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

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Part 2 - Management Skills: lessons learnt from a group of 18 year olds

Part 2

#3 - Management Skill Learnt: Listen to Your Team…..And Set the Stage for the End in Mind

I listened to the youth group by having each individual share their reasons for participating in the study trip, their objectives and what they hope to achieve. I made sure I remember each of their objectives vividly and made a verbal and public commitment to help them achieve their goals as best as I can. I was sending a message to them;

"I was telling them that I care about them enough to make a commitment to help them achieve their objectives."

Caring is a decision and I made the decision to care about these youths.

"My ex-bosses taught me not to stop at caring and listening to the people you manage and lead. You have to help them understand the end in mind"

what you as a leader want to achieve with the group. Every group wants to know the eventual outcome and the goals they are striving towards. A clear and consistent focal point is, really, half the battle won.

Hence, after listening to each individual I began to explain my objectives and what I want to achieve with and for the group. I explained the end I had in mind.

More importantly, I had 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

"The people you manage and lead are constantly evaluating you and finding reasons to give or withhold their respect and trust."

I knew this fact and I’m sure most of you in managerial positions will agree with me. However, I was reminded again of this point in a most refreshing manner.

Being teenagers, this group of 18 year-olds are constantly observing the way I conduct myself and the degree to which I keep my commitments. In other words, they are evaluating my integrity as a person. In the most refreshing and telling manner, the youths told me one morning that they were disappointed with our local liaison (who is a Singaporean living in Hanoi) who did not seem to keep to his promises and commitments.

They saw how I had kept my integrity and did the things I said I will do, and this built enough trust for the youths to confide in me their views of our local liaison. This episode made me re-discover and re-learn the importance of integrity. Without integrity it is really an uphill task leading your people and doing business with others.

"Keeping to your commitments will help you earn respect and trust from your people."

Remember; people are constantly watching and evaluating you.

End of Part 2

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Doing Business in China: Lessons learnt from a story

A Tale of Two Monks

There was once a wise old monk who had a young apprentice. The old monk put all his heart and strength teaching and passing on to his young apprentice the knowledge and wisdom he had learnt over many years. The young apprentice did not disappoint for he proved to be intelligent and kind. He took great care of his master and the old monk was happy.

Once a week, the old monk and his apprentice would make a short journey to nearby villages to see patients and to ask for alms. The old monk was accomplished in medicine.

The old monk and his apprentice had to cross a river before they could reach the villages. Like any young man, the apprentice looked forward to each journey with eager anticipation as this provided his only chance to step out of the monastery and interact with the world.

On this day, the apprentice made the usual preparations and informed his master they are ready for the visit to the villages. Both master and student left the monastery and headed towards the river.

From afar, the student saw that something was wrong with the bridge. Walking ahead of his aged master, he jogged a little to see clearly what had happened to the bridge. To his dismal, the bridge had collapsed.

Not only had the bridge collapsed, there was a young woman standing by the entry of the collapsed bridge, crying.

The old monk realized what happened and informed his apprentice that they had to trek down river to make a crossing. They had to wade through the river. The old monk turned to the young woman and gently asked her if she needed help. The distraught young woman replied she was upset because she couldn’t bring medicine she had received from the monastery back to her ailing mother now that the bridge has collapsed.

The old monk smiled and assured her that her return to her ailing mother would not be delayed; they could wade across the river but they have to travel a little downstream. Hearing this, the young woman brightened and was grateful to the old monk and his young apprentice.

The old monk, his student and the young woman made their way downstream and found a crossing site where they could safely wade through the river. The young woman was apprehensive and fearful of the crossing; she could not swim and was afraid she will be swept by the current.

The old monk turned to his student, told him to hand over their traveling bags, carry the young woman on his back and cross the river. The young apprentice believed that male monks should never be that close physically to a woman and with his staunch belief respectfully refused his master’s request.

The old monk had no other choice but to carry the young woman on his back.

When they had crossed over to the other side, the young woman was full of gratitude and offered the old monk and his student some money. The young woman invited them to her house and hurriedly left for her village to attend to her ailing mother.

The old monk and his apprentice slowly made their way to the village. After some distance, the young apprentice could not help but remarked to his master that he was appalled by his master’s physical closeness with the young woman. The young apprentice did not think it was right for a male monk to be so physically close to a woman.

The old monk smiled, turned to his young apprentice and asked if he was very disturbed by the old monk’s actions. The young apprentice replied yes. The old monk then asked if the young apprentice had been thinking about this matter since the crossing. The young apprentice replied yes.

Putting his hand on his young apprentice’s shoulder, he said: “My young apprentice, you are very upset with my action and have been thinking about it since we left the river. I stopped carrying the young woman after we have crossed the river. But you my young apprentice, you have not stopped carrying her in your mind since that time. It is time now to let her go lest you’d be thinking of her tonight.”




This story was told to me by a Chinese business friend of mine some time ago. My friend is rather philosophical and enjoys talking to people about politics, life and business. He asked me if I wanted his advice on doing business in China since he has discussed this subject with many young entreneurs (foreign and local Chinese) like me. I said yes of course!

After narrating the story, I pressed him for the advice he promised. He said to me that the answer to that will have to come from me. Duh?!

He knew I was flustered but assured me that the story certainly has a moral and advice behind it. He told me he did this many times with many different persons. And every single one of them after some time told him the moral and advice from the story, from their perspectives.

This, to my friend, made more sense and it is more valuable advice.

I have learnt many lessons on doing business (in China) from this story, from my perspective of course.

Now, I'd like to hear yours.

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Doing Business in China: Words of Wisdom

Introduction

During my early years working in China, I made many mistakes and learnt from them. One of the working attitudes and habits I practiced was being extremely curious. I was hungry to gain experience and to learn, fast. So, it may surprise you that I remembered and took down some of the words of wisdom I collected from talking to industry leaders, businessmen and government officials.

I still keep to them and they have served me well when I conduct business in China and when I serve clients in their consulting projects.

Words of Wisdom
Here are some of them:

(1) It matters not who you know; who knows you is that which matters.

(2) Always seek to give help to others before they request it; favours are owed to you, collect them when the occasion arises.

(3) Never embarrass your prospective client or your partner. When possible, make them feel and look extremely good. Chinese people enjoy that very much.

(4) I have 3 pieces of advice for you; connections, connections and connections.

(5) When you meet with a business problem, don’t waste time resolving it the right way. Go straight to the person who can resolve the problem, make a connection and have cash on hand.

(6) Monetary benefit is the greatest motivation in China. Remember this.

(7) You must present yourself as a successful businessman. Do not sound or look desperate for business. Chinese people do not like to associate with desperate persons.

(8) Guard your value-add, where possible increase it. Chinese people are capable of duplicating your value-add.

(9) To safeguard your interests, get the other person or organization to be in the same boat as you. Sharing the same stake is good protection of your investments.

(10)China is made up of several different markets. Not all of them are addressable to you.

(11)Display integrity and commitment. Chinese people appreciate it and they will keep doing business with you.

(12)You are not the only entrepreneur in China. There are thousands of others like you. What sets you apart is the amount of time you spend in building connections, you are professional and committed.

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