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Marketing Viewpoint by Ruth Winett

Is It Time to Demote the 4 P's? Five Lessons from Chinese Marketers

 

Western companies wishing to expand into China and other global markets should emulate Chinese marketing practices rather than concentrating on Price, Product, Promotion, and Place, observes international marketing expert, Kimberly A. Whitler.*

 

Whether targeting foreign or domestic customers, marketers should begin to focus on a mobile first multi-channel strategy that emphasizes content and experiences, not price promotions.

 

Because of different consumer and business practices Western marketing principles and strategies are not always effective in China, according to Whitler.

 

  • The Chinese access media on mobile devices, spending seven hours per day on their phones, or twice as much time as most Americans.
  • Conglomerates BAIDU, Alibaba, and Tencent control digital content, and these conglomerates are "channel-straddling media powerhouses...." It would be as "if Amazon, Bank of America, Google, Facebook, Activision Blizzard, CNN, and ESPN were all owned by one company."
  • BAIDU, Alibaba, and Tencent possess integrated consumer data from many channels, giving them comprehensive information on consumer behavior. These insights allow them to create "more relevant and engaging experiences" for the consumers.
  • Chinese companies use content to grow (i.e., market share and revenue), while US companies use promotions to increase profits.

 

Lessons from Chinese Marketers

 

Even if you do not intend to market in China, Whitler's recommendations are worth considering:

 

Use engaging content to drive sales, not price promotions. Americans wait for sales. Engaging first through content causes consumers to buy because of "passion and joy," not because they have become conditioned by promotions, such as a buy one, get one (BOGO).

 

"Creat[e] a single brand experience that cuts across channels (in the West) or across platforms (in China)." Tencent created a game, a nine-book series, and an online series derived from a Chinese novel. Tencent made McDonald's products part of the online story, going beyond simple product placement. Tencent also created offline experiences that involved content and included Key Opinion Leaders.

 

Partner to develop cross-channel marketing programs. In China partner with the three Big Conglomerates.

 

Exploit Mobile First with content-based promotions. Huge, a digital marketing agency, and Procter & Gamble's SK-II skin care marketers created "a virtual reality experience viewed via a smartphone inserted in a Virtual Reality headset...." Within one week Chinese consumers bought 20,000 Virtual Reality headsets to view a famous actor re-enacting the discovery of an SK-II ingredient that was discovered in a sake brewery!

 

Exploit Key Opinion Leaders and go viral. Marketers from BMW and Tencent collaborated to use "Tencent's entertainment, sports, news, gaming, and finance [capabilities...,] to create a live concert/"virtual car show." Using mobile devices, Chinese consumers viewed the virtual show, which featured famous singers "test driving" the SUV. No American company has collaborated with Amazon, Facebook, or Google to create similar cross-channel programs, claims Whitler.

 

For companies that focus on domestic and/or foreign markets, Whitler has an important message: deploy mobile first; rely on digital content rather than price promotions; and create content for various channels that conveys the same messages about your brand. Also important is partnering to distribute the content on various platforms.

 

For more of Whitler's insights, click on https://hbr.org/2019/05/what-western-marketers-can-learn-from-china.

 

Winett Associates helps companies understand their customers and markets.

 

Copyright © 7/19 Ruth Winett. All rights reserved.

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