Last night in Shanghai - catch up post

So, I've been a little negligent in keeping you all updated. I figure it's okay because I know no one is reading this everyday. Anyway, I'll use this post to fill you in on the last four company visits we had. On Monday (9/5) we went to L.L. Bean and Draft FCB. Today (9/7) we visited Yum! Brands and Kraft. I'll just touch on some key interest points from each visit.

L.L. Bean

Iconic Bean Boot (the extremely large version)

Self explanatory

We met with Zane, who has 22 years of experience in marketing, 18 of which were international. He gave us some insight on L.L. Bean in China and the difference from the US.

• There are 50 Chinese cities with over 1 million people versus 9 cities in the US + China's rapidly expanding middle and upper class = TONS of opportunity in China
• They have the same positioning as in the US, but the product and communication of the product is different
• Target is men & women, 25-45 years old, as compared to the US target which is 55 +
• While they maintain some of the iconic L.L. Bean products, such as the Bean Boot pictured above, 70% of the merchandice is China-specific product, making it more relevant to the local consumer. Specifically and most importantly, the fit of the apparel is more suited to them (I don't fit into a lot of clothes here).
• another difference is the color. While the American apparel is very neutral colors, they use brighter colors and bigger logos on the China apparel
• They maintain US quality, testing, and sourcing standards
• Catalogue is not as big here in China; they just launched their China e-commerce site
• Outdoor activities are growing in popularity here in China due to governement mandate to get outdoors and exercise more.

Draft FCB

Me at Draft

Draft FCB Cafe

Met with Patrick, who handles Asia Pacific for the Kraft account. Some interesting tidbits from him.

• 439 million internet users in China, and 1 in 3 are located in rural areas, which is extremely significant for marketers using the internet in marketing campaigns
• 1.5 kilogram buscuit consumption in China which is extremely small compared to other markets = a lot of opportunity for Kraft and other buscuit companies
• Orea campaign for China
• introduced in 1996
• had to some changes as Chinese found them too sweet and the package was too big
• Used Yao Ming (international basketball star from China) to help teach the "twist - lick- dunk" ritual and add aspirational element; plus, basketball and "dunking" just fit ;-)
• It's all about sharing and connection - works well for China consumer due to "one-child policy" (into second generation under this policy). This policy has had a number of implications for the parents and children. The parents are more protective (only get one) and building a connection/deep relationship is important. Also, since the child has no siblings, building a connection with peers is extremely important.
• The campaign, which included elements on TV, QQ (China's Facebook equivalent), micro-internet site = 40 million participants, +71% sales growth from 2010-2011.
• IMC + Distribution + New Products = growth and success

Yum! Brands

Yum!

Pizza Hut in China = so much nicer than in US!

• In China, they have: KFC, Pizza Hut, and East Dawning
• KFC has your typical fried chicken, but they also have added a lot of localized flavors
• KFC is the #1 fast food chain in China. They outnumber McDonnalds 3 to 1
• Pizza Hut is a casual dining rather than quick service and offers five star quality food for a three star price
• Pizza Hut and Pizza Hut delivery are two completely seperate entities
• They made the decision to make them two seperate things based on learnings from the US. They viewed the US delivery business actually had a negative impact on Pizza Hut as a whole
• Pizza Hut, which is more upscale than the typical casual dining or fast food restaurant (see picture above). People go, sit, and eat. It targets young adults (ages 20-30ish). It is okay to take a date here.
• Pizza Hut delivery has lowered priced food, and targets more of the family.
• Pizza Hut and Pizza Hut delivery have different menu items
• East Dawning is a casual dining Chinese food, first opened in 2004. This restaurant has about 30 locations, exclusively in China (at least for now)

Kraft

Katie and myself with the Chips Ahoy characters

This was the company visit I had to give a presentation on, along with my partner Amanda. Prior to arriving at Kraft, we gave a brief company overview and history, spoke to the current state of the business and some examples of their marketing communications strategies and successes. We got to meet the President of Kraft Foods China as well as their Social Marketing Director.

• They are about delicious products and making connections
• They see success depending on: innovation, sales, and IMC (yay!)
• As was stated in the Draft post, the Biscuit category is still in the early growth stage here in China, which means there is a lot of opportunity for Oreo, Chips Ahoy! and others
• Prince was a product Kraft got when they acquired Danone's biscuit business
• Created a new product under the "Prince" brand that didn't compete directly with Oreo (as previous product did)
• Basically defined a new category - Kid Snacking (seems so simple)
• Campaign consisted of: on pack promotions + digital game + actual product
• seems a little confusing, but basically the product itself had 10 differently shaped crackers (all prince/fairy tale related, such as crown, heart, etc.)
• These shapes all represented a word/theme. So, the heart meant "I like you", the sword meant "I hit you", and so on for all 10 shapes
• The on-pack promotions inspired kids to get online to the game
• The game was basically all about the kids unlocking the "code" (figuring out what each shape meant) and they could beat levels and get points.
• The kids actually started to use the code in real life, not just on the digital game. Think about those candy hearts when you were younger, and giving the ones with certain phrases to your crush. Basically the kids started using the 10 shapes to talk with each other. So, if one gave a heart shaped cracker to someone else, it meant they like them. If they gave a person three heart shaped crackers, they really really liked them.
• This campaign was hugely successful and really hit on those key consumer insights for the Chinese consumers: one-child policy, all about connection with others.

That is it for now. I was going to do one more post with the last of our sight seeing, but I may just make it a picture post. This will have to wait for another day, as uploading the photos takes forever with this slow internet connection. The next time I write will be from Taipei!!