The Chinese have always been split between spending to impress and saving to ensure future stability, between "projecting" status as a means of forward momentum in life and "protecting" existing wealth. The urban mass market, which accrued limited direct benefits from China’s economic reform, has always been conservative, less sure of material stability, fear-based. The middle class, on the other hand, has traditionally preferred transformative benefits, promises of professional or societal advancement.
During the economic downturn, optimism has softened, albeit temporarily. The protective impulse, usually a dominant mass-market and secondary middle-class trait, has reasserted itself across all levels of society. Until long-term confidence is restored, the upscale set will become more like its poorer counterpart.
Marketers must recognize and respond to this shift. They must offer affordability, but at the same time preserve long-term brand equity. This involves a reassessment of competitive advantages and of the assumptions regarding a product or brand’s "role in life."
Shift from style to substance: Brands, particularly in high-end categories, should promote inner substance. Rejoice advertising in China now highlights "viscosity" to cue more nutrition and, therefore, more value. China Mobile is refocusing on "superior coverage" rather than the more conceptual "reach out and touch someone" rallying cry.
Turn from selling to helping: Face-conscious Chinese do not like to beg for low prices, but now more than ever, they are fiercely price conscious. Therefore, "discounts" must be positioned as "bargains," the fruit of clever resourcefulness. Crest advertising, for example, demonstrates how its tubes are packed with more toothpaste than competitors.
Repurpose from want to need: In a back-to-basics environment, celebrating indulgence is risky. Concrete benefits conquer. Premium yogurt should focus on "delicious digestion that gets you going" rather than pure taste satisfaction. It is also important to dramatize the consequences of not using the brand. Panadol, for example, shows nasal discomfort disrupting an audition, neatly linking the product with career advancement.
Refocus the portfolio: During a downturn, wary shoppers will gravitate to affordable options. Therefore, all companies should examine their portfolios to ensure maximum coverage across economic strata. But care should be taken to avoid degradation of brand equity; to avoid "trade-down humiliation," benefits should be simplified rather than debased. Furthermore, payoffs should shift from projective (status, professional advancement) to more protective (financial security, safety, prevention).
Move from hard-sell to soft-sell: Corporate trust is an invaluable asset in uncertain times as consumers flock towards safety. First, companies can reinforce the reliability of their products by highlighting corporate scale and showing consumers they are "big enough to care." Bank of China deftly leverages its ubiquity ("almost a branch on every corner") to reinforce "life-long partnership, through good times and bad." Second, firms must show an ability to invest in consumers’ well-being. A good example of this is Johnson & Johnson’s small-town network of neo-natal and pediatric clinics.
Bring families together: In Confucian society, the clan, not the individual, is the basic unit of society and ultimate bulwark against instability. Consequently, products that forge domestic harmony will be embraced. Ajinomoto, a Japanese food manufacturer that sells seasoning in China, now positions its spices as a "family magnet" that draws loved ones together.
Promote confidence: The Chinese really do see opportunity in crisis and the country’s comparative economic stability at present predisposes a look toward the bright side. While the benefits of such a broad emotive approach are difficult to link with sales, brands should encourage a chin-up mentality to reinforce long-term equity. Anta sports shoe’s "from perseverance to glory" proposition, originally launched after last year’s Sichuan earthquake, continues to strengthen "bonding."
These seven measures amount to a "back to basics" approach, maximizing any product’s role in stability and protection against uncertainty while avoiding pessimistic overtones. It is by no means a long-term solution, but one that will keep brands in the game during this bout of conservatism.