"2015-2016 China Elite Marketing Development Report" from National Advertising Research Institute indicates that mass market enters homogenization competition. The introduction of internet to mass market aggravates the competition. Same merchandise and service are not applicable for all Chinese customers. Extensive economy age has gone. China is moving towards the diversified "Elite Market", the more accurate and diverse market than any segment ones. Enterprises need to redefine the consumers, look for more vertical elite market and personalized elite community, and have a keen insight into the community labels which group elite consumers.

The consumption market of China under the Economic New Normal will more emphasize the connotation upgrade from value view. The elitism in consumer goods and service becomes the inexorable trend under the consumption connotation upgrade. In 2015, this trend is obviously shown in different fields in consumer goods market. Introducing new products of more innovative and high-quality to elite market is main business target for all enterprises. In a word, when the growth of mass consumer goods slows down, elite products become new growth pole of the enterprises under the Economic New Normal. Numerous mainstream brands activate the need of elite market.

What does "the elite" mean?

"The elite are the consumers with the common tags of positive life value, pursuing and leading high-quality life style. Elite has the meanings of ‘carefully selected’, "the best of best", "delicacy’, and ‘shrewd.’" Unlike the public, the elite are the leaders of fashion, not followers; they are creators of the brand, not fans. The elite make purchase according to the "sense of trust" from brands, not the adverting information. At the same time, the elite construct the fashion of the public.

The report from National Advertising Research Institute indicates that until the end of 2015, the number of the elite consumer has reached 1.2 hundred million, which accounts for 12.6% of urban population of China. The elite represent the most part of consumption power in China. They are pioneers who attract all, or prior attention from the enterprises in every marketing stages.

The research in the consumption behavior of the elite found that the need of the elite is encouraging the innovation trend in different industries. Environmental protection is the key factor for the elite in vehicle purchase; financial institutions reform the current business to meet the requirement of the elite by adopting new technology and idea; the introduction of new cell phone products emphasizes on the experiences in products sensory, entertainment, and extremes, instead of function innovation; the upgrade of quality and the ecosystem of FMCG (Fast Moving Consumer Goods) is the most concerned factor for the elite; for the luxury goods, good story attracts more elite’s attention than the goods itself; in the eyes of the elite, home appliances should free their hands so that they have more time and freedom.

Consumption logic in "elite age"

The changes from "mass" to "focus" and then to "elite" is the innovation of enterprise marketing which meet the requirement of the changes of consumers needs and structure. It is also the changes for enterprises from extensive operation to intensive one. Today, the consumers become more and more shrewd. With the accelerated increase of media type and information quantities, consumers’ consumption intelligence becomes more and more high. The products and brand are controlled by the consumers, not the enterprises.

Therefore, enterprises classify the customers not by the traditional methods such as age, gender, income, and education background, etc. More complicated and vibrant factors are considered, especially lifestyles, values, consumption symbols, and consumption orientations, so that enterprises could make more sophisticated market category, catch the soul of consumers’ lifestyles, shape delicate consumption culture, and market in the channel of gathered elites to win the keen competition.
Today, we could find the "elites" phenomenon in many consumption scenes: in medium-to-high grade fitness clubs, more and more people gather and keep energy, vitality, and competitive strength by body building; the designs of IT digitals, vehicles, fashion and luxury are more and more personalized and stylized. New marketing logic in "Elite" times is appearing: marketing to "the consumers walking ahead of time" shows the feature of values drive, and the consumption tag formed in this process leads the fashion trend of the public consumers.
Positive attitudes, pursuing independence, caring about unique style, and seeking special life style… the product and brand needs for the "elite" is redefined. If enterprises would like to exert influence on the elite, they need to add these factors to the brands.

"The elite" forces marketing transition

In the mass consumption times, enterprises normally recommend brand information to consumers. However, when facing the "elite", they need to encourage consumers to initiatively give brand a "hug" and define the brand together. Therefore, the elite makes a new marketing ecological system. Under this ecological system, elite marketing not only means that the enterprises need to assimilate the brand into the elite’s life, choose right time, right location to build relationship to gain their hearts, but also need to change the communication context when doing it.
The difference of the communication context between the elite and the mass is that the "elite" cares more about the brand connotations, the degree of association between brand and life style, and the consistency between the brand contents and values accepted by the consumers. The elite are wiser and more disgusted with the sermon than the mass. The elite marketing need to create new communication language, let the elite choose and accept products, so as to set consumption behavior example and lead the fashion trend by spreading public praise influence. Even a simple marketing activity should emphasize brand value, not just traditional "benefit" on communication language to the elite.
On the other hand, enterprises need to find the symbol to carry brand connotation to appeal the "elite". Such symbol could be person, location, or any kind of image. Therefore, the essences of the elite marketing lie not only in optimization of the communication channels, but also in infiltration of brand information into the elite’s life and positive public perception of brand, so as to encourage the demonstration effect of consumer groups. These are the most concerned points of the elite marketing. Meanwhile, perpetual summary and innovation should be made in practice by more enterprises.

From traditional PC Era to current Mobile Internet Era, the appearance of smart devices totally changes people’s life style: making friends, reading, shopping, touring, game, and video, etc. In the modern society, the amount of information grows explosively, media resources spread everywhere, and time shows fragmentation development. Therefore, enterprises’ policies on brand establishing and marketing promotion have experienced great changes: timely interaction is emphasized; multi-platform base on PC and phone covers completely; there is change from fighting for flows and entrance to multi scenes arrangement (chatting would remind people of WeChat and shopping would remind of Alipay. Behind these it is applied design based on the scenes of paying and social life). The era of encouraging PV (Page View) has gone. The era of "Contextual Marketing," the scene touch revolving around people’s daily life, is coming.

This trend revolves around users, connects the seemingly irrelevant application to the real consumers’ scene, and under the circumstance of mobile internet provides scene applications based on big data, Cloud, internet, and AI (Artificial Intelligence): industry integration, integrating different kinds of products and services according to users’ fragmentation time; making targeted scene set to market according to characteristics classification management of different target group, so as to obtain extensive popularization and accurate spread, and make consumers’ behavior happen imperceptibly and naturally. In a way, it is the key point to decide the success of marketing under the circumstance of mobile internet that with the help of scene design of users’ life pattern, the product channels and on-link mode are reshaped.

The evolution of the concept of Contextual Marketing

Although recently the discussion on Contextual Marketing mainly focuses on mobile contextual application and O2O scenes, it is not a new concept. If we narrow the range to the marketing mode in digital era, the Contextual Marketing experienced evolution of different stages:

The relatively early and mature typical modes include searching ads. For example, Google and Baidu display the related ads according to the users’ key research words and the key words is a kind of scene representing users’ interests; in addition, there is a kind of native ads that fit into users’ current browsing circumstance according to the types of users’ reading content and media; the lately appeared programmed creativity could show different contents according to users’ personal interests.

The above mentioned Contextual Marketing modes basically need users to have a circumstance of content browsing consumption. However in mobile internet era, Contextual Marketing could be independent from content and operates by the properties of the users’ time and location, like recommending restaurant by the location and news and weather by the time. When time, location and users’ browsing and use behaviors are considered, more accurate discrimination and judgment to users’ scene could be realized and users’ need could be satisfied naturally with the help of the information and services provided by the brand. For example, in the process of air ticket booking, additional reservation information on destination hotels and sight spots are also provided to the consumers.

To sum up, all the above mentioned modes first judge the needs of consumers in current circumstance and then recommend related brand information to users. However, currently higher mode appears: by deeply grabbing users’ need, brand provides solution tool to consumers, builds whole new scene, and creates whole new marketing opportunities.

For example, by creating the scene of red envelopes on WeChat, the social need to communicate with friends and relatives during the Chinese New Year is satisfied for users; the taxi app on mobile creates the scene of calling taxi by mobile GPS and solve the problems of trip difficulty and car spotting; Nike creates the scene of running with the wearable recording device and sharing the information with friends by mobile app. It helps user to have better exercise and adds social factors on the lonely sport of running. Such solutions are beyond the limitation of providing information. It could not only link to more marketing scene (for example, WeChat red envelops provide brand cards and coupons), but the more important thing is that offline scenes translate to online flow. By using the accumulated user data and technique methods, the service under more personalization scene could be possible.

Why do we say that the king of future marketing in mobile era is scene?

1. Brand has more opportunities and touch points to connect with consumers In traditional marketing mode, touch points are limited on putting ads on the media of TV, Internet, magazines, advertisement, and outdoor advertising. However, from the point view of Contextual Marketing, consumers’ need exists in the whole process of discover, research, purchase, use and share brand. If brand could make deep analysis on the scenes of consumers’ need, the touch points are unlimited.

For example, neglected functions such as notification bar message and text message in the cell phones could be translated to the suitable scene for communication between brand and consumers. Bank could offer the installment option to consumers when it sends consumers bills by the text message; mobile payment option could be informed to consumers by the ways such as scanning two-dimension code, when they receive the hydro bill.

2. To really resolve the users’ problems and make favorable value exchange with the users.

When consumers know how to distinguish and avoid ads, the traditional ads marketing mode doesn’t work anymore. What consumer needs are the products and services that could provide them real value. The Contextual Marketing based on resolving users’ problems could form the favorable circle between brand and users: brand provides users their required information and service in right time and right location. This not only helps users, but also increases the stickiness of the users for the better experience. The users’ data could further prompt brand to discover the users’ need and then provide perfect service to the users.

3. The targeted consumers are not limited on static definition of demographic property

In traditional marketing practice, brand usually defines target consumers by demographic property. But if we look for targeted consumers by demand scene, we could unexpectedly obtain more potential users. For example, Dayima App is originally used for female period management. Based on the fact that female would like to get more cares from male in the special time of period, the Dayima App of male’s version appears. When a female’s period time is coming, the male could take care of her. This App had had 10% male users in last year.

This is "fans" age, as well as an idol age. Idols have fans, and products also have fans. The word of "fans" comes from the plural of fan. It means fanatic and enthusiast. The popularity of this word comes with the rise of Internet. Although in history, every age had idol and "fans", they had no communication platform and could not become power, like today.

"Fans" represents a kind of consumers’ trend – a group of consumers with the same participation, feeling, and interests. For marketers, they need to understand the consumer group and set up long-term relationship with the group, if they want their products cover large "fans" market.

"Fans" marketing is different to the traditional marketing. The experiences from many international well-known enterprises, like Coca Cola and P&G, tell us that the traditional marketing is the total of media advertisement, promotion event, new products development, and deep distribution. Such marketing pattern was regarded as the most efficient pattern and it also costs a lot. It is a kind of "manual transmission" marketing. The development speed of the enterprises depends on advertisement effect, promotion frequency, new product development speed, and the level of deep distribution.

In internet age, consumers become more and more wise. Search engine gives them opportunity to obtain information broader and quicker. The influence of advertisement and promotion sometimes is weak compared to recommendation from friend. Moreover, consumers have more rights of speech in internet. It is absolutely big issue on how to use consumers’ experience and interaction to shape good reputation and fans’ voluntary spread, thus the brand could enter the "automatic transmission" marketing pattern.

Marketing to "Fans"

Most enterprises treat "Fans Marketing" as the process to build a WeChat public number and use it as "importuning marketing" or "small ads marketing." After people subscribe the WeChat public number, they are fed with small ads very day: all kinds of enterprises articles, product introductions, promotion events; or different quoted articles such as chicken soup for the soul, inspirational stories, classic quotations, and gossips. The bustle from such petty flavors and curiosity could not bring the enterprises expected profit, and the crowd of onlookers is not real "fans".

First, any fans marketing and fans activities need to make detailed plan and deep research. For example: 1. who are our customers and how many of them have brand awareness? 2. Do we have fans, how many loyal users to our brand, and what kind of type are they? 3. Why do fans like our products, and what is their purchase behaviors based on, ads, activities, or products? 4. Does the spirit expressed from the fans marketing match the brand culture? 5. Is there any connection between the marketing activities and sales volume? 6. How to make fans to spread the positive information spontaneously?

After catching the above key points, the brand could better understand the fans, and based on such understanding, the more important thing is to guide the fans to increase the communication and interaction with brand in the activities and topics, so as to obtain the deeper trust and support from fans. Take fans club marketing as an example: the way that encourages the communication and interaction between fans and brand is to make the club discussion and activities to be a part of fans’ life, such as blogging, posting photo match, sharing the stories related to the products, attracting more fans to be engaged in discussion, and improving the community popularity. During this process, one representative from the enterprise needs to be deeply engaged in and becomes a sounding-board between the brand and fans. Based on serving the fans, the representative could guide and lead the speech and interaction of fans, find out the constructive suggestion from fans and give quick response. Only so can fans feel themselves important to the enterprise, which could improve the fans’ loyalty to the brand, and bring the brand and "fans" together.

"Fans" marketing: core force to control the brand

The difference between banal products and great products is "fans". But the effect of using the stylized marketing methods is too limited on shaping a brand with big "fans" market. The reason why a brand gets "fans" support is not because of the industrialized traditional marketing methods, nor the boastful ads on media, but that there is no clear definition for suppliers and users, no absolute position relationship of buying or selling, and the factor of human is added.

The secrets of better understanding of brand among fans are as follows: first, brand need to treat itself as a person, a person like consumer. Fans appear not by management, but by "attraction of each other" or "concern for each other." On this core concept, brand could invite consumers on product design and interior evaluation. Brand could be amused. It could also be criticized by fans. Fans meeting could be held; second, the brand mode needs to change from unidirectional to fans to network one. The brand places itself in the group of fans, understands their feelings, knows their interests, and be a part of them. Who could refuse friends? But we hate salesmen and ads agents who deceive us.

In traditional business, the goal of marketing is "brand" – after all, the brand could exert all its influence on consumers’ decision-making on purchase. This may be applicable before Internet age. However, in internet age, some brands are not welcomed. The reason is that internet breaks region limit and eliminates the information asymmetry.

Under the traditional mode, there are local brands and industry brands. But after internet appeared, people found that same kinds of brand compete in same platform, and most consumers could only choose the few famous brands in the industry. Therefore, there is a saying in internet industry – there is only big boss in internet world, no second one. Although the words sound absolute, it is reasonable. Under such circumstance, the emergence of "fans marketing" and "fans economy" is inevitable and they are the result of conforming times. In internet age, brand is not enough. Fans are necessary. Who gets the support of fans will gain the world.

Written by Han Liu, Founder, Easywei

If you are interested in my article here, I guess you are either willing to market your business in China or eager for a better marketing solution. Anyway, here are some questions you should ask yourself before any further marketing action. What do China’s consumers want today? What do brands really mean to them? What qualities do China’s growing consumer groups seeking in the brands they choose?

To better understand the challenges facing companies that want to establish and better manage a brand in China, my company Easywei searched into the Chinese consumer market to learn how they decided what to buy and which brand they choose. Here I start with the first chapter in my branding series: positioning.

Do we really understand the Chinese market?

As we all know, China is a rapidly growing consumer market. It is predicted that China’s consumer economy will expand to $6.5 Trillion 2020. Besides, China is also one of the biggest e-commerce markets in the world, with sales reaching more than $ 680 billion by 2016, which will reach the ridge in just three years. Chinese E-commerce sales channel represents 20% of the total sales of the country and will represent a quarter within 5 years.

What a boon for brands! That is why both big and small overseas brands are looking for ways to develop their markets in China. Data by Ali Index (data analysis platform by Alibaba.com) shows that the most famous E-commerce platform in China have brought in 14500 overseas brands from 63 countries and areas, among of which 80% are new comers. Just in the last two months in 2016, a number of well-known international brands settled in Tmall, such as Webber Naturals, DM, Rossmann, and SPRAYGROUND.

But apart from what we know about the huge market share, what we might not know about this market is, Chinese consumers are completely different from the Western population. In a few words, the Chinese population has its own culture which leads to different ways of thinking and consumption behavior. Besides, Chinese are very specific in its own language, and that might cause more complex market penetration, even on the digital platforms. For example, translating word-by-word may not necessarily give you the right meanings. I will talk more on how to create proper brand content for the Chinese market in the next chapter.

Another vital difference we should bear in mind when branding, is that China market is governed by information counterfeiting. Therefore, Chinese consumers are alert enough and sensitive to dishonest brands or brands that they have never heard of. This experiential alert mind somehow creates defense for new brands to enter, and therefore new marketers should never think it is too easy for a foreign brand to win market popularity in China!

See, the Chinese market is not as easy to brand in as you think! Although the extraordinary huge market demands in China are large enough for all brands to have a finger in the pie, not all brands are doing a great job, especially under the context of the special Chinese consumption behavior. Here I look into brands with higher marketing efficiency and market popularity.

By country, the Chinese market have shown enthusiasm for US products in recent years as US brands represent the largest market share in terms of foreign products purchased in China, ahead of Japan and South Korea. Thanks to its heavy invest on the Chinese market!

Since the reform and opening-up policy and the booming E-commerce, China is in constant evolution and its markets are highly competitive. These factors have forced American brands to innovate. This investment in Chinese markets goes even more complex and systematic, through a full understanding of the environment and the different markets of the country.

Take US’s century-old brand Starbucks as an example. Starbucks gets used to carry out full-scale market studies when entering into new markets. This habit allows the brand to own ability in paying attention to all details and dealing with market difference when launching. Chinese has its special culture on hot drinks, and it seems not easy to develop a branding campaign for a coffee maker. To learn how to convert the aggressive coffee resisters into lovers is vital for Starbucks. After market research, the brand played on the Glocal “Think Global but act Local” strategy. And experience shows that its market studies have worked to allow the brand to more or less adapt to the cultural differences of the country.

How to win quick recognition among competitors?

Here we talk about why brand positioning is important. Let us check a series of data first!

As known, Chinese people might be the most diligent people in the world, the average leisure time for Chinese people is only 2.27 hours per day, and it is about 300 pieces advertising crossing individual Chinese people’s life per day. Harvard psychologist Dr. George A. Miller says the average mind cannot deal with more than SEVEN units at a time. That may explain why most of the items remembered only have 7 units: 7 digits of phone numbers, 7 days of a week, 7 notes on the musical scales, 7 wonders of the world... Grab someone randomly, ask him or her the brands of a certain category and you may find out that seldom people can name more than seven brands. 

That is why positioning is important in marketing and promotion battles. Sharpening our brand message to cut into the mind, it encourages us to be seen and heard in the overcrowded marketplace.

Have understood the importance of positioning in relation to win quick recognition among the market, let us look into another aspect, brand trust. I believe brand marketers all know that it is crucial to establish a relationship of trust with consumers in the China market as this country is governed with information counterfeiting. As I mentioned before, due to this social phenomenon, Chinese consumers are easy to be mistrusted if a brand has a bad mark, even it is unreal. On the bright side, people tend to buy a brand because they recognize it and even create a strong commitment to it when showing the interest of the brand. Therefore, to win quick recognition among competitors means we need to win trust first.

Furthermore, to win brand recognition also means you cannot “take the usual path”. What does it mean? Simply speaking, companies with global brands can win recognition very quickly in new markets, thank god to their excellent brand gene. However, you can still see that some companies have tended to focus on narrower market segments to win market recognition effectively. Take a Chinese local spirit brand Jiangxiaobai for example.

Jiangxiaobai is a light Kaoliang spirit produced by Jiang Chateau in China. The spirit product is positioned in the new youth groups to meet the needs of simply and absolute life style. The brand slogan for Jiangxiaobai consists of these keywords: sprit, Chicken soup for soul, and self-expression. And the slogan is the hidden secret of its branding success. There is no lack of spirits in the China market. However, what could spirits connect us in mind? High-end? Passion? Or business talks? For almost all spirit products in China, the brand positioning are similar. But do market demands remain the same? The market study by Jiangxiaobai tells us the answer. For youngsters, spirits may not just be some alcohol to sorrow in, but might be comfort and companion in a late night. The “accompany bottle” of Jiangxiaobai allows us for self-expression and fuels for ourselves. That is why the “spirit for soul” wins its craze by market.

The case of Jiangxiaobai more or less gives us a clue on how to win market recognition by raveling out the relationship between brand position and market awareness. In other word, competitive positioning is the key for what sets your product, service and company apart from your competitors and what value you provide and how is it different from the alternatives.

But how to position your brand competitively? Mind that competitive positioning is all about defining how you’ll “differentiate” your offering and create value for your market. Therefore, “special” is the key for your brand being known as “something”. It’s vital to notice that positioning focuses on getting into the human mind of customers rather than the product itself. Because the only defense of people alive in the over communicated society, is the over-simplified mind. What really matters are the perceptions that exist in the mind.

Either your offering is special or your target groups. Here I conclude some steps: 1. Carve out your USP (unique selling point). 2. Analyze your market profile precisely and find the special need or target a niche market segment. 3. Match your USP with your target groups. 4. Choose a proper method for delivering brand value. That is to deliver value to your market at the highest level. And your positioning is done!

The survival of the fittest!

Marketers all know that products have their own life cycles. So do brands! In marketing philosophy, it means that we have to adjust branding strategies in keeping pace with the brand performance and market demands. More importantly, brand positioning strategy needs a better adaption when entering an entire new market, simply because the new consumers are totally different from the previous ones.

That explains why branding masters often call brand positioning an experiential viewpoint. The image of a brand within the consumer's mind has never been a fixed impression! Instead, what we position our brands in consumers’ mind are often dynamic and changing, and more importantly differentiates across countries and cultures, and specific consumer needs.

A common sight in international brands, differentiated brand positioning strategy is adopted overseas and in China. Take the well-known fast brand KFC for example. Needless to say, this brand is an internationally known for its brand slogan “we do chicken right”. When it firstly entered in China, this brand concept worked well, and the Chinese market is addicted to this tasty foreign fast food brand, just like in other countries. However, Chinese people have their own eating habits, which seem healthier, and we more often eat out as a family. What makes KFC clever than other fast food companies is that they noticed these special market demands and soon adjusted their brand position to come closer to a Chinese style and have shown us “they do chicken right also in China”, by bringing as a new fast food brand concept, which is more about health and family gathering! Along with the new localized menu, such as family meals, vegetable soup instead of soft drinks, steamed rather than deep fried, and etc, the new KFC worked out and there are more than 3000 outlets across China, which is twice more than its biggest competitor – the McDonald’s. This perfectly explains the theory of the survival of the fittest.

To conclude, what I mostly want to point out in this article is that China is a totally different market to position our brand! It is well worth to conduct market research before working out any branding plans. For example, we need to study the younger generations who are bursting with enthusiasm for "new", "cool" and "fun" branded products, or the typical urban Chinese consumer who have reached a level of maturity and feels a desire for change.

In my next chapter, I will further work on the study for the Chinese market, hopefully to help you better shape the brand message based on a proper positioning strategy. See you soon!