Tips for Growing Your Business in China

An Excerpt from Normandy Madden's White Paper on Winning Over Chinese Consumers

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SHANGHAI ( -- As the global recession continues, China remains one of the few bright spots for multinational marketers.

With about 300 million urban, upwardly mobile consumers, China is home to the world's largest internet and mobile-phone populations and is already the No. 1 global market for cars, beer, cigarettes and, soon enough, luxury goods.

Winning Consumers in China
Normandy Madden is an expert on the challenges facing brands in developing markets, and has spent the last 10 years studying and reporting on the topic in China. In this paper, Ms. Madden turns that decade of research into an invaluable primer for anyone marketing to -- or considering marketing to -- Chinese consumers. The paper documents a raft of opportunities for brands, agencies and media owners -- and offers guidance on avoiding some of the many traps that have snared brands in China in recent years. Click here to purchase the white paper.
But China's size doesn't guarantee success. The fifth-largest ad market is one of the toughest places in the world for foreign brands to succeed, especially if marketers don't do the right due diligence in everything from partnering to pricing.

Ad Age has identified key ways to help marketers grow their brands there -- and learn from the costly marketing mishaps of others -- in "Winning Consumers in China: The Top 10 Things Marketers Need to Know to Succeed in the World's Fastest-Growing Market," a comprehensive white paper being released today.

Here are a few of our top tips. The full analysis is available in the white paper.

Don't think of China as a single country. With 273 of its cities home to more than one million inhabitants (compared with fewer than 10 in the U.S.), China is more like dozens of countries sprawled across five time zones and 22 provinces.

Chinese consumers are fickle, demanding, price-conscious and often more educated about a company's brands than consumers in the West, thanks to the rapid growth of the internet.

And there is no such thing as the typical Chinese consumer.

Don't misinterpret the popularity of some Western brands as a desire among Chinese to become Westernized. Chinese appear to be flocking to international products to absorb and mimic Western culture, and a stroll through the biggest cities is often like a trip through a giant U.S. mall. Shanghai even has a new three-floor Barbie store.

The opposite is true. Yes, Chinese want to express a modern, global mind-set and be part of the international community. But they remain firmly grounded in many of the Confucian traditions and beliefs that have shaped China's culture over thousands of years.

Chinese people have a fundamentally different world view than Westerners, and products have to be placed into that world view.

Underestimate local brands at your peril. Marketers classify Chinese cities into five or more tiers based on size, sophistication, purchasing, attitudes, income and even the cost of retail space.

Most major marketers distribute in the first- and second-tier cities and are now pushing into smaller cities that are a much bigger challenge.

Procter & Gamble led the way in developing an innovative tiered-pricing strategy with more-affordable versions of its products that can take on local rivals better than the company's global brands.

Some of the most popular foreign brands are products and services that are used in public and convey status on their owners. That's why Nokia is the leading mobile-phone brand but local manufacturer Haier dominates home-appliance sales.

Beware mass media in China. State TV network CCTV rakes in $1 billion at its annual marathon auction for prime-time ad slots, but one of the most effective ways to reach consumers in the world's most populous country is through one-to-one marketing.

Why pay hefty prices -- up 15% in 2009 -- for airtime that reaches over one billion consumers when only a third of those viewers, at most, can afford foreign brands?

Skip CCTV's awful programs and put your ad dollars to work through events, product sampling and retail sales promotions, and master digital marketing on the web and mobile phones.

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