When I walked into the wedding flower shop in Tonglu, China — my husband’s hometown — I knew exactly the kind of flowers I wanted: roses, just like the roses on my wedding dress. The shop owner, however, didn’t ask us what type of flowers we wanted. Instead, she asked us how much we were willing to spend: 380RMB, 580RMB or 800RMB.

The implication was this: money defines who you are. The more you spend, the better you are.

I came for roses, and I was holding my ground. Even if they were on the lowest (380RMB) tier of pricing.

But most Chinese consumers would probably be tempted to go for the 800RMB choice — whatever it was. Why? Because it makes them look good in the public eye…and just as the salesperson said, it’s the trendy choice.

Chinese culture has long valued face, or mianzi. And as a collective country, Chinese people tend to easily follow mainstream trends; they desire conformity. All this spills over into consumer behavior, creating what many refer to as “mianzi consumption.”

If you’ve spent any time in China, you’ve probably seen mianzi in action already. Think about gift-giving customs — the packaging is just as important, if not more so, than the actual product. (this has, not surprisingly, led to excessive packaging in China). You’ll find these elaborate, overwhelming packages, all in the name of giving the sender good face. Shanghai’s Maglev Train, supposedly one of the most hi-tech trains of its kind, was built in the name of giving the city some good mianzi. Doesn’t matter that the design (forcing riders to take the metro before switching over to it), hours (it only runs 8:30am to 5:30PM) and cost (40 RMB one way — a lot for a lot of inconvenience, considering direct buses only cost half of that) have rendered it utterly useless.

Mianzi consumption takes the concept of face into the world of shopping, allowing Chinese consumers to exchange their renminbi for services and products that will boost their face and reputation — sometimes at the risk of their own health and financial well-being.

For example, a Sohu article (Chinese) describes how college-age women will spend hundreds of RMB on name brand makeup and beauty treatments, even to the point where they haven’t enough money leftover to eat. But they’d rather “invest” the money on their face — literally — because, as far as they’re concerned, appearances count.

This article in the Youth Daily makes a link between the “Housing Slave” (people whose mortgages take up 50% of their monthly income) phenomenon in China and mianzi consumption. They suggest that people get into such a precarious situation — having an unmanagable mortgage — simply because they choose to buy homes they can’t afford, all to live a lifestyle they believe is theirs.

Mianzi isn’t going away anytime soon — and neither will mianzi consumption. Especially when it comes to high-end, often foreign, products, such as BMWs, Louis Vuitton Bags, and top-shelf liquors. But there is a certain manipulation involved at times, one that perhaps nudges Chinese consumers into purchases that they would rather not make. Just as Chinese consumers have a responsibility to make smart shopping decisions, companies have a responsibility to sell their products without preying on a consumer’s emotional or cultural vulnerabilities (remember the sleazy car dealers?).

Come on…give roses a chance.

In case you missed the news back in late 2000/early 2001, here’s a quick review courtesy of CNN in December 2000:

The opening of a Starbucks in Beijing’s Forbidden City is brewing a storm in China, with outraged local media reporting that 70 percent of people would rather not sip the American chain’s frappuccinos in the footsteps of the Son of Heaven.

“This is no different from slapping China’s 1.2 billion people and 5,000-year traditional culture in the face,” said the China Consumer Journal. “Some people’s anger is no different from their feelings when our embassy was bombed.”

U.S.-bashing has been in vogue since American warplanes bombed the Chinese Embassy in Belgrade during NATO’s bombardment of Yugoslavia during the 1999 Kosovo crisis, triggering an outpouring of fury in Beijing.

But the media backlash against Starbucks took officials at the 600-year-old Forbidden City by surprise. Now they are considering revoking the coffee chain’s one-year license after just two months in business.

“The pressure from the media was far greater than we expected,” said Chen Junqi, an official of the Palace Museum, as the former residence of the Ming and Qing dynasty emperors is now known. “There are only two ways to solve this: to wait until the contract expires or to prematurely revoke it.”

Well, I guess Starbucks and Chen Junqi thought it was a good idea.

Thing is, people thought it was a funny idea. And not just foreigners — Chinese people too. But they weren’t thinking funny “ha ha” so much. The Chinese public felt insulted and embarrassed by the slight. That includes Rui Chenggang, a CCTV anchorman who visited it with his foreign friends and watched them enjoy a few good laughs at the situation. Rui wanted to cringe.

But he didn’t push the matter back then. No, it wasn’t until he discovered that government officials — perhaps Chen Junqi among them — invited Starbucks to open there that he began speaking out. Here’s the McClatchy newspapers report on it:

Rui said he first spotted the Starbucks in the red-walled complex five years ago.

“I was showing some friends around the Forbidden City, and I saw the Starbucks logo. I thought, `Wow! Where did this come from?’” he recalled. “It’s totally out of place. I see it as a pollution of the integrity of the Forbidden City, which is the epitome of Chinese culture.”

He said he was stirred to action after a recent exchange of correspondence with Starbucks chief executive Jim Donald, who told him that Starbucks was invited to open an outlet there six years ago and did so with “great sensitivity” to the surroundings.

I think this is an interesting case here for marketers to explore.

It’s no secret that much of the Chinese public is enamored with all things foreign. Starbucks’ success in China — a country that has sworn by tea for centuries — is symbolic of this trend.

But at the same time, you have this rich cultural heritage in China. Arguably a 5,000-year heritage…and perhaps the greatest source of pride for the Chinese people.

China’s modern and traditional culture often works quite nicely together. Perhaps that’s what Starbucks had hoped. Except they forgot one small thing — never make a mockery out of China’s historical/cultural sites.

This is, after all, a country that has endured humiliating invasions over from the 1840s. People are still traumatized and horrified by what Japan did to China (if you have no inkling of this, I suggest you read this recent Bloomburg article). The Chinese public probably couldn’t stomach the imperial undertones of Starbucks’ move.

So much for the “great sensitivity” on Starbucks part.

If you’re offered some real estate in a one of China’s cultural meccas, take a step back first. Do your homework (i.e. market research). Heck, talk to the media if you have to. But know what you’re getting into. Your reputation depends on it…and that’s no joke.

Ginseng a gift?

You bet. Ginseng, one of many treasured remedies in Chinese medicine, is a welcome gift for more senior folks. As are any number of nutritional and vitamin supplements. It’s an important distinction…never give these products to a younger audience, with perhaps the exception of vitamins or remedies for beautification. I remember I tried gifting Ginseng to the parents of a friend who clearly didn’t see themselves in the “Ginseng generation”…later on they ended up surreptitiously re-gifting it to their older relatives.

If you ever get the opportunity to visit a Chinese supermarket, go to the aisle selling these medicinals. The packaging is often a work of art in and of itself — and as this article attests to, at times over the top.

Why are these items so prized as gifts? I believe it is a modern reminder of the rich culture of Chinese traditional medicine, where certain remedies were nearly as prized as precious jewelry and metals.

Besides the tried-and-true products such as Ginseng and Spirulina, there is also a host of proprietary Chinese nutritional supplements. One of the most beloved of these is Qing Chun Bao, a capsule that offers the age-old yet somewhat dodgy promise of youthful vitality. I can’t speak to the efficacy of it, though if the preponderance of advertising for this product in China is any measure, people are clearly buying it.

Then there’s also the fast-growing market for Western vitamin brands. Because these are foreign (thus having a certain cache) and sometimes priced out of the reach of average consumers, they are hot Chinese New Year gifts. I’ll never forget how one of my neighbors in Hangzhou bragged about how people gifted her a slew of Amway vitamins. Amway was the first to make their mark in this category, but now recent newcomers such as Nuskin are grabbing market share.

Now for a nice shot of…er at…alcohol. During Chinese New Year, I think the advertising was almost half and half on nutritional products and alcohol. Nianye fan — the most important meal of the year that falls on the eve of Chinese New Year — always includes a fine wine or liquor. Top-shelf brands such as Wuliangchun, Jiannanchun or Maotai are prized nearly as much as the traditional Chinese remedies — and it shows in the pricing. Men especially will feel flattered to receive a “famous brand” of wine or liquor, since they tend to be the ones imbibing at the table.

Cigarettes also need a plug here. While cigarettes aren’t special to Chinese New Year, they often go hand-in-hand with alcohol. If you’re going to give the gift of cigarettes choose a well-respected brand such as Marlboro or 555. Anything else might be social suicide.

Snacks shouldn’t be overlooked…things such as pastries, cookies and nutritious biscuits. Seniors love them during the Chinese New Year holiday, and they work for just about everyone else.

So, you’re marketing your product in China for Chinese New Year. Make sure you don’t forget the packaging, something I alluded to above. Packaging matters. We’re talking about a country here where face is extremely important. Good packaging helps to preserve and perhaps lend face to individuals. Most of the nutritional supplements, liquors and wines, and some snacks have special packaging just for the holidays, including a special bag to match the item.

Also think about how to make your packaging design more auspicious — in color, symbolism and name. Chinese people quite often make choices based on the inherent or implied good fortune. This isn’t going to, say, save your product from utter failure. But it gives your audience one less reason to walk away.

Even if you’re not selling the traditional Chinese New Year gifts, you can still get in on the season. How might your product fit into the holiday — or evoke a sense of the holiday? Advertisers do it all the time during the Christmas season, and the same could be done with Chinese New Year. Consider cross-promotion with a traditional Chinese New Year gift that fits with your company’s mission or product.

If you’re doing business in China, keep up your relationships with a well-chosen gift for Chinese New Year. Here are my short recommendations:

• Male Chinese executives/husbands of Chinese executives: top-shelf liquor, wine or cigarettes
• Female Chinese executives/wives of Chinese executives: nutritional supplements for beautification such as Qing Chun Bao, or vitamins from a foreign company such as Amway or Nuskin.

Frogs and turtles may not be on your menu; heck, tea might not be the first thing that comes to mind as “refreshing”. But it’s another story for the Chinese — and an important lesson for anyone marketing products in China. Your marketing should reflect local tastes, preferences and values.

Let’s look at Avon, for example — one of the most recognizable international cosmetics brands in China. Avon knows that the Chinese consider snow-white skin in women as a standard of beauty (well, it’s no secret if you spend a little time in China. After all, this is a country that advertises umbrellas with SPFs for the summertime.). In fact, the word for facial cleanser literally translates to “wash face milk”, the milk suggesting the — you guessed it — whitening power. Now I’m not here to debate the validity of any claims on whitening properties of a cosmetics product…I’ll let Paula Begoun take care of that. The point is, Avon took the time to get cozy with their market — on a cultural level — and they developed a nice line of products that speak to the beauty desires of Chinese women and the culture as a whole.

What about what’s in a name? Culture dictates what flies – and what dies. For example, Konka, a Chinese electronics company whose Chinese name roughly translates into “healthy and beautiful”, had a lot of trouble going into Western markets. Why? Their name sounded like “conk”, a violent blow to the head. Same rules apply to companies entering China. This article here talks about how a marketer for Unilever tailored many of their product names to fit Chinese values:

LUX soap is called “lishi” (strong man) in China.

Omo is associated with hard work and ruggedness among Western consumers, but their Chinese counterparts see their washing powder as “Ao Miao” (magic or mysterious).

The different meanings of brand names is one aspect marketing director Mike Shepherd has to be aware of when marketing Unilever’s products in China.

“You have to learn again, you cannot bring Western perspectives to China, you can bring only values, don’t bring assumptions,” he says.

Think it’s just for products headed to consumers? Think again. Global Sources did an about-face for its brand when it realized the company was losing ground with Chinese manufacturers, who seemed to prefer Alibaba despite repeated and demonstrated claims that Global Sources’ services yielded better results. This even after Global Sources had a Chinese name in Chinese characters. Global Sources decided to redo their brand, incorporating traditional Chinese characters used in calligraphy (in the culturally auspicious color red) and their “35 years” to remind customers of their longstanding (as in before Alibaba) presence in China. While I have no offical stats on the change, I imagine the manufacturers will feel more of a connection with a company that acts more traditionally Chinese in its corporate identity…traditional Chinese values go a long way in a culture that has some over 5,000 years of history.

The Shanghai Daily doesn’t mince words about it, titling a recent article Car War Sparks Battle of Brands:

“China’s car market continues to be driven by novelty, with a majority of potential buyers attracted to newly-launched vehicles.

The long-established brands and models still have a strong impact,” ACNielsen’s Coquelle said.

China’s car market is poised for accelerated growth but as the sector matures rapidly, huge challenges lie ahead for manufacturers, he added.

“Product innovation and cultivating brand loyalty will be a greater than ever challenge.”

Puts a bit of a damper on the sweeping numbers that start out the article:

Close to 30 percent of Beijing residents own a car, followed by 18 percent in Guangzhou and 11 percent in Shanghai, the report said after surveying more than 1,500 people during May and June in the three key cities.

This represents significant growth from 2004 when car ownership in the three respective cities was 11, five and four percent.

New car sales last year jumped more than 40 percent in the three markets.

But this author isn’t alone in harboring a certain hesitant optimism towards China’s automotive industry and marketing.

Look at this Business Week article A Billion Tough Sells:

The competition is fierce. As many as 100 domestic and 10 foreign manufacturers are slugging it out. Consumers can now select from about 25 entry-level compacts such as the Chery QQ and Honda Motor Co.’s (HMC ) Fit. Not enough choice? Another 25 new models — from subcompacts to SUVs — are due out this year. That may be great for consumers, but it’s murder on manufacturers. The average price for a compact in China has fallen by 28% since 2000, while other categories are off by more than 20%, J.D. Power says. “China used to be a very profitable market for everyone,” but growing competition has eaten into earnings, says Yoshimi Inaba, Toyota Motor Corp.’s (TM ) executive vice-president in charge of China.

For Toyota and its rivals, cracking the code on Chinese buying habits is crucial. That can be tricky. With so many first-time buyers, there’s little brand awareness and almost no brand loyalty. Middle-class Chinese often spend more than a year’s income for even a low-end car, and 89% pay in cash, J.D. Power data show. About half of all Chinese buyers rely on the opinions of family and friends when making this critical purchase. That means driving a dud isn’t just disappointing. It’s also a huge loss of face for both the buyer and anyone who offered advice. Another quirk: One-third of Chinese rate engine and transmission performance as their No. 1 priority, vs. only 19% in the U.S. and 11% in India. A car “has to have an energetic heart,” insists Luo Changyi, a 24-year-old Beijing resident who drives a Volkswagen Golf.

Those same sentiments are echoed in Chinese Automotive Market 2010, a study by Mercer Management Consulting:

The Mercer study shows that foreign brands, thanks to their image, have a head start in the competition for buyers, despite government support for domestic brands. Foreign brands also have a clear lead in customer satisfaction. But given the confusing and rapidly expanding range of products on the market, brand awareness and brand loyalty are naturally still low: only 25 percent of the customers choose the same brand when they buy their next car, compared to almost 80 percent in western industrial countries. Long-term brand images and positions will only emerge over the next few years.

“This is where manufacturers have to buckle down,” Joas continues. “The brand is the only way to escape direct competition. Image is the best sales pitch, even in China.” Still, the study points out that 46 percent of mainstream buyers, and 34 percent in the case of premium cars, would again buy a car of the same brand. Image weakness and lack of differentiation are especially noticeable in the low-price segment: only 7 percent of current car owners maintained that they would buy a car of the same brand.

No sugar coating there.

So what’s a marketer to do for staying ahead? Thankfully, A Billion Tough Sells offers a few good ideas. Here’s one:

To make sure its customers stay happy, Nissan three years ago dispatched six retired dealership executives from Japan to help improve showroom cleanliness, interaction with customers, and after-sales service. The payoff? Nissan dealers in China ranked No. 1 in customer service for 2005, according to J.D. Power. That matters since even routine maintenance problems can be a brand-killer in a market of newbie drivers. Says Yasuaki Hashimoto, who oversees Nissan’s sales in China: “We want our first-time buyers to be second- and third-time ones.”

Customer service is king if you want to get ahead.

Not to rain on the parade here, but one thing struck me about all of these articles: they all seem to ignore certain environmental factors, which could put a few more brakes on the automotive industry. But that’s another topic for another post on China and automotive industry marketing.