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Branding in China: Lessons from the foreign brand success and failure stories

Jijo George*
jijogeorgepadavil@gmail.com
Dr. S. Victor Anandkumar
victor.dms@pondiuni.edu.in
Department of Management Studies
Pondicherry University, Puducherry, India

(Corresponding Author indicated by an asterisk *)


Presented at the: 2012 SIBR Conference on Interdisciplinary
Business and Economics Research, 7th-9th June 2012, Bangkok.

Abstract

Context/ Rationale: China’s role in the global economy is on the rise since their entry to WTO in
2001. Given its market size, potential and complexities, China presents an attractive market
opportunity for many multinational companies, as well as some unique challenges in building
and expanding a brand. Numerous foreign firms have ventured into China, yet many of them
failed miserably despite their years of expansionist brand experience.

Purpose: This research intends to identify the critical success factors and potential causes of
failure for the foreign brands in the Chinese market.

Methodology: A case study approach has been used for this study and select cases were
identified for the purpose of analysis and discussion. These cases comprise of brands that
represent different countries of origin, industries, product categories and value propositions, so
as to enable generalizations. This research is based on a review of extensive secondary
information which constitute of information gathered from review of reports from leading
consulting agencies, journal articles, news papers and blogs by prominent business strategy
opinion leaders.

Findings and Suggestions: The research throws light on the major challenges that hinder the
growth of foreign brands in the Chinese market and has made suggestions to overcome these
hurdles based on the best brand practices used by their Chinese rivals as well as foreign brands
like KFC, P&G, Carrefour and many others that have succeeded in China.

Originality/ Value: Though there are a multitude of researches that discuss the economic aspects
of entry of foreign firms to China, there are only a quite few studies which explore the scope of
branding in the Chinese market. This paper tries to fill this gap by identifying the major reasons
that caused the success or failure of different foreign brands in China.

Keywords: Chinese market, foreign brands, success factors, failure factors


1. Introduction

China is now in a new phase of economic development and has become the “must win”
market for global brands. The future potential offered by its vast population and strong economic
growth has made China a magnet for multinational corporations (Daye & VanAuken, 2010; LI).
As per a report published by McKinsey in 2009, consumption will double in China's 100 biggest
cities between 2008 and 2015 (Yu & Åkerfeldt, 2010). Due to rising incomes and more
discernment among Chinese consumers, the importance of ‘brand’ is growing in China. Adrian
Gonzalez, CEO, Millward Brown Greater China, said, “The role of brands is growing in China
and the country’s increasingly sophisticated consumer is using them to make the buying
decisions they are making” (BrandZ, 2011).

2. Branding in China

The marketing and branding environment in China is becoming more and more
sophisticated. China, once a land of Original Equipment Manufacturers is now in a transition
stage to the land of global brands. The value of Chinese brands has been increasing continuously
over the years. Now the total value of top 50 Chinese brands alone accounts for more than five
percent of the Chinese economy (BrandZ, 2011). Though the concept of branding is relatively
new to the Chinese firms, they are learning fast and are performing well against foreign brands.
Having great brand equity in U.S or Europe alone won’t do any good for these foreign brands,
and no firm can plant their brands in the Chinese soil without sweating out first. Any firm which
wishes its brand to be successful in China needs to adapt their brands to the local market
environment. This is evident from the success and failure of different foreign brands. Learning
from the mistakes of other brands and adopting the successful strategies of foreign as well as
local brands in the Chinese market can help a firm to establish, grow and sustain their brands in
the Chinese market.

3. Global brands in China

China, with its large and expanding economy has become the most attractive as well as a
strategic market for global brands. However it presents some unique challenges in building and
expanding a brand (Spear, 2009). An easy and effective way to understand the key to success is
by learning from the forerunners. Hence ten cases of successful and failed global brands in China
are analyzed in the following sections to compile the ‘branding do’s and dont’s’ in the Chinese
market. Out of the carefully selected ten global brands, the first five (including Starbucks,
Maybelline, KFC, P&G and Carrefour) represent brand success and the last five (including
Google, Best Buy, Forever21, eBay and Barbie) represent brand failures. Table 1 presents a brief
profile of the chosen brands.
Table 1. Profile of the brands considered for the study

Brand Country Industry Product Year of entry Current status and


name of origin Type category into China share in China
Retail Market leader
Starbucks U.S Retail coffee 1998 (66.3%)
Maybelline Category leader
(L’Oreal) U.S Cosmetics Make-Up 1996 (20.27%)
KFC Fast food Market leader
(Yum! Brands) U.S Restaurants restaurants 1987 (40%)
Consumer Market leader
P&G U.S FMCG goods 1988 (20%)
Hyper Market challenger
Carrefour France Retail market 1995 (8.1%)
Search Distant No.2
Google U.S Internet engine 2000 (16.7%)
Consumer Decided to close
Best Buy U.S Retail electronics 2006 their branded stores
Sold-off the
Foster’s Australian Brewery Beer 1993 business
Online Nominal presence
EBay U.S e-commerce shopping 2003 (0.7%)
Barbie Fashion Stopped
(Mattel) U.S Toys doll 2009 operations

3.1. Starbucks
Starbucks, the largest coffeehouse company in the world (Wikipedia), won the hearts of Chinese
customers since they realized the value of offering products that cater to local tastes (Tso, 2011).
For instance, in 2010 they introduced a line of ‘iced zongzi’ in honor of the dragon boat festival.
The brand was also successful in conveying the aspirational elements of their offerings through
elaborate packaging, high price attached to the product, and a good western style of service. All
these helped the brand to create an aura of luxury for their products in the minds of target
customers. Starbucks has understood how to tap into the demand for premium experiences by
tweaking its marketing to go upscale in China, rather than transferring the same mass-market
image it has in America (Rein, 2012). According the Chinese market expert Shaun Rein, the
formula is working. Starbucks plans to triple the number of Chinese outlets to 1,500 by 2015,
making China its largest market outside of the United States (Bloomberg, 2012).

3.2. Maybelline
L’Oreal’s Maybelline became the most popular cosmetics brand in China using localization
strategy, acquisition of famous local brands like Mininurse and Yue Sai, and a high orientation to
new product development and innovation; which is evident from their research lab in Shanghai
devoted to creating products for the Asian market (Tso, 2011). Maybelline makes China's biggest
selling lipstick with 33% of the market and prefers Chinese models and has signed up actress
Zhang Ziyi, star of the blockbuster kung-fu movie Crouching Tiger, Hidden Dragon, to promote
Maybelline lipstick (BBC, 2002). But localisation goes far beyond image. The products
themselves have been rejigged to suit Chinese hair, skin, and tradition, and the promotion has
been designed to leverage from the popular local social media platforms such as Sina Weibo, a
Twitter-like Chinese micro-blogging website and Renren, a Facebook-esque social network
(Lim, 2011).

3.3. KFC
KFC was the pioneer to introduce fast food to China in 1987. By 2011, the parent company,
Yum Brands operated 3,900 restaurants in China, and a new KFC location opened there every
18 hours (CBSNews, 2011). One of the many mysteries of modern marketing is how KFC, a
once rather lack-luster American fast food brand, outperformed all competitors and in particular
arch rival and world market leader McDonald's, to become the biggest restaurant chain in
China. Liu (2008), a former executive with KFC China, says it was crucial for firms to have an
understanding of China and the Chinese cultural context so deep that it is intuitive to understand
the Chinese people's mixed feelings of love and hate about the West and to understand Chinese
history. Like every other multinational in China, KFC made its way up the learning curve by
trial and error. But the strategy that emerged was remarkably clear and embodied truly radical
elements (Bell and Shelman, 2011). Among them was a branding decision to turn KFC into a
brand that would be perceived as part Chinese by adapting its offerings to the local palate and
hiring local management to serve as the local face of the global brand. KFC’s remarkable
success in China can be explained by their novel ‘fast food’ positioning, brilliant strategy of
localization and their emphasis on healthy menu which addressed the concerns of many health
conscious customers (Train, 2011).

3.4. Procter & Gamble (P&G)


P&G has been in China since 1988 competing in about 14 categories and is holding leadership
position in all of them but one. P&G found the scale of the market to be enormous. Each sub-
segment is large in its own right and P&G did not want to neglect any of these segments or
subgroups (Penhirin, 2004). As a result, the biggest marketing challenge was to stretch its brands
to reach the diverse segments in the market. As part of the branding strategy, P&G’s global
brands are known in China by their Chinese names (Penhirin, 2004). For example, ‘Pampers’
means ‘helping baby's comfort’. The Chinese names trigger meaningful visuals or associations
with benefits. P&G proved its mettle as an ace marketer when they launched a hitherto-unknown
product – the disposable diaper – in China. When P&G launched its brand of diapers – Pampers,
it first had to create a product category and then position the brand because the disposable
diapers just were not part of the cultural norm in the Chinese nursery. To make matters worse,
P&G made a lower-quality version of U.S. and European diapers, wrongly assuming that parents
would buy them if they were cheap enough. P&G had tried a similarly watered-down approach
earlier in laundry and hair-care brands in several emerging markets. Those products also failed.
After these experiences, P&G came up with a new approach to product development: ‘Delight,
don’t dilute’ (CBSNews, 2010). In other words, the diaper needed to be cheap, but it also had to
do what other cheap diapers didn’t. Apart from revamping the product, P&G developed an
innovative brand communication. Pampers launched the “Golden Sleep” campaign in 2007,
which included mass carnivals and in-store campaigns in China’s biggest urban areas. It included
a viral campaign on the Pampers Chinese website. Pampers now ranks No. 1 in a product
category that barely existed just a few years ago (Backaler, 2010).
3.5. Carrefour
In 1995, the French company Carrefour, now the world's second largest international retail chain,
began operations in China as a first mover among the global retailers. Carrefour was
immediately well received by Chinese consumers, thanks to its low prices, excellent service and
comfortable shopping environment. Developing rapidly from an unknown organization to a
hugely popular one, Carrefour became a model of success for Chinese retailers to emulate.
Today, Carrefour is widely considered the most successful foreign retailer in China. According
to the China Retail Ranking index, Carrefour had officially overtaken local Chinese retailers in
sales of ‘fast moving consumer goods’ by 2005 (Scarlatelli, 2010). The success of Carrefour in
China can first be attributed to the high level of localization strategy, which is carried out in
terms of stocking, service and institutional organization. For instance they were able to satisfy
the cheap product requirement of Chinese customers through their private label brands (Mathur
& Martow, 2011). Carrefour had to adapt to Chinese tastes. For example, how to sell fish to the
Chinese? In the West, the fish is dead and then filleted and packed or it’s whole. But in China,
there are two ways of selling fish. The first is to display live fish as in fresh markets. Carrefour
decided to adopt this fresh-market style and to display the same products at lower prices in a
better, cleaner environment. In interior China where customers are more confident of frozen fish
than of unfrozen dead fish, even if fresh, the fish had to be frozen. When Carrefour applied these
insights, it saw a 30-40 per cent increase in fish sales throughout China (Child, 2006).

3.6. Google
Google founded their subsidiary in China in 2005 and became the second largest search engine
in China (Wikipedia:Google). The major reason why Google was less successful in Chinese
market lies in the fact that it did not tailor its services in accordance with the unique needs of
Chinese consumers. For example, in China internet is used mainly for entertainment unlike
Europe or America. But Google largely ignored free music downloads at an early stage and it
was least effective in providing search results for music as compared to its Chinese competitor,
Baidu. In addition, Chinese do not usually type full sentences, but just some characters because
of the peculiar features of their language. Also, Google’s search engine was not friendly with
Chinese language; it was just like that of the one in U.S, which in fact did not fit properly many
of the Chinese words (D’Altorio, 2010). Another reason for Google’s failure was legal
regulations in China, which forced it to operate in a different manner from that of their
operations in other countries. They had to operate in a self-censored manner. Many of their
services were either restricted or not made available to Chinese users, for instance, YouTube.
Recently, which pulled its Web-search engine out of mainland China two years ago after a
confrontation with Chinese authorities over censorship, has renewed its push to expand there, in
an acknowledgment that it can't afford to miss out on the world's biggest Internet market (Efrati
and Chao, 2012).

3.7. Best Buy


China is the world’s biggest and fastest-growing consumer market, but overseas retailers have
continued to struggle in the market. The recent failure has been that of Best Buy, an American
multinational specialty retailer of consumer electronics who had closed down all its branded
stores in China except for the 170 Five Star brand stores it acquired in 2006. The reasons for the
failure stand out. Its management buy out policy increased its operating costs heavily and it got
its market entry timing wrong when it entered the Chinese market in 2006, at a time when 80 per
cent of the market share was enjoyed by two well established local brands namely Gome and
Suning; both of which had high brand awareness because of their wide network in the country
whereas Best Buy had only 9 stores in China (San Francisco Creative Agency's team, 2011).
Best Buy failed to localize their product selection, retail sales formats and be smarter in their
location choice in order to compete with emerging brand savvy, local players (Rein, 2011). Best
Buy’s failure in China is another example of a slow, arrogant major international player that
didn’t understand China (Yu, 2011).

3.8. Foster’s
Foster's is a brand of beer from Australia and the parent company was founded in the year 1888.
They entered the Chinese market in the year 1993 by acquiring majority stakes in the Shanghai,
Guangdong and Tianjin breweries (Foster's group, 2006). The trouble for the brand in China
started with the brand name they selected for China, which in Mandarin sounded like ‘the
disasters just arrived’. This was a problem caused by dialect and cultural differences across the
country. And this set the tone for the company's expansion into the Chinese market (Matchfit,
2009). Like many other global brands who failed in China, Foster’s also had overconfidence in
their brand. Also, they entered the market at a wrong time and targeted a non-existing segment.
According to Tim Murray, a former Foster's executive, the problems arose because Foster
entered China at a time when nearly 80 foreign brands were vying for a space for themselves in
the minds of Chinese consumers. All these brands targeted a premium market segment and there
was no such segment till then in China. Foster’s suffered from heavy loses in China because they
built state-of-the-art breweries and promoted their global brand in China. However, all their
plants ran into losses because of low capacity utilization and small profit margins. Heracleous
(2001) identified the major Challenges that caused the failure of Foster’s along with many other
foreign beer brands in China. These include the high price-sensitivity of consumers, high level of
loyalty to local brands, difficulty of converting brand awareness into actual purchases and the
notoriously underdeveloped distribution network in China. Because of the above mentioned
factors, Foster’s had to either close or sell all their plants in China by 2006 (Rochfort, 2006).

3.9. eBay
In China, eBay had built a presence since 2002 through its investment and absorption of
EachNet, a local player with a 80 per cent market share in the Chinese online auction industry.
However eBay lost their game in China to a late entrant because of their failure to tailor their
brand offerings in line with Chinese business culture. In the choice of brand name, eBay went as
eBay EachNet which had no instant appeal nor excitement. However, the competitor Taobao
with a name that means ‘digging for treasure’ in Chinese, attracted a lot of attention by a smart
play on words. Unlike its rival Taobao, eBay charged fees for sellers, and did not allow sellers
and buyers to chat on their website (Tso, 2011). While Taobao was customer-centric, eBay was
product-centric in order to be consistent with its global platform. Wang (2010) identifies three
reasons for its failure. Firstly, the top managers of the company were foreigners who were totally
unaware about the Chinese market. Second, they spent a lot in wrong marketing activities, for
instance, advertisements in the web whereas the target audience did not use the internet.
Thirdly, they did not adapt their products and services according to the needs of local customers.
(Wang, 2010)

3.10. Barbie
Two years after opening it to great fanfare in 2009, Mattel Inc. had closed the company's sole
stand-alone store dedicated to Barbie, the iconic American doll. Barbies are fashion dolls
manufactured by the American toy-company Mattel, Inc. They entered the Chinese market in
2009 by opening a mega store in Shanghai. The store was not just about selling dolls to young
girls, but pitching a lifestyle to well-heeled women in the fastest-growing economy in the world.
While ‘experience’ stores have worked in the US, Japan and other markets, China has proved to
be an exception given the operational complexity and unique consumer shopping preferences.
But by April 2011 they had to close the shop because of low sales volume. The product
positioning and style were not what Chinese women wanted. The pricing had not fit the market
either (Rein, 2010). According to Tso (2011), the major factors which caused the failure of this
famous American brand in China include their reliance on the novelty of the Barbie in China
alone as a competitive point of difference, not paying enough attention to cultivating loyalty
from any particular demographics, failure to pay attention to local consumer tastes (Chinese
customers preferred pink, girly toys over more sexualized dolls like Barbie).

4. Challenges for foreign brands in China

Several challenges await the foreign brands that enter China. These brands will have to
surmount challenges posed by local brands, copycats, regional differences, cultural nuances and
evolving consumer behaviour.

The path before foreign brands is not so easy. They need to face the stiff competition
from local players, who are more familiar with local trends and resources, and knowing how to
communicate with government departments (Yuvanjun, 2005). They will also have to address
the complex brand choice behavior of Chinese consumers. Many consumers don’t know which is
foreign or which is local. Their brand choice is influenced by multiple factors such as price,
quality, a distinctive Chinese look, and patriotism; the impact of which varies across product
categories and consumer demography. Safeguard, the No.1 soap brand in China from P&G gives
a lot of insights in addressing the above mentioned problems. P&G created a local image for
Safeguard through its advertisements using local celebrities. And by using affordable packaging,
sample trials for consumers and working with local education and health care agencies,
Safeguard was able to penetrate even in the rural markets of China.

Weak brand loyalty, poor market presence and visibility especially in smaller cities is another
challenge for foreign brands. Relatively higher prices of foreign brands, added with these, forces
many consumers to drop them from their choice list. Another challenge for foreign brands is to
protect brand integrity. Protecting patents and trademarks in China is also a hurdle before foreign
brands (Esler, 2007). The recent Apple-Proview dispute is an example for this (Harris, 2012).
Facing the challenges caused by Chinese copycats also remains as a trouble for foreign brands.
Earlier the tendency of copy cats was to imitate the products, but recently they started delivering
products, which even an experienced eye couldn’t identify easily. Foreign firms, while
countering these copycats, have a lot to learn from them as well. Lower price levels, regionalized
features, an in-depth understanding of local markets and a higher responsiveness to evolving
markets helped these Shanzhai (copy cat) companies gain market share and exploit growth
potential (Sinha, 2012).
Another challenge for branding in China is in understanding the regional differences (Wang &
Tan, 2011). The consumers in China’s second- and third-tier cities demand expensive looking
brands and services, without caring if authentic or not (Sinha, 2012). Established brands must
make the effort of educating lower tier Chinese consumers about the true meaning of brand
authenticity (Sinha, 2012). Creating a strong brand in the lower tier cities is a great challenge for
marketers. In China, there is a wide gap between first-tier cities and country-side (rural markets)
in terms media and brand attitudes (Wang & Tan, 2011). For example, residents of lower-tier
cities express a high level of interest in the functional benefits of products than on symbolic or
emotional benefits. Also their brand awareness and product knowledge are less. Most of the
consumers gain brand awareness from Television Commercials. The Chinese apparel brands
like Metersbonwe, Anta and 361 Degrees have identified certain solutions for these problems.
Their practices to differentiate their brands in lower tier cities include sponsoring very popular
sports programming in CCTV (it is the major information source for Chinese rural customers)
and establishing highly decorated stores in main streets. These initiatives have helped them in
creating high end brand image and high brand awareness among the consumers in the lower tier
Chinese markets.
Added to these challenges, there are certain common mistakes which many of the foreign brands
make in China. One among these is lack of flexibility and centralized authority which prevails
among the foreign firms (Yuvanjun, 2005). Many of the foreign brands have foreign managers in
the top level who do not understand Chinese language and the peculiarities of the market. For
any new strategy implementation the local managers will have to get permission from the foreign
top managers and which in fact causes long delays and by the time they implement the strategies
it becomes too late. Rein (2009) has identified three greatest mistakes by foreign brands: failure
to localise advertisements, not taking local consumer preferences in to account and not making
things big (Chinese usually prefer to own things which are big). Another major reason for the
setback of many multinational brands in China is their lack of proper field work to identify and
understand their core market to target them (Rein, 2007). Many new Chinese brands like
Tencent Holdings' QQ instant message service, Belle shoes, and Alibaba's Taobao consumer-to-
consumer (C2C) e-commerce service are incredibly successful because they were creative,
responsive and able to make their products in accordance with the needs of Chinese consumers
(Rein, 2007).

Despite these challenges there are many factors which give the foreign brands an edge over their
Chinese competitors. A research done by marketing consultancy R3 revealed that consumers in
China are more open to foreign brands (Gunelius, 2011). Most Chinese prefer foreign brands
over local brands in consumer goods in most categories except consumer electronics and luxury
goods. Local brands are less trusted by consumers because of their poor quality and this is a
point of competitive advantage for foreign brands. Younger consumers are ready to pay more
and are more predisposed to foreign goods (BCG, 2008). Chinese consumers are becoming more
brand savvy with rising disposable income. As compared to Chinese brands, foreign brands have
more experience in brand building and this can help them in gaining a large chunk of the newly
emerging brand savvy Chinese customers. Though there is a general complaint that Chinese
consumers are not brand loyal, Rein (2007) found that they are highly loyal to the brands which
satisfy their needs. If a foreign firm is able to establish its brand in China which properly caters
the needs of Chinese consumers, then it would be an easy task for them to sustain this brand in
China.
Understanding Chinese customers and delivering the product in accordance with their needs was
the reason behind the success of most brands. According to Tom Doctoroff of JWT, the
advertising agency, ‘Any firm which feels that they can just plant their brand in the Chinese
market and let it grow for itself will fail’. Success will be with those brands which will bring
their brand in alignment with Chinese cultural and consumer imperatives (Doctoroff, 2011).

5. Drivers of Brand Success in China

A study by Accenture identified seven important factors for building a winning brand in China.
They include trustworthiness, reliability, quality, consistency of the brand with their personal
values, familiarity of the brand, exclusivity and style, and the extent to which it is used by friends
(Nunes, Piotroski, Teo, & Matheis, 2010). The following section draws generalizations from the
discussed case studies and available literature, concerning the factors that drive brand success in
China, namely Familiarity, Conversation, Evidence, Value, Trust, Affordability, Socially-
responsible and Appeal (Chinese values, safety and health).

• Familiarity
• Evidence
Brand • Conversation
Perception • Socially-responsible

• Value
• Trust
Brand
• Affordability
Preference

• Brand Appeal
Brand
Success

Figure 1. Building blocks of brand success in China

 Build a trustworthy face for the brand in the minds of the consumers: This can be
achieved through referring to the long life of the company or by relying on testimonials
from trusted sources. This is often considered easy for foreign brands, since they are well
established and have been serving various markets for a long time. Domestic brands like
White Cat detergent and White Rabbit candy, have also built trust with Chinese
consumers and thrive because of it (Rein, 2007; BrandZ, 2011)
 Connect brand messages to what Chinese consumer value in a brand: Chinese consumers
buy brands with varied intentions, for instance, some purchase it to convey social status.
So brand messages should convey the brand value which consumers seek from the brand.
 Be a socially responsible brand convinces Chinese consumers that foreign brands are not
here only for their money. This can be achieved through social outreach programs and
Corporate Social Responsibility activities. For instance, KFC gained goodwill of Chinese
government as well as that of consumers by engaging in several CSR activities.
 Create brand familiarity by broadening the advertising mix: China ranks first in the use of
five of nine kinds of media namely TV ads, Internet ads, video boards, still boards and
kiosks. Brand managers will have to choose appropriate media to familiarize their target
customers with the brand.
 Research studies show that consumer-generated content is popular in China and more
than 63 per cent of Chinese consumers learn about new brands from product reviews in
newspapers and magazines. Hence brand managers will have to pay key attention to these
product reviews as a means for public relation as well as for building a strong brand.
 Study by Accenture also revealed that 67 per cent of the Chinese consumers learn about
brands from friends and co workers hence marketers should ensure that their brand offers
something which generates positive word-of-mouth. Foreign brands will have to
understand and make use of the unique features of the popular Chinese search engine,
Baidu and web portals such as Sina which provide special facilities like question-answer
communities wherein Chinese consumers discuss about different products.
 Creating a tangible dimension for the brand reduces the perceived risk for Chinese
consumers who want to see and try something before they purchase. Marketers can try
providing them free trials or sample products or an experience.
 One major reason for the preference of local brands is the patriotic feeling of Chinese
consumers (Yuvanjun, 2005; BCG, 2008). Many successful brands like Pepsi, Nestle,
Wrigley were perceived to be a Chinese brands by consumers because of their
localization (BCG, 2008).
 Associating safety and health dimensions with the brand increases brand preference
among Chinese consumers. For instance, they tend to prefer foreign products in baby
food segment mainly because of the poor quality of Chinese products (BCG, 2008).
 Low cost innovations help to penetrate the market by making the product more
affordable. For example, P&G’s Olay brand and Tide white used small quantities, less
costly packages to make the product affordable to consumers with low disposable
income. Coca cola introduced reusable glass bottles and identified recycling centres in
rural areas to reduce the production costs.

In essence, for a foreign brand to be successful, it should understand the local customer needs
and meet these needs profitably. What matters in China is not country of origin, but the ability of
the brand in meeting the needs of the customer.

6. Conclusion

China is a diverse market with great opportunities and potential threats. A pre-requisite to
brand success in China is to understand the local market environment as well as consumer needs
thoroughly and adapt the brand and its promises accordingly. By creating an offering with true
value for money, building close relationship with consumers and creating awareness among
consumers regarding the competitive points of differences can help the foreign brands to win in
the all-important Chinese market.
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