Unilever revamps Zhonghua to take on Crest and Colgate

Chinese brand's makeover centers around Valentine's Day

By Published on .

SHANGHAI--To transform Zhonghua, a local, mass-market toothpaste, into a cutting-edge innovator, Unilever has developed its first major digital campaign in China, an online contest linked to the unlikely western tradition of Valentine's Day.

Although the Feb. 14 celebration of romantic love began in Europe, and Americans turned it into a Hallmark holiday, Valentine's Day has become "hugely popular" among the young, urban Chinese that Unilever wants to attract, said Kitty Lun, chairman-CEO of Lowe Worldwide in Shanghai. The Interpublic Group of Cos.' agency handles advertising and brand strategy for Zhonghua, but the online contest was developed by DDB Worldwide's Tribal DDB interactive division.

The western holiday approach is just one of the changes Unilever has implemented to overhaul Zhonghua's image. It has introduced more dynamic advertising with a fresh, icy blue color scheme and logo and a "core-in-core" gel formula that combines antibacterial mouthwash with tooth protection--a first for China.

Zhonghua is No. 3 brand
The changes were needed. A leading player in the mainland for over 50 years, Zhonghua is still one of China's top three toothpaste brands with a 16% market share, according to ACNielsen, thanks to a solid base of older consumers who typically eschew pricey foreign brands. But it isn't popular among the young consumers who are fueling growth in China's oral hygiene category, and Unilever is tired of trailing the two market leaders, Procter & Gamble's Crest and Colgate-Palmolive's Colgate brands.

“We are still learning about how to manage this local brand,” conceded Frank Braeken, Unilever's chairman, Greater China, based in Shanghai, during a CEO forum sponsored by CCTV and GroupM last year in Beijing. “We are adjusting our strategy on Zhonghua pretty continuously, as we learn to compete with the particular features of that brand.”

The Valentine's Day promotion, which started on Jan. 1, allies Zhonghua with one of China's most popular portals, Netease. By visiting the brand's microsite zhonghua.163.com in the weeks leading up to Feb. 14, consumers can declare their love publicly in their own words. The most romantic vow on the microsite, selected by an online vote, will be published on Netease's home page 163.com on Valentine's Day.

The contest, which is spreading through cyberspace via the viral e-mails, blogs and message boards frequented by millions of Chinese, also offers chances to win prizes. The authors of the most romantic vows will be invited to a “love party” in Beijing on Feb. 11, where about 300 couples can state their vows onstage.

Valentine's Day "getting popular"
"We found the Zhonghua brand is weak on some attributes [like] modernity, innovation, appeal to young consumers. The key task is to rejuvenate Zhonghua and lift its brand image," said Scott Yuan, the company's brand director for Zhonghua in Shanghai. "This activation is carried out in key cities where Valentine's Day is getting popular among China's young generation. Also, the product benefit--fresh breath--is also related to relationships."

The digital contest is part of a mass-market TV, print and outdoor and print campaign created by Lowe that broke last month using the same slogan, “Freshness you can see.” Media was handled by GroupM's MindShare division, which also assisted in negotiations with the Netease portal.

Taking a brand online has become an essential step for any marketer looking to grow sales among young Chinese, among the most avid web surfers in the world, but the Valentine's Day contest is a major shift for Unilever, said Mr. Yuan. "We normally only use TV and outdoor to reach our consumers. This is our first time using the internet to promote a new product, as its functional benefit is targeted at younger consumers. It's not a one-off thing, it will continue, based on learnings from this campaign."
The heart of the overall campaign promotes the notion that Zhonghua can bring consumers closer to their partners by giving them fresher breath. That's an increasingly common approach for marketers of oral hygiene products, as well as chewing gum brands like Wrigley, as young Chinese worry about freshening their breath as they enter the workforce and begin dating. Many Chinese, particularly in rural areas where local brands like Zhonghua are popular, lack education about dental hygiene. China has just 56,000 registered dentists for a population of 1.3 billion, according to the World Dental Federation.

The new gel formula and marketing approach have great potential to build the brand in China, said Richard Pin, Lowe’s business director based in Shanghai. "It's in third place now but it's the No. 1 local brand, and increasingly is seen as an innovator."

Leasing brands

While rivals like P&G have fought to take full control of their Chinese joint ventures, Unilever entered China with a different strategy, leasing brands from local companies in unusual, often messy bilateral deals for undisclosed fees. It turned out to be a rocky strategy, and improving Unilever's acrimonious partnerships in China was one of the most urgent tasks facing Mr. Braeken when he arrived in China in August 2005.

Although Unilever doesn't own Zhonghua, a licensing deal with the Shanghai Toothpaste Factory Co. in 1993 gave Unilever full control of the brand for ten years. That agreement was renewed for another decade in 2003.

The Anglo-Dutch company promotes over a dozen global brands in China, including Lux soap, Hazeline skin-care and soap, Omo detergent, Cornetto ice cream and Lipton tea. The company has invested in other local brands besides Zhonghua over the years, such as Maxam, also licensed from the Shanghai Toothpaste Factory in 1993, Jinghua (tea), Mountain (ice cream), Lao Cai (seasoning) and Fang cao (detergent).

So far, the only Chinese brand supported by Unilever that has performed well is Zhonghua. That's partly because Unilever spent more to advertise Zhonghua than it invested in the other local toothpaste brand, Maxam, or even Signal, a global brand. Maxam was returned to its original owner when that ten-year agreement expired. There are widespread rumors in China that Unilever may withdraw Signal from China.

Mr. Braeken would not confirm a Signal withdrawal, but he did tell AdAgeChina, “All our strategic focus is on Zhonghua [and] Signal has only a secondary role.”
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