Organized with WPP Group’s GroupM media division and Ogilvy PR division, the event brought together senior marketers from companies such as Unilever, Motorola Corp., Mars and PepsiCo, for panel discussions moderated by a CCTV anchor.
Below is an edited transcript from a panel featuring Richard Lee, Pepsi’s Shanghai-based VP, Greater China and Michael Tatelman, Motorola’s Beijing-based managing director, China, about how to market successfully to local consumers.
CCTV: Why do you focus on fashion in your brand marketing in China?
Michael Tatelman: The device formerly known as the cell phone has become the 21st century’s symbol of self-expression. It’s natural that the one thing you’d never leave home without is a reflection of your personality. The device is not only for voice but also for entertainment, so it’s natural that would become an aspiration symbol from a fashion perspective and that it’s customized--and customizable--for various personalities, particularly among youth.
Richard Lee: With China’s economic market reforms, Chinese consumers, especially young people, are getting more self-expressive, optimistic and forward-looking. Pepsi’s core target is young people, so it’s important for us to position Pepsi as a trendsetter. I’m not talking about just making Pepsi a key brand, it should be a brand with aspirational brand values.
CCTV: How do you differentiate your brands from your competitors?
Mr. Tatelman: The magic happens when you’re able to take very complex technology and mask it with exquisite design and function that enables consumers to utilize a device seamlessly in their daily life but it also has iconic beauty. It’s not just about the product, it’s also about the aspirational branding, being authentic and original.
Mr. Lee: One way is to make our slogan, “Dare for more,” the central idea that ties everything together, not just in brand communication. I’m talking about making “Dare for more” as a central brand philosophy that guides everything we do. For example, each year we try to experiment with new unconventional ways of doing marketing, which make consumers the center, make brands as active and engaging as possible.
Earlier this week, we launched a new campaign, the Pepsi Creative Challenge, where we invite consumers to develop their own Pepsi stories, and invite consumers to go online to vote for their favorite, and then we’ll make the commercial starring our biggest star, Jay Chow. In this case, the consumers are not a passive audience, they become Pepsi marketers.
Mr. Tatelman: You can’t separate the notions of fashion and entertainment because entertainment sets the pace for many people in fashion, it’s great to mix the two. and utilize especially music, to produce that aspirational view and the fun aspects of life. Motomusic.com.cn (http://www.motomusic.com.cn/) is the largest legal music download site in China. It really represents our vehicle for introducing customers to the moto brand, download ringtones, soundtracks, it’s the center of our digital universe.
CCTV: Why are celebrities effective in advertising in China for both of your brands?
Mr. Lee: We use a lot of stars, who are very expensive, but they are not just the spokesperson, we use them as brand evangelists through what they wear and say in public campaigns, but they are doing this with conviction and passion. For example, they go out to charity events or even help us on packaging graphics, way beyond what we pay them.
Mr. Tatelman: We’ve used many stars in China such as Yao Ming to do an event with the Special Olympics here, but we also try to leverage young talent in China, especially through music. In Shanghai, for example, we’re using a young up-and-coming star in the music business. It’s a symbiotic relationship. It’s an incredible opportunity for an artist or celebrity to build their brand through us, so the artist generally comes to us with an idea and says we want to create our brand along with your brand.
CCTV: China has a large population and sometimes multinational marketers neglect western regions. How much potential do you see in the western regions?
Mr. Tatelman: We’ve been focusing for the past two years on expanding our distribution. Certainly it’s the No. 1 investment for us in this market, to expand our distribution into tier two, three, four and five cities and towns. Our marketing in those areas has been fantastic. We literally paint the walls of stores [and] buildings with advertising. It’s been very effective and we’ll continue to focus a tremendous amount of our resources into getting our brand and products into the suburban areas.
I’m also contradicting my friends and colleagues about the perceived lack of sophistication about Chinese in rural areas. You should never underestimate the sophistication of Chinese, especially in the electronic age. There are about 140,000 Internet cafes in China where you find youth engaged in shared gaming or surfing online. I don’t really find a lot of difference out in the suburban areas. Youth there are interested in the same aspirational attributes as youth in the big cities.
CCTV: How do you treat competition from local brands?
Mr. Lee: We do what we do best, although in many cases, the local brands have a big advantage, they can adapt to market conditions faster. We’re constantly trying to position Pepsi as a brand young people can relate to.
Mr. Tatelman: It’s not a question of if but when we see the emergence of very strong local brands, not only in China but globally. We compete with them already, Chinese brands control about 40% of the local mobile phone market and there is a consolidation going on in our business right now. There are too many brands and models. It’s confusing for consumers. We face strong competition from Chinese companies and it’s healthy, we learn a lot about understanding the market from what they do.
Mr. Lee: The key is to know the markets. In the third and fourth tier cities where local brands are strongest, we have dedicated marketing teams that take care of local executions with agility and strong local insights.