JWT scoops TCL deal as WTO tensions rise

<p>SHANGHAI: In a move to elevate itself above the heavy discount </p><p>practices of China's over-supplied television market, TCL has signed on </p><p>J. Walter Thompson Shanghai to a one-year advertising contract. </p><p><BR><BR> </p><p>JWT China chief executive, Tom Doctoroff, said the price war that </p><p>erupted last year had reinforced the urgent need for manufacturers of </p><p>television sets to decommoditise this category. </p><p><BR><BR> </p><p>"That said, TCL was least hurt by the discounting. The company has a </p><p>healthy reputation for innovation, which puts it in the upper tier </p><p>colour television market," Doctoroff said. </p><p><BR><BR> </p><p>Advertising for TCL's television products was previously handled by the </p><p>company's inhouse agency. </p><p><BR><BR> </p><p>However, as competitive pressure from China's imminent membership in the </p><p>WTO builds up, companies like TCL have begun looking outside for brand </p><p>building expertise. </p><p><BR><BR> </p><p>JWT won the TCL assignment without a pitch, but on the basis of a </p><p>credentials as well as strategic and creative presentation. </p><p><BR><BR> </p><p>The agency will handle domestic advertising to position TCL above rivals </p><p>such as Konka and Chang Hong. </p><p><BR><BR> </p><p>The advertising will need to take into account the two television </p><p>markets that co-exist in China - the rural market, where penetration is </p><p>still an issue, and the urban market, where the emphasis is on upgrading </p><p>to a better product. </p><p><BR><BR> </p><p>Significantly, TCL has chosen to sign a one-year contract instead of </p><p>handling its advertising on a project basis, which is favoured by </p><p>state-owned enterprises (SOEs). </p><p><BR><BR> </p><p>But even as Chinese corporations accept the need to build up brands for </p><p>domestic and overseas consumption, their relationship with multinational </p><p>4As agencies have rarely been smooth in the past. "Of course our </p><p>cultures are different and there will be challenges ahead as we </p><p>establish a smooth working style," said Doctoroff. </p><p><BR><BR> </p><p>Aware of pitfalls that have dogged agency-client ties in the recent </p><p>past, the JWT chief said the two sides have agreed to structural set-ups </p><p>which have been put in place to reinforce the building of a long-term </p><p>partnership. </p><p><BR><BR> </p><p>It has been agreed that the key point of contact for the agency will be </p><p>with the marketing department and the general manager of the television </p><p>division. </p><p><BR><BR> </p><p>"We have streamlined the process. Typically, SOEs are hierarchical, </p><p>where the ultimate control is divorced from the group and executives in </p><p>sales have a lot of power in terms of what gets sold and produced as </p><p>they control profitability," Doctoroff said. </p><p><BR><BR> </p><p>JWT, he added, had looked at several key points, including compensation, </p><p>before taking on TCL as a client. He said JWT had secured fair </p><p>compensation consistent with international standards." </p><p><BR><BR> </p><p>The agency also asked for exclusivity as TCL's advertising agency for </p><p>its television brand - something that is "rarely guaranteed" in </p><p>client-agency arrangements in China. Apart from televisions, TCL also </p><p>manufactures computers, air-conditioners and other electronic </p><p>appliances. </p><p><BR><BR> </p>