Currently Being Moderated
Jonathan Becher

What Chinese Consumers Want

Posted by Jonathan Becher in SAP Business Trends on Oct 22, 2012 8:27:41 PM

In July, I was in China for our second annual customer meeting. One of the things that made this event special is we didn’t try to export the US version to China but rather built an event ground up for China.  As Chinese consumers gain affluence, we expect them to act like Westerners and are puzzled when they don’t. It’s why Western marketing efforts often fall short in China.

 

Tom Doctoroff, head of advertising giant J. Walter Thompson’s China operations, has just published a book called ‘What Chinese Want: Culture, Communism and China’s Modern Consumer.’  A Westerner trying to characterize 1.5B people is a tough challenge but Doctoroff has the right pedigree; he was a recipient of the Magnolia Government Award, the highest honor given by the Shanghai government to expatriates.

 

In a WSJ article, Doctoroff makes the case brands have to follow three rules to win a following among Chinese buyers:

 

1. Leverage conspicuous consumption

Luxury items are desired more as a display of status than for their inherent beauty or craftsmanship. As such, products used in public command large price premiums compared to ones used in private. High-priced foreign cars are relatively common but the most popular household appliances are inexpensive domestic models.

According to a study by the U.K.-based retailer B&Q, the average middle-class Chinese spends only $15,000 to fit out a completely bare 1,000-square-foot apartment.

Häagen Dazs leveraged this concept to become the most popular ice cream brand in China.  While it is difficult to sell a $5 carton of ice cream to be eaten at home, Chinese consumers flock to their high-profile downtown location stores.

 

2. Promote external benefits

Product messaging should not emphasize the benefits to the person himself but rather to how others see the person. Beauty products don’t make a woman ‘feel prettier’; they must help her ‘move forward.’  Parents don’t take kids to pizza parlors so they can enjoy the food; parents reward their children with academic “triumph feasts.”  Even beer can’t be marketed as refreshing to the drinker,

… in China, pilsner must bring people together, reinforce trust and promote mutual financial gain.

De Beers’ successful repositioned their global slogan, “A Diamond is Forever,” from celebrating eternal romance to representing a covenant between families.  The diamond itself is a visual reminder of the obligation.

 

3. Stand out but fit in

Luxury buyers want to show they have succeeded but remain understated. Audis and BMWs are preferred over flashy Maseratis. Mont Blanc’s six-point logo is popular because it is conspicuously discreet.

Successful brands appeal to Chinese parents by promising “stealthy learning” for their children; this is intellectual development masked as fun.  McDonald’s has this figured out:

Happy Meals include collectible Snoopy figurines wearing costumes from around the world, while the McDonald’s website, hosted by Professor Ronald, offers Happy Courses for multiplication.

Even peanut butter has to combine “delicious peanut taste” with “intelligent sandwich preparation.”

The so-called American dream seems to be alive and well in China, but brands that miss the fundamental difference in emotions and motivations are not likely to be successful.

 

Follow me on twitter @jbecher.

 

This blog was originally posted on Manage By Walking Around.

Comments

Actions

Filter Blog

By author:
By date:
By tag: