Marketing activities constitute a budget priority for most companies, taking up a significant allocation of resources. And with good reason - managers across the world consider marketing a primary driver for growth. If your ideas about marketing have been groomed in the West, you are probably accustomed to long range planning, multi-channel strategies and - if you’ve worked with large corporations - lengthy decision-making processes. As consumers' preferences shift in the way they interact with brands, new marketing principles are surfacing, pioneered by emerging large consumer markets such as China who have figured out innovative tactics to profitably reach and acquire audiences at scale.
A recent Harvard Business Review article by Kimberly A. Whitler highlights a number of important differences in marketing approaches among Chinese and Western companies, drawing on insights to make a case for a new theory of marketing.
The article describes marketing approaches in the West as having traditionally focused on profitability and efficiency. This stance on marketing is generally slow and deliberate, seeking to nurture and capitalize on consumers’ proclivity for discounts and deals.
Companies in China, on the other hand, prefer to act quickly and iterate. To Chinese marketers, the risk of one short-term, unprofitable campaign is not a deterrent, if it's the price to pay for the chance of top line revenue growth.
The strategies adopted in each market are reflective of their specific contexts, a fact that becomes more apparent when we consider the counterpart approaches side by side:
Channel-specific vs. Channel integration
Media channels are more integrated in China, making it easier to access user data across multiple lifestyle categories (retail, entertainment, banking, etc.) on a single platform. The consolidation of user data enables marketers in China to develop highly targeted, multidimensional, engaging marketing content, consistently delighting their consumers.
This unusual level of integration is largely due to the fact that three of China's media giants - Baidu, Alibaba, and Tencent (BAT) - collectively control market share across the country's leading lifestyle platforms.
In the U.S., marketing data is more fragmented, so marketers have to develop channel-specific strategies (for TV, radio, social media, etc.) to reach their target audience. With such a fragmented approach, it is difficult (and expensive) to provide custom experiences to consumers.
Long-range planning vs. Just-in-time tactics Moderated by regulatory policies, traditional beliefs about buyer behavior, and their own risk aversion, companies in the West tend to plan out their marketing campaigns far in advance, with multiple layers of decisions. In China, you’re more likely to find marketing managers coming up with major marketing activations in blitz-style planning sessions. The highly competitive nature of the economy requires that companies consistently demonstrate "wins" in order to retain their investors; as such, they are less risk averse and quick to come to marketing decisions.
The just-in-time nature of planning in Chinese companies also means they can take advantage of trends and achieve virality with their content. The density of China's population allows companies to reach millions of consumers within a relatively small geographical area, so campaigns don’t require as much differentiation among
channels and locations to successfully acquire large audiences.
Mobile-first vs. Mobile-also
China experienced accelerated, large-scale adoption of mobile and smart technology over a relatively short period of time, and marketing principles were developed taking into cognizance that majority of their market consumed information via their mobile devices. As such, "mobile-first" is the default starting point for Chinese marketers in thinking about how to reach their audiences.
In the West, where communication channels evolved more systematically - from radio to TV, to PC, to mobile - marketing approaches also developed sequentially, each channel requiring its own unique outreach strategy.
The high cost of creating tailored campaigns across multiple channels puts pressure on Western marketers to maximize profit for every campaign, on every channel. In contrast, Chinese marketers are wired to think how to achieve scale on a single, widely-accessible channel. They can afford to focus their energies on developing quality, relatable content.
Western brands looking to go into China need to bear in mind these insights and take measures to be competitive within the market.
● To leverage on the benefits of channel-integration made possible by China’s unique setup, Western corporations need to collaborate with the BATs to develop data- and knowledge-driven marketing tactics.
● In setting up their marketing team, Western companies new to China should hire local talent who understand the terrain and can immediately set the company on the right track.
● Western companies in China will need to adopt a mobile-first orientation toward
marketing, and establish an active presence on relevant mobile apps.
● Companies entering the Chinese market must be prepared to move quickly in making marketing decisions, and willing to take a few risks.
As with all principles, in applying the proposed marketing strategies, startups seeking to adopt China's approach would be wise to take mediating factors into consideration. For instance, while the need to attract investment may call for aggressive, revenue-focused marketing tactics, the looming possibility of investor fatigue should not be overlooked. The recent decline of former investor favorite, bike-sharing startup Ofo (and others), offers an important lesson in this regard.