Future of Multicultural Marketing

The recent hype around Western imitations in China (Apple, Ikea, Subway etc.) have stirred up quite the controversy in China's ability to build global brands.

My POV:

1.) China definitely has the ability to build brands
2.) Western consumers aren't aware of Chinese brands simply because they aren't the target market
3.) In the long run, the Chinese has the ability to not only build brands but INNOVATE brands
4.) China has a high pool of information workers, combined with skilled labour & lower production costs - this will enable them to go to market faster and more effectively than Western firms
5.) It's just a matter of time, the tides are set to change. Perhaps Western brands are reacting because they feel the emerging threat?


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A discussion on LinkedIn has led to this thought provoking article: http://blogs.forbes.com/panosmourdoukoutas/2011/08/03/why-china-imitates-western-brands/

Here is my response, that can be found on LinkedIn as well:

"I would beg to differ from the author of this article, perhaps the words of 'inability of Chinese business to develop their own brands" and "that's why Chinese brands flip" come too strongly and overgeneralized.

1.) Chinese businesses definitely have the ability to develop their own brands, more than you think they do.

Some of the top Chinese brands enjoy the same successes (if not more) than "western brands", i.e.) China Mobile, China Life, China Construction Bank, ICBC, Bank of China, Ping An, China Merchants Bank, TENCENT, MOUTAI, China Pacific, Lenovo, Tsingtao Beer ... and the list goes on. This is according to a brand value study conducted by Interbrand and Forbes China (really should question the degree of research that was placed into the article of our discussion here).

Many leading Chinese brands are not known to Western consumers simply because they choose not to enter the Western markets. To me, that’s smart business strategy – to focus on building domestic market share and penetration before stepping into someone else’s turf. Wait and watch how the tides will change when these Chinese firms finally decide that “the time is right”.


2.)"A supply side approach to entrepreneurship" - my understanding of this statement is that "Western brands are good at conducting consumer research while Chinese are known for supply of labour/finance, and this fundamental difference is the reason why Western brands succeed while Chinese brands fail."

If I understand correctly, then I must say I disagree with the statement. The success of western brands as they translate to ROI and sales revenue is largely related to the balance between production costs vs. advertising expenditures. Taking advantage of low wages and operation costs in China and other APAC countries enable Western brands to reap profits and hence, allocate more advertising budget towards brand building and research. This is not a matter of chicken vs. egg - it is simple, producing a viable product comes before building a brand, for what good is a brand that does not deliver on its core promise? China helps to lower production costs, which ultimately gives rise to advertising budgets and the ability to actually “build a brand”.

Conversely, if Western brands can take advantage of China's low labour costs and resources - then I dare ask: why is China in the midst of such scrutiny for leveraging the brand expertise of Western countries and customizing it to fit the local markets?


3.) To wrap up my comments, I urge everyone to read another article by Shaun Rein – “Chinese Companies Can’t Build Brands? Think Again.” http://www.businessweek.com/globalbiz/content/jan2010/gb20100126_512186.htm"

Company Update!!

Hi Everyone!!

Sincere apologies for our blog to be MIA since April, we have been busy putting all sorts of neat stuff together that we will share with all of you down the road! Speaking of which, we have some great news to tell! Sensu Communications has added another Cultural Expert to our roster!

Laurie Ho, who will joining our team as a Partner Consultant, brings a wealth of industry knowledge and cultural expertise of the Asian-Canadian audience. In her own words, she is "an ambitious and results-oriented individual who is driven by her passion to excel in the marketing industry."  Laurie has a diverse portfolio in marketing research, financial planning, and supply chain management, with working experience from organizations such as Research In Motion, Bell Canada, and Ted Rogers School of Management. She is proud to be a second generation Canadian with an ethnic background from Vietnam. 

Laurie will also be a contributor on this blog, so remember to check back for her postings on various multicultural marketing topics, especially in the areas of experiential marketing and brand activation. Welcome to the Sensu Communications, Laurie!


PS: The Sensu website is working hard in progress at the moment, so stay tuned for our official launch coming soon!

Will Your Brand Save The Day?

http://www.marketingmag.ca/news/marketer-news/marketers-get-consumers-over-the-paywall-but-at-what-cost-25499

So it has been reported that many online publishers (i.e. New York Times) will begin to charge users for digital content. On second thought, that makes sense - you pay for your Toronto Star, National Post, Canadian Business etc., so why would that all become free now just because the same (if not more) content is available online? 

THAT is the objective viewpoint spoken with clear rationality and logic.

Unfortunately, the average consumer typically "thinks" with their emotions prior to using rationale. As an Asian Canadian, my genuine first response to any news that involves me ditching out my wallet is - "What the !#$#%^%*&%?! Are you out of your mind? Since when did we pay for anything over the Internet except for the service itself?" 

So now, imagine thousands of your customers evoking such an emotion to the idea of a paywall for online content. Not good right? Now, further imagine an advertiser walk in and announce that they will "foot the bill" for user subscription fees because they want their consumers  to be able to enjoy this digital content for free. Of course - such offers typically replace the price tag with a call to action and branded tagline. 

Putting my marketing hat on:
As the article suggests, this return model is just merely a form of sponsorship. What is most effective about it is that it manages to grasp the emotion of these bitter online users and then playing on these emotions, solve their problems to position the brand as a hero. 


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I love sponsorships - because they are such an effective form of marketing amongst the ethnic markets. When executed as part of an integrated campaign, sponsorships can drive the emotions that you want in your consumers - they show that you care about the audience, know about the events that are important to them and is simply an act of involvement at a very grassroot level.


Perhaps, one of the more notable brands amongst the multicultural audience is TD. The company's branding efforts have been a seamless execution leveraging cross-media implementations and of course, sponsorships & PR. 


Quite truthfully, as an active member of the local Chinese community in Toronto msyelf - I can say that TD's brand has been really well-integrated into both my community as well as my "consumer mind". Whenever an important event occurs within the Chinese community, you typically see TD's brand name plastered everywhere as a title sponsor. Whenever I have a financial service/banking need, I think of TD first. 


As a matter of fact, I even switched all my personal banking from CIBC to TD quite recently (largely influenced by my immediate peers)... But hey! That proves another point: you cannot expect sponsorships to deliver a quantifiable result for your brand as it is a qualitative method after all. It does however, connect you with your consumers at the relevant touch points, generate brand equity and increase top-of-mind impressions; all to ensure that the next time a consumer has to make a purchase decision, they remember you and recall that emotion they experienced with your brand.