booth school presentation
DESCRIPTION
Scott Markman's presentation for the Booth School Presentation.TRANSCRIPT
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Branded Entry into the U.S. Market for Chinese Companies
Presented to Booth School AlumniThe Monogram GroupFebruary 17, 2011
Copyright 2011 The Monogram Group, Inc.
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First, a bit of background on our agency.
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Monogram is a branding & advertising agency that specializes in boldly creating and repositioning brands.
Founded in 1990, we serve divisions of the Fortune 500, leading middle-market private companies, civic organizations and entrepreneurial startups.
For clients facing substantial growth opportunities or wanting to change the game in a commoditized environment, we offer a powerful blend of high-level strategic thinking and creative execution.
We often act as the quarterback for our client’s brand, delivering measurable results.
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Our clients include many leading consumer and B2B brands, many of them global.
™
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We also serve many of Chicago’s most respected civic institutions and retailers.
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Our Chinese client list includes companies in a diverse array of sectors and revenue.
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Scott Markman, Founder and PresidentThe Monogram Group
29 years in branding building and corporate design.
Media coverage: ARD German TV, Wall Street Journal, Xinhua (China’s Press Agency), China Daily USA, Ad Age Global, Industry Week, China Business Network, Chicago Tribune, Chicago Sun-Times, Crain’s Chicago Business
Speaking engagements: US-China Global Brand Summit, Asia-Pacific Chamber (Shanghai), National Venture Capital Assn., The Smithsonian, the British-American Business Council and Commercial Investment Real Estate Institute.
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Now, let’s do a quick exercise together:1) What is a brand?
2) What Chinese brands can you name?
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And, here they are:
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Why Chinese brands?Are we crazy?
What could possibly be in it for a relatively small Chicago agency?
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So how did we get started?
What did we do to establish credibility, make contacts, set up meetings and sell our services?
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We started with quantitative market research, querying 1,100 US consumers 2x on their attitudes towards China and Chinese brands.
Optimal Position
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Even the biggest Chinese brands were virtually unknown to American consumers, scoring the same awareness levels as brands we fabricated.
% Americans Aware of the Brand
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And that low awareness (along with a poor overall image of Chinese quality) correlated to low scores on quality perception.
% Americans Believe Brand is High Quality Based on Name
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However, Americans were not shutting the door to Chinese brands in many categories...especially those they already associate with China.
% Americans Open to Purchasing from a Chinese Brand
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The same branding fundamentals that all US/Western companies must follow were identified as precursors for Chinese companies as well.
67% of Americans say it is important that a Chinese company wanting to sell its products in the US has an English language web site written in excellent English.
45% of Americans say it is important that they purchase Chinese goods from a brand with which they are familiar.
36% of Americans say it is important that they have seen ads for a Chinese brand before they buy their products.
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A relationship map for our branded entry service offering.
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Our services reflect an integrated approach for a Chinese company’s branded entry needs.
Entry StrategyAdvisory
Category/MarketAnalysis
Consumer/BuyerInsights
Product Positioning
Product Innovations
SupportingEntry Services
Accounting
Legal Counsel
M&A
Banking
Warehouse & Logistics
Sales andDistribution
Human Resources
Brand Building
Naming &Brand Identity
Product Packaging
Brand Concept & Messaging
Sales Presentation& Brochures
Trade Show Booth
Website
Trade Shows
Go to MarketPrograms
Event Marketing& Sponsorships
Advertising
Direct/Email
Social Media
Public Relations
PHASE I PHASE II PHASE III PHASE IV
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And once we got there, what did we find?
(or, Scott’s excellent adventure into exploring China, Chinese culture, values, beliefs and business practices)
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Scott Markman’s Top Ten perceptions of Chinese business people.
#10: Very, very, very risk averse
#9: Assume they can’t trust you until proven otherwise
#8: Follow relationship, not expertise
#7: Reticent to pay for professional service and advice
#6: Hyperfocused on distribution and sales
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Scott Markman’s Top Ten perceptions of Chinese business people.
#5: Very short-term in their thinking
#4: Understand “brand” simplistically
#3: Slow to embrace the American Way of business
#2: Won’t say no to your face
#1: Assume a lower price solves all problems
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What have we learned from our experiences so far?
How has our approach evolved? What do we look for in seeking out clients?
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Distribution is very different in the US vs. China, and because that is top of mind for every prospect, we have to start there.
National Retailers
Branded Products
Innovative Products
• Dominates products competing on low price (not
available anymore)
• A strong brand gives retailer reason to stock
the product (Chinese companies’ best choice)
• Creates its own category, highest
chance to gain distribution
Private Label Products
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The Five Prerequisites every Chinese company needs to have to consider the US market.
Excellent product quality (ideally, innovative products)
Clear, realistic business objectives
An international talent team
Appropriate financial resources
Patience (minimum 2 year time commitment)
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...which lead to The Five Factors every Chinese company needs to master for success in the US market.
New product development
Willingness to adapt business practices to US standards and methodologies
Insights about consumers who buy their products
An understanding of the wholesale and retail process
The differences between OEM and Branded business models and how to do both concurrently as a transitional stage
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OEM Model
Good enough for client specs
Cheapest price
FOB only
Transactional focus
Trade shows, friends’ intros
Immediate sales
No consumer contact
Low margin, high volume financials
Branded Model
Excellent quality, own design
Competitive price
Entire logistics & customs continuum
Relationship with buyers and consumers
Marketing and sales support
Longer sales cycles with many factors
Understanding, serving consumers
Much higher margins and creation of brand value
The Old Reality vs. the Future Opportunity
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Case Study:Changzhou Asian Endergonic Electronic Technology Co., Ltd.(Asianbag)
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Asianbag is the leading manufacturer in dashboard mounts for portable GPS devices and smartphones.
This US$12 million company has been selling to four US importers for 2 years. They have 10% market share, and their products are sold at Best Buy and Radio Shack.
They own two US patents and several Chinese patents for their designs.
Monogram was hired in Sept. 2009 to create a US brand for Asianbag and build US distribution to grow sales and dramatically increase profit margin.
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Steps in our process to date.
Conducted online market research with 55 US consumers.
Created the brand concept, value proposition, positioning and personality.
Created names for the brand and product line, trademark, package design, web site and sales materials to prepare for the brand launch in May 2010.
Coordinated the company’s setup in the US, including filing a trademark application.
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Steps in our process to date.
Attended National Consumer Electronics Show, met potential sales reps, gathered feedback from retailers.
Set up warehousing, sales and merchant banking operation.
Developed e-commerce enabled website.
Created social media strategy including Facebook, Twitter.
Developed new product features.
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Chinese OEM brand name
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New US brandmark and tagline
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Züuma Dashboard Mounts (Z4 and Z6)
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moist towelette
Züuma packaging
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Züuma Sales Collateral
Comes with an adjustable
bracket. Ideal for cell phones.
Perfect for larger
GPS devices.
Highly portable.
Road trip anyone?
Inner diameter : 90 mm
Outer diameter : 198 mm
Inner diameter : 55mm
Outer diameter : 140mm
Inner diameter : 85 mm
Outer diameter : 165mm
Please call us at
877-90-ZUUMA.
Or, you can email our North American
Sales & Distribution Manager,
Michael Zakkour, at:
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What have we accomplished?
Established a long-term partnership with Priceless Resource, a leading electronics distributor to reach all big box retailers.
Established a relationship with a Canadian distributor in to sell Züuma products in Canadian market.
Got Züuma listed on a leading loyalty reward service whose clients include Citibank.
Placing Züuma products in major retailers,both online and brick & mortar stores
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Product innovations
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Product innovations
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Case Study:Yuzhou Green-Ship Garden Supplies Producing Co., Ltd.
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Green-Ship is a $7.5 million manufacturer of unique flower pots and planters made from a patented composite material.
$5 million in sales in Europe and $2.5 million in the US, all under private label. They have no domestic market.
Founded in 1993, they own over 20 Chinese patents for their manufacturing of their products.
They are completing the construction of a new factory in Qingdao that will allow them to triple in sales.
Monogram was hired in January 2011 to create a US brand and build distribution to dramatically grow sales with independent garden centers.
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Steps in our process to date.
Conducted online market research with US consumers.
Created the brand concept, value proposition, positioning and personality.
Conducting online research with buyers at independent garden centers nationwide.
Developing marketing communications materials.
Preparing list of distributors for factory, planning to attend 3 major trade shows in 2011.
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Consumer Research Question #1Who in your family buys flower/vegetable pots?
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Consumer Research Question #2When purchasing a flower/vegetable pot, what features are most important?
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Consumer Research Question #3Are you more inclined to buy a pot at a national retailer, a garden specialty shop or online?
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Consumer Research Question #4Where do you go for information about potting plants?
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Consumer Research Question #5If flower pots were made of eco-friendly material, would that be an important factor in your purchasing decision?
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Chinese OEM brandmark
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Current China Green-Ship.com web site
Home Page
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Introduction Page
Current China Green-Ship.com web site
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Introduction Page
Current China Green-Ship.com web site
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Product Page
Current China Green-Ship.com web site
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Current China Green-Ship product catalog.
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New US brandmark and tagline
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New Product Catalog
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New Product Catalog
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New Product Catalog
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Point of Sale Materials
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Who’s next?What Chinese brands can you expect to see coming to a store or showroom near you?
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And, here they are:
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Thank you very much for your time tonight.Questions? Comments?
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For more information, please contact:
The Monogram Group233 S. Wacker Drive, Suite 410
Chicago, Illinois 60606 USA
Tel: +1 312-726-4300Fax: +1 312-726-4308
www.monogramgroup.comwww.monogramgroup.com.cn
Scott Markman, [email protected]
John Yang, AE/China [email protected]
Direct: +1 312-268-6687