What the West can learn from China

As the world's economic attention turns to China and India, marketers are eyeing up new markets and new competitors. But rarely is the question asked: 'What can marketing learn from China?' When marketing commentators talk about China, it is in the same way they talk about marketing in the West – brands, advertising, markets, price, quality, etc. But there are fundamental differences in the way the West and the Chinese see their worlds.

These differences mean it is dangerous, as well as arrogant, to impose our Western marketing approaches on Chinese markets. Even more dangerous for Western marketing is that we close our minds to what we can learn from the Chinese about marketing. Just the idea that we can learn from them seems to be something that is either rarely considered or simply rejected. Yet the Chinese have been highly successful merchants for centuries.

But, at the very least, we can look at some major marketing concepts in relation to China and see that the rules of the West may not be as absolute as many think.

LANGUAGE OF MARKETING

The language of marketing reflects Western ways of thinking, in particular, concepts that primarily arose from American and English business people and academics. The original idea of the product brand, for example, places the brand at the core of the campaign and then focuses all resources on selling that brand to the target audience, who are also individuals. The implication is that the market is made up of small parts and if we understand the parts, we will be more effective marketers.

Thus, Western marketing is very much an individualistic concept, because it is more concerned with the individual buyer and less concerned about the people and environment around the product – for example, who made it, who transported it, how old it is and who else uses it. Moreover, marketing is very much concerned with immediate results, in particular reaching quarterly targets.

The Chinese are more patient and more dogged in their approaches. They even see markets very differently, as they tend to look for changes in patterns rather than breaking things down into smaller parts. This difference in the way we look at things (the Western atomistic perspective versus the Chinese pattern perspective) has been highlighted in discussion on scientific thought and processes, and needs to be more widely considered in marketing.

It has also been suggested that 'today's multinationals may have yet another lesson to learn from China's companies: the idea of thinking forward in decades'.

There are many Western marketers who would be very pleased to think forward, if only a few years, rather than simply a few months. But thinking forward in decades must create a very different perspective of challenges and goals, most notably, a view that short-term fluctuations are not important.

SOME LESSONS FOR THE WEST

An analysis of Chinese culture and values suggests that there are some fertile areas for marketing to investigate. It is ironic that we can see evidence of virtually all the following themes – fundamental to Chinese culture – developing in the West. So the Chinese may be giving the West a glimpse of its own future as it becomes increasingly clear that many of our marketing's cherished beliefs and practices are losing their shine.

Values are Crucial

The Chinese can teach us a lot about recognising the importance of values, particularly those that underlie consumption. The 'Eight Honours and Eight Disgraces' (see Appendix 1) do not glorify consumption as in the West; the idea of wallowing in luxuries is an anathema, in contrast to our belief that luxuries are something everyone 'deserves'. This is why the Beijing major reacted so badly to the outdoor advertisements promoting luxury goods during the Olympics. It was felt that conspicuous appeals to status consciousness undermines the goal of maintaining harmony between rich and poor as well as failing to maintain the balance between modern prosperity and China's ancient culture.

Relationships are All

Perhaps the most striking difference between Chinese and Western cultures is the focus on social connections – people as they exist in a group or network – as opposed to the individual by him/herself. Relationships are all important and the source of authority in virtually every area of life: people trust each other, not companies or brands. Indeed, the concept of relationships with companies as we know is alien since relationships take time and reciprocity to nurture.

Social networking, of course has become an area of great interest to us in recent years but, as the debates over viral marketing, peer-topeer and how ideas spread show, there is still a lot to be learned. We still persist in focusing more on trying to understand the individuals within the social connections, rather than on how the connections themselves work.

Product vs Corporate Branding

The Chinese attitude to brands is complex and often seems contradictory. It is a popular view that brands are everything in China because of the 'cool factor' or status. Studies have shown that 'flaunting my status' is the number one priority in choosing a brand. However, other data suggests that the Chinese care only about low prices, and point to the millions of brand fakes (see Appendix 2).

This is not necessarily a contradiction. If companies create brand fakes, then they must think that the brand is something worth having. For example, the Silk Street Market in Beijing, which is famous for making copies of international designer and branded goods, has recently unveiled its own brand – Silkstreet. With a delicious irony, it warns that anyone who tries to counterfeit that brand will be held liable!

Brands create a level of trust, but the Chinese are more inclined to trust the companies that make the product brands rather than the individual brands themselves. In other words, they relate to the family from which a brand comes.

Brands like Haier and Lenovo have been criticised for emphasising the corporate brand over the product brand. But when safety, reliability, durability or other functional benefits are important, the Chinese are more likely to believe in the corporate brand than the product brand, which is highly likely to be counterfeit.

P&G and Unilever have taken a similar tack and, unlike their practice in Western markets, have chosen to put the parent company's name to the fore, rather than that of the individual brands. They believe the market is so fragmented, the number of new brands so large and the fear of fakes so ingrained, that firms can best reach customers by emphasising the status of their corporate brand.

Indeed, corporate branding tends to be the norm in China because, as noted above, companies enjoy far greater trust and authority than single brands. It is also a defence against declining loyalty. Studies in China suggest that individual brands may have only fleeting appeal, especially to the young, and so-called loyalty is declining, particularly for product brands. In this case, the corporate brand becomes far more important.

We have seen the rise of corporate branding strategies in the West – for many of the same reasons – but the Chinese model takes it much further. This approach also demands rethinking of product and product brand strategies, perhaps with a shift to the idea of short-term brands and short product life cycles.

Saving for Tomorrow

While the rest of the world struggles to raise savings, China, with a savings rate in excess of 40 percent, struggles to get its people to consume more - Joseph Stiglitz

A key difference between the Chinese and the West is that they have a completely different attitude to saving. Savings are currently 28% of monthly income, compared to 21% in 2005 (only 3% in UK). To the Chinese, saving is a virtue that is similar to the Victorian or religious values of the West, but that few now practise. It is a reminder that we could do much more in the West to encourage saving. As Stiglitz notes, China needs to do more to encourage spending.

Consumerism and materialism in the West appear firmly entrenched. But the lack of savings is creating considerable concern among Western governments, especially given ageing societies and certainly in light of the current world economic downturn. Saving must be encouraged and governments are already moving to reward increased compulsory saving through the tax system. The result is likely to be buying behaviours more similar to Chinese behaviour than current Western behaviour.

A Long-Term View

There is a Chinese proverb that says 'A journey of a thousand miles begins with a single step', and it appears that, while China may be in a hurry to grow, it is also accustomed to an ancient culture with a long history. They respect age, not youth. They may well take a more long-term view of every aspect of marketing, preferring not to sacrifice quality for quarterly earnings, or to compromise integrity for short-term gain.

The lesson from the Chinese may be that it is desirable to take a long-term view. If marketers only learned this lesson, marketing would look very different than it does today.

CONCLUSIONS

Marketing, indeed capitalism itself, is not value neutral. All cultures interpret the basic concepts of marketing through the filter of their own deeply rooted cultural values and practices. China offers a fascinating insight into how Western marketing 'works' in a culture that differs in so many ways to our own.

What is fascinating is not just how the Chinese are adopting many of our principles and practices, but how we may, inadvertently, be adopting some of theirs.

APPENDIX 1 – VALUES IN DAILY LIFE

Values are important to China. 'Eight Honours and Eight Disgraces' is a concerted, nationwide effort to improve behaviour. Among the honours are 'Love the country,' while its accompanying disgrace is 'Do it no harm.' Another honour is 'Live plainly, struggle hard,' with its accompanying disgrace, 'Do not wallow in luxuries and pleasures.' Traditional values are pushed on TV with modern stars and praise for foreigners who adopt Chinese values or ways, such as Chinese medicine.

APPENDIX 2 – BRAND FAKES

The recent NEC case, which crossed China, Taiwan and Japan, found that sophisticated pirates were faking NEC itself. They had set up a parallel NEC brand with links to 50 electronics factories. Using the NEC name, they copied NEC products and even created their own line of NEC-branded products. They behaved as NEC managers would, carrying business cards, commissioning product research, and signing production and supply orders, even issuing warranty and service documents (Source: Jeff Swystun, Interbrand).

THE BRAND FAMILY

Yahoo! focuses on advertising its corporate brand rather than individual products. The company organises events that invite consumers to participate, knowing that people value their associations with name brands and how they are perceived by their friends and family. It also helps that Yahoo! founder, Jerry Yang, is a Chinese-American; this gives him credibility.