Tom Doctoroff, head of the J. Walter Thompson ad agency`s China office, explains in the WSJ what he`s learned from a couple of decades in China:
To win a following among Chinese buyers, brands have to follow three rules. First and most important, products that are consumed in public, directly or indirectly, command huge price premiums relative to goods used in private. The leading mobile phone brands are international. The leading household appliance brands, by contrast, are cheaply priced domestic makers such as TCL, Changhong and Little Swan. According to a study by the U.K.-based retailer B&Q, the average middle-class Chinese spends only $15,000 to fit out a completely bare 1,000-square-foot apartment.
Luxury items are desired more as status investments than for their inherent beauty or craftsmanship. The Chinese are now the world`s most avid luxury shoppers, at least if trips abroad to cities like Hong Kong and Paris are taken into account. ...
Public display is also a critical consideration in how global brands are repositioning themselves to attract Chinese consumers. Despite China`s tea culture, Starbucks successfully established itself as a public venue in which professional tribes gather to proclaim their affiliation with the new-generation elite. Both Pizza Hut and Häagen Dazs have built mega-franchises in China rooted in out-of-home consumption. (The $5 carton of vanilla to be eaten at home is a tough sell in China.)
The second rule is that the benefits of a product should be external, not internal. Even for luxury goods, celebrating individualism—with familiar Western notions like "what I want" and "how I feel"—doesn`t work in China. Automobiles need to make a statement about a man on his way up. BMW, for example, has successfully fused its global slogan of the "ultimate driving machine" with a Chinese-style declaration of ambition.
Sometimes the difference between internal versus external payoffs can be quite subtle. Spas and resorts do better when they promise not only relaxation but also recharged batteries. Infant formulas must promote intelligence, not happiness. Kids aren`t taken to Pizza Hut so that they can enjoy pizza; they are rewarded with academic "triumph feasts." Beauty products must help a woman "move forward." Even beer must do something. In Western countries, letting the good times roll is enough; in China, pilsner must bring people together, reinforce trust and promote mutual financial gain.
Emotional payoffs must be practical, even in matters of the heart. Valentine`s Day is almost as dear to the Chinese as the Lunar New Year, but they view it primarily as an opportunity for men to demonstrate their worthiness and commitment. In the U.S., De Beers`s slogan, "A Diamond is Forever," glorifies eternal romance. In China, the same tagline connotes obligation, a familial covenant—rock solid, like the stone itself. ...
Chinese parents are drawn to brands promising "stealthy learning" for their children: intellectual development masked as fun. Disney will succeed more as an educational franchise—its English learning centers are going gangbusters—than as a theme park. McDonald`s restaurants, temples of childhood delight in the West, have morphed into scholastic playgrounds in China: Happy Meals include collectible Snoopy figurines wearing costumes from around the world, while the McDonald`s website, hosted by Professor Ronald, offers Happy Courses for multiplication. Skippy peanut butter combines "delicious peanut taste" and "intelligent sandwich preparation."