China Marketing

Download your ipodder software here and install this little sucker.

I am going to establish podcasts on this site so you can listen to my wild ranting to companies in China about change, marketing and the news de jour. The podcasts will be in English AND Chinese. Good for you to practice your English language skills (for the Chinese readers of this blog) AND get some cool new ideas!! You lucky people!!

- Posted by James Nash - 1:58:37 PM - Comment? Rules: Criticize ideas? Yes. Criticize people for holding those ideas? No. []

Download this! Chinese innovation (huh?) is snuffed out, drowned (murdered) at as young an age as possible (read school) and then kept locked away in the heads of the gifted for fear of being different – gotta follow the rules!! Or the company will descend into chaos! (INSTABILITY!!) Can’t have people think for themselves, (INSTABILITY and INSUBORDINATION!!). Gotta follow the rules, don’t stick out, don’t be different, don’t do anything new, wait until it is PROVEN (obviously, by someone else first - duh!), don’t change the status quo and rock the boat!

PROBLEM: Quality in China

PROBLEM: Chinese brands getting BATTERED

PROBLEM: Brain drain from big Chinese companies

REACTION > MORE CONTROL!!! GOTTA CONTROL EVERYTHING THEN QUALITY WILL GO UP / CUSTOMERS WILL BELIEVE US / YADDA YADDA!!

"I believe that The Rules are the leading cause of crap products, frustrated users, and unhappy relationships. I'm not talking about all rules and standards of course, just the largely-unstated-but-blindly-accepted ones that:

• Never made sense.
• No longer make sense.
• Make sense, but only in a different context."

F*** the rules! on Knowledge management: "Trying to capture and express experts' knowledge in rules is like trying to reach the moon with a bicycle: that's damn fun, but if your goal is really to walk in Armstrong's steps, that's far to be the most efficient solution."

This little .pdf  is great. In fact, I am going to translate this into Chinese and throw it around in some of our seminars. I'll let you know how it goes. Thank you Dave and Passionate!

- Posted by James Nash - 1:31:42 PM - Comment? Rules: Criticize ideas? Yes. Criticize people for holding those ideas? No. []

"Avoid "suicidal" price wars among themselves.... "Such disorderly competition will benefit no one," he warned. In 2003, such competition left 27.5 percent of China's total 1,600 dairy firms in the red, with a total deficit of 510 million Yuan (US$61 million) . "Their loss for that year was 66 percent higher than in 2002, surpassing the average annual growth of 46 percent for the entire industry," said Wang, quoting incomplete figures released by his organization. He said the situation became even worse in 2004, when less than 25 percent of the domestic dairy producers made a profit." - Peoples Daily

I am somewhat familiar with the milk industry in China and see the same thing again an again. The consistent and shocking lack of companies that “get it” Vs a ever larger army of companies that have no idea how to build a sustainable business except through ever increasing capital expenditure and mindless advertising. No brand, No position, Nadda. Nothing. WAKE UP PEOPLE! It’s getting really boring!

There is one company I am aware of ("Maiquer") in western China that has put enormous effort into consolidating a position and customers are increasingly willing to pay a premium for their products. (I would link, but their website is down. Shock, horror!)

Company response to compettion? Ask Mummy Beijing for more project money to expand into other "growth" markets and extend their reach - Cheese, Yogurt ("its becasue we dont have enough cash, not becasue we are dumb") ...and guess what? All the "NEW" products still look the same! Solution: "We need to spend MORE on advertising identical to our competition. That's obviously what the customers want - they are buying it from the competition”.

Chinese consumer businesses are spending like crazy to rapidly dig their own graves. Rampant price wars in every sector. Standard response? "lower prices" - we tell people to put their prices UP and lead the market in some way, the silence when we say this is palpable.

large scale commoditization is screwing them all. The solution is staring them in the face, yet nothing happens. Deep in the psyche of many Chinese senior managers is the idea that the way to build a business is to have government relationships to ensure constant funding to build their assets and take market share through brute force = “What’s your strategy?” “Price!”

Government funding cuts off the necessary learning that is required for companies to really grow. There are no real consequences of making a mistake; no short term financial cost to screwing up. Almost all of the growth in China has been driven by an explosion in capital expenditure. This is unsustainable - all sustainable economic growth is through increases in knowledge and its dissemination leading to increases in innovation.

This provides HUUUGE opportunities for smart businesses (unfortunately for the Chinese – mostly foreign) to take advantage of this government funded madness and take great swathes of the growing consumer products landscape: Dell, Hoover, Panasonic, Nokia, Motorola -  all at the Chinese companies expense. When are local businesses going to learn that building a company isn’t about playing with words and numbers but about creating great products and services, taking a position and leading the customer? Its going to happen when they stop being encouraged to do so by the powers that be. Until that happens we are going to do all we can to encourage smart companies to keep getting smarter.

- Posted by James Nash - 12:21:58 PM - Comment? Rules: Criticize ideas? Yes. Criticize people for holding those ideas? No. []