This post is by Vineet Arora, Managing Director Arena China, and Herman Cheng, Marketing & PR Manager Havas Media China.
Large state hospitals in Shanghai are chaotic—patients throng in crowded lobbies as they stand in line-ups for a place to stand in even more line-ups. In 2009, Philips Healthcare waded deep to address this issue, scoring a phenomenal public relations victory and winning over both local government and consumers. A careful study of this case could help dispel some misconceptions about corporate social responsibility (CSR) marketing and building meaningful brands to create business value in China.
CSR has a long history in China, but its drivers are not well understood. For example, we often assume that Chinese consumers are generally not interested in CSR. But we believe that a silent revolution has taken place in China…a Havas Media 2013 Meaningful Brands study confirms this: Consumer expectations of brands to improve their quality of life and well-being have steadily risen, as a Havas Media 2013 Meaningful Brands study1 shows 72% of Chinese respondents agreeing with the statement that "companies and brands should play a role in improving our quality of life and well- being." 65% of Chinese respondents frequently consider the impact of a brand on people's well-being or the environment when they decide to buy, compared with the global average of 50%, the highest percentage result from all the territories surveyed.
Over the following years, we could see this sentiment begin to well up and influence buying actions. So how can we keep a poorly thought-out CSR strategy from impacting your brand during this impending sea change? As we'll discuss later, CSR has many facets, and can signify different things to different people.
As confusion can be quite commonplace, and different functions struggle to define an overall company strategy that can satisfy all stakeholders, we suggest a few general principles and guidelines to engage with consumers through CSR:
Philips knew that the government had a huge stake in the public good. So it worked with the government to install a terminal that allowed hospital patients to track their place in the queue, and freed them to leave for three to four hours without actually missing their appointment. A total of 10 hospitals in Shanghai installed this system, reducing over-crowding in public areas and increasing patient flow efficiency. Philips estimated the system saved patients over 156 years of time annually.
Philips Healthcare also rolled out a TVC campaign extolling the benefits of visiting newly refurbished community clinics rather than major hospitals, aligning broadly with local and state government policies on hospital overcrowding. Philips worked with government departments, particularly the Public Health Bureau, to craft the message, saving 65% on airtime advertising costs by having the commercial branded an official public service announcement. Today, Philips Healthcare is Philips' most profitable division in China.
The Philips case highlights several points about engaging in CSR marketing and in building a meaningful brand in China. First of all, companies must place government priorities close to the heart of any CSR strategy. China's domestic interests include the promotion of various policies, including job creation and maintaining social stability and harmony, so engaging with the government and policy on a meaningful level is fundamental.
CSR strategies must also be focused, and maintain consistency with the brand story the business is telling. "The concept of CSR is so broad that companies define it in a way that suits their purposes and objectives," says Annabell Chartres, a former sustainability director of Accenture China. "Materiality is important. There's no point investing in education if you're a mining company. There's no long-term value embarking on a CSR or sustainability program if it doesn't support your core business objectives."
An extensive range of CSR objectives could all be meaningful in the China environment: Proactive CSR initiatives include those that support the community through education, training, health and infrastructure improvement initiatives. Note that these are often informed by government priorities, and environmental initiatives and disaster relief are part and parcel of a robust government relations program. Managing environmental sustainability in the supply chain (particularly that of your Chinese suppliers) as well as sustainability in the workplace can help mitigate risks down the road should regulations change. And environmental sustainability goes beyond tree planting and carbon footprint. Due to water shortages in Northern China, for example, emphasizing water footprint would be more meaningful than carbon footprint.
But no CSR program in the world can be thorough and all-encompassing. Philips Healthcare made the obvious choice of prioritizing China's health care system, a government priority that's also a pressing issue for the consumer. So the message is clear. Choose a focus for your CSR and commit fully to it, integrating it into your broader communications plan.
Part of the success of Philips' program was that it matched its brand promise: to "save people time." Your CSR program must therefore not be separate from your brand story and promise: How your brand can help and bring value to consumers. In building meaningful brands, we often counsel clients to:
This is as true for consumer-brand engagement as it is for CSR. The brand story of rental car brand, eHi Auto Services, for example, matched well with its CSR initiative – offering an easier way to travel. The annual Chinese New Year "Spring Festival" is known annually as the largest migration in human history, recording over 3 billion passenger journeys over land, air and rail in 2014. Travelling during this time is often a painful experience for all involved, particularly rail users packing into the overcrowded trains. With this in mind, eHi launched the "Hey Home" Spring Festival campaign, strongly referencing its brand promise "to improve the way people travel." Through online promotions, eHi introduced a series of Spring Festival car rental packages and unlimited mileage offers, providing alternative options for travelers outside of rail. Participants who registered on eHi's official Sina Weibo page and other participants were also entered into a lottery, with prizes that included free car rentals to return home for drivers residing in Beijing, Shanghai, Wuhan and Chengdu.
What eHi and Philips Health Care both understood was that CSR activities should go beyond matching government priorities to finding resonance with the consumer through practical and social relevance. And digital amplifies this resonance. From influencing a few people in the old world, advocates for your brand can now influence thousands to millions of people through digital.
A vast majority of China's youth, in particular, are digital natives, and harbour growing concerns about the social and environmental impact of business. BMW tapped into this younger demographic in 2010 by appealing to this growing awareness through social media. During the Shanghai World Expo, the German carmaker paired up with Tencent (a social networking group with the popular instant messaging system, QQ) to craft an 'online volunteer relay' campaign that drew attention to its CSR activities under its official role as an auto sponsor to the Shanghai Expo. After selecting 20,100 'first-line' volunteers, BMW and Tencent encouraged them to pass on the volunteer spirit to online QQ friends by transfering exclusive volunteer icons. The campaign broke records for online engagement, with 65.3 million users participating, and netting news coverage in major newspapers and CCTV. And 2010 turned out to be a banner year for the group, as China sales of BMW and MINI grew 87 per cent year on year.2
Numerous studies have also argued that China's collectivist mindset encourages consumers to place greater weight on CSR.3 While this has yet to affect purchasing behavior, brands cannot put sustainability off their agendas for much longer. China is quietly changing, and anticipating future growth in consumer expectations can be the only sustainable strategy.
We believe that people need to know what brands stand for; what makes them different; and how they can help us lead a better life. Addressing issues that resonate with contemporary Chinese life (such as health care, transportation and pollution) and that match a brand promise can create this meaningful brand, thereby growing business value. And since companies can't do everything, they must choose issues that have strong social and cultural relevance, while matching desired personal outcomes (that benefit the target audience) with collective ones (benefiting society and the environment).