Few remember the cardinal branding rules of differentiation and catering to the needs and preferences of different consumer segments.
Instead, price points drive most marketing strategies developed for China.
No where is this truer than in the mainland's over-supplied bottled water and instant noodle markets, a major study by ACNielsen has found.
In both categories, big brands are entrenched in a fierce price war at the low end, but have largely ignored the mid to upper consumer segments, even in the more affluent economic hubs of Guangzhou, Shanghai and Beijing.
The study, conducted in the Big Three cities, underlined the need to differentiate in order to appeal to different segments by identifying what it called the five faces of the Chinese consumer.
The consumer mapping consisted of: adventurers, who are eager to try new products and experiences; worker bees, who are more material and aspirational; value hunters, who seek the best value for money; herds, who are vulnerable to the influence of advertising; and laggards, who are brand conscious but who do not discriminate between local and multinational labels.
Herds and value hunters account for the majority of Chinese consumers - more than a quarter each of the total - according to ACNielsen China managing director, Alistair Watts. They were followed by worker bees (22 per cent), adventurers (14 per cent) and laggards (10 per cent).
"If you look at these segments, you can see that if you are just going after the value hunters, you are completely missing three-quarters of the target, who are willing to buy at different quality and price points, Watts says.
He highlighted shampoos as an example."For the 400ml category, the price points in China currently are 19 Rmb, 24 Rmb and 29 Rmb. But if you are not doing well at the 29 Rmb point, it's probably a question of marketing rather than a question of price.
"Only one brand can be the least expensive but the least expensive brand doesn't normally have maximum market share. Price is not the whole story."
Advertising agencies agreed. Ogilvy & Mather group managing director for Hong Kong and southern China and vice chairman, Joseph Wang, says: "Dropping prices gets only short-term advantage, however, I have to stress that Chinese consumers are ahead of local Chinese marketers because they are exposed to everything, including the outside world and multinational campaigns, and they do appreciate branding messages because they now have the power of choice."
But while multinationals do have the benefit of branding expertise, they are up against very fierce, resilient and numerous local rivals who have home ground and distribution advantages.
"Multinationals will have the better time of it because they know that hitting different segments is critical to success. Local marketers are lagging in this respect but it is only a matter of time before they turn recently-learned theories into actionable, marketplace applications. The catch-up time is probably just a couple of years, adds Wang.
Overall, however, Watts said there hasn't been enough of a segment-based strategy in the marketplace, including among multinational companies.
"My feeling is that most companies have gone into China thinking it was going to be a volume market and believing their success would come from their ability to market better and manufacture more efficiently.
"One competitive advantage lies in going after niche markets. A niche sounds small but in China, it could represent 10s of millions of people."
The ACNielsen study also uncovered major success stories in China. It cited Rejoice, President, Kang Shi Fu, Nokia, Motorola, Samsung, Ericsson, Sony, Aiwa and Panasonic as popular brands with "a strong share of heart".
"If you look across these brands, you'll find one thing in common: they had a clear target at different segments of the market, and in the targeted segments, they established a strong image, which protected them from severe price competition, says Watts.
"Marketers, therefore, should target different segments in different stages of the product life cycle, as the theory goes. But such is not the reality."
While price isn't the whole story, neither is the size of a brand's adspend, according to him. Watts cited La Feng, a local shampoo brand that was one of the top adspenders last year, but which still lagged behind in preference.
"The issue here is not how much you should spend on advertising but how you spent your money effectively. And the answer to that is, again, targeting the right segment."
The ACNielsen study underlined the fact that there wasn't a magic formula to successful advertising and marketing.
However, Watts stressed that the study did reveal that the China pie is bigger than many local and multinational brands currently believe.
"The idea is for manufacturers to stop being blindfolded and fighting for lower prices."
