Dr Matthew McDougall ex­plains China’s unique con­sumer con­scious­ness and how your brand can find cut-through in an in­creas­ingly com­plex mar­ket.

Exporter - - CONTENTS -

Dr Matthew McDougall ex­plains China’s unique con­sumer con­scious­ness and how your brand can cut through.

Few mar­kets are as ap­peal­ing to global brand mar­keters as the con­sumer­driven, brand-ob­sessed China. This mar­ket of 1.32 bil­lion peo­ple, cou­pled with the me­te­oric rise of both the size and spend­ing power of its mid­dle class, holds enor­mous po­ten­tial for New Zealand ex­porters.

But, clearly, the dy­nam­ics of China are un­like any­thing Western mar­keters have ever seen be­fore, and it presents chal­lenges as se­ri­ous as its mar­ket is large.

The key ar­eas ush­er­ing in the Chi­nese trans­for­ma­tion are the rise of up­per­mid­dle-class and af­flu­ent house­holds as the driv­ers of con­sump­tion growth, a new gen­er­a­tion of freer-spend­ing, health con­scious con­sumers, and the in­creas­ingly pow­er­ful role of e-com­merce.

To that end, many brands around the world have flocked to China to ex­ploit these dy­nam­ics. Some brands have en­joyed suc­cess while many have not. It is worth re­flect­ing on why some brands make it and some do not and in most cases this comes down to Western mar­ket­ing man­agers not re­ally un­der­stand­ing the mar­ket, con­sumer and/or Chi­nese cul­ture.

It is im­por­tant to note that brand po­si­tions can vary greatly be­tween the var­i­ous Chi­nese con­sumer seg­ments; from pre-80s, to post-80s and the 90s gen­er­a­tions. For ex­am­ple, brands can have quite dif­fer­ent po­si­tion­ing; a good ex­am­ple of this in­cludes Star­bucks, Ap­ple, Hugo Boss, Nike and BMW, which are all as­so­ci­ated with ‘pres­tige' and ‘elitism' by the af­flu­ent pre/post-80s ur­ban con­sumer. While in the mil­len­nium group some of these brands may be con­sid­ered high-qual­ity but func­tional brands.

Dif­fer­ent con­sumer con­scious­ness

Why is the Chi­nese con­sumer's per­cep­tion of Western brands so of­ten as­so­ci­ated with pres­tige and ex­clu­siv­ity when the very same branded prod­uct or service in the West is merely a value-for-money means to an end? To un­der­stand this fur­ther, it is nec­es­sary to move away from the tra­di­tional view of brand po­si­tion­ing, in which con­sumer brand per­cep­tion starts with the branded prod­uct it­self and re­mains fixed re­gard­less of the ex­pe­ri­ences dur­ing which the brand is con­sumed. For the Chi­nese con­sumer, brand im­age starts with the ex­pe­ri­ence that the con­sumer en­vis­ages dur­ing brand con­sump­tion. Chi­nese con­sumer cul­ture, de­spite eco­nomic de­vel­op­ment, re­mains rooted in group ori­en­ta­tion and the ac­cep­tance of so­ci­etal hi­er­ar­chy. Eco­nomic de­vel­op­ment has sim­ply led to the im­me­di­ate and ex­tended fam­ily be­ing re­placed as the most in­flu­en­tial groups by close friends, col­leagues and peer groups. Achieve­ment of so­ci­etal po­si­tion or rank­ing has also been re­placed by con­spic­u­ous brand con­sump­tion rather than oc­cu­pa­tional pres­tige where ‘elite' oc­cu­pa­tions usu­ally in­cluded se­nior Party po­si­tions or el­e­vated po­si­tions in ed­u­ca­tion.

In China, ‘face' or ‘gain­ing face' has his­tor­i­cally driven brand con­sump­tion, where con­spic­u­ous con­sump­tion of an ex­pen­sive brand acts as a pow­er­ful sta­tus sym­bol. How­ever, in re­cent years, there's been a slight shift away from the big ex­pen­sive brands, at least in some tier-one cities. Some Chi­nese con­sumers, es­pe­cially in the lux­ury cat­e­gory, have started to look at brands that are less ‘showy' and more ‘lo­cal'.

In re­sponse, in­ter­na­tional brands have started col­lab­o­rat­ing with do­mes­tic com­pa­nies – such as the part­ner­ship be­tween Her­mes and mod­ern Chi­nese de­sign com­pany, Shang Xia – to re­think their prod­uct of­fer­ing (such as rolling out prod­ucts with less os­ten­ta­tious po­si­tion­ing of lo­gos).

De­spite the shift, con­spic­u­ous con­sump­tion and so­ci­etal sta­tus will still be the pri­mary mo­ti­va­tion dom­i­nat­ing the Chi­nese con­sumer psy­che.

Find­ing ef­fec­tive cut-through

How, then, will New Zealand's brands find their way through the Chi­nese

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.