In line with the suitable idea of this project, Robin Kerawala and James Button from SmithStreet Solutions argued at the first boot camp that it’s important to determine the quality requirements of the customers and then focus on delivering exactly that to the lowest possible cost.
The Chinese market is still not ready for higher quality product, so it’s a matter of meeting basic requirements - Chinese don’t want to pay extra for exceeding requirements. The two key questions: “What is the customer ready to accept?” and “What does the customer value?” leads to the underlying driver for the customers purchase of your product or service.
The Chinese market is very diverse, and it’s not possible to generalize about the customers and their preferences. Therefore, it’s important to understand how customers are different, e.g.:
Successful distribution typically begins at local level, so you can’t succeed with only a single distributor, but have to consider working with multiple partners who are determined by your strategy for the market. However, remember that distributors are more focused on distribution and sales, not on building your brand. Therefore, there is a risk that some distributors may damage your brand, especially regarding consumer goods.
Several cases where given on localization based on consumer understanding as key to success in China, e.g. Lego versus Barbie, and Bestseller versus Marks & Spencer. IKEA seem to be the exception to this rule.
Project SecretariatUniverse Fonden | Alsion 2DK-6400 Sønderborg | Denmarkinfo@suitableforgrowth.dk