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China 2015: THOUGHT LEADERSHIP | Brand China

Marketers need to mind the gap

For Brand China, the challenge to move up the value chain and create an image beyond the “factory of the world” remains significant. Chinese brands have a large part to play in this transformation. This article examines ways in which Chinese brands might address the challenge either by taking actions based on successful case studies or adopting new strategies. 

It is clear that in order to succeed in the global arena, Chinese marketers must have a good understanding of overseas consumers, then innovate and localize to meet their needs. To do this successfully a fundamental question needs to be answered: How do Chinese marketers address the gap between how they and Chinese consumers see Brand China and Chinese brands (internal perception) and how

the rest of the world sees them (external perception)?

Chinese marketers see Brand China and Chinese brands pretty clearly. Their view of China is up- to-date with how China has been changing rapidly and reinventing itself. But even this internal perception is subject to potential bias. That’s because when expanding overseas Chinese marketers shape their messages both for international consumers and for the domestic Chinese audience for which they want
to create a powerful image. For example, Chinese banks expand overseas more perhaps to cater to their domestic consumers’ needs for global banking services. They might pay less attention to external perceptions of overseas consumers than they should.

Conversely, the external perceptions of overseas consumers might not necessarily have caught up with the

reality of Brand China today, and their impressions may consist of stereotypes that
are trapped in the past. Most international consumers have little direct contact with China, and 59 percent of the overseas respondents in Millward Brown’s 2013 Global Study learned about China through the filter of their own nation’s media.

GAPS ARE LARGE BUT MARKETERS MISS THEM

The gaps between internal and external perceptions can be huge, but marketers are not always aware of the nature of these gaps and their magnitude. That blind spot can have serious consequences. The successes and failures of foreign brands entering China or Chinese brands going abroad have been, and will be, marked by how brands manage these gaps.

Just a few years ago, for example, a multinational white goods brand deployed a cobranding strategy with Chinese partners. The strategy seemed sound, but what the multinational failed to understand was how Chinese consumers at that time perceived international brands as a symbol of quality for which they were willing to pay a premium. By cobranding with local brands, the multinational could not sell at the high price that the international brand name on its own could command.

In another example, many international luxury brands rapidly expand in China to sell more products. In their rush, the brands too often dilute the value of their brands and the scarcity proposition of luxury. Today, many Chinese consumers want an exclusive brand rather than one that can be seen on every street corner. When luxury brands fail to close this perception gap they diminish their brand appeal.

Similarly, when Chinese brandsgo abroad and face a perception gap, historical examples can guide Chinese marketers on how creative concepts, better quality and clever marketing can come together to change the image of low price and shoddy quality to a certain extent. Most important is for Chinese marketers to understand image gaps and come up with innovative strategies on their own. 

CHINESE IDENTITY CAN BE A BRAND ADVANTAGE

China’s unique identity, offering meaningful points of differentiation, makes the engagement of
Chinese brands at the global level interesting and imbued with potential advantages. The image of contemporary China is not just about Chinese cultural and social elements, but also about the country’s modern day economic success. The differing ways Chinese and overseas consumers perceive this image will reveal gaps. Those gaps create unique opportunities or threats for Brand China and Chinese brands.

Millward Brown’s Global Study researched the image of China as seen through the eyes of both Chinese consumers and overseas consumers from six countries. The study revealed and examined in detail the gaps between how these two groups perceive Brand China and Chinese brands. The sidebar to this article (see the following page) describes four of the gaps and approaches for dealing with them. These approaches include: changing misperceptions, as in tackling China’s trust deficit head on; or accepting perception differences and leveraging them for brand advantage.

There are many more gaps, specific to various markets, industries and brands. Chinese marketers should find out where the image gaps are and make use of them to tell fresh stories. For example, traditional Chinese medicine can leverage the acceptance of homeopathic treatment in the West. Brands such as Tong Ren Tang and Yunnan Baiyao can tell a “pure and natural” story in uniquely Chinese ways. Chinese values such as diligence and integrity can also be deployed as brand personalities for banking and insurance brands.