Written by Andrew Kuiler, Managing Director, The Silk Initiative
Welcome to our second article in this three-part series where we share insights drawn from our experience helping American food and beverage brands navigate the complexity of the Chinese marketplace.
As we explored in the first article, US brands wanting to successfully enter the Chinese market can no longer rely on the image of being an imported brand alone. In this article, we explore whether the same applies for brands that already have their products on the ground in China and how they can best penetrate and grow their position in the marketplace further.
In contrast to how companies in the US grow through line extensions or by extending their brands into new categories, success for US companies in the Chinese market also rests on other abilities. This includes utilizing their company’s brand equities from back home whilst simultaneously adapting the product to the Chinese marketplace.
Three US companies in China that have done this well are KFC, McDonalds and Coca Cola, who have all benefitted from being early movers. They are setting themselves apart from their Chinese competitors by leveraging their ‘American heritage’ and building engaging and fun brand stories at the same time. They are also continuously adapting their brand strategies to a rapidly changing marketplace.
Early KFC and McDonalds campaigns in China above hint at what has made them successful besides being first movers: localization that still manages to differentiate with home country brand equities that are fun and playful. In contrast, below, see how that compares to a typical Chinese brand food ad from around the same time period.
Nevertheless, this is often easier said than done and an American-owned cookie brand that we work with, failed to do just this. The brand entered the market as a first mover and did for a long time rely on its ‘national heritage’ as its key selling point. However the brand failed to adapt to a changing market and found itself vulnerable to counterfeiting by local brands.
To overcome this disadvantage, we have been working with this client to build a strong brand communication strategy that includes a winning RTB message. This brings us to the crux of this week’s article: storytelling.
Storytelling as a differential tool
A strong RTB message should be a building block in a larger brand story, shifting the product from a commodity to an ‘own-able’ brand, capable of setting you apart from your competitors.
Storytelling is a particularly interesting marketing tool in China, due to the role stories have played in the development of the country’s national identity and culture. Traditional forms of storytelling, known as ‘Pingshu’, gathered Chinese people around radios to hear stories, many taken from ancient Chinese history.
The radio’s glory days may be long gone, but storytelling continues to play an important role in Chinese consumers’ lives through TV shows and movies.
Chinese consumers are intrigued by interesting narratives and are increasingly looking for unique elements that set brands apart from their competitors. Moving beyond advertising, and towards storytelling can, therefore, ensure that your brand grabs consumers’ attention and engages your target audience more efficiently. This can safeguard your brand’s continued penetration and growth in the Chinese market.
Getting the story right
Getting the storytelling right is particularly important for foreign companies since their brand messages sometimes appear unfamiliar to the Chinese consumer. In order to limit this disadvantage, focus on creating strong visual cues on product labels and packaging. This will ensure that you get your brand story across efficiently.
Two examples of US brands that have mastered the art of storytelling in China are Wrigley and M&M’s.
Wrigley is a market-leading chewing gum brand in China that very successfully tells its brand story through clever ad campaigns adapted for the Chinese market.
M&M is another US brand whose success in China is influenced by its ability to communicate a strong brand story. It does this by simultaneously levering its brand equity from back home, as a fun and playful product, and adapting to the local market, for example, by designing a panda M&M or creating M&M terracotta army characters (see below).
Even Chinese brands, which previously communicated mostly through emotive or straightforward brand narratives, are starting to use storytelling as a differentiating tool. One good example of this is in Nongfu Spring’s premium water product line (below).
The brand utilizes its packaging design to communicate the quality of the water and tells a story about the water source; an underground spring at the foot of Changbai Mountain.
Clever storytelling is key
Storytelling is being used by both successful local and imported brands to stand out in a crowded marketplace in China. US brands aiming to further penetrate or grow here will need to differentiate themselves in clever ways, like using stories which convey their US brand equities such as novelty and energetic playfulness, or else they risk stagnation.
If you are a US brand interested in learning more about how you can use storytelling to grow your competitive advantage in China, contact us at firstname.lastname@example.org for a free 20 minute consultation with one of our brand strategists.