Building brands in China

Article at a glance:

Chinese shoppers love brand names, but companies are having a difficult time translating these preferences into revenues, in the form of either increased market share or premium prices. But our market research suggests ways for companies to turn consumers into loyal customers.
Salespeople in China have tremendous sway over the decisions of customers. Point-of-sale promotions can be an effective way of addressing last-minute switching and getting products into the hands of consumers.
Compared with developed markets, messages that focus on functional features can be more important in China, since many product categories are new. This preference will probably change as shoppers become more experienced, but the pace will vary from one product to the next.
Consumers in China also have strong national pride, so multinational companies could lose important segments by seeming too foreign.

This article includes the following exhibit:

Exhibit: Few Chinese customers who considered buying a brand actually did so.

This article is part of a McKinsey Quarterly package on the new Chinese consumer. To read the other articles, please select from the following choices:

Marketing to China's hinterland
China's smaller cities and towns conceal pockets of prosperity that shouldn't be dismissed lightly.

Understanding China's teen consumers
Teens in China influence the spending of hundreds of billions of renminbi annually, but don't expect them to mirror their counterparts in developed markets.

The value of China's emerging middle class
Faster than many companies expect, a massive middle class could dominate China's urban markets.

Lessons from a global retailer: An interview with the president of Carrefour China
A retail veteran discusses what he's learned after years of running hypermarkets in Taiwan and China.

Shaping China's home-improvement market: An interview with B&Q's CEO for Asia
This British retailer finds that keeping up with the changing Chinese customer is the biggest challenge.