Cause Marketing: The Key to Half a Billion New Customers in China?

Half of the world's billion Millennials are ChineseMillennials around the world are the biggest consumer block EVER – one billion people fall into the generation, and half of them are Chinese.

Obviously, companies looking for growth in China need to be targeting Chinese Millennials. But reaching China’s young people is not easy and what I see here is that most companies are stuck putting on the same old show when it comes to how they spend their marcom renminbi. 

In the early 2000s, multinational corporations targeted Millennial Chinese primarily by touting themselves as great places to work.  Now these same Chinese want brands to engage with them in new ways. Over the past two years, I interviewed hundreds of Millennial Chinese from coastal and tier two cities, from executives at global brands, SOEs to entrepreneurs and students. They have disposable income. They are online. They also repeatedly tell me that they are OK with being pitched at, or sold to by brands and companies. What they want to hear is more about the social value proposition of what they buy. According to a survey done by KRC Research and Weber Shandwick, 83% of Chinese Millennials try to buy products made by companies that do “good things for the environment or community”. 

Chinese Millennials definitely read which causes companies support and which community events they are doing all over the world.  And they are frustrated by what they see brands doing in China versus what they do in their own countries when it comes to cause 

marketing[1].  

There are several admired North American brands that do great integrated marketing by including cause-based activities into the mix.  A great example is Starbucks.   Chinese know and respect Starbucks and while they may not be able to name Howard Schultz as CEO, they definitely know Starbuck’s point of view on sustainable business. For most companies though, marcom budgets mainly go to traditional ads, product PR, and product-oriented social media. Instead, companies should be putting more of their marcom spend into the same kind of cause related, socially focused campaigns in China that they do in the US and Europe.

The Case for Cause Marketing

When Fortune 500 companies speak to me about “the importance of the China market”, or wanting to ensure they “get their China marketing strategy right”, I always encourage them to think about how and where they spend in China.  Some speak of the importance of social media and online advertising. But few tell stories of cause marketing.  

Millennials are telling us they want to interact and engage with the brands they buy, so simply donating funds or products around the holidays to charities isn’t enough.   

Good corporate citizenship builds a positive reputation and a good reputation leads to higher returns. Researchers at Tuck Business School discovered that when a company engages in meaningful cause-related marketing that is integrated into the consumers' direct experience with a brand - it can produce substantial improvements in their brand loyalty.

And a 2010 Global CEO Survey by the UN and Accenture, found that 93% of global CEOs see sustainability as important to their future success; with 72% citing “strengthening brand, trust and reputation” as the strongest motivator for taking action on sustainability issues. However, where they put their money tells a different story.

Take Kraft Foods for example, whose strategy of dedicating a larger amount of advertising and promotion dollars to 10 of its top brands has dramatically boosted overseas sales of classic American brands like Tang in China. But in spite of raking in huge profits by convincing Chinese that Tang “makes water more exciting”, you don’t see Tang doing any cause marketing in China. Now, if you are recalling someone from PR or marketing once telling you, “this won’t work in China”, that’s simply no longer true.  In today’s China market, this is a missed opportunity to generate long-term brand loyalty and further strengthen Tang’s position in the market - period. 

Chinese Millennials – Born to Weibo

As the first totally digital generation, Millennials are born to share. And as the latest Edelman 8095® survey found, Millennials are amazingly confident in their role as “alpha-influencers”; 76% believe that their peers and other generations expect and look to them for opinions on products and brands. They also believe it is their “job” to share their opinions in the widest forums possible – social media. 

Here in China, Millennials take to the weibo-sphere in mass numbers to talk about brands, products and societal issues. Global food giant Yum’s recent antibiotic chicken scandal is a case in point. In spite of earlier food safety issues, KFC (the largest Western fast food chain in China) was a respected brand with a reputation for quality. But as a result of an ongoing government probe and subsequent news reports, many bloggers are changing their tune and are clearly expressing their new opinion of KFC:

“’I will never eat KFC again,’ said microblogger ‘Neverbunny’. ‘We should get KFC out of China,’ wrote another under the name ‘ninibababa’”.

The result – Yum’s same store sales dropped 4% in Q4 – considering half of its revenue comes from China, Yum can’t afford to have China’s weibo-obsessed Millennials not eat its chicken. 

Coca-Cola, one the other hand, is doing it right by investing billions in local programs across China and is considered one of the most respected brands on the market. 

Bottom-Line

Companies who are recognized as stewards of change in their home country, will also reap the rewards in China - half a billion, eager to be marketed to young, savvy and socially aware Chinese consumers who respect, like and choose your brand. Traditional advertising, marketing and PR around products is limited though, and with even with paid press and paid social media, it’s still a massive challenge to get the normally capricious Chinese consumer to truly become brand loyal.  Show them what your company stands for and how it fits into their community and you can turn them in vocal brand advocates.

[1] Cause-marketing can be defined as a a potentially profit-making initiative by a for-profit company or brand to raise awareness, money, and/or consumer engagement in a social or environmental issue

Faith Brewitt is a senior branding executive in Beijing with 17 years international experience managing global public relations programs for leading brands in the United States, China and Asia Pacific. She also sits on the advisory board of Girls in Tech China. Faith has deep experience in developing creative, results-driven campaigns for emerging and mature markets through consumer and channel marketing, traditional and social media, experiential branding and executive thought leadership. Faith has held positions as general manager of Fleishman Hillard, regional technology practice director of Hill & Knowlton and global communications director for Dell Consumer, Small & Medium Business. In 2010, Faith created the Dell Women Entrepreneur Network.  For more information, see her website.

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