“What most Westerners fail to remember about Confucianism is that it is the first socially-mobile social system [and] the world’s first meritocratic social system,” said Tom Doctoroff, a senior partner at Prophet, the brand and marketing consultancy.
“In order to climb up the hierarchy, however, you needed to internalise the rules of that hierarchy. You need to advance by mastering convention, not bucking against tradition… this is the core unifying tension in China that brands need to resolve, in order to charge a price premium,” he said at the recent Mumbrella360 Asia event in Singapore.
For more on how brands can successfully tap Chinese consumer culture, read WARC’s in-depth report: Three golden rules to crack China’s consumer culture.
Despite being a mostly tea-drinking country, Starbucks recently opened its largest store ever in Shanghai and is launching a new branch roughly every 15 hours in China.
Doctoroff explained that Starbucks found success in China “by conforming to the public consumption imperative” and offering opportunities to show social status.
Even the pricing strategy takes this philosophy into account – the Starbucks logo is a status symbol, so products emblazoned with the logo are more expensive.
“Their coffee comes in a cup emblazoned with the Starbucks logo that [consumers] take around … [it is] more expensive by 30% than the United States, but sandwiches and meals which do not have branding are 50% less expensive,” he said.
From store designs that make for ease of social interaction to targeting wealthy customers by being located in high-end buildings, Doctoroff said that Starbucks cracked the market “by conforming to the public consumption imperative”.
“The stores are bigger, the tables are longer, there are fewer single plush chairs – people go in there in groups to proclaim their affiliation with a new generation of elite,” he said.
Sourced from WARC