Advertising for the Chinese Consumer Chinese Consumer Behavior

The paper illustrates how Chinese consumers evaluate, change and accept advertisements. Are they willing to accept the new ideas and how they accept it? Also, the paper discusses the question of what the impact of Chinese customer behavior of a foreigner advertising company is and what its future is.

Advertising for the Chinese Consumer
Chinese consumer behavior

The paper illustrates how Chinese consumers evaluate, change and accept advertisements. Are they willing to accept the new ideas and how they accept it? Also, the paper discusses the question of what the impact of Chinese customer behavior of a foreigner advertising company is and what its future is.

2011
Prepared by Sonya Staneva
To Prof M. Slavova
15.12.2011 г.

J. Walter Thompson (JWT) was one of the largest advertising agency in USA and the fourth marketing communications network three years ago. At that time, one of the leading global markets of the company was JWT China. Having in mind, the JWT solar integrated model that ties the design, marketing, advertising, new/net media, PR and sampling, I would say that JWT disciplines within the system really work seamlessly together without competing for their clients’ marketing spending budgets. Also, if the system is so successful, it can bring a revolution into the advertising business in China, it can contains and handle the public, marketing and advertising image under its wing and build all these for any company that needs it. In addition, all the businesses that are part of the “system” are competitors that can avoid the competition, to work together and to guarantee JWT’s income.
As always, however, not everything is perfect and here, we can say that there are several problems that can be taken under consideration. First, as one of the major countries, China has a lot of small advertising firms that fight one another and try to have a great impact over the local customers. If JWT breaks down all the traditional advertisements, and also, takes the power over the small companies and their completion, the company will have a great challenge over its economy.
Second, as the Chinese are people who difficult accept the new, it would be a problem for the model to be implemented. I consider that is so because, even if the model is innovative, new and great as an idea, it will be difficult to take place among China’s marketing strategies and understandings. It is also unclear how it can be implemented, developed and spread in order to be recognized and successful for JWT advertisement.
As the company and its Shanghai office became the largest creative center and a valuable company for both local and international companies, we can say that Shanghai office could be JWT’s hub in China.
For supporting that opinion, I would say that during the past years, JWT Shanghai office was ranked as the top agency in China. It is also characterized as “the temple of Advertising”. JTW has an international experience and can be accepted as a starting/ key point and sample for many companies that want to be great and go global. In addition, JWT is a member of a Western and Chinese market which makes it stronger and also, very good connection between two different world and markets.
In addition, New York office is also an important hub for JWT. Its marketing operations are one of the main competitors of Chinese markets, and mainly North America. Looking at other point, if a company would like to become global, it should start investing more abroad and it can be a great step if it makes an investment in New York. Having in mind, that the Chinese consumers have a great impact over the market all over the world, I can consider that Shanghai and New York can work together as globe. Also, if both cities, as part of different world united their marketing and advertising strategies can have a great impact over the global market.
JWT advertisement is a very well-known company. It has a lot of partners, brands and companies to work with. The Chinese customers are extremely sensitive and at the same time heavy buyers. These are people who are interested in the advertisement but they are not interested in the company that created the good and memorable commercial.
However, because of the vast goods and services which are provided on the Chinese market, JWT has to work hard in order to save its shares on the market. As the company is a wild spread and works with different companies in different market, it has the ability to develop itself into advertising matter. JWT would stay as a leading advertising company in the country with very high quality commercials. Also, if the company would like to compare to its major competitors, it should work harder and try to convince more and big companies (not only foreigners but also domestic) to work with. Some domestic companies can seek the help of JWT as a foreigner agency once their revenue and growth could justify considering a strong national or even international brand vision. On the other hand, the main target groups of JWT are the large companies with international and domestic markets. Because of its qualitative and wild spread experience, the company is willing to change the industry premium and raise it to 90%. We also cannot think of the foreigner companies as strong competitors because JWT has a great experience behind its back. The company already researches the Chinese customers’ behaviors and knows how to react in each situation. This can lead us to the opinion that JWT is an expert on the public relation of the Chinese business. Based on Chinese culture and media understanding, JWT could have some problems with staying at the top in advertising world. First we can say that China was considered as an “old media” market. Although, every family member owns a personal computer, Chinese consumers do not rely on Internet commercials. In China, television, radio and newspapers are still predominant. If the company continues to develop print and TV ads it will have a great success. In addition, JWT works with a company such as WPP that are not a major competitor and develop ideas and increase growth together. On the other hand, if the company starts to work more on Internet advertisements and leave the standard commercials behind, it will not be able to continue establishing a good and profitable business in China. In addition, by creating the new “solar system” model, JWT already started setting the new standard for the adverting industry. The industry perspective introduced here is of a modest order but issue-oriented so that the institutional conditions which gave impetus, and in turn, set barriers to the development of Chinese advertising can be teased out for a preferential treatment. Indeed, to lay the groundwork for a production-centred take on advertising, we need first to map and sort out larger issues, both institutional and cultural, that articulate telling concerns of Chinese advertising professionals.

In 2007, when the economic crises hit Europe and USA business, China stays the only country with a great positive possibility of making investments. China is a country with the fastest growing economy all over the world. This growth has rapid development and positive impact over the JWT and its business in China. Chinese customers are status-oriented, buying as much goods and services as it is possible, is a way of making the Chinese to project the future success. After JWT faces the problem that the middle-class of Chinese population have a desire of buying more and more; and also providing more luxury goods, JWT in China become more aware of the need of arise in marketing and advertisement in the country. As one of the major companies on the Chinese market, JWT can fast and easily secure its high benefits and major role on the market. However, as there is a problem with Chinese GAP, the company should try to target cheaper goods and services which can bring more profit, use and advantages. By using marketing and advertising strategies for more affordable products, JWT will explore different segments of Chinese consumers; it will affect them and will bring the positive impact over itself. Chinese economic market is trying to determine the right market entry strategy. The Chinese economic market is defined by a number of distinct characteristics, among which we can include its size, complexity, rapid changes, the implementation of specific rules and regulations etc. China also has an impressive economy and it is the diverse Chinese consumer behavior that contributes directly to making it so powerful. The Chinese consumer market is evolving very fast and it happens often that new products have been accepted before their predecessors have succeeded in the market.
Television is almost omnipresent and is therefore also a good means to target consumers in midsized cities, which are growing quickly in importance in terms of income to spend. The foreign company should be careful by making business in China because of the Chinese consumer behavior, their history and culture. Also, as a major advertising agency, JWT should be very careful with the multinational commercials in order to avoid the conflict and have a positive impact. Although, China is the fastest grow country and has a great ability of inventing the new technology, adopt the new and transform its traditional media understanding to the new media, TV, newspapers and radio still have the greatest impact over the Chinese population. Having in mind, every second person of China uses computer and internet; Chinese consumers are not willing to adopt the new advertising media as a primary source. Using the data from some research we can say that China is a country without a middle class. Because of the difference in the social status of Chinese, there is a significant problem- how to find and determine that middle class. To find the answers, we have to take into consideration that Chinese are very traditional people with a high values. The government also has a great impact over the advertising agencies in China. The law has some regulation for advertising contents, and prohibits some wordings that are not appropriate for the Chinese consumers. As JWT China works often with companies such as WPP that are not direct competitors, the company has a great success and increase it value. Also, JWT become one of the major sponsors of China’s Luxury Summit with is a great opportunity for development and targeting the customers of luxury brands. In addition, doing a good business, developing and creating different models in China, JWT has a great opportunity for future business. It continues to develop its adverting, design, public relations, marketing and new media.