Warc Blog

Innovation models mature in China

5 August 2013
BEIJING: Companies like Philips, Visa and Anheuser-Busch InBev are taking a consumer-led approach to innovation in China, reflecting the challenges and opportunities characterising the market.

Greg Paull and Goh ShuFen, of consultancy R3, interviewed 17 leading marketers for a new book, China CMO: Best Practices in Marketing Effectiveness and Efficiency in the Middle Kingdom.

"There's a lot of noise when you're in China, regardless of what company you're in," Marie Han Silloway, chief marketing officer of coffee chain Starbucks, told them, as reported by Campaign Asia.

"For us, there may be global initiatives we must consider - a new food regulation, or a government changeover - so we have to be very agile in that respect. But we also have to be very focused by asking, 'What is our North Star that we are ultimately working towards?'"

Philips, the Dutch conglomerate, attempts to answer this question based on a consumer-centric model, rather than letting technology alone determine its choices.

"We call it innovation that matters," said Lawrence He, marketing director, Philips China Investment. "In our research lab, there are lots of great ideas. But the question is: do they matter?"

Insights are also vital for Rex Wong, VP, marketing, at brewer Anheuser-Busch InBev China. "When we came here, we looked at the research to decipher what the value sets in China are, and what Chinese people think," he said.

Taking a long-term perspective is equally important, given the megatrends - from urbanisation to the ageing of the population - that are reshaping Chinese society.

"From top to bottom in Visa, everybody is trying to think about how we can lead the payment category for the next 50 or 100 years," said Vivian Pan, chief marketing officer, Greater China, at Visa, the financial services provider.

Despite this, it is still possible to create new categories in China, where habits are changing fast. Nestlé opened a coffee-growing operation in Yunnan two decades ago, and has reaped considerable benefits since.

"We had a 20-year head start to do that ahead of our competitors," said Paolo Mercado, head of marketing and consumer communication, Greater China, at Nestlé. "Nescafé is really a flagship in terms of embedding a foreign product into the Chinese market."

Data sourced from Campaign Asia; additional content by Warc staff

 
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