Brand Loyalty, China? [Part 1]

Introduction

This topic is of interest to me because, like most of my friends in the industry (we are usually most perplexed, if sales & marketing plans are not going well, and exhilarated when sales & marketing plans go well), I expect brand loyalty to help me sustain and grow my business.

This is a huge topic by itself and you can easily find many articles and discussions on the internet. I don’t intend to write a thesis on it. My writing will primarily reveal some observations I have made regarding the subject, how important it is for me as an entrepreneur and what I can do to achieve it.

Snapshot of Chinese consumers general characteristics

To begin, I have listed some general characteristics I have concluded from past projects and reviewing present literature.

· Diverse market segments across different regions and cities
· Choices are aplenty for Chinese consumers
· Chinese consumers are primarily influenced by media advertising, internet, family and friends
· Brand conscious
· Price-for-value conscious
· Quality and function conscious
· Chinese consumers generally perceive foreign brands to have better quality and status
· Like to associate with products and services that are associated with high or privileged status

#1 First Observation: Check Your Assumptions – the missing equation

I discover that if you peel the onion enough (as a figure of speech), you will discover assumptions and insights on any issue or subject. This is important to me as a business owner because I am daily faced with limited resources and time, and I simply want to make the best use of it. I need insights and clarity to help me achieve economical usage of my resources.

So, what do we understand by brand loyalty? What are our expectations and assumptions?

Brand loyalty is having my customers returning and preferring to purchase my products or services over my competitors. The expectation and assumption is that if I can address the key buying behaviours in my target segment and the 4Ps (place, promotion, price and product), I can usually expect brand loyalty from my customers.

I suggest we check our assumptions because I have observed many successes as there are failures despite companies adequately address key buying behaviours and the 4Ps.

The missing equation, in my observations, is the presence and activities of competitors. The 4Ps and addressing key buying behaviours certainly contribute to the success or failure in my attempt to build brand loyalty. But notice the culprit behind these activities besides me? That’s right, my competitors.

My point is simple; do not assume customers to consistently purchase your products and services even when you have addressed key buying behaviors and the 4Ps, if you have not consider your competition. This is true in China.

Case in point: Cosmetics in China. Chinese women are willing to pay for premium products. However, they are also willing to switch to another premium cosmetic provider if they are giving away generous gifts. Why? Because Chinese women perceived both premium brands to be equally good in addressing their needs since they are in the same category – high-end brands.

Thus, I can be sufficiently and accurately addressing my target segment’s key buying behaviours and the 4Ps but my efforts can be thwarted when one of my competitors pull a stunt like the cosmetic example mentioned.



End of Part 1

Read more!

Brand loyalty, China? [Part 2]

#2 Second Observation: Learn from your top competitors – they are probably doing something right

From the many competitors that are competing in the same market space, there are usually a few that manage to achieve brand loyalty. I study them, observe them and try to determine their key success factors in achieving brand loyalty.

From this, I typically uncover certain buying behaviours or demand drivers that I may have overlooked. This discovery helps me in two ways; first, I realize fresh insights into my target segment’s buying behaviours and demand drivers, and second I further determine my value innovation.

Case in point: Using the same cosmetic case we gain two insights namely the importance of product differentiation and Chinese women sensitivity to price (or perceived value). The cosmetic company can then find or create new demand and value that really matter to Chinese women. Professor Chan Kim and Renee Mauborgne of INSEAD explains this very well in the ‘Blue Ocean Strategy’.

By learning from top competitors and acting on the insights gained, you are giving consumers good reasons not to follow your competitor.

#3 Third Observation: The Punch of Promotion & Publicity

The Chinese consumers are swarmed with many choices all vying for their attention. Added to this, the vast majority of Chinese consumers are still not familiar with foreign brands, lifestyles and influences. To make matters more complex, China has diverse consumer market segments. And finally, Chinese consumers rely very much on recommendations made by family and friends, and emotional appeals.

The above phenomenon has three implications:

• Chinese consumers’ decision making can be influenced
• Chinese consumers are being presented incessantly with large amounts of product and service information

Therefore, buying behaviours and demand drivers change over time as current industry players and consumers are constantly interacting and shaping the market landscape.

For an entrepreneur such as me, these implications mean that my brand message has to be consistent and strong working hand in hand with an appropriate promotion plan. The point is to have my brand message lodged deep into my target segment’s minds such that my brand name will outshine my competitors’.

Since I have limited resources, this means maximizing the returns on promotion activities.

#4 Fourth Observation: Consumer demand is changing…..

I don’t have to tell you this as you must already know that China’s consumer demand landscape is changing. The factors that are driving this change are urbanization, increasing affluence, influx of information to consumers and the many alternatives for consumers in the market.

A very important example of this observation is the rapid widening of attention by many organizations on first tier cities to China’s second tier cities. Consumer demand is expected to be huge in China’s second tier cities and already many organizations are vying for market shares.

For a business owner, it is not enough to keep close tabs on his or her market; you have to identify trends and growth opportunities, constantly. I started focusing my attention on China’s first tier cities initially but found many clients have already started to be curious about second and even third tier cities, curious enough to approach my competitors.

Conclusion

Brand loyalty is possible in China but remains elusive for many businesses. There are many key success factors leading to brand loyalty, depending on your industry, and the consumer market landscape is not consistent.

My experiences and observations led me to focus on building a strong and consistent brand, and deliver enough value to my customers giving them enough reasons to prefer my services over my competitors.

This basically means (and I mean it) exceeding clients’ expectations and producing top quality work. I cannot expect 100% brand loyalty because I cannot adequately address all key buying behaviours and the 4Ps; there are simply too many variables.

My strategy has not failed me thus far.



End

Read more!

Part 1: Management Skills - lessons learnt from a group of 18 year olds

Introduction

I would like to pen my first blog article on a recent trip to Vietnam (Hanoi) with a group of 18 year olds. This was a voluntary study trip I agreed to lead as the team leader. And the reason why I chose to describe this trip to you is because I have observed (or re-learnt rather) certain lessons on management skills from this lively group that I hope will be useful to you as it is for me by penning it into a blog entry.
I will split this article into 3 Parts:

Part 1

#1 - Management Skill Learnt: Select the Influencer in Your Team to be Your Assistant
#2 - Management Skill Learnt: Earn the Respect of Your Influencer/Assistant and You will Gain Respect from the Team

Part 2

#3 - Management Skill Learnt: Listen to Your Team…..And Set the Stage for the End in Mind
#4 - Management Skill Learnt: Integrity as a Leader - People are Constantly Watching and Evaluating You Especially Your Team

Part 3

#5 - Management Skill Learnt: Leading by Example – Pushing Your Team to Their Potential
#6 - Management Skill Learnt: Be Humble

My first meeting...

Although I had past experiences in leading youth groups, I was a little 'rusty' as I have not been engaging youths for some time. I certainly felt that way in my first meeting with the group.Before every and any meeting, I will ensure that I am prepared.

"My rule of thumb before entering any meeting is this; have the end in mind (many thanks to Stephen R. Covey!)"

The end I have in mind is simple:
(1) I will introduce myself to the group for them to get to know me
(2) I have to get to know the group (at least remember their names)
(3) Details of the trip will be explained
(4) My expectations of the group and the trip (ground rules)

Simple and straightforward right?

When I first saw the group, I was apprehensive and, to be honest, a little fearful that I will have major problems in controlling them. This group was rowdier and appeared more 'rebellious' than the rest of the other teams going elsewhere. One had his hair dyed and styled like a punk rock-star complete with striking purple. A few others were joking and laughing loudly completely oblivious of the ruckus they were causing. And then there were two youths who looked at their rowdier trip-mates with disdain.

There were 15 of them.

"If I can lead and manage a cross-cultural team, I can certainly tame these fellas!", I said to myself.

#1 - Management Skill Learnt: Select the Influencer in Your Team to be Your Assistant

From my past experiences to observing my ex-bosses and handling teams of people from across the globe in consulting projects,

"I have learnt the benefit of delegating control and responsibilities to one of your team members."

I’m quite certain most people know and practice this. The question I am often asked is, “Whom should I select from amongst my team to be my assistant?”.Through experience and learning from others,

"I always make it a point to choose the most influential person in the group I manage to be my assistant."

This practice has helped me tremendously especially if the person you choose to be your assistant has a strong personality and extremely capable or talented. More on this later.

So I size up the group of 15 youths and identified the person I believed to be the influencer in the group to be my assistant. I delegated certain responsibilities to the person and made clear that I needed him to step up to those responsibilities.

Later, I realized that my assistant was not the dominant and real influencer in the group. In fact, there were two others who exerted dominant influence amongst the group. But there is always one who is usually the ‘leader’.

The guy with the rock-star purple hairdo? He is the real influencer.

#2 - Management Skill Learnt: Earn the Respect of Your Influencer/Assistant and You will Gain Respect from the Team

Alright, so I have made a slight mistake and selected someone who is not the real influencer to be my assistant. Regardless, I knew I have t0 start earning respect from the guy with the purple rock-star hairdo.

"Respect from your team is important because with respect comes trust and with trust comes good quality work produced."

If you work with someone whom you give a lot of respect I am certain the quality and the efficiency of your work will be vastly and positively different.

And know this;

"I have learnt from observations and experiencesthat most people want to give you respect and trust. You just have to earn it."

There are many ways to earn the respect of your people. Having more knowledge and experience usually earns you the right to speak and quickly gain the respect from others. I have found 2 qualities that earned me respect from every team I have led. They are integrity and a genuine caring attitude.

I will explain how I put these two qualities into practice on this group of youths.


End of Part 1

Read more!