Brand China - a presentation to Chinese Trademark Officials Dec2016

22
Partners
I’ve worked in: import/export, product development, logistics, research,
advertising, marketing, licensing, strategy, compliance – FMCG, autos, imported
beer, wine, spirits, tobacco, firearms, cameras, film, infant & baby food and
products, flowers, shelf-stable and frozen food, famous and private brands,
clothing, single serve coffee, storage bags, aluminum foil, lawn & garden,
restaurants, energy, start-ups turnarounds.
Where? China, HK, Taiwan, Japan, Singapore, Thailand, Korea, Malaysia,
Vietnam, Philippines, Poland, Bulgaria, Russia, Spain, Italy, France, UK, Canada,
Mexico, Australia, Ecuador etc. …and the USA
Some brands I’ve worked for and on: Gerber, Polaroid, Reynolds, Fuji, Volvo,
Beck’s, Moosehead, Foster’s Lager, Dos Equis, Dom Pérignon, Teacher’s Scotch,
Cointreau, McCann’s Irish Oatmeal, Volkswagen, Hallmark, 1800Flowers, Disney,
Nabisco, Carlsberg, Pilsner Urquell, McDonald’s, Smith & Wesson, Great Value
(Walmart PL) and Great Adventure/Six Flags Amusement Park
First thing I learned from my Dad, working in his hardware store:
Always respect your customer. Always respect your customer’s culture, Always
remember, the customer is always right.
What I learned in military school (New York Military Academy – now owned by Mr.
Vincent Mo of SouFun Holdings, Ltd., and a new superintendent, Jie Zhang)
Resilience. To succeed, you must accept you will also fail.
Integrity. You stand by your word.
Responsibility. You take ownership of every step.
Respect. To get respect, you have to give respect.
About Harry Falber

33
Partners
Topics
Introduction
USA – it’s a big country. Learn from what it takes to market in China
The principles to market in the US are the same you need to use at home –
segmentation
Culture
SWOT analysis of America
Culture as language
Before you sell a brand, sell the brand DNA
The landscape of America is strewn with broken brands
Made In USA, Made In Japan became powerful mantras and symbols. Made In
China should be just as strong
Need for powerful brand distribution system
In the USA we love teams. To be successful, develop your Growth Action Team
Today: A 45 Minute Road Trip To The US Market

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Partners
Don’t think the American culture is what you read or
see in the movies
Don’t make the mistake of assuming what you think
will work will work
Big data is not important as insight into cultures
Don’t make the same mistakes international
companies do when trying to market in China - pick
your partners wisely, pick your consultants wisely
Don’t paint America with just one paint brush
Don’t expect to impose Chinese culture on American
culture (Japanese companies learned that the hard
way)
What you don’t know, you don’t know
(and need to learn)

55
Partners
Americans may live differently and sound different
than Chinese consumers, but in the end, they want
the same quality and attention to tradition
America is big, but it’s DNA is small town
USA conversation is filled with jargon that changes
from subject to subject, region to region,
demographic to demographic, products to products
You need “feet-on-the-ground”. Senior managers
cannot run US introductions remotely
What you don’t know, you don’t know
(and need to learn)

66
Partners
The world’s largest retailer learned how to differentiate
in China and the rest of Asia.
Even more differentiation and attention to culture
and demographics are needed across the USA
“We are expecting a great deal from this area. We have
been doing business in Asia since 1989, and we are
very familiar with local customs and trends. We
believe the rapid changes in consumer patterns in
the countries where we do business are promising.
Asia is the continent with the greatest potential for
long-term growth for the Group”
USA – it’s a big country. Learn from what
Carrefour said about strategy & marketing in Asia

77
Partners
And recently……
The hypermarket format is not going to end. There
will be a lot of opportunities in many cities for a
long time and it has a great future in China,"
“The retailer is also expected to open more of it
calls proximity stores branded EasyCarrefour.”
the format is different from its other convenience
stores in that they offer takeaway food.
The proximity stores additionally provide services
and fresh foods to nearby communities from within
what is a slightly larger space, offering varieties of
merchandise.
Carrefour constantly updates its strategy &
marketing in Asia

88
Partners
To sell, to manufacture, to distribute, you
need to know what makes the US “tick”
(idiomatic jargon for “what motivates” )
American consumers and workers “tick”
differently by state, by city, by town, by
region.
America is a jumble of ethnicities, of
educational levels, of needs, wants and
desires that you need to be careful before
you ”move in”
(All-to-many US companies learned that by error
as they looked to China to expand).
The principles to market, to build in the US are
the same you use at home – segmentation

99
Partners
Know before you go. Make sure your US
partners know you before they lead you into
the great American unknown.
The US has a lot to offer, but it’s a wide
offering with no distinct boundaries and wide
differences among regional cultures.
Let good US marketing companies help you
speak the language of where you want to go.
It’s different in Wisconsin than in Alabama or
New York, or California
The principles to market, to build in the US are
the same you use at home – segmentation

1010
Partners
Chevy
Ford
Levi’s
McDonald’s
Winchester
Smith & Wesson
Ralph Lauren
Polaroid
Hallmark
Coors
Gallo
Apple
Nike
Zappos
Citi
Google
Coke
Pepsi
Dr. Pepper
Disney
Cisco
IBM
Dunkin
Starbucks
Amazon
……and more
A country’s culture is a wonderful &
important thing. It will guide you.
USA’s culture is by far not as old as China’s, but we sure have a
lot of different ones – recently it has gotten more complicated.
America’s culture is often defined by its iconic brands:

1111
Partners
Strengths
One of top 5 world markets
High value investment on R&D and Education
World’s largest economy (followed by China, then Japan)
Economy is consumer driven
2/3s of economy driven by personal consumption
Stature of being a big global driver (if you make it here, you can
make it anywhere… well, maybe)
No real business monopolies. Startup and import mecca for the
world.
High literacy rate
Strong democratic setup
Resilient
Want to believe that they compete in an open and free market
Knows USA is not perfect and strives to improve
Size and vast cultural differences across regions make the U.S.
market a fascinating and diverse
Weaknesses
Americans don’t save for the future
Big disparity between have and have nots
Far too much poverty
Labor pool issues: many at the bottom line lack the education
and professional skills, we compensate at/below poverty income.
Current and future generations are on track to earn less and live
less well than the “Baby Boom” generation
USA remains a single language country
Low support for elementary education for the 21st Century
Lack of a cohesive national health safety net
Reemergence of isolationism, bigotry, racism, ultra-right
New fear and uncertainty following elections
International concern that incoming government does not
command insights, governance, and leadership needed for the
future
Opportunities
Thirst for new, quality, innovative products and services
Retail and on-line stores fill shelves with new products
Size and vast cultural differences within regions make for
diverse markets
Belief in the “facts” of brand advertising drive traffic to retail
Brands and brand DNA drive consumer attitudes & usage
China’s rich and robust cultural and innovation history has never
been truly exploited as a brand differentiator
Emerging technologies being developed in regional centers of
excellence
EB-5 opportunities abound
Threats
Unemployment
Commitment to public education improvement
Cost of higher education
Cost of healthcare
Global inexperience of incoming government
Isolationism
Foreign Relations over the next four years
Continued disparity in income
Rise of racism and bigotry
EB-5 opportunities and opportunistic immigration face unknown
government challenges
SWOT USA

1212
Partners
Americans are notorious for being a single language group.
Only 7% of college students are enrolled in 2nd language studies (2015)
Less than 1% of adult Americans are proficient in a language other than English (The
Atlantic Magazine 2015)
But, when it comes to cultural segmentation, the US is a Babylon of strange language.
English is arguably more varied by US regions than one finds in the seven major Chinese dialects.
Northerners don’t understand Southerners. Residents of Maine aren’t understood in California.
Speaking the language of America means
understanding the melting pot of America

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Partners
To insure that your brand receives the widest audience acceptance,
ensure you create your brand story in the most meaningful and
memorable ways
Differentiate your brand by rationales that American consumers
can “hang their hats on” (American idiomatic expression: To strongly believe in)
When you introduce your brand to America, it may
resonate with some, be tone deaf to others

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Partners
USA brands are national and fiercely regional
US Consumers often define
themselves by the brands
their country is known for.
US consumers define and
marry brands (and
themselves) to brand
birthplaces.

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Partners
But of course, US brands don’t own the hall of
brand fame. We embrace others as well.

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Partners
Some brands never adapt well, don’t understand
culture or don’t understand market differences
Braniff International translated a slogan touting its finely
upholstered seats "Fly in Leather" into Spanish as "Fly Naked."
Clairol launched a curling iron called "Mist Stick" in Germany
even though "mist" is German slang for manure.
Coca Cola's brand name, when first marketed in China, was
sometimes translated as "Bite The Wax Tadpole."
Colgate launched toothpaste in France named "Cue" without
realizing that it's also the name of a French pornographic
magazine.
Coors translated its slogan, "Turn It Loose," into Spanish,
where it is a colloquial term for having diarrhea.
Electrolux at one time marketed its vacuum cleaners in the U.S.
with the tag line: "Nothing sucks like an Electrolux."

1717
Partners
Some brands never adapt well, don’t understand
culture or don’t understand market differences
Mercedes-Benz entered the Chinese market under the brand name "Bensi,"
which means "rush to die."
Nike had to recall thousands of products when a decoration intended to
resemble fire on the back of the shoes resembled the Arabic word for Allah.
Panasonic launched a Web-ready PC with a Woody Woodpecker theme using
the slogan "Touch Woody: The Internet Pecker."
Parker Pen, when expanding into Mexico, mistranslated "It won't leak in your
pocket and embarrass you" into "It won't leak in your pocket and make you
pregnant."
Paxam, an Iranian consumer goods company, markets laundry soap using the
Farsi word for "snow," resulting in packages labeled "Barf Soap."
Pepsi's slogan "Pepsi Brings You Back to Life" was debuted in China as "Pepsi
Brings You Back from the Grave."
Puffs marketed its tissues under that brand name in Germany even though
"puff" is German slang for a brothel.
The American Dairy Association replicated its "Got Milk?" campaign in
Spanish-speaking countries where it was translated into "Are You Lactating?"
Vicks introduced its cough drops into the German market without realizing that
the German pronunciation of "v" is "f" making "Vicks" slang for sexual
intercourse.

1818
Partners
Some brand introductions that failed in USA

1919
Partners
Brand failures come in all shapes and sizes

2020
Partners
Famous brands, sadly, lead the list

2121
Partners
To export Chinese Brands, technologies, services,
and “Brand China” be aware of facing new paradigms
Export Phobia
Fear comes naturally to anyone new to exporting. Fear of the unknown, or lack of
information, is one of the reasons that many businesses that are doing well in their
own country are reluctant to find out what they don’t know.
Fear of the unknown encourages deeper thinking.
With creative thinking and careful planning, the risk of failure in exporting can be
reduced. Never allow fear to impede exporting. Exporting is vital to the growth and
prosperity of the company and the country.
The process of exporting a BRAND is not an easy
process or one that can be done without partners.
……..but it can be learned and can be done well.
Get the best guidance and team you can - from your own country
and from those you wish to do business in.

2222
Partners
Rewrote imported automobile category
Rewrote automotive category
Found the “Hidden Dissatisfiers”
And even Toyota makes mistakes
Then
And now
A Toyota Story

2323
Partners
In early 70s Toyota organized a press
event on the newest and largest
distribution center – in California.
On December 7th (who showed up????)
In 2012, no manager would take
ownership on acceleration issues
US consumers were very angry
Over a $1bb settlement
Toyota error in cultural judgement

2424
Partners
Must-be Quality
These attributes are taken for granted when fulfilled but result in dissatisfaction
when not fulfilled. An example of this would be a package of milk that leaks.
Customers are dissatisfied when the package leaks, but when it does not leak
the result is not increased customer satisfaction. Since customers expect
these attributes and view them as basic, it is unlikely that they are going to tell
the company about them when asked about quality attributes.
One-dimensional Quality
These attributes result in satisfaction when fulfilled and dissatisfaction when not
fulfilled. These are attributes that are spoken and the ones in which companies
compete. An example of this would be a milk package that is said to have ten
percent more milk for the same price will result in customer satisfaction, but if it
only contains six percent then the customer will feel misled and it will lead to
dissatisfaction.
Attractive Quality
These attributes provide satisfaction when achieved fully, but do not cause
dissatisfaction when not fulfilled. These are attributes that are not normally
expected, for example, a thermometer on a package of milk showing the
temperature of the milk. Since these types of attributes of quality unexpectedly
delight customers, they are often unspoken.
What Toyota looks for to satisfy consumers
(Kano process)

2525
Partners
Indifferent Quality
These attributes refer to aspects that are neither good nor bad, and they do not
result in either customer satisfaction or customer dissatisfaction. For example,
thickness of the wax coating on a milk carton. This might be key to the design
and manufacturing of the carton, but consumers are not even aware of the
distinction.
Reverse Quality
These attributes refer to a high degree of achievement resulting in dissatisfaction
and to the fact that not all customers are alike. For example, some customers
prefer high-tech products, while others prefer the basic model of a product and
will be dissatisfied if a product has too many extra features.
What Toyota looks for to satisfy
consumers (Kano process)

2626
Partners
Satisfaction drivers terminology[2]
Author(s) Driver type 1 Driver type 2 Driver type 3 Driver type 4
Herzberg et
al. (1959)[3] Hygiene Motivator
Kano
(1984)[4] Must-be Attractive
One-
dimensional
Indifferent
Cadotte and
Turgeon
(1988)[5]
Dissatisfier Satisfier Critical Neutral
Brandt
(1988)[6]
Minimum
requirement
Value
enhancing
Hybrid
Unimportant
as
determinant
Venkitarama
n and
Jaworski
(1993)[7]
Flat Value-added Key Low
Brandt and
Scharioth
(1998)[8]
Basic Attractive
One-
dimensional
Low impact
Llosa
(1997,[9] 199
9[10])
Basic Plus Key Secondary
The Toyota Kano process

2727
Partners
To export Chinese Brands, technologies, services,
and “Brand China” you face new paradigms
Export Mindset
The USA business ground is a battleground. Exporting, like any
other business, involves risks. It is necessary to prepare for the
challenges and the consequences.
Engaging in exporting to the USA and introducing your product
and its rationale for being an alternative to an existing brand is
akin to engaging in a war.
It is a war of price, quality, delivery and service. It is a battle for the
business orders.
It is a fight for your company's USA division’s survival---profits
and growth. In practice, rough strategies are often used by
competitors in order to win.

2828
Partners
Brand:China must have a strong core of
executives here in US that work side by
side with US marketing partners.
Brands:China must ensure that their
executives probe for significant cultural
directives that are drivers and drive the
skills and quality of China home in
communications and ethics.
The secret to introducing growing and
protecting a brand is the team

2929
Partners
What is a GAT and how will it help?
Growth Action Teams are compromised of talent pools of
creative executives trained to be leaders as well as team
players to come to market in a strange land.
In the building of Brand:China, they would be matched
executives from both China and the USA.
US members providing the guidance on consumer attitudes
& usage, culture, demographics, language… i.e. what makes
Americans “tick” and how specific Chinese products,
services, and technology will be embraced.
Chinese GAT members own the concept, intellectual
property, skill sets, current and future branding, and all
aspects of what is intended to be introduced.
Together, GAT members build, nurture and protect all
aspects of the products, services, and processes.
To build Brand:China & your brand you need
a solid team… a Growth Action Team

3030
Partners
US retailers judge all suppliers by a
scorecard
That scorecard measures the distributor
partners of each brand owner
You are only as good as your last order and
how you live up to the culture of each
customer
The distribution system you put in place is
as much a statement of the company you are
as the products you make.
And the brand GAT must include a quality
logistic and distribution system

3131
Partners
How and what your distributor sales
partners say about your product may be
even more important than what you say
about your product
Distributor sales and marketing plans are as
important as yours
Your marketing partners need to prepare the tools
and language your distributors will use on behalf of
you
You need to make your distributors working
partners of your Growth Action Team
All team members need to focus on the detail
Your distributors become not just your
arms and legs…but your VOICE

3232
Partners
Example: To launch Gerber in China & Asia, we
developed a GAT program to work at every level
Gerber (Asia) GAT organization
Asia-GAT
H. Hahn
J-GATJ-GAT K-GATK-GAT
ANZ-GATANZ-GAT
I-GATI-GAT MK-GATMK-GAT
SEA-GATSEA-GATC-GATC-GAT
Japan
PRC
HK
Taiwan
Thailand
Laos
Cambodia
Vietnam
Singapore
Indonesia
Malaysia
Philippines
Korea
Australia
NZ
India
Srilanka
Pakistan
Gerber Support GAT organization
Support-
GAT
Beringause-Relford**
Doug
Hocking
Doug
Hocking
Curt
Griggs
Curt
Griggs
Teresa
Kotecki
Teresa
Kotecki
Bryan
Hussey
Bryan
Hussey
Deb
Bryant
Deb
Bryant
Jim
Fisher
Jim
Fisher
Greg
Meibeyer
Greg
Meibeyer
Tech
Services
Co-pack
Jarred Prod.
World-wide
Logistics
Printed materials,
packaging,
labels
Consumer
Complaints
Finance
Product
Registration
Baby Care
Marketing
Jan Relford
Medical Mkting
Public Relations –
Fast Response
R&D
Ops
Eric Beringause
Global Strategy
Regional Strategies
Sales/Mkting
Prod. Development
GAT parallel focus: basic & growth
Gerber
Existing
Products New
Products
New
Markets
New
Channels
New
Territory
Existing
Territory
CHF 100mm
Focus on Basics Focus on Growth
Globalization
Thru“GAT”
Globalization
Thru“GAT”
Existing
Markets
Existing
Channels

3333
Partners
Capital investment (Capex) is limited
Investment thesis can be tested at other’s
risk
You have ability to place brand on more
product categories than you might be able
to on your own
Licensees have their own distribution
systems
It is a tested and proven strategy –
although it needs strong focus and
control by managers
Other important pathways to brand
introduction can be through licenses

3434
Partners
Limited quality control during process
Too many intermediaries
Brand failure from one category can spill
over into another
Licensees may not treat the brand with
the same respect direct partners will
Whatever issues arise, retail partners and
consumers hold licensor responsible
You need a licensing specialist and brand
extension studies to manage your
expectations.
Issues with brand management through
licenses

3535
Partners
The USA is consumer and brand driven.
Brands can be destroyed even more quickly than
they are built.
China’s DNA and culture and important components
to success.
Americans are proud of ethnicity. Promote China’s.
You need ”feet on the ground”, creative thinking,
and true partnerships with marketing and
distribution companies who will guide you on the
proper USA pathways.
The USA loves entrepreneurs. EB-5 is a way to put
more feet on the ground to build a Chinese Brand
Presence
In Summary

3636
Partners
…Protect
your trademarks
Your intellectual property
Your brand
And don’t forget to….

3737
Partners
Thank you

Brand China - a presentation to Chinese Trademark Officials Dec2016

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