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What Western Marketers Can Learn From China

Воскресенье, 14 Июль 2019 r. 18:30

Source: Harvard Business Review
Issue: May–June, 2019
Page: 75
Format: Abridged (highlights only)

Subtitle: "Think content, not channels or advertising."

The Problem: Western executives of multinational brands seeking to expand globally are quick to export their media and ad strategies to developing markets. But these theories and practices, created largely in the West, are not enough to succeed in China’s new landscape.

The Context: Chinese marketers rely on the creation of shareable, viral content and the presence of dominant, channel-straddling media giants. The Chinese approach is faster, cheaper, and often more effective than Western marketing is. It’s also more embracing of risk.

The Way Forward: Western firms must learn to adapt in six ways to successfully market in China. These techniques may also help them compete around the world.

"Chinese marketers have developed a unique approach tailored to China’s mobile-first consumer. It relies on the creation of shareable, viral content and the presence of dominant, channel-straddling media giants. It is faster, cheaper, and in some respects more effective than the traditional Western marketing paradigm."

"Consider a U.S. computer programmer I’ll call Joe. He is 28 years old and earns $70,000 a year. He buys most of his clothing from one retailer, which captures every purchase he makes at its stores and website. But Joe’s life consists of much more than stocking his wardrobe. Like most people, he also spends a lot of time on his smartphone. Every morning, he checks his social media accounts. He plays an online game on the bus ride to work. Over lunch, he scans the sports news. During the commute home, he reads an online book. Spotting a coupon for pizza on Facebook, he might order one. He gets an email about a concert and orders tickets before it sells out. And he buys a new shirt for the show.

This shirt purchase is the only data point the clothing retailer sees, just as the pizza store notes only the coupon’s effect and the concert vendor captures just the ticket purchase. Each company has a little window into Joe’s life; this context explains Western marketers’ mastery of channel-based marketing—via TV, radio, print, digital, social media, and so forth. By contrast,the BATs’ vast data ecosystem allows an integrated view of customers’ lives across all channels, instead of just snippets. With this holistic understanding, the marketer can create programming that ties shopping, gaming, news, reading, video-watching, and celebrity-following habits into smarter, more contextually relevant engagement."

"A mobile-first market development. In the West, media developed sequentially over the past century, with radio giving way to TV, followed by the personal computer and then mobile. In China, the evolution happened much more rapidly, essentially leapfrogging the PC to move straight to mobile. Thus, the marketing theory, principles, and methods developed in China were built on the assumption that mobile devices are the primary way to reach consumers. Tsuyoshi Suganami, president of Amplifi China (Dentsu Aegis Network), pointed out that on China’s biggest shopping day, known as Double Eleven or Singles Day, consumers bought over $25 billion worth of merchandise—more than U.S. customers bought on Black Friday and Cyber Monday combined—with 90% ofthe purchases made on mobile phones."
 
"Western marketers do not aim to be slow, of course. But there is a central difference in approach, with large Western firms emphasizing scale and efficiency (a profit mindset) while Chinese marketers focus on speed and growth (a revenue mindset). Among the China-based teams of Western multinational firms I’ve met, this is a significant tension. Local managers are hampered by layers of global management that tend to slow down decision making, even as they interact with Chinese marketers accustomed to working quickly. 'The speed at which they work is intimidating,' Beaumonttold me. 'It’s hard to comprehend how big of an impact it has.'"

"Western firms emphasize scale and efficiency (a profit mindset) while Chinese marketers focus on speed and growth (a revenue mindset)."

“Other countries seem to have been earlier to [understand] mobile’s power and to capitalize more on it, given they have fewer options to get to consumers.”
 
"Go all-in on a social, viral approach. What would Western marketers do if they were told to drive immediate awareness without using traditional advertising—no radio, TV, digital, billboard, print, or other common channels? This is where many in China start. They believe that virality through socially engaging content is faster and cheaper and yields better results than advertising."

"In China, marketing executives speak disparagingly about “strategy,” but they aren’t using that term the way Westerners do. They really mean the painstaking, bureaucratic, process-heavy planning that takes place in firms in which economies of scale, efficiency, and risk management have become more important than speed. That way of thinking is in direct conflict with agility and risk taking. “Chinese companies have a growth mindset,” explained Hai Ye, a partner at McKinsey & Company. “Many of them can tolerate relatively low profitability in order to scale up quickly. This difference—driving market share versus bottom-line profit—gives the Chinese companies an advantage because they are willing to make big investments and take short-term losses to achieve long-term dominance.”


"DURING THE 1990S, I worked in global strategy for the personal-cleansing category at Procter & Gamble. A sizable piece of the business came from the Chinese market, so I spent much of my time traveling there, focusing on how to grow the business. Based on that experience, when I moved into academics I felt I had a foundational understanding of how to market in China. Twenty years later, my research with C-suite marketers in China has convinced me that those marketing theories and practices, largely created in the West and taught in school today, are not enough to succeed in China’s new landscape. China’s market is fundamentally different, which has given rise to a different marketing mindset and drives a different set of competencies. Whether Western firm leaders embrace or ignore the emerging mindset may very well determine their success in China—and eventually, their ability to compete around the world."

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