Marketing a product in China is a challenge for many a Western company. The biggest mistake is thinking that this is just one country.Cultural differences and differing socio-economic backgrounds make successfully establishing a brand locally a tough nut to crack.
Any person who has been in contact with local culture will immediately pick up on the fact that even the Chinese make a clear distinction on where they are from geographically. On its most basic level, in China this is the North-South divide. Common stereotypical depictions state that Northerners eat mainly noodles, are physically tougher and more direct and are able to drink more alcohol, while Southerners eat mainly rice, are of calmer nature but also cunning. While this sounds like a humorous generalisation, the sort of which can be found in pretty much any country the world over (one only need think of existing stereotypes between the South and North of England), the difference in character in the Chinese world is actually so prevalent, that different marketing approaches are necessary for different parts of the country.
According to Professor Bernd Schmitt, executive director of ACI (Institute on Asia Consumer Insight) the difference between Northern and Southern Chinese consumers are as follows: “North China is more of an artistic culture whereas South China is more of a trading culture. This means that for marketing communications to be effective in the North, the appeal should point towards traditions and history as compared to the South where the messages can be more direct.”
The differing cultural backgrounds of the Chinese people seen from a North/South perspective have a number of other consequences. For one, the stereotypes that Northerners drink more alcohol and Southerners eat more rice were corroborated by a study of China’s geographic market segment published by the Association for Consumer Research.
More generally speaking, research indicates that Northerners are less cautious with their money and less fastidious with products they purchase. Bowen Huang, general manager of Delta Pronatura, a company in the process of introducing German Dr.Beckmann cleaning products to the Chinese market, explains the difference as follows: “If a Northern Chinese girl asks her boyfriend to buy her something, he will immediately follow suit, no matter the cost.”
Southerners on the other hand, due to their trading in background, will consider value for money and inspect the quality before deciding to buy a product. For Mr. Huang’s company that means following a different marketing strategy in different parts of the country. Larger packages are sold in the North, where bulk purchases are common, whereas down South not only is the size of the package decreased, but a lot more consideration needs to be given to the pricing. As Southerners are very good at budgeting and unlike their Northern brothers care a lot about price, this is also a very important consideration for new companies entering the market.
However, the North/South divide, while already being more complex than the regular approach of “one size fits all of the country”, might still be oversimplifying an excruciatingly diverse consumer group. In addition, there are differences in purchasing power and product preference between the densely populated East and the underpopulated West.
Then of course there is the urban/rural divide. Especially import products are usually found in metropolitan areas, where people have a) been exposed to foreign culture and are therefore more open to it and b) possess more disposable income than their rural counterparts and are therefore able to afford the highly-priced foreign goods. It is not without reason, that the ACR study suggests foreign companies to test-run their products in China’s top-three urban areas, Shanghai, Beijing and Guangzhou, as if these areas like the concept, other cities will follow. Examples of chains such as Element Fresh or Wagas opening stores in Nanjing after being a success in Shanghai is obvious proof that this has become the tried-and-true marketing concept for many foreign companies.
After much consideration and research and taking all the above differences into account the complex Chinese market tends to be split into seven different regions, adding the East, Central, Northeast, Southwest and Northwest to the mix. Dealing with such a wealth of differing tastes and possibilities can be daunting.
One company that has solved this problem in an efficient and creative way is KFC. In order to recognise their customer’s diversity, they introduced a monthly rotating menu item, that is chosen from China’s diverse culinary tradition, appealing not only to different geographical locations, but also attracting older generations who are not overly tempted by the idea of fried chicken.
Some might argue that the Chinese love for food certainly has made it a lot easier for foreign culinary enterprises to penetrate the local market, whereas companies such as Mr. Huang’s, specialised in selling cleaning products, might face a far greater challenge, one of creating an entirely new niche for themselves.
A quick look into Suguo confirms that the local choice of cleaning products is rather limited. According to Mr. Huang “Chinese consumers have very basic ideas about cleaning products. In Germany, where Dr.Beckmann cleaning products stem from, people are used to the idea using a variety of cleaning products for different types of stains. In China, this is not the case and so consumers expect to find the one product that takes care of everything. Therefore it takes time to convince local people that specialised products will yield better results.”
While introducing a hitherto unknown concept to an incredibly diverse market seems like a gargantuan task, in moments of doubt one must only remember that favourite anecdote told by marketeers the world round; the tale of two shoe salesmen. Upon arriving in a foreign country in search of new business opportunities, they both discover that the locals do not wear shoes. One man is devastated. He contacts his company to tell them “I am coming back. There is no hope here, no one wears shoes, so there is no one to sell to.”
The second man gets in touch with his company overjoyed: “No one here wears shoes! So much opportunity!”
