Any entrepreneurial marketer should only be interested in a business model that has an identifiable market with a sizeable homogenous group of commercially viable consumers as the target market. This also mean there are different types of markets with different needs and wants. A good business model if it has a large enough group of consumers that can be reached and give a profitable economic return. By focusing on using limited resources to get into the heart and mind of this group, a marketer must attempt to find out what “turns these people on” (because what turn them “on” may turn others “off”!) and what keeps them ticking. Then design a solution not only to meet their needs, but more important, their aspirations. And, it is not just for the body, but also for the mind and soul too, because marketing, branding and positioning is all about the battle in the mind.

There are 2 major challenges marketing to consumers here in China. With an immense diversity of culture and wealth distribution, it is not difficult to recognize that there are differences. The million dollars question to answer for marketer is to find a REACHABLE and SIZEABLE COMMONALITY that will make commercial sense. REACHABLE - distribution channel infrastructure is not yet well established (hey, loud business opportunity here!) so, it is very expensive to distribute goods across a nation that is almost the size of the whole Europe! Any viable business should not look at selling across the whole nation of 1.3 billion people. Can we realistically reach all of them? SIZEABLE - after acknowledging that we can only reach, say, all the channels here in Shanghai then we must answer is the group big to enough to be sustainable. COMMONALITY - it is well and good to be able to customize, but it must make business sense and more importantly, production sense. So, the next thing a marketer should focus on is how to satisfy the common needs and wants of this group.

Winston Nyo

General Manager, Village Earth Pte Ltd

Positioning can be a powerful tool for marketers. When melatonnin was first introduced in China to deal with “jet lag”, it failed miserably. A few years ago, a “marketer” re-packaged the product, gave it a “brainy” name and positioned it as a brain health tonic gifts for the well respected elderly (in the good old confucius teaching). It promised to help the elderly sleep better, thus, leading to good health. The marketing bliss took advantage of an aging population and a nation with a tradition of filial piety teaching.

Positioned as a gift because the older generation will not buy it themselves (different consumerism mentality), but their filial piety children (a new generation of consumers with increasing purchasing power!) would buy it for them because it is a respectable gift (for the face). It became an overnight roaring success across China. From a marketing positioning point of view, it is a very good powerful case. From an ethical point of view, well, it is very controversial.

Marketers should recognize that they should be responsible because they hold powerful tools and customers’ insights in their hands.

Winston Nyo

General Manager, Village Earth Pte Ltd

In Asia and especially here in China, branding is taking a very unique form.

I have always learned and believe that branding is about delivering the promise of the brand’s position in the minds of targeted customers. I was very naive to believe that “promise” is about quality, design and image. I used to believe that the promise of quality was most critical. I was proven wrong. The market in China is not short of examples where prestige outweighs promise. Customers are more concerned with face than with fulfillment. Often, the request for delivery is confusing and conflicting.

We have been dealing with corporate using cultural festivals to build customer relationship with gifts. An example would be the mid-autumn festival or what we call the moon cake festival back in Singapore. Customers had always requested that the gift set should be unique, ie different from others. Yet, it must carry the moon cake that is a long time brand, ie same as everyone. The definition of a “branded” moon cake that it must be acceptable by the general public. Customers had often requested for long time well known brands, which should be strong market leader. Going to the retail shops to hunt for this brand, we saw an unbelievable sight at the retail store. Checking out a long time leading moon cake brand, not only it was not individually packed like other brands, it was packed in very “cheap”looking box! But this is what customers prefer over a high quality well packed moon cakes (where the factory exports its moon cakes to Europe and the US). To boggle the mind further, after asking those who have received moon cakes in the past, 8 out of 10 Chinese do not eat or like to eat the moon cake. However, they would be upset if they do not receive the moon cake or if it is not a branded moon cake.

If I take the well developed scientific steps to evaluate a brand, or diligently carry out a conjoint analysis market research to map out the consumers’ AIO and preferences, I am not sure how it can help me develop a offensive marketing plan. Understanding Asian customers, especially here in China, it is seldom sufficient to just go through extensive market research. Customers being researched will often answer what they think or feel they are expected to answer. A totally professional but naive simplified look into the rationality of the market would not give companies the picture of the market they should see. To truly understand the customers, one have no choice but to literally live and breath with them. This will ensure successful marketing and branding.

Winston Nyo

General Manager, Village Earth Pte Ltd

Merry Christmas everybody! I would like to start off my blogging life with the spirit of the Christmas season, and I sincerely hope to share and learn from this new world of networks without barriers that we live in today!

With globalization and rationalizing of resources, companies around the world are in a frantic race to out beat their competitors on gaining an edge in cost and in value. Questions are getting more difficult and answers are getting more complicated! Running an enterprise today is NOT easier, it is getting complicated. First, managing TQM and lean manufacturing is critical to deliver quality products, then branding becomes important to differentiate from competitors, then the right talent with the right process design are critical in delivering that promise, then innovation must continue to keep the competitive advantage abreast, then companies need to outsource to leverage on global resources and the list goes on and on. To make business life more “interesting”, each must??and should comes with it a “dark side” after companies adopted the new “business to-do-list”!

However, it is a very different here in Asia and especially here in China. It is unthinkable to outsource. Instead, entrepreneurs rushed to in-source and vertically integrate whenever possible. Why let someone else make the money when we can make the money? Why should we pay so much to our suppliers? Can we do what our suppliers do?

Companies should major in the major. Business must learn the art of paradoxical balance. Be focus and specialized in what one is good at and expand in that area! The start of the journey should come from knowing and growing the companies core competence against competitions addressing key success factors of the industry. Every industry requires a different set of critical capabilities to win the game and enterprises should match its core competence to that before considering outsourcing. As a start, many companies are ignorant or the industry’s critical capabilities and “blind” to its core competence. Simply, core competences are well-performed activities that are central to a company’s competitiveness and profitability.

It is quite common that companies struggle with the right core competence required to win in the industry and matching the company’s unique capability to deliver that better than its competitors. As I read into a very good article, “Strategic sourcing from periphery to the core by Mark Gottfredson, Rudy Puryear and Steven Phillips Harvard Business Review February 2005″, I realize that my own company and my clients should strategically and systematically map out the proprietary nature of the process or function against the uniqueness of business process or function and the company’s ability to perform function against cost per transaction. Only when an enterprise is clear about the consequences of the company’s decision to capture a critical competence that would give the company the competitive advantage when delivering value to their customer through in-source or outsource should a company consider the knowledge lost in outsourcing. On top of that, it is not necessary true that by outsourcing a function, a company would loose control, knowledge or capability of that function. On the contrary, I have experienced otherwise. By being the marketing department of clients where sales and production or supply chain and merchandizing are at the core of the company, their organization learned to carry out marketing activities never been done before.

Outsourcing usually failed because it was done purely for cost savings and when it is done piece meal. Besides cost savings, companies should also look at the value of it. Sometimes, it could be to transform the organization or even the industry. Outsourcing itself is nothing wrong, it is just how a company chose to outsource or in-source.

Winston Nyo

General Manager, Village Earth Pte Ltd