‘What Are You Giving Away?’ The Challenges of Marketing in Asia

KNOWLEDGE@WHARTON— Western companies looking to do business in Asia, especially in China, don’t always confront a homogenous market, and the ways that consumers make decisions about what to buy aren’t always predictable, according to a group of marketing experts who spoke at the 2007 Wharton Asia Business Forum. Like developed-world consumers, many urban Chinese people are technologically savvy and comfortable seeking product information on the web. But unlike them, they don’t typically show brand loyalty and are often more motivated by price than perceptions of product quality or prestige.

Consider cosmetics. Ellene Hu, director of global skincare marketing, Asia, for Estee Lauder, said that Chinese women will willingly pay for premium products such as the ones her company sells. But they are also willing to jump to another higher-end brand if that company offers a generous giveaway. “For cosmetics, the Asian market is very promotion-driven,” Hu noted. “‘What are you giving away?’ is always a question in the consumer’s mind. We have had to struggle with how to do that and preserve our brand equity.” Read article.