China's leaders are not the only ones struggling to reconcile the needs of the urban elite and the masses. Marketers are too. The most pressing challenge marketers face is how to position brands for lower-tier and rural consumers. Any successful product must have both high margins and broad scale, lest it lack the momentum to maintain successful volumes over a long-term time frame. Therefore, understanding the drivers of mass market consumers has become a matter of great importance.
First, all Chinese consumers, rich and poor, are driven by the same fundamental motivators: a conflict between wanting to both move forward in life and abide by family-oriented hierarchical restrictions.
However, the economic constraints of lower-tier consumers create distinct needs that brands must not ignore. Income growth has become ever more skewed over the last 10 years and those who have gained from the economic reforms of the 1990s are significantly younger that those who have not, creating attitudinal and psychographic tectonic shifts on top of economic fault lines.
Mass market consumers look for different "benefits" to the new middle class. While the latter are largely hope-driven - and fixated on boldly-assertive status projection, regarding brands as tools for advancement - poorer consumers are relatively fear-driven. They like to save money, are leery of abandoning tradition and are motivated by "protective" messages ("Don't worry, you're kid will not fall ill if you feed him X").
The schism between projective and protective values can be seen across a broad spectrum of products. Wang Da Shan, a mass market infant formula, achieved an 8% share by leveraging an "immunity from disease" platform, whereas most premium brands such as Nestle, Wyeth and Heinz highlight benefits such as "growing taller" or "becoming stronger and smarter."
Even adult categories such as female hygiene must alter their message when broadening appeal beyond the urban elite. At the premium end, "liberation" and "removing barriers for success" work. However, third- and fourth-tier markets require a reassurance sell - i.e. "helping you cope with your period." Procter & Gamble's Whisper tailors its "absorption" benefit differently for high- and low-income targets ("Stand up!" vs. "Helps you protect your family").
In addition to relevant positioning, success in the mass market requires omnipresence, value beyond price and skillful portfolio management.
Bigger is Better. Lower-income consumers, relatively inexperienced in navigating the brand landscape, prefer the safety and security of big brands. In emerging markets, once market leadership is established, it lasts for years so "first-mover dominion" is a powerful pull. Size reassures in three ways:
* It reduces the risk of lost face that can occur when seen using the wrong brand.
* In China, brands are, first and foremost, surrogate indicators of quality. In a land of shoddy quality, wall-to-wall counterfeits and tainted toothpaste, mass market consumers do not take basic safety for granted. Large brands reassure. Operationally, scale means channel power. Despite progress made in the wake of China's accession to the WTO, distribution remains disjointed, layered and kick back-driven.
Value Beyond Price. Low price is a necessary ingredient in achieving broad penetration. Nokia's success is driven by the wide availability of cheap phones and the same is true for white goods brands. However, affordability alone is not enough to secure long-term loyalty. Successful brands must offer additional benefits lest they descend into a never-ending spiral of lower prices and even lower margins.
Portfolio Management. Once relegated to niche status while local players met the needs of a price-sensitive mass market, most multinational brands now build image with premium products and generate scale with cheaper ones. For example, there is Colgate Total for high-end consumers and Colgate Herbal for the mass market. These tactical and thematic messages must still be harmonized with a unified brand vision. Rejoice shampoo uses "confidence from softness" across all price tiers but interprets "confidence" differently across different segments (e.g. as a catalyst to family harmony versus career progression).
Above all, the golden rule of mass marketing - simple sells - must never be violated. Message comprehension is the largest barrier to purchase, particularly in lower-tier cities. This is why KK beer, a mass market brand owned by InBev, establishes its "freshness" proposition with fish leaping out of a tank and Sunlight detergent demonstrates stain removal by holding a white collar to the sun. These concepts are creative yet direct.
China's mass market has only recently begun to reward gold-star brands. And the potential for long-term return rooted in critical mass is more and more apparent. However, marketers will have to manage the hat trick of tailoring to protection-driven consumers with minimal brand experience while maintaining cachet amongst more sophisticated segments.