Posts by Haidong Guan - Shanghai

Chinese pain-relief brand tells anxious consumers to pop a pill

The OTC pain-relief category in China has been very competitive due to low product differentiation. So successful brands such as GlaxoSmithKline’s Fenbid try to differentiate on emotional territories. Since as early as 1995, Fenbid has consistently worked to own “empathy” and “care” with touching copy. Fenbid’s latest campaign for headache relief caught my attention because it shows how anxiety can be turned to brand’s advantage if handled skillfully.
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The TV commercial features a real-life conscientious lawyer who helps poor people protect their civil rights. Her monologue has the audience empathizing with the pressures and anxieties she must have weathered over the years in dealing with numerous difficult cases. The product comes into the scene as she starts to talk about how anxiety-induced headaches can render her mind blank—but that thanks to Fenbid, she can continue to work for the people.

A model McDonald’s promotion in China

3761842166_7bc4301aa61In a recent promotion for summer drinks, McDonald’s in China turned a simple buy-one-get-one-free offer into a resonant campaign that enhanced the value of the brand rather than take away from it (see commercial here). This was done by laddering the promotion to a higher-order benefit: quality time spent face-to-face with friends.

The campaign leveraged the insight that youth tend to spend more time online than socializing with friends outside the home. Hence the strategy was to encourage youth to meet their closest friends more often, at McDonald’s. The creative idea is that even though one may have hundreds of friends online, only a few of those are close buddies, and more time should be spent with them offline.

As we noted in our first issue of the AnxietyIndex Quarterly, “The Genericizing of Brands,” price and value messaging must be approached in a branded way. When offering consumers more value, smart advertisers make sure the offer works harder than a promotion, something that McDonald’s has pulled off with this campaign.

Photo credit: Sheep”R”Us

Trading up in a downturn? A Japanese brand looks to China

meji-milk2As long as the motivation is strong enough, consumers are still willing to trade up. And currently, Japanese infant milk brand Meiji is taking advantage of a unique opportunity in the Chinese market.

JWT’s latest global AnxietyIndex survey revealed that while Chinese consumers are the least anxious in the world, food safety stands out as a key source of anxiety. No surprise, considering that last year’s melamine scandal nearly destroyed the Chinese dairy industry. Wary of local infant milk brands, affluent Chinese consumers swarmed to Hong Kong and Tokyo, sweeping the shelves for Japanese brands, which are sold at a price premium and not widely available in mainland China.

Japanese milk brands had shied away from the competitive Chinese market—which is full of strong players both local and international—but now Meiji is launching its brand in China. The time is right: Japanese food products have long been regarded as high-quality and safe, and affluent Chinese parents are more concerned with finding trustworthy milk for their only child than with finding a bargain price.

Meiji, which is airing its first television commercial in China, emphasizes on its Web site that all products are produced and packaged in Japan, with milk sourced from Japan, Australia and New Zealand. 

In China, the downturn has a different face

thumbnails_aichiIn JWT’s latest AnxietyIndex study, Chinese consumers had by far the lowest level of anxiety level among the global markets studied: 35 percent reported feeling anxious or nervous compared with a global average of 70 percent. It’s mainly the lower-income groups that show signs of more cautious spending patterns. That’s because the crisis has primarily affected the export sector (garments, toys, electronics assembly, etc.), which is very labor-intensive and employs low-skill migrant workers from rural areas. The government estimates that 20 million migrant workers have lost their jobs. Coupled with a weak social security system and rising food prices, this makes the lower-end consumer feel more vulnerable.

But China’s financial markets have been largely insulated from the global financial tsunami, as the market is relative closed to foreign flows and is highly regulated. The more affluent consumers, who are mainly employed by government agencies, state-owned enterprises or JV companies, have felt very little impact. Their savings in the bank are safe, the prices of their homes stable and high, their jobs secure. As most brands target these more affluent consumers, this explains why few marketers have reacted to any mood change.

Is there a financial crisis in China?

emile3003645344_2d2865fa38With sales increasing by more than 30 percent and 2.68 million vehicles sold, China took over the U.S. to become the world’s No. 1 vehicle market in the first quarter. Even as GM struggles at the verge of bankruptcy, its China operations have been experiencing fast growth. And in a recent market visit of Ford dealers across China, there was widespread sentiment that the financial crisis is welcome if it means China is now the largest auto market.

China has been exempt from a direct loss in the global financial crisis. The one badly hit part of the economy is the export sector. But with by far the largest economic stimulus plan in the world, China seems to have weathered the worst of it. Government policies aimed at developing the huge rural market and brands’ price promotions seem to have worked together to keep the economy out of trouble.

It’s no wonder most brands haven’t fine-tuned their messages to reflect a mood shift—there hasn’t been a detectable one as of yet. Indeed, brands have an opportunity to ride on and persuade skeptical consumers to keep spending.

Photo credit: _emile_

In China, a premium brand justifies its cost

OMO, a leading washing powder brand in the premium segment in China, is positioned as cleaning more types of stains than competitors—99 types of stains, as its advertising claims. Heightened consumer sensitivity to price recently prompted the brand to further justify its cost. Current advertising tries to convince housewives that OMO is a good value because it cleans twice the amount of clothing with the same amount of powder. Most urban consumers here have not been hard-hit by the downturn and few brands are actively responding to the crisis—all the more reason that OMO’s proactive messaging is likely to resonate.

‘Just do it’ plus ‘Don’t worry, be happy’ = ‘Just run, and be happy’

china_funrunChinese sports brand Li Ning has launched a Web site, iRun Club, dedicated to runners across China. Not a new idea, as Nike launched Nike+ quite a while ago, but two factors make this initiative look promising. First, Nike+ has never achieved real momentum in China due to its high-end positioning—joggers tend not to have the money for Nikes or an iPod. So this site is more likely to resonate with Li Ning’s target consumer. Second, it comes at a time when consumers are beset by increasing anxiety due to the economic climate. Its slogan, “Just run, and be happy,” is a perfect pitch for people looking to de-stress in this volatile time.

Haier puts its hope on selling computers to the Chinese countryside

computerEven before the current economic turmoil, Haier—like other appliance manufacturers—was facing the challenge of excessive production capacity. So recent government efforts to promote domestic consumption by subsidizing home-appliance sales in rural markets have ignited much excitement. Haier is poised to take advantage of this opportunity not only because of its brand reputation, but also because it produces appliances that have been targeted specifically to rural consumers.

Haier has created a personal computer that’s easily mastered, especially when it comes to input method. The common form for inputting Chinese into mobile phones or computers is PinYin, i.e., the alphabetic system based on English for representing the pronunciation of Chinese characters. However, as most rural consumers don’t use PinYin, Haier developed a handwriting input system that is more intuitive; you simply write Chinese onto a sensor pad.

As it faces declining exports, the Chinese government is looking to the rural market as an opportunity to stimulate domestic consumption. Other brands should follow Haier’s lead and tap into the vast rural market.

Dining to ease anxiety in China

china_bankHow to forget anxiety? One Chinese credit card company has an idea. SPD Bank recently launched an integrated campaign for its credit card product (issued jointly with Citibank), tapping into Chinese people’s addiction to fine food in a bid to help customers forget the financial turbulence and enjoy themselves.

Card holders get a discount when dining at selected restaurants in each campaign city, earn double reward points and are entered into a lottery to win a vacation. An enticing TV spot was shot in beautiful Guilin. The voice-over in the commercial translates as: “Unexpected hospitality, unlimited cuisine. SPD Bank credit card makes you enjoy more.”

Not a bad idea given the fact that Chinese people dine out whenever the economy is booming, and when the economy is receding, the dining table is one of the last places to be hit.

With upbeat spin on hurdler’s hard luck, Coke encourages a nation

The global financial downturn has reached China and its consumers, with recent research from Millward Brown ACSR indicating that 78 percent of Chinese consumers have felt some impact from the crisis. So far, however, most advertisers’ response has predictably been focused on promotions—with ads touting deeper-than-usual discounts and longer-than-usual price promotions. It’s worth noting a Coke ad celebrating Chinese New Year that smartly leveraged a celebrity’s anxiety to encourage the whole nation at this moment of hardship.

The spot featured Chinese track hero Liu Xiang, the 110-meter-hurdle Olympic champion who had to abruptly withdraw from the Summer Games due to an injury. Amid a CNY setting with celebrating neighbors and flaring fireworks, we see that Liu hasn’t gotten past the bitter memory of the Olympics. His father comes into his room and passes him a bottle of Coke. “Do you know how many hurdles you have leaped over in the past?” he asks. Silence from Liu. “100,006 hurdles,” his father continues. “This is just another hurdle in your life.” The spot ends with a revived Liu knocking at his father’s door and giving him a bottle of Coke.