Change of tactics paying off in China

Running a business in China may not be the easiest job in the world, but for WPP CEO Sir Martin Sorrell, who travels the globe a fair bit, stress levels there are a lot lower than in many other places. "One thing that you find when you come to China is that CEOs are smiling. I must say in the West, where we are facing a particular set of challenges, you don't find many CEOs that are smiling."

Sorrell made his observation in Beijing late last month, at a WPP-organised Business Leaders Summit, recorded for broadcast by CCTV, addressing custodians stationed in China for global brand powerhouses such as Mars, Motorola, PepsiCo and Unilever.

Sorrell argued that China's momentous growth ensures that the occasional misstep won't trip up business progress, unlike the unforgiving developed markets, where brands are locked in gruelling competition for a prize no greater than a sliver of market share. MNC brand owners in China do have serious challenges to contend with, however. Sorrell named three: the speed at which the existing media hierarchy is being transformed by digital channels, a rate of change far faster than marketers are experiencing in the West; the need to develop an extensive distribution network, perhaps the most consuming pre-occupation of advertisers in China today; and finally, linked to this, the battle for shopper's hearts and minds instore, which can determine the ultimate success or failure of a brand.

PespiCo marketing VP Richard Lee concurred, citing the fear of a sudden disruptive change in technology as the one thing that could keep him up at night. "The pace of change in technology is getting faster and faster," he said. "We as companies ought to be innovative, willing to take risks, to challenge the way of doing things."

Lee, who had just unveiled a bold new marketing experiment from PepsiCo in China, in which marketers take a back seat to consumers in developing a TVC for its flagship Pepsi brand, called upon media owners to help advertisers embrace the changes taking place. "We need to work with TV stations to come up with something that is more creative, something that consumers can relate to, as opposed to a plain TVC."

Meanwhile, Unilever's Greater China chairman Frank Braeken said that it is on-the-ground issues that are foremost in his mind, such as how well Unilever can execute its marketing campaigns. "What keeps me awake is not strategy — that is long-term and set," he said. Holding on to Unilever's key talent is also a major concern.

Brand owners at the summit agreed that as they push into China's smaller cities beyond the Eastern seaboard, what is required is not a change of strategy but a change of tactics. Motorola's corporate VP Go-to-market for its North Asia mobile devices unit, Michael Tatelman, observed: "I don't find a whole lot of difference in suburban areas, particularly youth who are interested in the same aspirational attributes you find in the big cities."

As the China market develops brand owners are finding the marketing problems they are encountering are familiar, although they are arising at a hair-raising pace. Speaking to Media in Beijing, Sorrell said: "Things we somewhat arrogantly believe in the West are unique factors to us, like traditional media and new media, the role of distribution, the concentration of retailing, are very, very similar here. The only thing that's different here is the growth."