their ties to multiple stakeholders. Such a move not only erects entry and mobility barriers but also would allow them access to scare resources thereby creating a credible source of competitive advantage.

2.) Develop a powerful local, regional and national distribution system: China is a vast and widely spread out country. Distribution systems in China are not consolidated as they are in much advanced countries such as the United States, United Kingdom or Europe. Given the strategic importance of having a wide spread and well managed distribution system for reaching customers, Chinese companies should invest in creating a well managed, far flung and well coordinated distribution system. Mere reliance on existing fragmented distribution channels will not be sufficient.

3.) Tap the local human capital of customers, collaborators and competitors: As is widely acknowledged by now, China is a very different market from those in the Western world. Chinese companies should leverage this difference to their advantages. In addition to using market research firms, Chinese companies should tap into the human capital across the spectrum and across markets. Local customers, business partners and collaborators would have a wealth of information on local customer buying habits, the local regulatory policies and other strategic information. By establishing a formal network to enable information flow, Chinese companies can create a strong advantage over foreign companies that may not have access to their market information.

What GM Should Learn From The Brown Rat

Last Sunday, GM announced plans to introduce a new car brand into the Chinese market. Baojun - which means “treasured horse” in Mandarin - will go on sale later this year. Shen Yang, the general manager of SAIC-GM-Wuling, the joint venture responsible for the new car, was brimming with enthusiasm on launch day: “Baojun is being positioned as a reliable partner with an image that is confident, smart and dependable”. It all sounds very exciting but marketers with long memories might take the news with some degree of scepticism.

Only 18 months ago, GM was on the verge of disaster thanks to an over-sized portfolio of a dozen automotive brands. No bad thing you might think - after all there are many companies like Procter & Gamble or LVMH that manage much larger portfolios than twelve. GM, however, made the classic error of targeting the same brands at the same segments with the same positioning. Back in 2006, for example, it was not unusual to see Saturn, Buick, Pontiac, Chevrolet and GMC all competing on price to snare the same American consumer. The result was a company with huge marketing costs, poor margins and an abject lack of differentiation across its loss-making portfolio.
 
Meanwhile better-run competitors like Toyota and BMW used more parsimonious brand architecture to ensure superior levels of differentiation and profitability. In the end President Obama had to step in and save GM from bankruptcy with a $50bn injection of taxpayers’ money and a specific demand that GM shed some of its weaker brands. The company has since sold Saab, closed Saturn, Pontiac and Hummer and begun to make a profit again in the US as a result.

But while GM might be down to four core brands in the US, Baojun marks the company’s seventh brand in a Chinese portfolio that also includes Buick, Cadillac, Chevrolet, Opel, Wuling and Jiefang. GM China president Kevin Wale rejects any notion that his latest brand will detract from the existing portfolio: “The introduction of Baojun is part of GM’s multi-brand strategy in China. Baojun will complement our other brands sold in China; it will enable us to better address the increasingly segmented Chinese vehicle market.”

China Embracing English Names

Go global, young man.

That was the advice from Harvard’s Theodore Levitt when his seminal article, "The Globalization of Markets," was published in 1983. Since then, globalization has become a dominant theme of international business strategy.

It really is a neat idea: You drive a global brand with one big differentiated idea, everywhere from Akron to Auckland. Your brand gets recognized on the shelf by travelers and natives alike. A single name lowers production and manufacturing costs.

That’s normally what we mean by a “global name.” But in China, the younger generation is giving globalization a provocative new spin. As China talks of opening itself to the world, its young people are presenting themselves to the world by selecting new names in English.

Exploit Advantages in Chinese Brand Naming

As FedEx and UPS expand their services in China, one leading linguist argues that they could have profited more from the positive sounds of their names transliterated into Chinese.

The name FedEx has a strong association in Mandarin Chinese with fei, which is flying – a desirable name hinting at speed. The U of UPS also has a good association: it sounds like yo in Mandarin Chinese, meaning excellent. In Taiwan, UPS has its name transliterated as You Bi Su (literally "excellent-compared-to-fast," insinuating quality service as well as speed).

Fed Ex’s “flying” nuance effectively expresses excellence with a picture of quickness in delivering, according to Andy Chuang, president of Good Characters in Fresno, California.

According to their official Chinese websites, however, both FedEx and UPS chose to translate the meaning of their names rather than transliterate the already familiar American names. The result is a mouthful. FedEx is Lian Bang Kuai Di, meaning Federal Express; UPS is Lian He Bao Guo Yun Sung Fu Wu, meaning United Parcel Service. Fortunately for them and no surprise to nameologists, customers use the shorter, positive-sounding English name more often.

The bottom line: Consider the positive association your brand name might have if transliterated into Chinese, and take advantage of it.

Sponsored By: The Brand Positioning Workshop

Don't Underestimate Chinese Marketers

 
Greetings from the wonderful, if rather wet, city of Shanghai. About seven years ago I signed on with a big multi-national to train its marketing teams here in China. To be honest, when I started running the programme I had little idea what to expect. Now, however, many years later, China exerts a strong pull over me.

Each year I fly out here and review the plans of the small army of marketers that I have trained up over the years, as well as running new recruits through the programme. Seven years is a long time in China and I have watched the city of Shanghai evolve and improve at a mind-boggling rate. Each July when I arrive I find bridges where last year there was just river, amazing restaurants that have sprung up and established themselves and formerly drab streets that have become wide boulevards.

Even more impressive is the evolution in the marketing skills of my executives. Before my eyes they have transformed from anxious graduate students with no practical experience into the best marketers I have ever seen.

I have been a marketing professor for 12 years and taught all over the world, but it is only in China were I have seen my instruction executed to perfection in the field.

Chinese Naming Strategy Q&A

Someday, it will be the biggest consumer market in the world. No wonder that marketers are increasingly interested in Chinese naming.

With his training in classical and modern Chinese literature plus an advanced American psychology degree in bilingual memory research, Andy Chuang is the first in his family’s 1,500-year history to master not only Chinese but also English. His company, Goodcharacters.com in Fresno, California, specializes in Chinese naming and linguistic evaluation.

We sat down with Andy to talk about the rationale and the process of Chinese naming.

Q: Americans have a set of basic assumptions about how they name things. Is it true that the Chinese have a completely different orientation towards naming?

Americans typically choose existing first names for their babies. For example, John, David or Mary. However, the Chinese name their babies in the same manner that you would name a company or a product. The Chinese pick some “good characters” and put them together to form a “good meaning.”

Consider the Chinese president, Jiang Zemin, as an example. Jiang is his family name. His first name, Zemin: the combination of the two characters, Ze and Min. Ze is a “pool” or “benefaction.” Min is “the people.” By putting these two together, Ze-min means “benefit to the people” or a “blessing for the people.”

China's Brands Imitate to Dominate

From the moment the fireworks exploded over Beijing at the Olympics' opening ceremony, you knew something fantastic was taking place.

But you'd have been forgiven for underestimating just how truly fantastic those fireworks were, because many of them did not actually occur. They were digitally enhanced video effects superimposed onto the Beijing night sky by a team of special-effects experts headed by Gao Xiaolong. 'Most of the audience thought the display was filmed live, so that was mission accomplished,' smiled a clearly delighted Mr Gao after the event.

Meanwhile, equally fantastical events were taking place inside the 'Bird's Nest' stadium, where little Lin Miaoke was belting out a rousing rendition of Ode to the Motherland. It emerged later that Miaoke had been lip-synching and the real singer was another, slightly less photogenic, seven-year-old called Yang Peivi. Chen Qigang, musical director of the opening ceremony, explained to the world's media that Lin Miaoke was chosen ahead of Yang Peivi because she was nicer looking.

In China, there is often a vague but accepted disparity between what is seen as genuine and what is real. Fake fireworks that look real can be better than actual gunpowder. It's acceptable to have a little girl singing with someone else's voice if it makes for better entertainment. Copies and fakery can be better than the real thing. That's important, given the influence China is about to have on branding over the next century.