Time to adopt a new philosophy

Confucius is reputed to have said that the scholar who loves comfort is not fit to be considered a scholar. That maxim certainly seems to have been taken to heart by Professor Philip Kotler, who used a keynote speech at the recent Marketing Forum to blast comprehensively the complacency of his audience, real and metaphorical.

Stage pyrotechnics never do your profile or book sales any harm if you’re an academic, but on a more serious note, Kotler managed to score a number of hits below the waterline. Most damning was his image of a marketing industry obsessed with the minutiae of promotion, while the other three ‘P’s wither on the vine of neglect. He said a lot more besides, but perhaps his most memorable suggestion was that unless marketers get a grip, many Western companies will face ‘brand death’ as China begins to build its own brands at lower prices.

This observation, by arguably the leading marketing guru, has prompted us to look at the China challenge in more detail, and to draw some tentative conclusions. To be sure, the sheer size and dynamism of the Chinese economy is beginning to have some bewildering effects for the rest of us. No global manufacturer can afford to ignore the competitive reality of a cheap, numerous and increasingly skilled labour pool; no global brand can be unaware of a vast, untapped consumer market – albeit one where disposable income is still extremely low. Already, the ‘Made in China’ tag is ubiquitous in the West, whether on pianos, teddy bears or digital radios. Branded presence is quite another matter. Most commonly, Chinese products provide a private label service as, for instance, white goods manufacturer Naiko does for Comet under the Proline brand. Evidence of autonomous branding is rare.

There is, of course, Tsingtao beer, beloved of Chinese restaurants across the world. This has been joined by China’s largest PC manufacturer, Legend, now rebranding as Lenovo in readiness for an international assault. Add to that telecoms company Kejian, now sponsoring Everton, and Haier, one of the world’s largest white goods manufacturers (interestingly starting up operations in Italy) and China’s international brand presence is almost covered.

In truth, China experts are sorely divided over whether these are the precursors of a tidal wave that will overwhelm Western markets. Optimists point to the bolstering effect of the 2008 Olympics, which will showcase the Chinese economy to the world. Sceptics fret over a variety of retardants, from the Confucian bureaucracy of the Party system, to language difficulties and the lack of an independent legal system. Most specifically, perhaps, they say the Chinese just don’t ‘get’ branding – particularly on the brand communications side. To which the optimists reply: ah, yes, but like Japan and Korea they will learn.

Though osmosis rather than tidal inundation seems the most likely outcome, the implications for marketers in the West are not to be underestimated. Perhaps Kotler is right: marketers should spend a little less time agonising over their TV budgets and a little more time impressing the bigger picture on their corporate colleagues.

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