Why the U.S. Marketplace Is Prime for Chinese Products

Monogram Group's Scott Markman Breaks Down the Results of His Company's Latest Study

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Americans are increasingly open to buying Chinese products, according to a survey by The Monogram Group, so President Scott Markman is advising Chinese marketers to make the jump into the U.S. market now.

Scott Markman
Scott Markman

Based in Chicago, Mr. Markman has been helping Chinese brands grow internationally since 2007. He hired China experts and started visiting the country, where he tried to explain the importance of American marketing concepts to technocratic Chinese executives.

Mr. Markman spoke with Ad Age about his company's latest survey of Americans' perceptions of Chinese brands.

Ad Age : Your survey this year showed that 24% of Americans believe goods made in China are high quality, up from 16% in 2008. And there was a drop in the percentage of Americans who believe Chinese goods are low quality, down to 39% from 55%. What's behind the shift?

Mr. Markman: In the last two or three years there's not been any sort of poisoning stories in the national press about products coming from China, so it's a little bit of that . People tend to have short memories. … But we all make perceptions on a handful of data points and fill in the dots. The problem with China is a lot of the dots out there are about shoddy quality.

China's price times quality equals value ratio is on the ascent. They're going in the right direction. Gradually China -- in the collective sense -- needs to continue going up that curve; it needs some bellwether brands to lift the whole perception.

Ad Age : One finding from the study is that more Americans are open to purchasing Chinese products in categories such as computers and cars. But interestingly, the trend also includes categories such as toys, herbal products and soaps and shampoos . Were you surprised?

Mr. Markman: Those were the biggest shockers to us. Categories we queried were purposefully all over the place. Some of the news stories about dangerous products being recalled were about toys. And products like soaps and shampoos are personal things.

With soaps and shampoos , we took that as a powerful signal that American consumers are open to considering excellent Chinese products and brands that do their work correctly and follow global branding standards. The real missing piece for Chinese companies is the marketing piece, it's what they don't value and don't understand. There's often the perception that 'I make a very good product, get it on the shelf and it's going to sell.'

Ad Age : What needs to be done to change this perception?

Chinese don't tell their stories in an American way. I can guarantee you the first image on the homepage of 90% of Chinese companies' websites is a bird's-eye view of their factory, because it's important to them to say to the world, 'We're legitimate, we've very big' and the best way to show that is the roof of their gazillion-square-foot factory.

The second thing is always an image of the chairman-CEO sitting at his desk, scowling. Third, they show scans of their quality certificates. And, if they take the time to develop branded imagery, it is Chinese faces smiling, looking off into the sunset ... life is good, life is harmony.

Would Kraft ever do that ? Of course not. To an American, it comes off as goofy, but this stuff is infused in every Chinese website. And you say, "Look it's fabulous for you in China but here in the U.S. it means nothing or is going to take you off message. So are you going to invest $40,000 to American-fy your website or not?" Well, a lot of Chinese companies won't.

Ad Age : Which Chinese brands have done a good job of marketing themselves in the U.S. market so far?

Mr. Markman: Lenovo and Haier are the two brands spending tens of millions of dollars on major campaigns, so from a sheer investment spend, they are the two guys playing the game at a world-class scale. Their brand awareness numbers, I promise you, while on the rise, are pretty low. They will have to do this for years to become a household name. Haier is a big sponsor of the NBA, so they are absolutely headed in the right direction.

After these two companies, there's a massive drop-off. There's really nobody else pouring people, time and money into brand building that are even close to those guys. I think very soon Li-Ning will be the next one because an American company [Chicago-based digital marketing firm and joint venture partner Acquity] is bringing them into the U.S. market and they're going against Nike . So if anything, they'll have to overspend. Will they do it skillfully and not just copy the leaders? I'm not sure.

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