It is simply naïve to believe that you can move a product into China with a Western price point, and perform well. And if you simply move in with your standard, one-size-fits-all branding then failure is almost inevitable. Experience shows that many Western brands do not cross the cultural divides.
The language barrier is the first obstacle to overcome. Western languages codify words in written script whereas each Chinese character represents a word. So any brand moving into China has to decide how it will be rendered in Chinese—both phonetically and visually.
According to Bing Ho and Hal Fiske of Baker & McKenzie, about half of the foreign brands used in Chinese-speaking jurisdictions are translated phonetically, half conceptually. Phonetic transliterations include Louis Vuitton ("lu yi wei den”) and Nokia ("nuo ji ya"). Shell and Nestlé, meanwhile, have opted for literal translations of their names: "bei ke" (a shell) and “que chao" (a swallow's nest) respectively.
The best renderings, however, are those that marry the two approaches together, and Coca-Cola's choice of “ke kou ke le"is perhaps one of the best examples. In the early days shopkeepers would use any characters that gave a close phonetic approximation to “Coca-Cola.” Thus resulting in an oft-told story of Coke’s early translation problems. Today, the consistent use of “ke kou ke le" ensures that (in Mandarin at least), consumers understand Coke to “permit the mouth to rejoice.”
Big brands like Coca-Cola have to choose their Chinese name with care. “Five years ago, so long as the name sounded OK, it didn't matter that much,” says Mark Kennedy. “Now you have to have a name that works visually, phonetically, and means something too.”
But a name is only the beginning. Marketing and advertising is equally tricky in the Chinese market. You may have a thoroughly researched brand strategy for Western markets, you may know your positioning and your key messages, but there is no guarantee that any of it will work in China.
“In terms of messages, some Western brands make the mistake of addressing personal or individualistic things in their promotions,” notes Fuchs. “But the Chinese think in terms of community. They look at group issues; they see themselves as members of a group.
“Chinese society is a relationship society. The Chinese are not so easy with big bang advertising. They listen to recommendations, and emotional appeals. They are phenomenal readers and talkers and branding works well using word of mouth. Brands therefore must tell a story and have a strong identity and history.”
Basically, a global brand strategy must be tweaked and adjusted for China. If your target market in the West is the 25-year-old college graduate, there's no reason to think that a 25-year-old graduate in Shanghai would be at all similar. Furthermore, a graduate from Shanghai may have a very different view on life from a graduate in one of China’s smaller inland cities.
“People have little understanding of what China is,” says Mark Kennedy. “They think Shanghai equals China, but this is far from the case. China is a huge landmass. Beyond Shanghai, Beijing and the developing east coast, cities have limited infrastructure—this is still an emerging market.”
Most companies launch in eastern coastal towns (usually Shanghai), hoping for some sort of halo effect. They use the cities as a showcase, and as these markets become saturated the idea is to move to secondary and tertiary cities. What they do not allow for is the vast contrast in language, culture, tastes and attitudes between the different regions of the country.
“There is no such thing as a Chinese consumer,” Kennedy warns. “Proper research is paramount.”
Fuchs echoes this call. “This is where people have gone wrong in the past. Market research is very underdeveloped in China—you just don't have the facts, figures and consumer insights. And most of the official facts and figures are inaccurate so you cannot trust published data. You've got to do lots of original research.”
The end result of the branding exercise (the look and feel) may not resemble the brand in other countries, but how you get there should not change. The fact that the market is developing is no excuse for shortcuts.
It is important that companies quickly learn to get their branding right, for competition is increasing fast. Choice is exploding and the brand will quickly become the main differentiator. Joseph Wang of Ogilvy & Mather in Beijing puts it thus: “China is like a child that has had no toys,” he says, “then suddenly the world's biggest Toys R Us opens up round the corner. There's a tendency to overdose at the moment, but they are learning fast. The consumer is becoming more demanding and brands must be able to meet their desires.”