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China 2008 Communications in an Olympic Year January 8, 2008
Agenda <ul><li>Welcome to China </li></ul><ul><li>The context for communications </li></ul><ul><li>A two-faced monster: Th...
Welcome to China <ul><li>GDP Growth: +11.5 percent in 2007 </li></ul><ul><ul><li>Forecast +9.9 percent in 2008 </li></ul><...
Welcome to China <ul><li>In 2007 </li></ul><ul><li>China's electronics and information industry realized sales revenue of ...
1. The Context for Communications  <ul><li>Politics </li></ul><ul><li>Economic development </li></ul><ul><li>Nationalism <...
Politics <ul><li>Political system </li></ul><ul><ul><li>One-party communist state </li></ul></ul><ul><ul><li>25 years of e...
Economic Development <ul><li>WTO & Competition </li></ul><ul><ul><li>China acceded to WTO in 2001. By 2008, all major mark...
Economic Development <ul><li>Capital markets, currencies and banking </li></ul><ul><ul><li>Renminbi value being managed up...
Chinese Brands to Watch
Nationalism  <ul><li>China is literally “the middle kingdom”, at the centre of the world </li></ul><ul><li>The Olympics </...
The Consumer  <ul><li>Sustained economic growth has led to the rise of a new consumer class </li></ul><ul><li>Credit cards...
The Environment  <ul><li>China has 16 of the world's 20 most polluted cities </li></ul><ul><li>Fast rising consumer and go...
2. The Media in China  <ul><li>H ow broadcast, print and online media are changing fast   </li></ul>
A Two-faced Monster <ul><li>Propaganda machine vs. money machine </li></ul><ul><li>Propaganda machine </li></ul><ul><ul><l...
Broadcast Media Overview  <ul><li>The most two-faced: the most government controlled, but also the most lucrative </li></u...
Print Media  <ul><li>Over 10,000 print media titles </li></ul><ul><li>Fast becoming more market focused </li></ul>Referenc...
Online Media  <ul><li>There were172 million Internet users in China (2007) – making it the world’s second largest market a...
Editorial Styles <ul><li>Foreign media </li></ul><ul><ul><li>More objective  </li></ul></ul><ul><ul><li>Tend to investigat...
3. Communications Challenges  <ul><li>PR pitfalls and how to avoid them </li></ul>Need a photo to illustrate Chinese consu...
Communications Challenges <ul><li>Nationalism and pride  </li></ul><ul><ul><li>Double standard to MNCs and domestic compan...
Communications Challenges <ul><li>Dealing with joint venture partners </li></ul><ul><ul><li>Interests are often not aligne...
Communications Challenges <ul><li>Working with the government </li></ul><ul><ul><li>Criticism of China is frowned upon </l...
4. Strategy and Tactics: What Works <ul><li>Align with national issues </li></ul><ul><ul><li>What’s good for China is good...
Strategy and Tactics: What Works <ul><li>Feed the media with information  </li></ul><ul><ul><li>To suit “cut and paste” ap...
Conclusion Five Truths About Communications in China <ul><li>China IS different </li></ul><ul><li>Western ways will not wo...
Q&A & Resources <ul><li>Paul Mottram </li></ul><ul><li>Upstream Asia </li></ul><ul><li>[email_address]   </li></ul><ul><li...
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China 2008: PR in an Olympic Year

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Presentation from Horn Group and UpStream Asia, Oriella PR Network partners, on PR in China in an Olympics year.

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  • Upstream Introduction An Asia Pacific-based corporate and marketing communications network Direct presence in Beijing, Shanghai, Honk Kong, Taipei, Tokya, Singaport and Sydney With afffiliate offices in 9 other regions in Asia Pacific Beijing-based Hua Foley is Managing Director, China at Upstream Asia. A Chinese native, Hua has worked in the media, government, academia and agencies and has unrivalled knowledge of communications in China. Paul Mottram is Chief Operating Officer, Upstream Asia, based in Hong Kong. Paul has worked in B2B, consumer and corporate communications for Asian, US and European multinationals in China for 15 years. Oriella PR Network member Upstream Asia was named PR Week’s New Consultancy of the Year in 2001 and runner up Mid-sized Network of the Year in 2007. 70+ staff, more than half in Greater China A full range of off- and on-line solutions, including: Branding/positioning/messaging Media relations/special events Crisis and issues management Proven track record with global and Asian brands Corporate and financial Consumer and travel Technology, media and telecommunications Experienced, hands-on international/local management team with a direct presence in 7
  • How to explain the depreciation against Euro?
  • # Mobile users Online population % rural/poverty 440,000 According to World Bank, in 2006, a total of 135 million people live below poverty line, 10% of total population
  • Chinese
  • The point 2-4 are estimated numbers based on 2006. will update when gets official info.
  • A Chinese reporter once commented that he wrote a negative story because he didn’t like the European spokesperson’s attitude; he thought the spokesperson was demeaning China. Another editor commented he had no problem “offending” a Western company because, although it did big business in China, the company didn’t have anyone on the ground in China to offend.
  • Mercedes-Benz Crisis learning: 技术替代公关、律师替代公关,这是奔驰公关败笔最根本原因。在奔驰的每次表态中,技术和律师都是主角,技术专家讲一通谁也听不懂的名词,律师再来一通不是每个人都能懂的术语。“奔驰可能没有意识到,让那些严谨而较真的律师的取代公关真是一种灾难,因为他们对法律的忠诚和信仰真可以到什么都不管不顾的地步。” Attitude: commented on the event: “ 非理性的而且无意义的举动”
  • Transcript of "China 2008: PR in an Olympic Year"

    1. 1. China 2008 Communications in an Olympic Year January 8, 2008
    2. 2. Agenda <ul><li>Welcome to China </li></ul><ul><li>The context for communications </li></ul><ul><li>A two-faced monster: The media in China </li></ul><ul><li>Communications challenges </li></ul><ul><li>Strategies and tactics that work </li></ul><ul><li>Conclusions </li></ul>
    3. 3. Welcome to China <ul><li>GDP Growth: +11.5 percent in 2007 </li></ul><ul><ul><li>Forecast +9.9 percent in 2008 </li></ul></ul><ul><li>Industrial production index: +17.3 percent </li></ul><ul><li>Population: 1.3 billion </li></ul><ul><li>Currency: Renminbi </li></ul><ul><ul><li>US$1=RMB7.26 </li></ul></ul><ul><ul><li>(up from 7.8 in Jan 07) </li></ul></ul><ul><ul><li>Euro$1=RMB10.71 </li></ul></ul><ul><ul><li>(down from 10.27 in Jan 07) </li></ul></ul>Terracotta soldiers Shanghai Three gorges dam Llasa Hong Kong Beijing Shanghai Taiwan Hong Kong Macau Chengdu Wuhan Chongqing Xi’an Tibet
    4. 4. Welcome to China <ul><li>In 2007 </li></ul><ul><li>China's electronics and information industry realized sales revenue of $747 billion, ranking second in the world. </li></ul><ul><li>China is world's second-largest auto market and its sales are likely grow 20 percent to hit or surpass 8.7 million units </li></ul><ul><li>There will be 539.4 million mobile users in China in 2007, ranking number one in the world, with an annual growth rate of 19 percent </li></ul><ul><li>China will be the world’s third largest buyer of luxury consumer goods, accounting for 12% of global demand </li></ul><ul><li>By 2009, 105 million households will have $3,000 or more in annual disposable income - a tripling in size of the consumer class in three years </li></ul><ul><li>In 2007 </li></ul><ul><li>A total of 135 million people live below poverty line - 10% of total population </li></ul><ul><li>Average annual rural income is just over US$300 </li></ul><ul><li>Sixty million people live on less than US$100 per year </li></ul>
    5. 5. 1. The Context for Communications <ul><li>Politics </li></ul><ul><li>Economic development </li></ul><ul><li>Nationalism </li></ul><ul><li>The consumer </li></ul><ul><li>The environment </li></ul>
    6. 6. Politics <ul><li>Political system </li></ul><ul><ul><li>One-party communist state </li></ul></ul><ul><ul><li>25 years of economic reform </li></ul></ul><ul><li>Government priorities </li></ul><ul><ul><li>Economic growth </li></ul></ul><ul><ul><li>Social stability </li></ul></ul><ul><ul><li>The environment </li></ul></ul><ul><ul><li>Anti-corruption </li></ul></ul><ul><li>Focus industries </li></ul><ul><ul><li>High tech </li></ul></ul><ul><ul><li>Financial services </li></ul></ul><ul><ul><li>Automotive </li></ul></ul><ul><ul><li>Services </li></ul></ul>Deng Xiaoping Mao Zedong Jiang Zemin Hu Jintao
    7. 7. Economic Development <ul><li>WTO & Competition </li></ul><ul><ul><li>China acceded to WTO in 2001. By 2008, all major markets have been significantly deregulated </li></ul></ul><ul><ul><li>Despite significant remaining protection for local players, competition now intense in every industry </li></ul></ul><ul><ul><ul><li>Huge benefits to consumers and private enterprise </li></ul></ul></ul><ul><ul><ul><li>Rust-belt industries and some rural areas in danger of being left behind </li></ul></ul></ul>US consumer activist flyer <ul><li>Foreign Trade </li></ul><ul><ul><li>China accounts for 30% of global merchandise exports </li></ul></ul><ul><ul><li>Domestic suppliers facing tremendous pressure from global importers and appreciating currency </li></ul></ul><ul><ul><ul><li>Wal*Mart alone bought US$ 26.7 billion of goods from China in 2006, almost 10 percent of China’s total exports to US </li></ul></ul></ul><ul><ul><li>Quality has become a huge issue, also a matter of national pride </li></ul></ul>
    8. 8. Economic Development <ul><li>Capital markets, currencies and banking </li></ul><ul><ul><li>Renminbi value being managed upward. Slowly. </li></ul></ul><ul><ul><li>China’s stock markets grew 97% in 2007 </li></ul></ul><ul><ul><ul><li>Foreign access beginning with QDFI and QDII schemes </li></ul></ul></ul><ul><ul><ul><li>Hong Kong status as financial center being questioned </li></ul></ul></ul><ul><ul><li>Banking industry showing some signs of recovery, boosted by IPOs and successive bailouts </li></ul></ul><ul><li>Innovation and technology </li></ul><ul><ul><li>National goal to move up the value chain </li></ul></ul><ul><ul><li>China is the second-highest investor in research and development behind only the US </li></ul></ul><ul><ul><li>Technology transfer is a stated goal of joint ventures with foreign companies </li></ul></ul>
    9. 9. Chinese Brands to Watch
    10. 10. Nationalism <ul><li>China is literally “the middle kingdom”, at the centre of the world </li></ul><ul><li>The Olympics </li></ul><ul><ul><li>Hard to overestimate the significance of the 2008 games as a source of national pride </li></ul></ul><ul><ul><li>Positioned to showcase the best of China to the world </li></ul></ul><ul><li>The Taiwan issue </li></ul><ul><ul><li>Remains extremely sensitive </li></ul></ul><ul><ul><li>Foreign companies often caught out </li></ul></ul><ul><li>Nationalism in business </li></ul><ul><ul><li>Several major companies seen as national champions </li></ul></ul><ul><ul><li>Foreign companies can be discriminated against </li></ul></ul>
    11. 11. The Consumer <ul><li>Sustained economic growth has led to the rise of a new consumer class </li></ul><ul><li>Credit cards becoming common </li></ul><ul><ul><li>31 million credit card holders </li></ul></ul><ul><li>Young people driving consumption </li></ul><ul><ul><li>Little emperors </li></ul></ul><ul><li>Seeking quality of life and individualism </li></ul><ul><ul><li>Xiao -Z i (little bourgeois) = “yuppies” </li></ul></ul><ul><li>Influenced by advertisement, product review, feature articles and endorsement </li></ul><ul><li>Fast-growing e-commerce market </li></ul><ul><ul><li>More online payment users that credit card holders </li></ul></ul>
    12. 12. The Environment <ul><li>China has 16 of the world's 20 most polluted cities </li></ul><ul><li>Fast rising consumer and government awareness </li></ul><ul><li>National government “green GDP” targets not met in 2007 – this year civil servant’s performance reviews directly linked to progress </li></ul><ul><li>China is a signatory to the Kyoto Accords </li></ul><ul><li>Recent criticism of foreign companies applying different standards in China </li></ul>
    13. 13. 2. The Media in China <ul><li>H ow broadcast, print and online media are changing fast </li></ul>
    14. 14. A Two-faced Monster <ul><li>Propaganda machine vs. money machine </li></ul><ul><li>Propaganda machine </li></ul><ul><ul><li>Still tight control over policy related report, to keep the country under one voice </li></ul></ul><ul><li>Money machine </li></ul><ul><ul><li>More than 10,000 publications, each one of them need eye-catching news for survival </li></ul></ul>“ The capitalist theory of journalism is…wrong” Opening lines from a Chinese University Journalism School textbook, 1980s
    15. 15. Broadcast Media Overview <ul><li>The most two-faced: the most government controlled, but also the most lucrative </li></ul><ul><li>Major TV channels </li></ul><ul><ul><li>CCTV (13 national channels) </li></ul></ul><ul><ul><li>Regional TV: Hunan Television, Phoenix TV (more than 300 channels) </li></ul></ul><ul><ul><li>Others: CBN, CCTV9 </li></ul></ul><ul><li>Trends in programming </li></ul><ul><ul><li>CCTV becoming more modern </li></ul></ul><ul><ul><li>Entertainment programs are popular among young people </li></ul></ul><ul><ul><ul><li>China not immune from flood of reality TV </li></ul></ul></ul><ul><ul><li>Brand-sponsored programming common </li></ul></ul>Show some reality show (Chinese pop idol?)
    16. 16. Print Media <ul><li>Over 10,000 print media titles </li></ul><ul><li>Fast becoming more market focused </li></ul>Reference News Circulation: 3,000,000 Used to be the only international news resource for high ranking government official. This newspaper now can be bought on the newsstands. 21st Century Business Herald Circulation: 400,000 One of the most influential business newspapers in China Cosmopolitan Circulation: 400,000 Chinese version of Cosmopolitan, a leading consumer magazine featuring fashion news Caijing Circulation: 80,000 Regarded as the most criticizing media, and has built its reputation as the leading voice in Chinese business and financial circles
    17. 17. Online Media <ul><li>There were172 million Internet users in China (2007) – making it the world’s second largest market after the US </li></ul><ul><li>Of these, more than 100 million have a broadband connection, and 20 million now access the Internet primarily via a wireless device </li></ul><ul><li>Internet users are more likely to be urban dwellers, with nearly 60 percent of all users living in Beijing or Shanghai </li></ul>(Source: Asia Digital Marketing Association Yearbook, 2007)
    18. 18. Editorial Styles <ul><li>Foreign media </li></ul><ul><ul><li>More objective </li></ul></ul><ul><ul><li>Tend to investigate and understand </li></ul></ul><ul><ul><li>More critical and persistent </li></ul></ul><ul><ul><li>Focus on hard and timely news </li></ul></ul><ul><ul><li>Prefer market comments </li></ul></ul><ul><ul><li>Working relations are critical </li></ul></ul><ul><li>Chinese media </li></ul><ul><ul><li>Tend to bring personal feelings to work </li></ul></ul><ul><ul><li>&quot;Copy and Paste&quot; reporting </li></ul></ul><ul><ul><li>Less inquisitive and forceful </li></ul></ul><ul><ul><li>Prefer macro-policy related numbers/percentage </li></ul></ul><ul><ul><li>Personal rapport important </li></ul></ul><ul><ul><li>Nationalism matters </li></ul></ul>
    19. 19. 3. Communications Challenges <ul><li>PR pitfalls and how to avoid them </li></ul>Need a photo to illustrate Chinese consumers smashing a Mercedes-Benz
    20. 20. Communications Challenges <ul><li>Nationalism and pride </li></ul><ul><ul><li>Double standard to MNCs and domestic companies, more critical to the former </li></ul></ul><ul><ul><li>March 15 is national consumer day: Each year, several foreign companies are blacklisted </li></ul></ul><ul><li>Paying for media </li></ul><ul><ul><li>Travel allowance (US$30) is a commodity and a cost of doing business </li></ul></ul><ul><ul><li>Traditionally these allowances have made up to 1/3 of reporters salaries </li></ul></ul><ul><ul><li>Advertorial approach rampant (more so outside of main cities) </li></ul></ul>Headline - Focus 3.15: 10 MNCs Criticized by Chinese Subtitle: Foreign Companies weakening in China
    21. 21. Communications Challenges <ul><li>Dealing with joint venture partners </li></ul><ul><ul><li>Interests are often not aligned </li></ul></ul><ul><ul><li>M&A issues under increasing scrutiny </li></ul></ul><ul><li>Dealing with crises </li></ul><ul><ul><li>Slow MNC reaction can be translated into “arrogant” and evoke a wide-spread nationalism </li></ul></ul>
    22. 22. Communications Challenges <ul><li>Working with the government </li></ul><ul><ul><li>Criticism of China is frowned upon </li></ul></ul><ul><ul><li>Nationally sensitive issues and industries </li></ul></ul><ul><ul><li>Local competitors supported by government </li></ul></ul><ul><li>Localization </li></ul><ul><ul><li>99.9% people do not read English </li></ul></ul><ul><ul><li>99.9% media do not care about non-China related corporate news </li></ul></ul><ul><ul><ul><li>IT media can be an exception – but don’t bank on it </li></ul></ul></ul><ul><ul><li>Local spokespeople are best </li></ul></ul><ul><ul><ul><li>But a Chinese speaking foreigner can be very effective </li></ul></ul></ul><ul><ul><ul><li>Global CEOs also in demand </li></ul></ul></ul>
    23. 23. 4. Strategy and Tactics: What Works <ul><li>Align with national issues </li></ul><ul><ul><li>What’s good for China is good for your business </li></ul></ul><ul><ul><li>Go beyond the Western headlines and identify real policy-making dynamics </li></ul></ul><ul><li>Focus on the major cities </li></ul><ul><ul><li>National media and government focused on Beijing </li></ul></ul><ul><ul><li>Financial and auto industry based in and around Shanghai </li></ul></ul><ul><li>Localize </li></ul><ul><ul><li>Don’t just translate – ensure content resonates in China </li></ul></ul><ul><li>Educate </li></ul><ul><ul><li>In many areas of business, China has a comparatively short history </li></ul></ul><ul><ul><li>Don’t patronize </li></ul></ul>
    24. 24. Strategy and Tactics: What Works <ul><li>Feed the media with information </li></ul><ul><ul><li>To suit “cut and paste” approach to reporting </li></ul></ul><ul><li>Personal rapport </li></ul><ul><ul><li>Invest in long term relationships…or people with access to such relationships </li></ul></ul><ul><li>Give face </li></ul><ul><ul><li>The higher the level of the executive to be interviewed, the more “face” and respect reporters will grant </li></ul></ul><ul><li>Be humble in attitude and show commitment to China market </li></ul><ul><ul><li>Local materials, spokespeople </li></ul></ul><ul><ul><li>R&D commitments, facilities, investment </li></ul></ul>
    25. 25. Conclusion Five Truths About Communications in China <ul><li>China IS different </li></ul><ul><li>Western ways will not work </li></ul><ul><li>You are a foreigner </li></ul><ul><li>Be a partner </li></ul><ul><li>Keep learning </li></ul>
    26. 26. Q&A & Resources <ul><li>Paul Mottram </li></ul><ul><li>Upstream Asia </li></ul><ul><li>[email_address] </li></ul><ul><li>+(852) 2973.0222 </li></ul><ul><li>Hua Foley </li></ul><ul><li>Upstream Asia </li></ul><ul><li>[email_address] </li></ul><ul><li>+(86) 10.6530.7200 </li></ul><ul><li>Shannon Latta </li></ul><ul><li>Horn Group, Inc. </li></ul><ul><li>[email_address] </li></ul><ul><li>+1.415.905.4030 </li></ul>www.oriellaprnetwork.com www.upstreamasia.com www.eastwei.com “ Catching Up Fast” – A bible for Web 2.0 PR and Marketing in China “ China PR” – Knowledge Driven Media Relations www.horngroup.com
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