China, April 8th, 2016
It is no longer sufficient – or even possible – to bombard consumers with hyperbole and broad messaging. Jonathan Turner, General Manager at Brandimage in Greater China, shares insights on why brands must dig deeper to identify key rational and emotional benefits and how to be declarative about them.
Since the news of a slump in the Chinese stock market in late summer, 2015, growth in China has slowed, but has not stopped. With the world’s largest population, and a rapidly growing middle class, China presents unlimited opportunity for brands to create relevance for its consumers.
Even in the wake of a slowdown, let’s put things into perspective:
• Per-capita income has grown at 11% annually since 2010
• The government’s five-year GDP growth target outpaces the West at 6.5%
• Personal consumption is projected to grow 9% annually through 2020
The slowdown in economic growth has actually had minimal effect on consumer lifestyles. Retail sales are on the rise and local brands in particular are experiencing strong growth. Even the “made in China” stigma is beginning to disappear at home and abroad.
“There’s no reason for brand managers to panic about China – only to adjust to an evolving marketplace, as successful brands always do,” says Jonathan Turner.
With new regulatory legislation, the expansion and clarification of existing rules are designed to protect consumers in ways Western brands are used to, in regards to quality and safety issues. To promote responsibility and fair competition in the marketplace, these rules include prohibiting the use of China’s flag in advertising, and require that spam marketing be opt-in, among other updates.
Compliance is the only way for brand owners to respond to these rules in order to see sustainable brand development and growth. Marketing efforts are now becoming smarter, more creative, more nuanced, and more focused. The newly empowered Chinese consumers welcome this strategic approach, as they’re eager to express their individuality and independence.
But new legislation shouldn’t keep brands from making extravagant or irrelevant claims. Chinese brands in particular, have much to learn from their Western counterparts in defining brand essence and strengthening the brand core. Instead of offering dozens or even hundreds of “me too” products, brands should focus on the products that truly drive ROI, creating a coherent identity around these products that is distinctive and differentiated from the competition.
Western brands can learn from their Chinese counterparts how to engage on a local level. The key is to understand that consumers, no matter where they are, aren’t really all that different.
“As consumers gain purchasing power and social influence, the challenges of a consumer-driven market come to the fore,” says Jonathan Turner.
Read the entire article in the first 2016 issue of Patterns:
PATTERNS ISSUE 1 – MAKING CONNECTIONS: BRAND INSIGHTS FROM AROUND THE WORLD
ABOUT BRANDIMAGE – DESGRIPPES & LAGA
Brandimage is a global consultancy of brand equity architects and designers. Brandimage creates brands that drive brand performance. Brandimage is an SGK Group company. SGK is part of Matthews International Corporation (NASDAQ GSM: MATW).