The Value of Building Your Brand in China

The executives who underestimated China’s potential in 1999 are unlikely to do so in 2011. China is now on everyone's radar. There are major changes that must be considered in developing 2011 plans to grow in China’s markets. In 1999, the customers of interest were global firms who entered China in order to take advantage of low-cost manufacturing potential. The cultures and processes that these global firms put into place were familiar ones transplanted from North America, Japan and Europe. Today, the growth plans of many companies focus on the China market itself.

Going forward, a China growth strategy must respond to the needs of the China market itself. This requires a massive transformation in strategy and thinking. In Western markets, firms win business on the basis of product, service and price advantages. Then they focus on building a strong customer relationship in order to sustain that business. In China, firms win business on the basis of relationships first. Then they focus on the product, service and price challenges that are on the minds of their customers to sustain that business.

Knowing that the 2011 growth plans of many companies depend on succeeding in China’s markets, we've identified several lessons that firms must recognize if these plans are to yield the desired results. All of them require a willingness to embrace new ways of doing business:

1. Success won’t come quickly. Even though growth is galloping in China and many firms have had to learn to adapt to "China speed" in product development, relationship building in China doesn't occur overnight. It takes much longer to build a relationship in China that delivers on sales and profits.

2. Recognize that business relationships have a significant personal dimension. One firm we worked with was involved with a Chinese firm that completed an acquisition. From Western perspectives, the acquisition could have been considered a solid asset to the proposed relationship. The Chinese firm was distracted and found the new people in the room totally confusing. To develop relationships in China, continuity and consistency are quite important. Executives involved in developing these relationships must stay the course.