Multi-national companies
in China often wonder the extent to which they should emphasize their foreign
origin to the consumers as against demonstrating roots and strength in the
local market. In general it is true that in China, as in many other developing countries,
products of international origin command a certain degree of respect and are
often favored over their domestic rivals. The reasons for this are not
difficult to fathom - including frequent disastrous experiences that consumers
have had with some miscreant local players. However, given
the ascending star of China on the global stage and the
emergence of a strong streak of national pride, one could also be forgiven to
assume that emphasizing local roots is of paramount importance.
Like many marketing riddles
in developing markets, this is a complex question and the answer depends upon
many factors. First of these factors is whether the product category in
question is a premium product or an inexpensive product of daily use. At
one end of the spectrum are luxury product categories. In these
categories, only international brands have been able to register
their prowess with the consumers so far. Consumers use such products for their
exclusivity, as status symbols and as markers of success in their climb up the
ladder of success. Brands are valued for their high quality, craftsmanship and
heritage. Brands are often strongly associated with a country and derive their
image from the perception of the country (as in case of Luxury automobiles from
Germany, a country known for its craftsmanship
and engineering skills, or perfumes from France, associated with
romance and chic) Clearly establishing your international origin is of
critical importance in this category. Such brands normally do not need to
(in fact are not advised to) adopt their core offer and brand essence to the local markets.
At the other end of the
spectrum are daily use products whose usage is in the private space. Whether
you use an expensive premium product or a cheap one, may have a significant
effect on how well does your bathroom floor shine, but not in terms of how are
you seen by your friends and compatriots. The consumer choice of such products
is based on price and basic functionality, and consumers show little concern
about the origin or provenance of the brand. In fact, often the consumers are
not able to correctly classify such fast moving consumer goods as local or
foreign. In a research among consumers in second tier cities of China, many
consumers mentioned Johnson & Johnson as coming from Shanghai!
For products which fall
somewhere in between the continuum of luxury and pedestrian, the issue is a bit
more involved and establishing the international origin can be a plus
though not necessarily so. While being foreign may be associated with
better quality, being nimble and having a strong pulse of the market and the
consumers can be even more important. Marketers have to carefully decide
the relative emphasis they need to place on their international origin and
local roots. One important guiding factor is the specific product
category. For high technology products, consumer experience suggests that
international brands bring in a quality and panache that local brands struggle
to achieve. On the other hand for some categories such as skin-care or apparel,
understanding of local tastes and preferences can act as a plus. In this
middle territory, local brands often try to disguise themselves as
international ones by choosing names such as Metersbonwe ( a popular apparel
brand in China) with varying degrees of success.
The third factor guiding
the brand's strategy is specific to the brand. For brands like Coca Cola and
Nike, which through clever and consistent marketing investments, have built a
unique narrative and aura for themselves, which has stood the test of time as
well the test of geographical diversity, it makes sense to exploit their
universal value in all markets. For other brands, which though still
international, lack that strong narrative, localisation and ammasing local
strength may be a more logical choice. Even when such brands choose to retain their
global aura and persona, localization of communication themes and styles is necessary
- absence of which often leads to alienation.
Lastly, while such
preferences and attitudes do determine the importance of being
"foreign", certain events can suddenly change the equation. The most
notable of which has been the milk contamination scandal, which drove mothers
to imported milk powder to ensure the safety of their children. In a short
period of time, the share of imported milk powders rose to unimaginable levels.
International marketers need to be on the look out for such sudden "change
of wind", which can make their provenance and heritage more
valued by the consumers.
Written by Ashok Sethi
ashok.set@gmail.com
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