Oct 212006
 

Lisa Merriam, New York brand strategy expert, advises top Chinese marketers on how to efficiently create global brands

Originally published in the Beijing News, October 21, 2006.

Iconic-Chinese-Brands-Shanghai

Branding may still be a relatively new concept in China, but the nation can be expected to reach a high level of sophistication in a relatively short period of time, branding expert Lisa Merriam told Chinese executives at the Kotler Marketing Forum here yesterday.

Creating Iconic Brands in China

In one of the Forum’s keynote speeches, Ms. Merriam, a New York based brand strategy expert, outlined what it would take for Chinese companies to build profitable global brand icons on par with Coca-Cola or Nike over the next few years. The Kotler Marketing Forum, co-hosted by the World Marketing Association and with Harvard Business Review as one of the strategic partners, has quickly become the annual ‘must-attend’ event for top-level Chinese marketing executives. So high is interest in marketing in China that the Forum this year added a third day at a second location – Shanghai on October 20. Ms. Merriam spoke at both locations.

“With 1.3 billion people, China represents the world’s largest market for brands,” Ms. Merriam said prior to the event. “What is even more exciting is that in the next 10 years or less, China will move from being the world’s biggest producer of products to the world’s biggest purveyor of brands.” She noted that branding is now official government policy. On June 11, the Chinese Ministry of Commerce kicked off its official brand promotion policy in response to the Party Central Committee’s call for “expediting the construction of proprietary brands” in China.

During her presentation, Ms. Merriam advised Chinese business leaders how to create brands with global power in only years, not decades. “China is moving very fast,” she said. “Though branding is in its infancy now, you won’t be able to say that in a few years. Today, branding in China is a name and a logo. It won’t take long for branding to reach the level of sophistication of the rest of the world.”

Using some of the world’s best-known brands as examples, Ms. Merriam showed how Chinese companies could put those lessons to work for their own products. “In Nike’s case, it took 35 years and billions of dollars to make the ‘swoosh’ into the instantly recognizable global symbol it is today,” she noted. “But there is a faster way to establish a brand in the public’s consciousness.”

Ms. Merriam went on to outline four effective techniques to more rapidly attain that objective. These include: start with a rich corporate story and a distinctive symbol, make the symbol “the star,” flood the market with that symbol, and “involve the symbol with every audience you have,” she said.

Oct 152006
 

china-business-newsChina Business News interview with Lisa Merriam, originally published October, 2006 discussing China brands, marketing challenges and globalization.

Question: What do the developing countries get from globalization in the economic and social way?

Answer: Trade can be short-term disruptive for the societies of both sides, in this case both the developed nations that multinationals call home and for developing nations. It encourages specialization, drives improvements in quality, and forces maximum efficiency in costs and prices. But, at the same time, there are benefits for both sides. For developing nations, globalization (global trade and commerce) brings in new ideas, new capital, new jobs, and over time, an increased standard of living.

Question:What kind of problems do those multinational corporations meet frequently?

Answer: Multinationals do run into problems if they are not aware of “brand” in its larger sense.. Most companies believe they are doing their job if they make great products and have strong brands. For multinationals, that is no longer enough. A number of multinationals are now bigger in terms of revenue than the GDP of entire nations. Multinational brands thus have a bigger role beyond product and beyond company, extending to social, political, and economic considerations. The mistake they make is not thinking about these issues until a crisis forces them to do so. By that time, the damage is done.

Question: Could those problems be avoided or solved exactly?

Answer: Yes, these problems can be avoided or minimized—and also solved. First, though, companies need to realize where they could run into trouble. Then, they need to put plans into place and act on those plans. Considering social, political and economic impacts is indeed an expansion on the concept of brand. Making the mistake of thinking of a brand in terms of a product, a name, a logo, and maybe some advertising is is to misunderstand the very nature of brand. Brand is really reputation. Product/name/logo/advertising certainly play a role in reputation, but so too does how companies source raw materials, how they treat their employees, how they behave in markets, etc. Multinationals that do best (both in terms of generating sales and profit, and in serving society), are led by people who understand brand is reputation. They manage that reputation deliberately and actively at the very top. “Job one” of a good CEO is manage brand through every other function and corporate activity.”

Question: Recently, some countries started to suspect the developing of multinational corporations and funds in their own land — some even started an anti-globalization movement. Could this situation become worse? Why?

Answer: Anti-globalization forces have been active in recent years—most visibly since the 1999 riots in Seattle. Most of these activists have other agendas and are using globalization as the vehicle to protest for any number of causes. Books, blogs, television shows and other media have been produced to decry globalization. While it is certainly possible to find cases of companies behaving badly, on the whole, globalization has benefited people. Looking at countries that prosper the most, you will see that they all actively engage in and encourage global commerce. The history of economic development is a story of how standards of living and national wealth have increased across the board. Look at the world’s poorest nations and you will find nations that don’t engage in free and widespread trade. The anti-globalization movement has already lost steam since 1999. The “protester” population segment has largely moved on to other issues such as protesting the war in Iraq. Companies once the target of anti-globalization forces have changed policies, behaviors and communications to address many of the complaints. And the disruptions that accompany any large-scale change in trading are already being absorbed by the many of the economies and societies in question.

Ms. Merriam adds:
I would like to contribute an additional thought. The idea of tying economics to nations may eventually become obsolete. Nations are political entities and economics transcends nations. As humans travel more, communicate more and trade more, the concept of nation economic concept may become irrelevant. Consider an industry where globalization has been under way for decades. It used to be that a Volkswagen was a ‘German car.’ No more. It may be designed in Germany—but with significant input from the U.K. Parts might be made of Chinese steel tooled in Canada and finished in Chicago. The whole thing might be shipped via a Greek company to be assembled in India and sold by a dealer network in Mexico. So is it really a ‘German car?’ Is Germany the economic beneficiary—or are dozens of nations economic beneficiaries? The automotive industry exemplifies both the initial disruptions and end game benefits of globalization. Are there fewer steel jobs in Youngstown, Ohio? Yes. Are fewer cars made in Detroit? Yes. But there are more cars made and better cars made, and, in constant dollars, cheaper cars made. More car jobs have been created around the world. Now one town and one country doesn’t corner all the benefits—those benefits are spread around the globe. As globalization continues, and it may be an unstoppable force, products, companies and profits may no longer be things of nations, making the developing nation vs. multinational issue moot or, at the very least, the wrong way to frame the debate.

Oct 012006
 

sporting-goods-Business-branding-in-chinaBranding in China article originally published By Lisa Merriam in Sporting Goods Business magazine

The opportunity for marketing sporting goods in China is formidable—in both senses of the word. Yes, the market is awesome in size, but it is also intimidating in its challenges. Companies that bring American attitudes towards sports marketing in China will resoundingly fail.

The Chinese have dramatically different values, expectations and understanding. A few points illustrate how easy it is to run off course.

1. The Chinese don’t want to “be like Mike”—or even to be like Yao Ming. Sports play almost no role in Chinese culture. Newspapers don’t have sports sections. Kids don’t clamor to play sports in school or idolize the faces on Wheaties boxes. There is no caste of athletic millionaires. The Chinese have nothing like the NFL, the NBA, or MLB. Sport is for the “dumb kids” as it takes away from education. Education and hard work are the honorable ways to success. True, China produces fine athletes and dominates many Olympic sports, but that success does not translate into the kind of sports-centric culture we experience in the U.S.

2. Concepts like the “thrill of victory” or the “joy of healthy competition” fall flat in China. Even before Communism, the stature of the individual was subordinate to the group, usually the family. Standing out, winning, besting others, is seen as lacking in humility and vainglorious. Competition is not something that is sought. China is a highly competitive and many people feel vulnerable. Chinese history, even very recent history, has taught many Chinese that life is full of risk and that prosperity can disappear in an instant. Security and stability are valued over standing out.

3. The importance of humility can’t be overestimated. Bragging is a cultural no-no. Superlatives are to be avoided unless you want to appear untrustworthy, arrogant and presumptuous—particularly if you are a foreign brand. A restaurant in Shanghai claims “very good” food, not “the best”. What earns points are straightforward, humble, locally and personally relevant messages and promises.

4. The Olympic Games are a minefield. In China, sport is a secondary or tertiary consideration. To most Chinese the games are about demonstrating Chinese capabilities to the world and boosting the economy. You’ll find a significant amount of “Olympic fatigue”. The anticipation has been long and people just want to get on with it already. Tying marketing to the Games, with partners, sponsors, suppliers and licensees at the international, host city, national, and team level means hundreds of companies can claim some Olympics connection. Clutter is inevitable. Beware of trying guerrilla tactics in China. The Beijing Organizing Committee and the government will not be lenient if they perceive you claiming false connection to the event.

5. Image ads and conceptual ads don’t work. The Chinese are relatively new consumers and thus have a different level of sophistication in their expectations and understanding of commercial messages. Be mindful that you don’t disorient or confuse your audience. Government regulation can be a minefield, too. What seems like a neat concept to you might be deemed deceptive by the government. This is a country that banned the movie Babe because it infers incorrectly that pigs can talk.

6. You are going to run up against stiff Chinese competition. In 2004, the government launched a Brands Promotion Committee to help companies move toward the goal of building internationally valued brands. It is official government policy that Chinese companies create brands. Branding is not well understood in China, but it is only a matter of time before Chinese marketers “get it”. Meanwhile, you’ll still have to battle their bargain basement prices, inside edge in distribution, and their local knowledge of how to work the ropes of business.

7. The truth of each of the above points varies dramatically across China. The young, Westernized strivers in Shanghai are a completely different breed from middle aged peasants in the countryside. Mass marketing in China is impossible due to affect demographic differences such as age, economic status, and geographical location on attitudes and behavior.

All obstacles aside, China still represents a huge opportunity for Western sports brands, an opportunity that can’t be ignored. With 1.3 billion people, many of whom are rapidly achieving middle class status with discretionary cash to spend for the first time, it dwarfs the United States and Europe together.

But you can’t walk in with your tried and true Western marketing strategies and messages and hope to succeed in Beijing, Shanghai or Urumqi. You’ll need reliable, local mainland Chinese marketing partners. A Hong Kong or Taipei ad agency will do you about as much good as a Greek one. Test your brand messages rigorously with all relevant demographic groups. What sounds and looks amazing to you is just as likely to fall flat before Chinese consumers. Maybe you’ll be lucky and find your brand translates well. Coca-Cola means “makes mouth happy”. And then again, maybe you won’t. In Chinese, Google sounds like “old dog”.

© 2014 Lisa Merriam