A Brand On The Mainland
Branding has become
the logical long-term market development strategy on the Chinese mainland.
According to data compiled by the National Bureau of Statistics, the
top 10 best-selling brands commanded an average combined market share
as high as 65% in more than 80 major consumer goods categories nationwide
They exceeded 70%
for products with an emphasis on quality, such as household electrical
appliances and cleansing agents.
Brand appeal continues
to grow in trendy merchandise with a relatively strong sense of individuality
and image such as garments, despite the relatively scattered market
demand. For instance, more than 25% of the market for men's suits and
T-shirts is taken by the top 10 brands.
One of the major
reasons underlying Chinese consumers' surging brand consciousness and
predilection is their tendency to rely on word of mouth and their feelings
towards the brand to make purchase decisions in the face of an ever-widening
product selection and a rising level of product homogeneity.
In other words,
when consumers choose a product, they are in effect comparing brands.
Hence, to ensure sales, famous and influential brands have become the
natural pick of department stores and shopping malls.
Building a brand
does not simply mean registering a trademark. A brand of depth has to
satisfy customers' psychological and social needs and be able to manifest
the users' personality and taste, apart from meeting the required quality
With rising incomes,
mainlanders' consumption demands have shifted from the materialistic
to the spiritual plane. In deciding which product to purchase, Chinese
consumers will consider the buyers of the product and whether they wish
to join their ranks.
building therefore necessitates segmenting the consumers, followed by
selecting an appropriate positioning and designing the right products
for each segment according to their characteristics. Aspects including
product packaging, advertising image design and pricing have to match
target customers' preference and receptivity.
from different age groups and regions vary in their psychological demand,
self-image and life focus according to their social and economic environment
Meanwhile, as a
market in transformation, the mainland is experiencing more, and faster,
changes than Western markets where the status of development, including
consumer mix, commodities distribution channels, and distributorship
and agency systems, is comparatively stable.
Success in brand
building requires an enterprise to continually adjust and adapt, be
it in product development or sales strategies. Objective market surveys
and analyses are also essential to get an accurate grasp of market changes
and the consumption mentality and habits of target customers.
The emergence of
a mainland middle class in recent years has been a key factor in terms
of consumer mix. The Chinese Academy of Social Sciences estimates that
middle-class consumers with household assets ranging from US$18,000-36,000
currently comprise 19% of the entire population, are growing at a rate
of 1% per annum and will constitute 25% of the total population by 2010.
In addition, the
first generation of children born during the one-child policy has now
reached the age of 26. These young people are financially independent
and their consumption power is not to be underestimated.
Both the middle
class and the one-child generation are relatively open-minded in terms
of consumption mentality and seek fashion and personal style.
The mainland is
also not a single homogeneous market and, as such, resembles Europe
more than the US. Therefore, to enhance its brand's chance of success
in a regional market, a company should introduce products that suit
that particular region, targeting the local people's living habits,
preferences and affordability.
the mainland's distribution sector is still immature. In order to help
distributors understand and practise the marketing concept, strategy
and mechanics of their brands, many foreign-funded enterprises are deeply
involved in their distributors' operations.
Thus, while some
big mainland cities, in particular those in Guangdong Province, have
a group of competent and sizeable distributors capable of performing
a full range of market development and promotion tasks and operating
on a national or trans-provincial scale, such distributors remain limited
Hence, most enterprises
still opt to establish intensive regional distributor networks or set
up branches in major sales territories to directly manage their distributors.
They believe that such arrangements can better adapt to the domestic
market environment than having big distributors.
As for brand propagation,
enterprises can enhance brand image and recognition among the target
audience by advertising, public relations, sponsorship, news coverage,
sales promotions and image ambassadors.
For small- and
medium-sized enterprises, advertising is probably an extremely expensive
option. An effective yet low-cost form of brand propagation is event-driven
marketing, such as organising innovative promotional activities and
introducing novel management or technological ideas to generate positive
media coverage. Guangdong-based Vantage Company serves as a good example
of event-driven marketing.
the mainland market is developing rapidly and is expanding both in terms
of overall capacity and degree of segmentation, with ample room for
brands with different positioning.
also abound. Counterfeiting, lack of credibility and cross-region parallel
goods are just some of the difficulties frequently encountered in the
process of brand building on the mainland.
Based on the experiences
of enterprises with different backgrounds and scales in different industries,
success in building a brand on the mainland hinges on a number of factors.
These include offering
quality products meeting market needs, correct market positioning, effective
advertising, publicity and sales promotion, extensive distribution networks,
well-planned distributor management systems and brand protection measures.
Cleansing (Zhongshan) Co Ltd's Enear brand of shower cream targeted
women aged 20-35 who were career-minded, fashionable, mature, self-confident,
had their own opinions and were attentive to personal care. Based on
these attributes, the company appointed Hong Kong movie star Maggie
Cheung as the brand's ambassador and shaped an elegant, trendy and tasteful
image through TV commercials. Enear was on the National Bureau of Statistics
list of top 10 best-selling shower cream brands in 2003.
and Gamble took positive steps to ensure effective enforcement of its
marketing strategy when it made its mainland debut in the early 1990s.
The firm stationed sales managers directly at its distributors' offices
to carry out network building, logistics management, product display
and sales promotion jointly with the distributors, and even train and
manage the distributors' sales and promotion staff.
The Ting Hsin Group
used market visits to identify the mainland's northern region, where
people eat noodles habitually, as its priority market in 1992. The company
began by concentrating its resources on establishing a foothold in this
region before extending to the eastern and southern mainland, the southwest
and finally the whole country. Appropriate adjustments were made in
its products every time the company entered a different regional market.
For instance, plain-flavoured and seafood-flavoured noodles were introduced
in the southern market, while hot and spicy noodles were launched in
the southwestern market. Consequently, the Ting Hsin Group captured
more than 40% of the mainland instant noodle market in 2002.
the management from ownership of the company in 2002, hiring professionals
to run the organisation in a bid to raise its management standards.
The company distributed 21 press releases to six websites and 14 large
newspapers and magazines nationwide in less than a month, giving its
name a big boost and increasing awareness of its gas burners among distributors
Importance of brand name image in purchasing garments
& women 26-45yrs
& Women 15-25yrs
important at all
Source: Hong Kong
Trade Development Council
brand names by categories
10 Brand Names
Business 2003 Supplementary
Bill Gates predicted there would be two kinds of business this millennium:
those online and those out of business. While it hasn't reached that
stage yet, the time is fast approaching when an Internet presence will
be essential to a company's operations, and those without a website
will be at a severe competitive disadvantage.
online can be a relatively easy and inexpensive process - particularly
when compared to the costs of printing thousands of brochures or advertising
in traditional media.
The level of sophistication
of a website can also be tailored to meet specific business needs and
budgets, but there are many potential pitfalls and professional advice
is definitely needed if a Web presence is to help rather than hinder
One company with
plenty of experience in building websites for organisations large and
small is CiF Solutions Ltd, a Hong Kong-based IT solutions provider
with a dedicated Internet team.
find Web companies with either good design or technical skills but not
both," claims general manager Chris Chan. "Our Web design
and portal development team has designers, editors and programmers,
so we can offer our clients a complete service, including e-marketing."
Chan, who also
has experience on the client side managing websites, has identified
four levels of corporate Internet activity:
Level 1: the ability
to access the World Wide Web and send and receive email
Level 2: an online
presence with a website
Level 3: the ability
to carry out business over the Web
Level 4: conducting
sophisticated e-commerce that allows interaction with business partners
as well as customers
According to Chan,
most small- to medium-sized enterprises (SMEs) in Hong Kong and the
southern Chinese mainland are still moving from level one to level two.
Although many companies
want to go straight to level three, he recommends taking the process
in stages, with a well-structured basic website as the first step.
level two website enables an SME to introduce itself, showcase its products
and services, build an instant international presence, initiate customer
contacts and generate orders.
Chan advises keeping
things simple, clean and precise. "All sites should have a homepage
that quickly defines what the company is about, pages that outline the
products and services on offer, and have a contact point."
Similarly, a website
appears to provide unlimited space for great detail about a company
but this is a common mistake: "People don't want to spend time
reading lots of information online," he maintains. "Simply
copying the corporate brochure onto a website is a mistake many companies
He says getting
clients to decide how they want to structure their products and services
is one of the most difficult and time-consuming parts of the development
process. "But, done well, this can be the foundation for moving
to the next level of actually doing business online."
The look of the
site also says a lot about the professionalism of the company, as well
as contributing to the clarity of the information and ease of navigation.
That's why it is
important to keep the style clear and consistent throughout the website,
says Chan. "For some clients we will adapt the look and feel of
their off-line marketing materials for the Web," he explains. "Others
want to take the opportunity of a new website to completely revamp their
corporate identity, which we can also help with."
Web surfers are
notoriously flighty, so key factors in holding their attention are making
the site quick to download, easy to read and navigate, and relevant
to the audience - which can involve multiple languages.
also be user-friendly, and Chan recommends an e-form that defines fields
for users fill in. "The e-form has the added bonus of simplifying
the administration of enquiries at the company end," he adds.
Costs for a website
vary enormously depending on the complexity and the level of integration
with other systems and e-business infrastructure. However, according
to Chan, a basic two-language site with 5-10 pages and a contact e-form
can be had for less than HK$20,000.
complexity of the design elements, number of pages and sections - as
well as programming to enable, for example, a search function or a smart
content updating tool that does not require html knowledge - will also
add to the production cost.
it is possible to have a website up and running much quicker, I would
recommend that a company allow 2-3 months," Chan adds.
He also warns that
the project isn't finished once the website has been completed, and
the next task is encouraging people to visit it. "Getting a site
listed on the leading search engines, directories and industry websites
is often overlooked, but plays an important role in driving traffic
to a home page," Chan advises.
provides valuable information on how many people are visiting the site
and which parts work best. "But don't be tempted to put a site
visit counter on the front page as these look outdated and low numbers
can prove an embarrassment," Chan adds.
seen regularly is an outdated site, and he warns companies not to include
a "what's new" section or time critical information unless
resources are available to keep them current.
however, a website will prove an immense asset and over time it can
evolve to become an integral part of a company's overall business strategy,"
BY ALISTAIR WADDELL
|Keep it simple:
increasing the complexity of the design elements, number of pages
and sections will add to the cost
A recent CiF Solutions
Ltd project for one of Hong Kong's largest laundry companies illustrates
the typical timeline taken by professional website design companies.
CiF's client wanted
the website to extend its new corporate identity online and provide
a comprehensive overview of the company, its services and facilities.
The first step saw
CiF conduct extensive background research on the company and its industry
before meeting the client to: