Photo: milla_ | Flickr
Companies doing business in China constantly struggle to convert brand awareness into loyalty. A marketer will invest furiously to ensure that his or her brand is part of consumers’ consideration sets — only to see them swayed by a slightly cheaper price, a flashier promotion, or a more aggressive in-store salesperson. Many marketers wonder just how to attract and retain Chinese consumers when they are so promiscuous.Chinese consumers will only consider buying brands they trust and like. According to a recent study we conducted, 45% of respondents believe that well-known brands stand for better quality and safety — many more than the 31% and 27% of American and French consumers who responded similarly. But, despite their preference for established brands, the Chinese always shop around extensively.
The number of consumers who choose from among a distinct set of brands (whom we call repertoire loyalists), and the number of brands that are in their repertoire, are both rising. The average Chinese consumer now chooses from between three and five brands in each product category compared with two to three brands a couple of years ago.
Still, there are signs that it’s possible to build a loyal following around brands in China. One sign is the increasing sophistication of consumer tastes and preferences. At the end of the day, brands appeal to emotions; consumers need to see themselves reflected in the brand in some way. For a long time, penny-pinching Chinese consumers — many buying certain products for the first time — focused only on a brand’s functional aspects, such as whether it does what it promises; how safe is it; and what’s a good price to pay for it.
That’s changing, as consumers in China also seek the emotional benefits that a brand can offer. What’s increasingly tipping the scales between brands is which one makes consumers “feel good,” “feel special,” or “stand out in the crowd.” Our survey shows that as opposed to 8% in 2009, 19% of Chinese consumers purchasing chocolate in 2011 chose a brand based on emotional considerations such as it “made me feel good.”
Dove chocolate, for instance, has built a successful brand in China by creating a positioning for itself as an indulgence for women. These consumers are looking for more than just chocolate; they want to feel that they’re treating themselves to a well-deserved reward. Dove has become the leading chocolate brand in China, with a market share of over 50%.
Rising urban incomes are playing an important role in driving the shift from the purely practical to the emotional. As consumers become wealthier, they care less about the functional attributes of brands, so rising incomes are often correlated with brand loyalty. For example, among consumers who earned more than RMB 8,500 (U.S. $1,300) a month, 26% buy only one brand of mobile phone compared with 21% across all income groups. In fact, across product categories, the proportion of higher-income consumers who are brand loyal is five percentage points above the average proportion.
To be sure, marketers shouldn’t overlook the need to get the basic brand promise around features and quality right. Consumers do need the reassurance that if they splurge on chocolate, they can count on the product being safe and healthy. However, with consumers looking for something more, brands will also have to address less tangible desires. Marketers who better understand Chinese consumers’ less rational drivers will have a better chance at winning them over tomorrow.
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