This article was published in the 2011 December issue of “GCTicker”, a bimonthly publication by the German Chamber of Commerce in China.
Brand Development for China
Since its opening to foreign trade in the 1980s and again after its membership of the WTO in 2001, China was getting more and more attractive for Western brands. Key opportunities for foreign brands were limited trust in the quality of domestic products and a rapidly growing market of consumers with little brand experience and only few references but an increasing willingness to spend.
China is experiencing fast economic and social changes, this becomes clearly visible when travelling from the big cities to rural areas. Any foreign corporation approaching this complex and diverse market will need to be aware of the current situation and even more that it is likely to change quickly. As of today it might often be good enough to be perceived as a foreign brand but the branding approach should be tailored to the Chinese mindset. While this mindset is difficult if not impossible to grasp entirely, it becomes obvious from daily practice that some things work quite differently here than there.
Questioning Western-centric Standards
From a German perspective and experience many brands in China appear very “in-your-face” and strong as opposed to the more down-to-earth communication prevailing in Germany. But visuals that work very well in Germany do not necessarily do so in China. And this is not only due to the fact that models are Caucasian or the environment of a key visual is clearly Western. Chinese consumers appear to approve much more of a visual stimulating and playful communication and seem to show less appreciation for modesty or understatement. While working for Western brands one has to keep this in mind. From a China perspective visual guidelines from a brand’s Western headquarter often seem too restrictive as they place consistent appearance above all. This approach has to be questioned. Of course “You have to know the rules before you can break them” – it is still necessary to be aware of a brand’s visual vocabulary and the “do’s” and “don’ts” that come with them, but if a more appealing visual and stronger impact can be created with a minor violation of these guidelines, a responsible brand manager should be open to evaluate that direction.
Friction is a Must
In a long term design project with the Chinese subsidiary of a very successful German kitchenware brand it became apparent, that image material and guidelines from German headquarters were – unintentionally perhaps – too much localized to a “German style”, which meant in this case: clean, precise and sometimes a bit boring. It helped a lot to see how Chinese designers in the team worked with the brand. While their interpretation was often missing the mark – sometimes too emotional, too playful or daring so the brand image was on the verge of breaking – it was still an effective counter balance to the German design culture. Only through constant interaction in a mixed team the desired result could be reached: A German brand communication with Chinese characteristics.
Frictions among the design team and with the client are bound to happen in this challenging situation. Often the German HQ of a brand disapproves of even the slightest deviation from the safe roads of corporate identity guidelines. In this case it worked out very well: the business success of the Chinese subsidiary with its highly knowledgeable Chinese management convinced the HQ that this was the right path. Several results of this long-term collaboration were adapted for the German and International market subsequently.
German Perfume and Spanish Cars
Branding German brands for China often means branding them as distinctively German. This is a valuable asset, since Germany is connoted mostly with positive attributes in China. However, it should not be the main branding strategy – with a plentitude of German brands available in China this is not unique and not enough. Relying on the “German-ness” (or “French-ness” or “Danish-ness”) of a brand is also restrictive and does not fit for every product and brand. It is a good idea to mention German origins if you are in automotive – for German perfume it might not work so well.
Besides, if a brand is tied closely together with its origins, the business can be influenced by politics. French retailer Carrefour experienced China-wide boycotts after the 2008 Pro-Tibet demonstrations in France. While Carrefour does not rely strongly on its French brand origins, this would obviously be less likely to have happened if they had approached Chinese market under a Chinese brand.
China and Germany look back on a long and mostly positive bi-lateral relationship, but German brands should be aware that using “the German branding” can put you in a place beyond your control.
Raising the Bar without losing Credibility
Western products, especially luxury items, are subject to taxation and import regulation which makes them more expensive than in their country of origin, while domestic products are usually competitively priced. In addition, the willingness of Chinese to spend more money on foreign brands allows higher margins. This makes it sometimes necessary, that a brand is elevated from medium positioning at home to the premium segment in China. Cultural differences aside this alone calls for a different communication approach. However, it is important not to lose credibility. If the Chinese localization of a product and brand is too different in market positioning and communication it will loosen its ties to the brand heritage and subsequently have negative impact on trustworthiness.
While Chinese customers are still willing to pay a higher price they often also expect more in terms of presentation and service. For packaging projects this often means “more is more”. Take Baijiu, the staple of any respectable business diner and a popular gift and lubricant for business transactions. The elaborate packaging of the high-priced spirit is quite different from the packaging of a Western wine of similar price range. The ratio of packaging to product cost reveals that Chinese consumers like to see something for their money. Additional services, vouchers and gifts that come with a high-priced product are common as well. However, a balance in terms of offering and appearance has to be kept to remain credible.
A chief topic of cross-cultural trainings is the differences in cultural codes between China and the West: “White stands for grief”, “don’t give a clock as a present” and so on. Books are published which perpetuate these stories. Surely one has to be aware of certain codes, but visual communication and the perception of color is less of a mine field than one might think. Colors are not in general interpreted differently in China than in the rest of the world. Certainly, red and gold are more important and culturally “charged” than say in Germany: a declining stock value on the website of the Shanghai Stock Exchanged is indicated in green color while the rising values are red – a color system that is used in exactly the opposite way in Western Stock Exchange notation. But the emotional connections to colors work in a similar way and the most promising approach is always to look at the end-user and find out what really motivates her or him. Text book stereotypes only carry you so far.
The Power of the Word
Many foreign brand names are difficult to pronounce for Chinese and do not obviously carry meaning. For several brands Chinese consumers developed their own transliteration but it is not desirable to leave something as crucial for a brand’s perception to chance. Whether or not the Chinese brand name finds its way in a bi-lingual or Chinese logo needs further examination. Kraft as a brand mostly known for consumer goods uses a fully localized logotype with Chinese Characters. Premium brands Mercedes-Benz or Omega rely on their original Logo with Latin Characters but make strong use of their Chinese Brand name in their marketing material. If a brand name consists of an abbreviation like IBM, this Latin notation can prevail also within Chinese text, but in general: not using a Chinese name is a missed opportunity. The metaphoric quality of the Chinese language allows injecting memorable images into a brand name which can be of great assistance in promoting it. A simple phonetic transliteration might please Western headquarters as this shows strong connections to the original name, but it might only convey “foreign-ness”. Using the Chinese language in its full right (not only to emulate a Western name) and at the same time not neglecting the brand heritage is a challenge which requires cultural sensitivity for both sides.
The most balanced and sensitive branding efforts will not lead to success if the products do not deliver. Especially the product portfolio has to be carefully examined. Does it fit to the market? Do Chinese use products really the same way we do? A typical example is the dominance of “extended versions” of German cars with their roomier passenger seating area. The reason is, that once people can afford a car they can usually also employ a driver and will sit in the back. In addition, the larger gap between low and high income class makes it more economically reasonable to focus on premium cars. This also is changing, but for a good while the brand communication directive for most German car brands was obviously “premium” and “quality”.
On the other side of the spectrum: in a branding project for washing powder, research revealed that in 2nd and 3rd tier cities most people use the washing powder to hand-wash their clothes. This information has to be considered, since in most Western markets it would not make sense to promote that a washing powder is also good for the skin. The same product is used differently, and its design has to adapt to that situation.
For foreign brands it can make sense to focus entirely on the top range of their products but this is not a given and careful market research is an important requirement for foreign brands on their way to China.
There is no standard approach to branding for China. China is very complex and diverse and the best way to have success with a foreign brand in China is not to simply rely on the fact that it is foreign and thus by default attractive. It is crucial to get to understand the specific market and end-users and find out how they live and what motivates them. In the creative development, interaction between Chinese and Western team members is the best foundation for convincing brand localization that neither breaks with the brand’s heritage nor ignores Chinese special characteristics.