Elec­tron­ics sales like ‘grapevine’ as ad­ver­tis­ing tool

Word of mouth reap­ing big re­wards for Xiaomi, Sam­sung, com­peti­tors

China Daily (Canada) - - BUSINESS - By GAO YUAN gaoyuan@chi­nadaily.com.cn

Over­seas con­sumer elec­tron­ics ven­dors are edg­ing out do­mes­tic com­peti­tors when it comes to brand ad­vo­cacy, a gauge also closely rel­e­vant to com­pany rev­enue growth in China, a con­sul­tancy re­port said on Wed­nes­day.

Lower word-of­mouth scores are sound­ing the alarm for Chi­nese com­pa­nies — es­pe­cially those with global am­bi­tions — that it’s time to change mar­ket­ing strate­gies while their prod­ucts are steadily gain­ing ground, said an­a­lysts.

Price, hard­ware per­for­mance and de­sign are the most looked-at ar­eas for Chi­nese buy­ers when pur­chas­ing con­sumer elec­tron­ics such as smart­phones, tablets and smart tele­vi­sions, ac­cord­ing to the Bos­ton Con­sult­ing Group, a multi­na­tional con­sul­tancy and pub­lisher of the re­port.

The study, which gath­ered re­sponses from more than 8,500 people, found that ad­vo­cacy serves as a sig­nif­i­cant in­for­ma­tion chan­nel.

Sam­sung Elec­tron­ics Co Ltd and Ap­ple Inc are among the most rec­om­mended choices in the coun­try be­cause of good de­vice per­for­mance and ag­gres­sive mar­ket­ing strat­egy, it said. By con­trast, Huawei Tech­nol­ogy Co Ltd, Len­ovo Group Ltd and other lo­cal brands scored low, even in heav­ily in­vested mar­kets such as por­tal de­vices and smart TVs.

Len­ovo re­ceived a merely aver­age score of 58 per­cent in the hand­set cat­e­gory, on par with Black­Berry Ltd, a Cana­dian com­pany that doesn’t have a sub­stan­tial busi­ness in China.

The re­sult was par­tic­u­larly brac­ing for Len­ovo, the sec­onds­mart­phone pro­ducer in China by mar­ket share, which re­cently said it would buy out Mo­torola Mo­bil­ity for $2.9 bil­lion.

Guang­dong-based con­sumer elec­tron­ics maker TCL Corp also came in low in the smart TV seg­ment, while South Korean and Ja­panese brands dom­i­nated the top five spots, the re­port said.

“The brand ad­vo­cacy scores from ex­ist­ing buy­ers were sim­i­lar in the smart TV seg­ment, but Chi­nese man­u­fac­tur­ers failed to get a bet­ter-than-aver­age score among non­cus­tomers,” said Li Shu, head of BCG’s Bei­jing of­fice.

Eval­u­a­tions from non­con­sumers can be used to in­fer the brands’ fu­ture earn­ings po­ten­tial. BCG found out that com­pa­nies get­ting higher scores tend to en­joy higher po­ten­tial rev­enue growth.

Al­though Chi­nese com­pa­nies are gain­ing larger mar­ket share, they’ll face prob­lems tak­ing on global play­ers be­cause com­pa­nies such as Sam­sung en­joy far bet­ter brand aware­ness than Chi­nese play­ers, said Li.

Fran­cois Can­de­lon, se­nior part­ner with­BCGGreater China, said young com­pa­nies in China should know the mar­ket thor­oughly and en­sure their ad­ver­tis­ing is ef­fi­cient.

“The power of­mass­me­dia is de­creas­ing, and buy­ers tend to lis­ten to friends and rel­a­tives for ad­vice. Tra­di­tional Chi­nese man­u­fac­tur­ers should give more­at­ten­tion to new­mar­ket­ing skills, in­clud­ing mak­ing bet­ter use of so­cial me­dia,” said Can­de­lon.

About half of the re­spon­dents said they seek opin­ions from friends or rel­a­tives about an un­fa­mil­iar brand.

“It’s not enough for lo­cal mak­ers to have good en­gi­neers; it is also im­por­tant to ad­vo­cate their brands in the most ef­fi­cient way,” he added.

Xiaomi Corp, a Bei­jing­based smart­phone maker, may be set­ting a good mar­ket­ing ex­am­ple for other lo­cal brands, re­searchers said. Mar­ket­ing moves in­volv­ing mul­ti­ple so­cial net­work­ing plat­forms meant that Xiaomi re­ceived the same score as Ap­ple on the smart­phone front.

Even the com­pany’s long­time foe, Qi­hoo 360 Tech­nol­ogy Co Ltd’s founder Zhou Hongyi, praised Xiaomi’s mar­ket­ing strat­egy this week. Zhou asked his own mar­ket­ing team to learn Xiaomi’s “suc­cess­ful” mar­ket­ing mind­set.

“Xiaomi needs to be more so­phis­ti­cated to ad­dress cus­tomers from dif­fer­ent seg­ments, and they did it well,” said Can­de­lon.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.