“Branding in China” Series – General Strategy
BRANDING IN CHINA – who knows?
Who knows exactly what “Branding” is? There seem to be more than 30 definitions in the market, with online research showing quite a colorful variety of them. Whereas the American Marketing Association defines a “Brand” rather clearly as “A name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers.”, the definitions of “Branding” seem less obvious. One can read that “Branding is more than a name and symbol. A brand is created and influenced by people, visuals, culture, style, perception, words, messages, PR, opinions, news media and especially social media.”, or that “Branding is the art of aligning what you want people to think about your company with what people actually do think about your company. And vice-versa.”
A more elaborate definition is given by Bryan Eisenberg: “Branding is the sub-total of all the “experiences” your customers have with your business”.
He binds a successful branding to three principles:
Whichever definition one might choose, they certainly do have one common denominator: the people seeing, experiencing, recognizing and valuing your branding. Hence, Branding without a “receiving party” is rather useless.
As a logical consequence, the perception of any Branding (or any Brand as such) strongly depends on the experiences, the education and the culture these people are surrounded with. Different background as well as geographical distance can divide the brand awareness drastically, still in our age of digital marketing, not many Brands can actually claim the reputation of “Global Brands”.
This also means that the “Branding Job” meaning the activities to build, endorse and spread your brand need to be adapted to the market you operate in. Especially for the smaller Brands, to enter new markets often also means to have to rebuild your brand, sometimes even from scratch.
Hence for us, “Branding is the total perception of a frequent and consistent experience receiving parties have with your business in their local and emotionally anchored environment”
While Interbrand reveals that Apple, Google and Microsoft are the Top 3 of the Top 100 Brands in the world in 2017, the most recognized (not the most valuable) Brand Logo in the World is still “Coca-Cola”. However, Walt Disney seems to be the Brand with the highest Brand Strength (91.8!)
It is true that Switzerland has quite some reputable Brands, and despite being such a small country, some of them are actually real global brands. However, besides those big names, there is also a rather large number of smaller brands.
One of these brands in the Fast Moving Consumer Goods (FMCG) industry produces food, and has an alleged Brand recognition in Switzerland of over 90%. This is rather impressive, meaning that 9 out of 10 people immediately recognize and know the brand. In other words, 90% of the entire country population knows this brand.
In its initial approach to a China Market Entry, the Brand was convinced that the market penetration would be a “piece of cake” and that sales would reflect the strong Branding of the home country also in China. A preliminary Market Survey showed a sobering result: only 3 out of 1000 people asked upon the Brand did actually recognized it, meaning that the Brand’s recognition in China lies at 0.3% (compared to the 90% back home). Most of the people simply asked: “Who?”
As a consequence, the Brand decided to postpone the market entry and do initially some “homework” by learning to understand better the market they are about to enter.
Totally on the opposite side, we can see that a brand like Victorinox/Wenger was strongly anchored in the market even.
Sound Branding Strategy for China
It is a reality that Chinese consumers often do not know smaller European Brands, same as Europeans do not know many Chinese Brands. With a country of that size, with such an enormous number of Brands already present locally, and with an international Brand awareness not much older than a decade, the level of knowledge on international brands probably lies actually already higher than in some European countries.
Nevertheless, everyone surely wants to avoid the “who” question. As a consequence, no one should approach this gigantic market without a sound marketing & branding strategy. In fact, before people ask “who” you are, the brand entering the China market needs to ask itself five questions starting with “W”:
Where am I entering?
The general market environment differs among countries and that may have significant impact on the strategy. Many aspects such as import/export regulation, logistics, distribution and market channels should have been studied thoroughly.
Which area to enter first?
China is a huge market, thus the entry point meaning which area(s) in this country and the business scale need to be defined upon the demand as well as the expectation. Different areas have different levels of purchasing power and Brand knowledge, some are more receptive to new international brands than others. Depending on the industry you are in, the “point of entry” into China is decisive on your success in this market.
Who is my audience?
As mentioned, Branding is the art of aligning what you want people to think about your company with what people actually do think about your company. The prospective of people is influenced by education, knowledge, experience, emotions and more. Therefore, knowing the target audience and the purchase behavior is crucial for market-entry and brand-building.
What are my competitors doing?
Learning from the competitors could be another way of knowing yourself. Especially local competitors know the behaviors and customs locally obviously much better. Without blindly copying them, it cannot hurt to see and listen to what they are doing.
Why are the competitors doing this?
The marketing in China might be much more digitalized and integrated than you imagined. There are quite some roads leading to the consumer end but which one(s) to take is a topic to study for. The reason behind why the competitors are doing can also help you to choose the right direction for yourself.
At the end, after answering all the “W” questions, a brand will finally be able to know how to rebuild the brand in the new market successfully. Ideally, in the target market you enter, people will already know about you the moment you enter.
However, there are further obstacles to overcome, such as translations, marketing tools and channels, new means of information dissemination and last but certainly not least the marketing & branding budget and its attribution.
We will deal with these topics in the coming Newsletters of the same series.