Guest post from Alex Geertz, who attended the Fifth China Branding Roundtable in Beijing on September 18 and 19.

Friday’s conference closed with a panel on new media and addressed the question of whether or not brands can “afford to stay out.” CIC’s Sam Flemming presented alongside McKinsey and Nokia, exploring the question of what new media really means for brands in China. Vinay Dixit, Senior Director Asia Consumer Centres, McKinsey & Company presented findings from a recent consumer study from McKinsey’s Insights China, which found that from 2007 to 2008 Word of Mouth (WOM) remained the highest quality media source based on credibility and level of engagement. Interestingly, consumer perception of IWOM including blogs and BBS jumped 94% from 2007 to 2008, making it the second most trusted media channel. This rise shows the growing influence of IWOM as a “new” and important media.

According to Sam, social media, which he defines as consumer created content found on BBS, blogs and online video sites, is more than just the “scary stuff” often highlighted in the media (see here for example). In reality, in social media you can find significant amounts of “real people, real talk, real community” and which represents an opportunity for brands to both gain consumer insight as well as listen to, react to and participate in this new media (see case study here).

In an earlier panel on below-the-line marketing panel, Cesar Jarmillo from P&G echoed this sentiment in characterizing the environment for advertising and marketing as moving from a “telling and selling” structure to a much more complex environment in which brands must build relationships with consumers. New media provides this opportunity. He believes brands must be experiential, generous and authentic to succeed in the changing environment. (For some examples, see here)

Mckinsey’s Vinay argues that to leverage social media requires art, craft and science. Art, as social media provides unprecedented opportunities for innovation and creativity in collaboration between brands and consumers; craft, as brands have flexibility in the presentation style, user experience and multiple channels through which they can deliver information to consumers; and finally, science, as social media requires a systematic method for tracking.

So getting back to the original question, “can brands afford to stay out of new media?” Nokia’s Dan Wong doesn’t think so. With the emergence of new media, companies today need a change of mindset, organization, hiring, management, and in some cases even a complete change of business model. In a changing market, where competitors from other industries such as Apple, Google and Garmin, are entering the mobile phone market, Dan Wong explained how Nokia has chosen to not only acquired the tools to adapt to social media but has decided to completely change its focus from a strictly hardware company to a supplier of both hardware and software.

Sam mentioned that he saw the shift in companies making structural changes within marketing communications. In the US, according to Indeed.com, there is a sharp rise in jobs listing “social media” in the job description (see here for more on this trend).

The change is happening in China as well, with 3 of CIC’s clients hiring social media managers to work with social media vendors such as CIC as well as to develop relationship with social media.

From listening to the speakers at the conference, it seems that it’s no longer a matter of “if,” but rather a matter of “when” and “how” brands will adjust to new media in order to leverage its enormous potential.

Guest post from Alex Geertz, who attended the Fifth China Branding Roundtable in Beijing on September 18 and 19.

While many Olympic sponsors chose to invest in the high profile sporting event with the primary intention of driving sales, UPS had an additional motive. Joseph Guerrisi, VP of Marketing for UPS Asia-Pacific Region mentioned one of the main motives for sponsoring the Olympics and improving brand image and awareness in China was for recruitment. In 2005, UPS set out to grow from 200 to 2000 employees in just 9 months. With low brand awareness and with little understanding of what UPS service offering among Chinese consumers, UPS found it difficult to differentiate itself as a competitive employer in the market.
From our research, we find netizens in China’s “buyer’s market” for employment will go to BBS message boards when considering job prospects to discuss brand reputation, especially brands which are famous overseas, but unknown in China. Chinese netizens increasing “brand consciousness” extends to employers. With its Olympic sponsorship, UPS strengthened not only its overall branding, but also its “employer brand.”

Guest post from Alex Geertz, who is attending the Fifth China Branding Roundtable in Beijing on September 18 and 19.

Going “green” has become a growing trend in the US and European markets, and is increasingly influencing consumers and their purchase decisions. But is the “green revolution” reaching China? Russ Meyer, Chief Strategy Officer for Landor Associates presented a recent study conducted jointly by WPP agencies Landor Associates, Cohn & Wolfe and Penn, Schoen & Berland Associates on Green Brands in China. The study found that Chinese consumers are indeed concerned with the state of the environment in China and many are willing to pay a premium for Green products.

One interesting finding is that some of the top green product categories for Chinese consumers are housecleaning products, cosmetics and groceries--all products that you put “on or in” your body. This corresponds with CIC’s experience tracking consumer opinion via Internet Word of Mouth on blogs and message boards where we see “personal safety” among the most discussed attributes in cosmetics and baby care products, especially in light of the recent milk powder crisis. In China, it may be that a “green” brand may be equated with a “trusted” brand.

Russ also emphasized that brands cannot stray too far from their core brand message. A company making mp3 accessories can reduce the size and amount of packaging to lower costs and lessen the harm to the environment, but they still need to make good earphones.

Pricing also remains a key concern in China. While it may be the case in some markets consumers are willing to pay more money for green products, this may not be the case in China.

Reusable Shopping Bags Created by Online Communities

We saw very little buzz about plastic shopping bags until the government passed a law forcing stores to charge for them. This law not only increased talk, it actually spurred consumers in online communities to create their own “green bags."

For more on the Landor study and its findings, see the press release here.

Guest post from Alex Geertz, who is attending the Fifth China Branding Roundtable in Beijing on September 18 and 19.

A common theme throughout today’s branding conference was sports marketing in China’s changing environment, driven, of course, by the recent Olympic Games in Beijing. Olympic sponsors, including Adidas, Samsung, and UPS shared what drove their campaigns and why these brands chose certain branding and marketing strategies.

Adidas, for instance, tapped into the emotional side of consumers with the localization of its Impossible is Nothing campaign by inspiring people to rally behind Chinese athletes.

In a later session, David Shoemaker, Head of Asia-Pacific and COO of Sony Ericsson WTA Tour, who was joined by tennis star Li Na, also emphasized the value that can be gained by choosing local sports stars over international sports stars. Matches featuring Li Na were the most watched tennis matches of the Olympics in China.

According to Paul Pi, VP of Marketing for Adidas Greater China, the Internet is an integral promotion channel for fans to experience the Adidas brand with over 12 million visitors to the site. With news articles, consumer reports and comments, sms updates and the live streaming of the Olympic Games on CCTV online, the Internet did indeed serve as main channel to consume the Olympics. According to the Data Center of the Chinese Internet (DCCI) reports, an average of 80 million Chinese Internet users tracked the Olympics online daily. We have previously seen how Chinese Internet users are familiar with experiencing major sporting events online by engaging in live “group watch/reporting” on BBS—online bulletin boards (see here for more examples).

While many official research reports on campaign effectiveness for Olympic sponsorship campaigns are only just coming out, brands, such as Adidas, were still able to offer some insight into how they track their brands’ performance. For example, Adidas is working with R3 on a report to measure Olympic campaign ROI through interviews with over 1,500 consumers aged 15-39 across ten cities in China.

In a panel discussing “Below-the-line marketing in China,” Gyehyun Kwon, the head of worldwide sports marketing for Samsung Electronics, mentioned the need to understand the local market and how the Chinese perceive the Olympic Games especially in relation to brands as media is becoming more and more fragmented. CIC recently explored this issue by looking at how brands and different topics surrounding brands are linked to their Olympic campaigns (see a sample analysis here).

Overall, the message was clear that brands need to adapt in order to keep up with China’s rapidly changing market and the most effective way to do this is by exploring innovative channels, including the Internet, for engaging China’s complex and unique consumers.

Guest post from Alex Geertz, who is attending the Fifth China Branding Roundtable in Beijing on September 18 and 19.

As Sam mentioned yesterday, we will be covering key highlights from “The Economist’s Fifth China Branding Roundtable: A New Brandscape: The shape of things to come" over the next two days. Today’s sessions opened with presentations from the co-chairs of the conference — Xu Sitao: Director of Advisory Services, China at Economist Intelligence Unit and Chief Rep of China Economist Group and Professor Sun Baohong: Associate Professor of Marketing, Carnegie Mellon University and Visiting Prof of Marketing, Cheung Kong Graduate School of Business.

In her opening remarks, Professor Sun stressed that as China changes, it is important for brands to change as well and integrate new strategies for engaging consumers, with new media representing an important new channel to explore.

For more on Professor Sun’s thoughts on the influence of web 2.0 and the Internet on brand strategy, here is an interview from Tangos’ interview with her taken from his awesome blog China Web 2.0 Review.

CWR: The discussion of the Internet and new media play an important part on the agenda of the Roundtable, do you think the web 2.0 has changed brands strategy and practice online a lot? what’s the main challenge of using new media for brand management and promotion in this wired era?

Professor Sun: Definitely. Internet and related technologies provides consumers abundant information and allow consumers to make highly informed and rational purchase decisions. Consumers may no longer be willing to pay the brand premium to resolve uncertainty about the product quality. This creates opportunities for new brands to quickly establish themselves if indeed they offer the best products.

The wired era provides highly customized and highly interactive marketing environment for the companies. One opportunity for companies to take is to fully take advantage of customer information and tailor their marketing effort to each individual consumer. This is the customer-centric marketing which can help companies to improve both effectiveness and efficiency of their marketing campaigns.

CWR: Is there any difference between utilizing new media for marketers in China and in the US and Europe? Anything special in China’s online market which brands should pay attention to?

Sun: In China, more new medias and new ways can be explored as marketing media in China. For example, cell phone is widely accepted by Chinese consumers as a promotion tool, comparing to the US or Europe. Viral marketing and social network also plays important role among Chinese consumers.

CWR: Many surveys show that Internet users tend to spend less time on portal sites, but more on social networking sites, how will this change of online behavior affects the brands?

Sun: This means customer experience and word of mouth become more and more important. It implies that company should focus more on delivering consistent product quality to maintain a consistent brand image over time and across users. It should also learn to identify opinion leaders in the social network and recruit them to help the company build brand image. In the meanwhile, the company should learn to manage crisis and mitigate damage when negative word-of-mouth is going around.

As I mentioned previously, I will be speaking on a panel Friday at The Economist’s Fifth China Branding Roundtable: A new brandscape: the shape of things to come in Beijing. The two-day event which starts tomorrow will focus on the rapid development of consumer markets in China, and the major issues faced by marketers today. In addition to speaking on a panel, I will be blogging throughout the conference to highlight key issues and topics discussed on the panels. Stay tuned for more updates throughout.

For information on registering for the conference, see here.