Best Practice for Small Business. Marketing ideas for small business.

What Messages Must Western Businesses Communicate?
Successful marketing communicates to a target audience that its needs can be met by a particular supplier’s offering. Any marketing campaign should have at its core the communication of the target market’s needs. With this in mind, it is essential to consider what Chinese businesses require from potential Western suppliers. We have excluded ‘price’ from our analysis, taking this as ‘a given’.

Figure 5 – Main Chinese Requirements From Western Businesses (Other Than Price)

Communicating Superior Quality
Unsurprisingly, the main requirement Chinese buyers have from potential Western suppliers is to provide market-leading quality. Indeed, this is a ‘hygiene’ requirement, in that the minimum a Western company must do is justify its higher prices vis-à-vis the local competition. In other words, the company’s offering must add value in the eyes of the buyer.

Importantly, communicating superior value in Chinese business-to-business markets is far more difficult than even two or three years ago. Most Western companies target the top-end of their markets, in no small part because their higher cost bases force them to. However, in many business-to-business markets the premium that can be charged for Western products is decreasing quickly. There are a number of reasons for this: firstly, increasing numbers of foreign companies are competing with each other, driving down prices; secondly, the quality of the local offering is improving rapidly, eroding Westerners’ competitive advantage; thirdly, the ability of local companies to communicate their offering is increasing; and fourthly, international companies based in China are recruiting more and more local staff into senior (buying) positions. Such staff are far more confident than their expatriate predecessors at ‘buying local’ and managing cheaper local suppliers.

Communicating Experience and Credentials
Two of the top four requirements of Chinese buyers and business owners – the need for Western companies to prove that they are ‘established’ in the market, and the need for them to demonstrate experience of dealing with similar companies (preferably in China), illustrate the difficulty many Western companies have in gaining the trust of their target audience. As discussed elsewhere in this paper, to a great degree ‘business’ trust is developed through relationships. However, important as these will be, the first thing any Western company should do is prepare and present comprehensive case studies and client lists for the potential Chinese customer. These should be leveraged to the absolute maximum, and from the earliest possible stage in the relationship. This is in contrast to many Western markets, where past experience is often mentioned in the vaguest terms and references are rarely followed up.

This need to communicate relevant past experience cannot be overstated, and relates to perhaps the biggest barrier facing any Western company (particularly new entrants) in China – the time and effort required to gain the target market’s trust.

Leveraging The Brand
The challenge of gaining trust can be turned into an advantage, if the Western company leverages its brand to the maximum. When approaching a potential customer for the first time, a company’s brand can communicate experience and credentials in the same way as a case study or reference. Even if the company is unknown in China, the brand of ‘The West’ can be a real plus, and at the very least generate curiosity in the company’s offering. In many cases, the Western ‘brand’ represents quality; therefore in at least one respect most Western companies enter the market at an advantage.

Of course over time, any company would want their brand to refine and develop a personality of its own in China. Nevertheless, Western companies’ cost bases are such that entering China without quality at the core of its branding strategy and other communications is virtually impossible.

Communicating Reliability
Reliability is linked to quality, articulating to a large extent quality of service as opposed to quality of product. Chinese buyers are extremely demanding in terms of their service requirements, on issues as diverse as lead time (this tends to be shorter than in the West), availability after hours (a much more frequent requirement than in the West) and technical service (particularly when dealing with Western companies, Chinese businesses feel they are paying for top quality, and when technical issues arise they therefore expect them to be dealt with quickly and efficiently).

A key challenge in respect of such needs is communicating that the Western supplier has an established and permanent presence and infrastructure within China. There is a great deal of wariness regarding Western companies who are happy to export their products to China and charge significantly more than local competition, but who then have little interest or ability when it comes to aftersales service, ongoing relationships or even making good small issues with the product that has been sold. The latter point also explains the prominence of ‘local presence’ as a requirement from Western suppliers.

Communicating Understanding, and Willingness To Meet Needs
Chinese buyers state emphatically that they want Western companies to show an understanding of their needs, but also a willingness to listen to and learn from the buyer. A frequent comment is that Westerners ‘turn off’ buyers by spending far too much time talking about what they can offer, and far too little time building up their understanding of what the customer requires, and what is driving that requirement.

Chinese buyers do not expect suppliers to understand their needs immediately; in fact they tend to believe that to do so is impossible, and perhaps even belittles the uniqueness of their challenges and requirements. Rather they want suppliers to listen carefully to the issues facing the business, and commence a dialogue which begins to identify their needs and put forward ways of meeting these needs. Suppliers who claim to have the solution as soon as they begin talking to the potential customer are seen as crass, naïve and untrustworthy. On the other hand suppliers who listen, understand and suggest are seen as understanding the problem, qualified to give a solution and willing to work for the benefit of the customer.

Being Easy To Work With
As well as being reliable in a business sense, Chinese buyers state that they want suppliers that are easy to deal with, and who engage with them on a personal level. Business relationships in China can often be distinguished by the way they go beyond the workplace and impinge on the participants’ social lives. Companies that do not wish to take the discussion outside the workplace are often seen as unfriendly and – more significantly – hard to get to know, perhaps willfully so. The latter can be fatal to a potential business relationship, in an environment where gaining trust is fundamental.

Language and other barriers clearly make expanding relationships beyond the workplace difficult for many Western customers. However this, as well as the requirement to show a general interest in customers as people rather than ‘just customers’, is often essential.

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What Messages Must Western Businesses Communicate?
Successful marketing communicates to a target audience that its needs can be met by a particular supplier’s offering. Any marketing campaign should have at its core the communication of the target market’s needs. With this in mind, it is essential to consider what Chinese businesses require from potential Western suppliers. We have excluded ‘price’ from our analysis, taking this as ‘a given’.

Figure 5 – Main Chinese Requirements From Western Businesses (Other Than Price)

Communicating Superior Quality
Unsurprisingly, the main requirement Chinese buyers have from potential Western suppliers is to provide market-leading quality. Indeed, this is a ‘hygiene’ requirement, in that the minimum a Western company must do is justify its higher prices vis-à-vis the local competition. In other words, the company’s offering must add value in the eyes of the buyer.

Importantly, communicating superior value in Chinese business-to-business markets is far more difficult than even two or three years ago. Most Western companies target the top-end of their markets, in no small part because their higher cost bases force them to. However, in many business-to-business markets the premium that can be charged for Western products is decreasing quickly. There are a number of reasons for this: firstly, increasing numbers of foreign companies are competing with each other, driving down prices; secondly, the quality of the local offering is improving rapidly, eroding Westerners’ competitive advantage; thirdly, the ability of local companies to communicate their offering is increasing; and fourthly, international companies based in China are recruiting more and more local staff into senior (buying) positions. Such staff are far more confident than their expatriate predecessors at ‘buying local’ and managing cheaper local suppliers.

Communicating Experience and Credentials
Two of the top four requirements of Chinese buyers and business owners – the need for Western companies to prove that they are ‘established’ in the market, and the need for them to demonstrate experience of dealing with similar companies (preferably in China), illustrate the difficulty many Western companies have in gaining the trust of their target audience. As discussed elsewhere in this paper, to a great degree ‘business’ trust is developed through relationships. However, important as these will be, the first thing any Western company should do is prepare and present comprehensive case studies and client lists for the potential Chinese customer. These should be leveraged to the absolute maximum, and from the earliest possible stage in the relationship. This is in contrast to many Western markets, where past experience is often mentioned in the vaguest terms and references are rarely followed up.

This need to communicate relevant past experience cannot be overstated, and relates to perhaps the biggest barrier facing any Western company (particularly new entrants) in China – the time and effort required to gain the target market’s trust.

Leveraging The Brand
The challenge of gaining trust can be turned into an advantage, if the Western company leverages its brand to the maximum. When approaching a potential customer for the first time, a company’s brand can communicate experience and credentials in the same way as a case study or reference. Even if the company is unknown in China, the brand of ‘The West’ can be a real plus, and at the very least generate curiosity in the company’s offering. In many cases, the Western ‘brand’ represents quality; therefore in at least one respect most Western companies enter the market at an advantage.

Of course over time, any company would want their brand to refine and develop a personality of its own in China. Nevertheless, Western companies’ cost bases are such that entering China without quality at the core of its branding strategy and other communications is virtually impossible.

Communicating Reliability
Reliability is linked to quality, articulating to a large extent quality of service as opposed to quality of product. Chinese buyers are extremely demanding in terms of their service requirements, on issues as diverse as lead time (this tends to be shorter than in the West), availability after hours (a much more frequent requirement than in the West) and technical service (particularly when dealing with Western companies, Chinese businesses feel they are paying for top quality, and when technical issues arise they therefore expect them to be dealt with quickly and efficiently).

A key challenge in respect of such needs is communicating that the Western supplier has an established and permanent presence and infrastructure within China. There is a great deal of wariness regarding Western companies who are happy to export their products to China and charge significantly more than local competition, but who then have little interest or ability when it comes to aftersales service, ongoing relationships or even making good small issues with the product that has been sold. The latter point also explains the prominence of ‘local presence’ as a requirement from Western suppliers.

Communicating Understanding, and Willingness To Meet Needs
Chinese buyers state emphatically that they want Western companies to show an understanding of their needs, but also a willingness to listen to and learn from the buyer. A frequent comment is that Westerners ‘turn off’ buyers by spending far too much time talking about what they can offer, and far too little time building up their understanding of what the customer requires, and what is driving that requirement.

Chinese buyers do not expect suppliers to understand their needs immediately; in fact they tend to believe that to do so is impossible, and perhaps even belittles the uniqueness of their challenges and requirements. Rather they want suppliers to listen carefully to the issues facing the business, and commence a dialogue which begins to identify their needs and put forward ways of meeting these needs. Suppliers who claim to have the solution as soon as they begin talking to the potential customer are seen as crass, naïve and untrustworthy. On the other hand suppliers who listen, understand and suggest are seen as understanding the problem, qualified to give a solution and willing to work for the benefit of the customer.

Being Easy To Work With
As well as being reliable in a business sense, Chinese buyers state that they want suppliers that are easy to deal with, and who engage with them on a personal level. Business relationships in China can often be distinguished by the way they go beyond the workplace and impinge on the participants’ social lives. Companies that do not wish to take the discussion outside the workplace are often seen as unfriendly and – more significantly – hard to get to know, perhaps willfully so. The latter can be fatal to a potential business relationship, in an environment where gaining trust is fundamental.

Language and other barriers clearly make expanding relationships beyond the workplace difficult for many Western customers. However this, as well as the requirement to show a general interest in customers as people rather than ‘just customers’, is often essential.

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How Do Chinese Companies Want To Be Targeted?

Before considering how well or otherwise Western companies are targeting potential Chinese customers, it is worth assessing Chinese companies’ preferred means of being targeted by potential suppliers. As in any market, the answer to this question is that a wide range of marketing and sales techniques can work, and that usually a combination of different methods is necessary. Nevertheless, it is informative to look at the general view of the Chinese business community (see Figure 2 below).

Figure 2 – Communicating With Chinese Clients

What are your most and least favoured ways of hearing about a supplier’s product or service?

Conferences and exhibitions

In many Western markets, conferences and exhibitions are derided as a waste of time and money; in Asia and particularly China, nothing could be further from the truth. Whatever the business and whoever the target audience may be, attendance at exhibitions, conferences and similar events is likely to be essential for any company wishing to achieve substantial or sustained success in China.

Such events are an excellent way of making initial contact, and can also be a good means of moving a potential sales relationship forward relatively quickly. They are a means of gaining trust, and are an opportunity for the target market to compare local and international offerings, establishing the supplier as ‘open’. The events are an opportunity for potential customers to ask questions, and have the advantage of establishing the face-to-face contact on which Chinese buyers place so much value. And of critical importance, they help persuade buyers that companies are committed to the local market, by virtue of the fact that they have physically devoted the time and expense to be there.

All big cities have conference and exhibition centres (Beijing has three, for example) and details of their events can be found simply by contacting the centres directly or looking at their websites. Increasingly, the larger exhibitions and venues publish their programmes in English. A good option for Western companies is the ‘Events Eye’ website, which gives details of Chinese exhibitions across industries and cities, and can be found on www.eventseye.com/fairs/event_l41.html (see Figure 3 below).

Figure 3 – www.eventseye.com (China section)

The size and scale of many Chinese trade fairs is staggering; for example the Canton Trade Fair in Guangzhou takes place twice a year and boasts over 5,000 exhibitors (see www.cantonfair.org.cn).

Email

Email is obviously important in any market as a means of communication, and its importance continues to increase in China as online bandwidth and affordability improve, and as Chinese business becomes more international. The role of email in the sales process is particularly important at the introduction stage – Chinese buyers tend to react positively to a well-structured, personalised email as a prelude to a more detailed face-to-face discussion. Such an email should be accompanied by a soft copy brochure that gives general information on the supplier’s offering. As discussed below, however, it is usually essential to make a call to the target company before sending company details through – ‘cold’, non-personalised messages are extremely unlikely to be taken seriously.

Websites

Clear company websites that convey a company’s ability to deal with Chinese customers are an excellent way of generating interest from Chinese businesses. It is worth noting here that the number of Chinese people currently learning English is greater than the number of people worldwide for whom English is a first language, and that the level of English amongst senior decision makers in Chinese companies is good, and improving dramatically. Nevertheless, small, quick and low-cost actions such as translating company websites – or even just part of the website – will improve Chinese search engine rankings and make the company’s serious intentions clear.

Other than communication in Chinese, an excellent way of differentiating from much local competition is simply to have a well structured, navigable and informative website, which above all should make absolutely clear what your offering is. It will be seen later in this paper that Chinese buyers – at the same time as using the Internet more than ever to find suppliers – are extremely critical of the standard of many Chinese companies’ websites, seeing them as badly designed, lacking in information and generally unprofessional. An informative homepage is therefore an unmet need that Western companies are well placed to meet.

Face-to-face meetings in the workplace

Face-to-face meetings in the workplace are an essential step towards making a sale in most business markets. Only when a face-to-face appointment is secured can it be assumed that the enquiry is a serious one. Chinese businesses vary in terms of where they want such a meeting to take place – sometimes they like to visit the supplier’s offices (if they have a local presence of course) to assess the size and nature of their operations. But frequently a visit to the potential client is necessary, particularly in service markets where there is little ‘operation’ to look at. Generally speaking, obtaining an invitation to visit a potential client’s premises can be viewed as more ‘promising’ than having an invitation to visit your own premises accepted. A visit to a potential client would tend to take place at a more advanced stage of negotiations, when the company has decided the supplier set-up is satisfactory in broad terms.

A willingness to try to speak at least basic Chinese is an excellent way of impressing and showing respect to a potential customer. However, English is increasingly spoken at high levels within Chinese businesses, and where this is not the case interpreters are routinely used. The ability to speak Chinese to a high level, whilst ideal, is not necessary.

Phone calls

Making phone calls to Chinese companies is an effective way of making an initial introduction, and above all in identifying the person within the target company who is most likely to be able to help. So, it is recommended to call a target company before sending an email, for example, in order to ensure that company documentation is being sent to the right person, and that someone in the target company is waiting for the information. And of course it is perfectly acceptable for general ongoing conversation to take place over the telephone; albeit linguistic challenges often make email more viable (many Chinese people find it more difficult to speak English over the telephone than to read it).

Whilst the telephone is a valued means of communication during the sales process, its limitations should be recognised. In summary, it should be used for introductory and relatively low level discussions, such as arranging meetings or clarifying points from a meeting. It is extremely unlikely that negotiations will be conducted or sales made over the phone, unless the contract is particularly small or there is already an established relationship with the customer. To put it succinctly, cold-calling campaigns are very effective at establishing contacts and beginning a relationship, but utterly ineffective when it comes to negotiating or closing sales.

Sending details by post

Whilst the postal service in China is relatively efficient, the increase in email and Internet use is such that it is increasingly acceptable, maybe even expected, for company literature and other details to be sent electronically. Hard copy brochures and presentations are used widely, but these tend to be presented during one-to-one meetings.

Where literature is being sent on a wider scale (the main example being a direct marketing campaign) then the postal service is perfectly acceptable. Indeed for non-personalised or mass communications, hard copy is usually more effective (assuming that good contact details have been obtained), as ‘junk’ emails are routinely deleted. Many businesses state that receiving good-quality company literature through the post is such a rare occurrence, that companies who succeed at doing it well do make an impact. Western-style campaigns in particular tend to have impact, especially if the materials are bilingual. As with websites and other media, a successful campaign can depend on appearing both ‘Western’ (usually synonymous with good quality) and ‘Chinese’ (knowledgeable about China, and willing to adapt to Chinese requirements).

Networking

‘Networking’ and ‘relationships’ (or ‘guanxi’, often used as its rough Chinese translation) are terms that are widely used to describe ‘the way deals are done in China’. There is probably no area of doing business that is less understood by Westerners, and as a Westerner it would be wrong for the writer of this paper to try to offer a full explanation of exactly what guanxi entails. What is clear, however, is that there is a tendency (particularly amongst Western consultants offering market entry services to Western companies) to build the idea of ‘guanxi’ into something so large and mystical that Chinese markets become seen as mysterious, impenetrable universes that no outsider can ever hope to understand.

It is perfectly true that relationships are important when doing business in China, probably to a greater degree than in Western countries. It is also true that networking (particularly when this involves speaking to someone following a recommendation) can lead to relationships and in turn business. However, Chinese businesses - like businesses anywhere else – require products that meet their needs and suppliers that they can trust. What Western companies sometimes have difficulty coming to terms with is the way in which this trust is gained, and the time it often takes to convince the customer that yours is the product or service that meets their needs. The overriding piece of advice for Western companies would be to understand the importance of establishing relationships when targeting Chinese companies, and to be prepared for the patience that enables this. However, networking and marketing should be seen as mutually complementary in China – one does not invalidate the other. Chinese companies are perfectly open to hearing about suppliers and solutions that can improve their businesses.

In conclusion, therefore, a wide-ranging marketing and sales approach is required in China, with different activities complementing each other, and working at different times in different ways. The table below summarises the main means of communication with Chinese companies, and the benefits and drawbacks of each.

Figure 4 – Marketing and Sales Communications in China – Summary Of What To Use, and When

Part 3 will be published on Friday 22nd June.

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Undertaking customer research on loyalty, satisfaction and service can make a big difference to your business. You’ll need to focus your efforts on finding out as much as you can about existing and potential customers. If you can work out how they make their buying decisions, you can adapt your sales methods and techniques to fit your customers’ needs.

For business customers, you’ll want to know how big their businesses are, what sectors they’re in, and who makes the decision to buy your product or service.

If you’re targeting individual consumers, it may be useful to know such things as their gender, age, occupation, income, lifestyle, attitudes or social class.

For your existing customers, try to find out:
• what they think about your products or services
• why they need your product or service - this may be different from what you believe
• why they buy from you and not your competitors
• what they think of your prices
• what they expect from you, eg reliable delivery
• how they rate your customer service
• how they think you could develop or refine your products or services

For your potential customers, try to find out:
• who your potential customers are and what groups they fall into
• how many potential customers there are
• how much of your kind of product or service they already buy from your competitors
• the criteria on which they make buying decisions
• what it would take to get them to buy from you
• what developments they expect in your product or service
• when and where they prefer to buy

Visit www.b2binternational.com/work.html for information on our customer loyalty and customer satisfaction research programme or contact one of the team at www.b2binternational.com/contact.html.

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From today, we shall be publishing the podcast version of our highly successful ebook “A Practical Guide To Market Research” on our podcast site www.themarketresearchpodcast.com. Each Monday a new chapter will be published, avaiable to download for free. This week sees the publishing of the first chapter written by B2B International founder, Paul Hague.

Throughout the publishing of the ebook on The Market Research Podcast, the B2B Blog will be publishing different content on Mondays.

Today’s chapter covers:

• The role of market research in helping business decisions through the systematic and objective collection of data.

• The applications of market research and how many studies are to help show the size of markets, to measure the satisfaction of customers with products, to guide new product development and to show people’s use of and attitudes to products.

• The Market Research Society’s Code Of Practice which sets out guidelines for protecting people who are interviewed and clients who commission research.

• The Data Protection Act that protects enforces data collection and analysis procedures to ensure that people’s wishes for confidentiality and anonymity are upheld.

For those of you who do not already have it (where have you been!?), you can download the ebook version of “A Practical Guide To Market Research” in PDF format by clicking here.

This is Paul’s first book not to be published traditionally in hard copy and will appeal to you if you have an interest in market research, you have a market research project to complete and need help with how to go about it, you are studying for a business degree and market research is part of your course or if you are taking the Market Research Society/City & Guilds Certificate in Market & Social Research. Whatever the case, we know that the knowledge shared within this book will help you succeed.

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