LONDON - A recent BrandZ study, produced for WPP by Millward Brown, has identified eight key ways global businesses can use Chinese New Year (Sunday 10 February) to gain a profitable foothold in China through establishing themselves in the minds of consumers - particularly in the country's fast-growth cities.
Peter Walshe, Global BrandZ director of Millward Brown, said: "China's national holidays are not the exclusive territory of local businesses; the increasing affluence of consumers, and the rapid rise of brand importance, have opened up opportunities for international brands to compete in the market. By playing a meaningful role at Chinese New Year, when consumption increases and purchase intention changes, these brands can get on - and stay on - consumers' consideration lists, and build a solid foundation of trust and loyalty."
The study, complemented by insights from WPP companies including Added Value and Kantar Media's TGI, has revealed these 'Eight strategies for building brands at Chinese New Year' around its deep insight into the cultural traditions and shopper behaviours that characterise the national holiday, and how China's most successful brands use these as a platform for growth.
1. Understand the history - and evoke tradition. Many people yearn for the traditional celebrations they remember from their childhood, and are keen to pass on aspects of culture to younger generations at this time. Brands can create a bond with consumers by leveraging their heritage and quality, and by providing a brand experience that sensitively evokes connections with the past, and supports harmonious family gatherings.
2. Get on the gift list by re-defining quality. Gift-giving at Chinese New Year is unlikely ever to take on the significance it holds at Christmas in the West, but it plays a part and opportunities await. The giving of traditional gifts to indicate status or show affection or respect, for example alcohol, is deeply embedded in the culture. As affluence increases, gifting - in particular to children - could increase in categories such as apparel. Brands from abroad will benefit from expanding the notion of 'quality', essential in gift-giving to show respect and sustain self-respect, as price is currently the sole indicator in China.
3. Market to shoppers who need to buy more 'essentials'. These are products such as food, alcohol and apparel that consumers tend to purchase all year round. But during the New Year they buy more as they need larger quantities, and their purchase intention changes - the pressure is on as they prepare important holiday feasts for extended family, and they need a greater degree of assurance that the product will deliver on its promise. Brands can make the most of this opportunity by focusing their promotional activity on hypermarkets, and emphasising quality, trust and value.
4. Make the most of the mood to 'upgrade' and switch brands. It's a celebration - so people might purchase a more expensive or aspirational brand of the products they normally use to enhance their status or as a treat. People use alcohol symbolically to express respect in China, and this category already benefits from the inclination to trade up. But most brands haven't yet fully realised the potential of using more original strategic positioning, value proposition, packaging, presentation and communication to highlight the emotional and symbolic aspects of a purchase.
5. Focus on trust and value. At New Year shoppers are willing to spend more, but they demand a strong value proposition. Brands that gain in trust and value are more likely to be considered. The interpretation of value varies depending on whether the purchase is for gifting or home consumption. Some brands of baiju - China's traditional clear alcohol - are highly priced, but if it's a gift people may buy it for the prestige it represents. For home consumption, consumers often select a brand that offers a combination of quality and affordability.
6. Target the increasingly discerning consumers in high-growth lower-tier cities. This is where affluence and spending are growing fastest on a year-on-year basis, and where brands have an opportunity to win presence and share at New Year as consumers consider options for gifting or upgrading. With limited (though rising) discretionary income and a surfeit of ambition to improve their lives, people tend to spend on items that are practical rather than simply status-enhancing. As they become more sophisticated, brands need to tell a clear brand story and tell it well.
7. Identify a niche, and get a foothold. Many of China's most valuable brands started small, for example establishing themselves in a lower-tier market or single province, and then grew. Chinese New Year brings an opportunity for brands wanting to enter the market to identify their niche - looking at where the consumer needs are that they can meet, and where there's an absence of major international or Chinese brands - then go in, play strong, and gradually grow.
8. Understand the changing media landscape. The media environment in China is becoming more fragmented and complicated, and consumers today access information via multiple channels and multiple screens. To market themselves effectively, brands need to consider each target audience and the relevant channels for addressing it - not just at New Year, but all year round. They also need to integrate social media touchpoints into their marketing strategy.
Peter Walshe concludes: "China's GDP is predicted to grow by around 7.5% in 2013, far above that of most Western economies, so the opportunity for international brands to penetrate the market remains enormous. However, it's a vast and complex market and they will need to work hard to get a foothold - making decisions about where, when and how to enter, based on a deep understanding of and sensitivity to the dynamics and behaviours of Chinese consumers in multiple regions."
Part of the 'code' for succeeding in the Chinese market can be seen in the strategies of the BrandZ Top 50 Most Valuable Chinese Brands 2013. The report is available from http://www.millwardbrown.com/BrandZ/BrandZ_Top50_Chinese_Brands.aspx and can also be downloaded as an App and iPad magazine: https://itunes.apple.com/us/app/wpp-brandz/id571644755?ls=1&mt=8.
About Millward Brown
Millward Brown is a leading global research agency specializing in effective advertising, strategic communication, media and brand equity research. Millward Brown has helped its clients build strong brands and services through a set of comprehensive research-based -qualitative and quantitative solutions. We have 88 offices in 58 countries. Our additional specialist practices include Dynamic Logic (global leader in measuring digital marketing effectiveness), a network of media experts (measuring media effectiveness), Firefly Millward Brown (our global qualitative network), The Neuroscience Practice (using neuroscience to optimize the value of traditional research techniques) and Millward Brown Optimor (focused on supporting clients to maximize their return on brand and marketing investments). Millward Brown is part of Kantar, the insights, information and consultancy diivision of WPP.
About Added Value Group
Added Value offers brand development and marketing insight services to blue-chip companies across all industry sectors. Everything they do starts with insight and ends with action, in pursuit of healthy brand growth for their clients. With a footprint that now extends across 22 locations in 14 countries, drawing on the expertise within its global network, Added Value Group fuses brand marketing, consumer insight, innovation, and communications optimisation to help solve clients' marketing problems. Added Value Group is part of Kantar Group, the information, insight and consultancy arm of WPP, a world leader in communications services. More information is available at: www.added-value.com or blog www.added-value.com/source
Target Group Index (TGI) was established in Britain in 1969, with most of its international expansion taking place over the last 10 years, giving it a presence today in over 60 markets worldwide. The TGI studies measure consumer product and brand consumption, attitudes and media usage. They are used across the globe by brand owners, agencies and media for a range of strategic and tactical purposes, including consumer profiling, brand positioning, the identification of target audiences, and media planning and buying. Sample sizes are robust, with over 800,000 interviews conducted around the world each year. For more, visit www.kantarmedia-tgigb.com
About Kantar Media
Kantar Media provides strategic advice and competitive intelligence to the world's leading brands, publishers, agencies and industry bodies, helping them navigate and succeed in a rapidly evolving media industry. This includes analysis of paid media opportunities; counsel on brand reputation, corporate management and consumer engagement through owned media; and, evaluating consumers' reactions in earned media. Kantar Media provides clients with a broad range of insights, from audience research, competitive intelligence, vital consumer behaviour and digital insights, marketing effectiveness and online influence. Our experts currently work with 22,000 companies tracking 3 million brands in 50 countries. www.kantarmedia.co.uk