The majority of urban consumers in China is highly aware of a multitude of German brands and holds a strong preference. Most interesting: The higher the income, the stronger the perceived appeal of German brands. However, some weaknesses also appear: In general, the recognition of the origin of German brands still holds improvement potential. In total, over 1,000 Chinese consumers from Beijing, Shanghai, Canton, Wuhan and Chengdu have been interviewed. The China results are part of globeone’s comprehensive BRIC Branding Survey with 4,000 consumers-interviews in the 20 most important cities in China, India, Brazil and Russia.

1. BRIC Branding® Survey – China Edition
The Perception of German Brands in China –
Strength, Weaknesses and Opportunities
Beijing, March 2012
Cologne | Shanghai | Beijing | Mumbai | São Paulo | Singapore

2. 2
• About globeone
• Survey Approach
• Germany’s Image in China
• Leading German Brands in China
• Insights into Information Channels in China
• Marketing and Communication Strategies for China
• Contact
Agenda

3. 3
Global network with strong China focus
Mumbai Office
Cologne Head Office
São Paulo Office
Singapore Office
Beijing Office
Shanghai Office
globeone is a boutique business consultancy with a strong representation in the
world’s fast growth markets
We offer specialized marketing strategy consulting & project management to help
driving success in the world’s key growth regions
About globeone (1/2)

4. 4
Marketing & communication strategy consulting to drive
customer success in BRIC
ExecutionStrategysupport
Consumer & strategic
market insight
1
Quantitative market
research design (e.g.
market potential,
segmentation)
Customer insight
generation / Market trend
studies
Competitor analysis /
Benchmarking
Qualitative market
research (e.g. online user
experience, focus groups)
2 Optimized positioning
& planning
Brand architecture and
brand portfolio strategies
Definition of goals and
KPI’s & related strategy
development
Brand and product (re-)
positioning / Value
proposition development
Business case / Market
entry program
development
3 Support of 360°
fulfillment
Employer brand
development & program
implementation
Hands-on project
management & creation of
professional presentations
Creation of
360°integrated activity
planning
Creation of briefings &
steering of specialized
agencies (e.g. pitch
support)
4 Brand performance
& loyalty
Marketing spending
effectiveness (e.g.
correlation of investment
and sales)
Brand performance
analysis and controlling
(e.g. brand monitor
surveys)
CRM audit and
development of CRM
strategy
Set-up of activities and
programs to enhance
brand loyalty
Global Strategy + Local Adjustment = Success in BRIC
– Typical project examples of globeone for major global clients (selection) –
About globeone (2/2)

5. 5
• About globeone
• Survey Approach
• Germany’s Image in China
• Leading German Brands in China
• Insights into Information Channels in China
• Marketing and Communication Strategies for China
• Contact
Agenda

6. 6
Countries/ Cities:
Brazil Russia India China
São Paulo Moscow Mumbai Shanghai
Rio de Janeiro St.Petersburg New Delhi Beijing
Porto Alegre Novosibirsk Bangalore Guangzhou
Recife Yekaterinburg Chennai Chengdu
Brasília Nizhny Novgorod Pune Wuhan
Objectives:
• Identification of Country-of-origin Image (COO-Image) relevance in BRIC
• Assessment of perception of German brands amongst urban citizens
• Strengths & weaknesses of German brands and strategic implications
Method/ Timing1:
• Inclusion of DAX, MDAX companies and other major German brands
• Computer-assisted telephone interviews: n ≈ 1,000 per country
• Field work conducted: 2011
Over 4,000 interviews in 20 of the most important BRIC
cities to analyze the perception of German brands
Survey approach – Objectives and scope
Source: globeone
¹ Representative survey of urban population based on field research conducted by certified market research agencies in each country.
German brands

7. 7
Cities:
Objectives:
• Identification of Country-of-Origin Image (COO-Image) relevance in China
• Assessment of the perception of German brands
• Analysis of China-specific strengths, weaknesses and opportunities
Method/ Timing1:
• Inclusion of DAX, MDAX companies and other major German brands
• Computer-assisted telephone interviews: n = 1,010 for China
• Selection of cities to achieve a good representation of urban China
Over 1,000 interviews in the 5 key cities in China to
analyze the perception of German brands
Survey approach – Objectives and scope
Source: globeone
¹ Representative survey based on research conducted by certified market research agency in China. The city sample was selected in order to achieve a good
representation of Chinese regions
German brands
Shanghai
Beijing
Chengdu
Guangzhou
Wuhan

8. 8
COO – Definition
Survey approach – Country-of-origin definition
Source: globeone
“Country of origin is defined as the country where corporate
headquarters of the company marketing the product or brand
are located. This does not require local manufacturing.” 2
“Consumers and customers associate positive or negative
attributes with a company, product or brand if they know it
originates from a certain country.“ 3
“Country-of-origin effect is one of the most analyzed phenomena
in consumer behavior in international markets.“ 1
Sources: 1) Amine et al. (2005): Executive Insights: Exploring the Practical Effects of Country of Origin; 2) Daniels, J.D./ Radebaugh, L.H., (2002): International Business ;
3) White, P.D./ Cundiff, E.W. (1978): Assessing the quality of industrial products
Country-of-origin as key factor for purchase decisions in
China
COO – High interest
eST

9. 9
Survey approach – Country-of-origin in China
Source: globeone
COO-Image – Important success factor in China
Upper middle class consumers in China are particularly sensitive
related to the COO-Image resulting from
• Local consumers’ demand for prestigious brands to highlight
their social progress
• Lower availability and higher novelty of foreign brands is also
boosting their image
• Limited trust: Lower Level of quality and marketing
competence of local brands in most emerging markets
China-specific relevance of a positive COO-Image
A positive COO-Image can:
• Increase perceived quality and prestige of a brand
• Promote consumers’ purchase intentions in favor of a brand
-> Potential for increasing brand performance dependent on
industry and product category
General relevance of a positive COO-Image– Perception of a brands’ corresponding
country of origin –
!

10. 10
• About globeone
• Survey Approach
• Germany’s Image in China
• Leading German Brands in China
• Insights into Information Channels in China
• Marketing and Communication Strategies for China
• Contact
Agenda

11. 11
47% associate positive
image
• Roughly half of
respondents have
a positive attitude
towards German
brands
• Only a very small
fraction (6%) that
dislikes German
brands
• Opportunity for an
effective
positioning
utilizing the
country-of-origin
potential
German image as asset – Half of urban population in
China confirms positive image of German brands
Germany’s image in China – General attitude towards German brands
Q.: Do you like German brands, products or services?
– General attitude towards German brands in China –
Source: globeone
!
Sample size in China: 1,010
1%
5%
47%
38%
9%
0%
10%
20%
30%
40%
50%
I do not like
German brands
at all
I do not really
like German
brands
I do not have a
preference
I like German
brands
I like German
brands very
much

12. 12 Source: globeone
Germany’s image in China – Income-class-specific attitude towards German brands in China
German brands enjoy substantially higher reputation in
middle class/ upper middle class
I do not like
German
brands at all
I do not really
like German
brands
I do not have
a preference
I like German
brands
I like German
brands very
much
Q.: Do you like German brands, products or services?
– Liking of German brands across social classes (according to gross monthly income in €) –
– Middle class –
(> 2,000)
2%
41%
34%
7%
16%
– Upper middle class –
(> 4,000)
0%
11%
44%
11%
33%
– Emerging middle class –
(< 900)
2%
38%
47%
5%
8%
46% associate
positive image
77% associate
positive image
57% associate
positive image

13. 13
Germany’s image in China – Detailed perception of brand and product attributes (1/2)
1
2
3
4
5
6
7
0% 20% 40% 60%
Germany most strongly associated with traditional values
like quality and reliability
– Perception of brand and product attributes of brands from different countries in China
based on respective countries –
Excellent quality
Good reliability
High durability
High performance
Outstanding design
High prestige
Sophisticated
Q.: We are interested in the important brand & product characteristics e.g. design, quality etc. Which countries are most strongly associated with these characteristics?
Germany
US
Japan
China
Source: globeone
Sample size in China: 1,010

14. 14
German brands are not seen as very innovative or exciting
but score high in terms of being trustworthy
1
2
3
4
5
6
7
8
0% 20% 40% 60%
Innovative & high-tech
Fashionable & exciting
Close to local customer needs
Good after-sales service
Good value for money
Trustworthy
Good corporate citizenship
Protecting environment & climate
Germany’s image in China – Detailed perception of brand and product attributes (2/2)
Source: globeone
Germany
US
Japan
China
Sample size in China: 1,010
Q.: We are interested in the important brand & product characteristics e.g. design, quality etc. Which countries are most strongly associated with these characteristics?
– Perception of brand and product attributes of brands from different countries in China
based on respective countries –

15. 15 Source: globeone
26%
31%
39% 40%
46%
0%
10%
20%
30%
40%
50%
France China US Japan Germany
German brands enjoy the best reputation in China based
on 15 relevant performance indicators
Germany’s image in China – Country image strength index
– Country-of-origin image strength index –
(average scores of 15 relevant dimensions)
Sample size in China: 1,010

16. 16 Source: globeone
• German brands
are mostly
perceived as
relatively
expensive
reflecting their
focus on the
premium
segments
• Large potential to
target emerging
middle class with
more locally
adjusted product
portfolio
consisting of less
expensive German
brands/ products
1%
3%
40%
50%
6%
Very cheap Relatively cheap Similar to other
countries' brands
Relatively expensive Very expensive
Sample size in China: 1,010
– Price perception of German brands in China –
Q.: What do you think about German brands in terms of price?
Very cheap
Relatively
cheap
Very
expensive
Relatively
expensive
Similar to other
countries` brands
56% of interviewees in China perceive German brands as
relatively or very expensive
Germany’s image in China – Price perception

17. 17 Source: globeone
– Industries/ categories most commonly associated with Germany –
Sample size in China: 1,010
13%
16%
16%
16%
17%
30%
42%
47%
57%
78%
0% 20% 40% 60% 80% 100%
Eco friendly technology
Detergent
Food
Clothing / Fashion
Services (insurance etc)
Cosmetics / Perfume
Pharmaceuticals / Medicine
Home appliances
Football
Machinery
Automobile / Motorcycles
• Traditional
industries like
automotive and
machinery lead
the ranking
• Eco-friendly
technology not
yet strongly
associated with
Germany yet
• German brands
less likely to be
associated with
consumer goods
and services
Q.: What categories do you think German brands are famous for?
11%
Germany most famous for cars, machinery, home
appliances and pharmaceuticals
Germany’s image in China – Categories with highest association

18. 18
8%
8%
10%
11%
11%
18%
20%
31%
35%
38%
39%
43%
0% 10% 20% 30% 40%
Zwilling
Puma
Nivea
Bayer
Porsche
Adidas
Metro Cash & Carry
Audi
Volkswagen
Siemens
Mercedes-Benz
BMW
– Unaided awareness for German brands in China (top 12) –
Q.: Which German brands do you know ? Please name as many as come to your mind spontaneously.
0%
20%
40%
60%
80%
100%
Can recall a
German brand
Can't recall a
German brand
Vast majority of interviewed Chinese population is
consciously aware of multiple German brands
Source: globeone
85%
15%
Germany’s image in China – Unaided awareness
Sample size in China: 1,010

19. 19
• About globeone
• Survey Approach
• Germany’s Image in China
• Leading German Brands in China
• Insights into Information Channels in China
• Marketing and Communication Strategies for China
• Contact
Agenda

20. 20
• German car
manufacturers
lead the top 12
ranking
• BMW (98%) is
best-known
German brand
followed by Audi
(97%)
• Siemens (95%) is
only non-
automotive brand
among top 5
• Nivea (65%) is only
FMCG brand in top
12
– Aided awareness in China (top 12) –
Q.: I will read you a list of German brands. Please tell me, which brands do you know?
0% 20% 40% 60% 80% 100%
BMW
Audi
Mercedes-Benz
Siemens
Volkswagen
Adidas
Porsche
Puma
Nivea
Metro Cash & Carry
Skoda
Bayer
98%
97%
97%
95%
93%
85%
82%
73%
65%
65%
53%
52%
(991)
(979)
(977)
(959)
(941)
(862)
(832)
(737)
(657)
(656)
(536)
(530)
Source: globeone
Leading German brands – Aided awareness (1/3)
Top 12 – Car manufacturers lead best-known German
brands with BMW as single most known brand
Sample size in China: 1,010

21. 21
• Deutsche Bank
(35%) is leading
financial service
brand in ranking
followed by Allianz
(27%)
• smart (17%) with
significantly lower
awareness than
other German car
brands, while MINI
commands much
higher awareness
(42%)
Q.: I will read you a list of German brands. Please tell me, which brands do you know?
0% 20% 40% 60% 80% 100%
52%Braun
Miele
smart
MAN
Carl Zeiss
Hugo Boss
Lufthansa
Allianz
Deutsche Telekom
Leica
Continental
Becks
Deutsche Bank
Henkel
Bosch
Osram
MINI 42%
41%
38%
37%
35%
32%
29%
28%
28%
27%
26%
23%
23%
19%
18%
16%
(527)
(428)
(410)
(379)
(369)
(356)
(327)
(297)
(287)
(280)
(269)
(258)
(230)
(230)
(195)
(177)
(161)
– Aided awareness in China (rank 13 to 30) –
Source: globeone
Rank 13 - 30 – Deutsche Bank and Allianz as most prominent
financial service brands
Leading German brands – Aided awareness (2/3)
33%Zwilling (336)
Sample size in China: 1,010

22. 22
7%
7%
7%
10%
– Aided awareness in China (rank 31 to 45) – • Media Markt
(13%) opened its
first Chinese store
in 2010, however,
its awareness is
higher than Dr.
Oetker (11%) and
Paulaner (11%)
• ERGO (8%) is least
known service
brand in ranking
• Worldwide
industry leader
ThyssenKrupp (7%)
and SAP (7%) last
the ranking
Q.: I will read you a list of German brands. Please tell me, which brands do you know?
0% 20% 40% 60% 80% 100%
16%Hansgrohe
Haribo
Bertelsmann
Boehringer-Ingelheim
Media Markt
Dr. Oetker
Paulaner
DHL
LANXESS
BASF
ERGO
Grundig
Linde
SAP
ThyssenKrupp
15%
15%
13%
13%
12%
11%
11%
11%
9%
8%
(157)
(156)
(147)
(134)
(127)
(119)
(115)
(115)
(107)
(106)
(90)
(73)
(73)
(71)
(76)
Source: globeone
Leading German brands – Aided awareness (3/3)
Rank 31 - 45 – B-to-B brands overall with lower brand
awareness among urban citizens
Sample size in China: 1,010

23. 23
• German top 12
brands are liked by
71% or more of
respondents
• Automotive brands
lead ranking with
BMW and
Mercedes-Benz
(both 88%) as best
liked brands in China
• Siemens (79%) is the
only non-
automotive brand
among top 5
• Metro Cash & Carry
(74%) as only B-to-B
brand among top 12
Leading German brands – Positive image (1/3)
Q.: Do you like this brand in general? (Only brands known to interviewee)
– Positive attitude towards German brands in China (top 12) –
Source: globeone
Top 12 – Automotive industry leads ranking with BMW and
Mercedes-Benz (both 88%) as best liked German brands
0% 20% 40% 60% 80% 100%
BMW
Mercedes-Benz
Audi
Porsche
Siemens
Adidas
Metro Cash & Carry
Volkswagen
Zwilling
Carl Zeiss
Braun
88%
88%
87%
87%
79%
79%
74%
73%
72%
72%
71%
(991)
(977)
(979)
(832)
(862)
(959)
(656)
(941)
(336)
(230)
(527)
71%MINI (428)
Sample size in China: 1,010

24. 24
Leading German brands – Positive image (2/3)
Q.: Do you like this brand in general? (Only brands known to interviewee)
Rank 13 - 30 – Bayer leads ranking as best liked German
pharmaceutical brand in China
– Positive attitude towards German brands in China (rank 13 to 30) –
Source: globeone
• Bayer (69%) leads
the brand image in
pharmaceutical
sector
• Beer brand Becks
(61%) enjoys
greater popularity
than Paulaner
(56%)
• FMCG brands Nivea
and Haribo liked by
more than 63% of
interviewees
0% 20% 40% 60% 80% 100%
Leica 70% (287)
Bayer 69% (530)
Osram 69% (410)
Bosch 68% (379)
Nivea 67% (657)
Puma 66% (737)
Hugo Boss 65% (230)
Haribo 63% (156)
Lufthansa 62% (258)
Becks 61% (327)
Hansgrohe 61% (157)
Boehringer-Ingelheim 61% (134)
smart 60% (177)
Henkel 57% (369)
Grundig 57% (76)
Dr. Oetker 56% (119)
Paulaner 56% (115)
AEG 57% (67)
Sample size in China: 1,010

25. 25
Leading German brands – Positive image (3/3)
Q.: Do you like this brand in general? (Only brands known to interviewee)
Rank 31 - 45 – ERGO and Deutsche Telekom enjoy relatively
low positive attitude
• DAX 30 aspirant
Continental leads
lower third with
55% of ranking
• Financial service
providers like ERGO,
Deutsche Bank and
Allianz with
relatively low
positive image
(maximum 47%)
• Service provider
SAP with relatively
low positive
recognition
0% 20% 40% 60% 80% 100%
53%DHL (115)
52%Skoda (536)
ThyssenKrupp 52% (71)
Miele 50% (161)
MAN 49% (195)
Media Markt 46% (127)
BASF 46% (106)
Deutsche Bank 45% (356)
Linde 45% (73)
Bertelsmann 40% (147)
ERGO 40% (90)
Deutsche Telekom 39% (280)
Allianz 47% (269)
– Positive attitude towards German brands in China (rank 31 to 45) –
Source: globeone
55%Continental (297)
Sample size in China: 1,010
SAP 37% (27)

26. 26
Leading German brands – Recognition of German brand origin (1/3)
Q.: Do you think this brand is originally from Germany or not? (Only brands known to interviewee)
Source: globeone
• Deutsche Telekom
and Deutsche Bank
lead ranking due to
“Deutsche” in brand
name
• None of leading car
manufacturers
among top 7
• MAN (77%) with its
Chinese translation
“German MAN”
claim scores highest
recognition of
German origin
among mobility
brands
• German origin of
niche player Zwilling
scores by 80%
Top 12 – High recognition of “German origin” for top 12
brands
94%
93%
89%
84%
80%
77%
77%
77%
75%
75%
75%
75%
Deutsche Telekom
0% 20% 40% 60% 80% 100%
Deutsche Bank
Continental
Boehringer-Ingelheim
Zwilling
Siemens
Metro Cash & Carry
MAN
Mercedes-Benz
Bayer
Lufthansa
ThyssenKrupp
(280)
(356)
(297)
(134)
(336)
(959)
(656)
(195)
(977)
(530)
(258)
(71)
– Recognition of “German brand origin” (top 12) –
Sample size in China: 1,010

27. 27
Leading German brands – Recognition of German brand origin (2/3)
• Car brands with
relatively high
recognition of
“German origin”
• Volkswagen using
its “Das Auto” claim
scores 69%
• Grundig, now
owned by Turkish
Koç Holding, still
perceived as a
traditional German
brand (63%)
Source: globeone
Rank 13 - 30 – German car brands like Volkswagen with
relatively high recognition of German origin
74%
73%
70%
70%
69%
67%
65%
65%
64%
64%
63%
63%
61%
59%
56%
55%
55%
54%
BMW
0% 20% 40% 60% 80% 100%
Braun
Audi
Bosch
Volkswagen
Osram
Henkel
Becks
Leica
Carl Zeiss
Grundig
Linde
Haribo
Hansgrohe
BASF
Allianz
Adidas
(991)
(527)
(979)
(379)
(941)
(410)
(369)
(327)
(287)
(230)
(76)
(73)
(156)
(157)
(106)
(269)
(862)
– Recognition of “German origin“ of German brands (rank 13 to 30) –
Q.: Do you think this brand is originally from Germany or not? (Only brands known to interviewee)
Sample size in China: 1,010
MINI (428)

28. 28
Leading German brands – Recognition of German brand origin (3/3)
Q.: Do you think this brand is originally from Germany or not? (Only brands known to interviewee)
Source: globeone
• Volkswagen’s Skoda
(33%) and
Mercedes-Benz’s
smart (51%) with
relatively low
recognition of its
“German origin” in
automotive sector
• Nivea has the least
German recognition
among FCMG
brands
• Hugo Boss (51%)
and Puma (43%)
both have relatively
low recognition of
“German origin”
Rank 31 - 45 – Skoda with lowest “German origin”
recognition despite its German mother company
53%
LANXESS 52%
51%
51%
50%
49%
49%
48%
47%
43%
40%
39%
39%
37%
33%
0% 20% 40% 60% 80% 100%
smart
Hugo Boss
Dr. Oetker
Bertelsmann
Paulaner
ERGO
Puma
Nivea
Miele
AEG
DHL
Media Markt
Skoda
(107)
(230)
(177)
(147)
(119)
(90)
(115)
(657)
(737)
(67)
(161)
(127)
(115)
(536)
– Recognition of “German origin“ of German brands (rank 31 to 45) –
Sample size in China: 1,010
Porsche (832)

29. 29
• Top 12 mainly
consists of brands
from B-to-C sector
led by Adidas
(56%) and Siemens
(48%)
• Volkswagen (15%)
as most
purchased/ used
German
automotive brand
• Adidas’ competitor
Puma only
bought/ used by
28% of the
interviewees, 28%
lower than Adidas
Leading German brands – Purchase/ usage (1/2)
Q.: Which German brands have you bought or which services have you used? (Only brands known to interviewee)
– Purchase/ use of German brands in China (top 12) –
Source: globeone
56%
48%
39%
37%
28%
18%
19%
Adidas
0% 20% 40% 60% 80% 100%
Siemens
Metro Cash & Carry
Nivea
Puma
Braun
Bayer
Zwilling
Osram
Henkel
Becks
(565)
(485)
(390)
(371)
(282)
(190)
(179)
(125)
(111)
(131)
(97)
Top 12 – Leading brands with high purchase/ usage rate
with Adidas at top spot
Sample size in China: 1,010
12%
11%
11%
10%
Volkswagen 15% (148)

30. 30
Leading German brands – Purchase/ usage (2/2)
– Purchase/ use of German brands in China (rank 13 to 30) –
Source: globeone
• Audi (7%) as
second most
purchased/ used
German
automotive brand
and first most
purchased/ used
German premium
car brand ranked
14th
Rank 13 - 30 – Audi as most purchased/ used German
premium automotive brand
Audi
0% 20% 40% 60% 80% 100%
Leica
Carl Zeiss
Mercedes-Benz
BMW
Lufthansa
Skoda
Haribo
Bertelsmann
Continental
Allianz
Miele
Hansgrohe
DHL
Porsche
(68)
(22)
(73)
(69)
(47)
(45)
(37)
(34)
(27)
(33)
(16)
(21)
(20)
(33)
(14)
(10)MINI
Q.: Which German brands have you bought or which services have you used? (Only brands known to interviewee)
Sample size in China: 1,010
7%
7%
7%
Bosch (101)10%
5%
4%
6%Hugo Boss (65)
4%
3%
3%
3%
2%
2%
2%
2%
2%
1%
1%

31. 31
• About globeone
• Survey Approach
• Germany’s Image in China
• Leading German Brands in China
• Insights into Information Channels in China
• Marketing and Communication Strategies for China
• Contact
Agenda

32. 32
Internet is the most used source to learn about foreign
brands in China
Sample size in China: 1,010 1 Category Internet includes Internet search engines, social media and corporate website research
Q10.How do you generally find out/ learn more about foreign brands?
– Sources of information to find out/ learn more about foreign brands –
Insights into information channels – Key sources (1/2)
Source: globeone
0% 10% 20% 30%
Family/ friends
Internet1
TV
Shopping center/ store
Newspaper/ magazines
Radio
34%
17%
12%
11%
7%
3%
16%
Event/ tradeshow

33. 33
Within digital communication, internet search engines,
social media and corporate websites are most relevant
Q10.How do you generally find out/ learn more about foreign brands?
– Sources of information to find out/ learn more about foreign brands –
Insights into information channels – Key sources (2/2)
Source: globeone
0% 10% 20% 30%
Internet search engines
TV
Family/ friends
Shopping center/ store
Social media
Event/ tradeshow
Radio
16%
12%
11%
7%
5%
17%
Newspaper/ magazines
Corporate website
17%
12%
3%
Sample size in China: 1,010

34. 34
• About globeone
• Survey Approach
• Germany’s Image in China
• Leading German Brands in China
• Insights into Information Channels in China
• Marketing and Communication Strategies for China
• Contact
Agenda

35. 35
Further improving China performance through effective
strategies
Strategies for China – Leveraging maximum brand potential to grow sales
• Success in China requires dedicated action and a clear
strategic roadmap
Strategic implications for corporations:
Source: globeone
• 1:1 transfer of ‘developed market’ strategies rarely
successful
• Almost continental complexity of China as key challenge for
annual strategy development and alignment of country
organizations
• Fact-based adjustments regarding strategic focus, relevant
target groups and brand strategy necessary
• Different levels of brand performance require a
differentiated approach and COO - strategy
- China brand performance analysis -

36. 36
Selected communication challenges China
Strategies for China – Leveraging maximum brand potential to grow sales (1/2)
Corporation with
low brand
awareness and
thus low general
brand
performance in
all major
dimensions in
China
- Key challenges -
• Lack of fact-based ‘one-world-strategy’ for China
• Local organizational setup not sufficient
• Inability to bridge gap between HQ and country team
• Unclear definition of market-driven strategy and
local target groups and needs
• Ineffective activation strategy & media investment to
communicate above ‘perception threshold’
• Ineffective utilization of media vehicles / insufficient
media investment
25%
50%
75%
100%
0%
Corporation
with high
awareness but
weak image as
compared to
industry
benchmarks25%
50%
75%
100%
0%
Awareness Image Recognition Purchase Loyalty
Awareness Image Recognition Purchase Loyalty
- Key challenges -
• Under-utilization of local customer insights and thus
no quick wins
• Absence of a relevant positioning adjusted to local
target group expectation (e.g. prestige appeal)
• Low differentiation to key competitors/ local hero
brands in China
• Lack of creative execution and effective media
strategy
• Shortcomings in locally relevant story-telling
- China brand performance -
Source: globeone
Awareness challenge1
- China brand performance -
Image challenge2

37. 37
German origin and activation challenge
Strategies for China – Leveraging maximum brand potential to grow sales (2/2)
Source: globeone
German roots of
the brand not
properly
recognized
- Key challenges -
• Missing link to German origin of a brand
• Advertising, PR, event or online activities lacking
proactive communication of German brand heritage
and thus no realization of additional image and price
premium potentials
• Lack of story telling related to the brand history
although brand history is one of few competitive
advantages that cannot be easily imitated
• Absence of educational approach
Brand enjoys
good reputation
but purchase
behavior and
loyalty remain
below industry
benchmarks
Awareness Recognition Purchase Loyalty
- Key challenges -
• Lack of a strategy to appeal to middle income groups
as well (e.g. creating low-cost brands for more price
sensitive target customers)
• Limited local distribution points
• Lack of implementing sequential expansion
strategies in line with regional development
• Under-utilization of global CRM basics and related
systems in the local market
• Lack of effective activation at POS & in social media
German origin challenge3
Activation & loyalty challenge4
- China brand performance -
Image
25%
50%
75%
100%
0%
25%
50%
75%
100%
0%
Awareness Recognition Purchase LoyaltyImage
- China brand performance -

38. 38
• About globeone
• Survey Approach
• Germany’s Image in China
• Leading German Brands in China
• Insights into Information Channels in China
• Marketing and Communication Strategies for China
• Contact
Agenda

39. 39
Global offices
globeone
Cologne Head Office
Kranhaus Süd
Im Zollhafen 24
50678 Köln
Germany
Shanghai Office
16F Feidiao Internat. Building
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200030 Shanghai
People's Republic of China
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Andheri (East)
Mumbai 400072
India
São Paulo Office Singapore OfficeBeijing Office
Office 39, Room 509A
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P.R. China
Av. Cidade Jardim, 400
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Brazil
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Singapore
Email:
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Phone +91 (0) 22 6770 3718
(ext. 11)
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Email:
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Phone +65 6808 6050
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Email:
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Phone: +86 (0)10 6593 5451
Phone +86 135 0129 8737
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Email:
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Phone +49 (0) 221 788068-0
Fax +49 (0) 221 788068-29
www.globe-one.com
39
Contact

40. Cologne I Shanghai I Beijing I Mumbai I São Paulo I Singapore
Thank you!

41. 41
Factors that drive the need for local adjustment
Different
macroeconomics
and political
environment
Different ways to
conduct business
Different key
competitors
Different
regional/city
structures
Different cultural
background and
expectation
Different
experience levels
Different languages
Different
perceptions of
brands and country
image
Different habits
and media
behavior
Different ways to
display social
status
Different needs and expectations
/ brand drivers in key target
groups
Need for sufficient adjustment as
far as required to ensure
business success

42. 42
- Relevant impact factors in China (selection) -
A successful approach to branding recognizes these
cultural specifics of transitioned
Economy in transition Regional disparitiesCultural differences
• Cultural differences are relevant for
fashion-makers as well
• Strong tensions that arise from
increasing levels of individualism in a
traditionally very collectivist society (e.g.
family acceptance, personal relations)
• Specific communication habits (e.g.
preference for personal communication
and relationship building, importance of
word-of-mouth and recommendations)
• Socialist heritage (e.g. clear rejection of
uniform offers, strong wish not to be
treated as 2nd class customer)
• The quick transition of the Chinese
economy influences purchasing patterns
• Buying as symbolic consumption (e.g. as
manifestation of the own social status
and cosmopolitan sophistication)
• High prestige value of foreign brands
• Intensive wish to “catch up” with
customers in other countries (global
village idea)
• Low level of brand loyalty and high
readiness to try new concepts
• Social heterogeneity of target groups
and broadly varying economic and social
backgrounds
• Increasing need to reflect regional
differences in a pragmatic way
• Tremendous regional differences with
regard to various marketing-relevant
parameters
 Income and price sensitivity
 Specific customer needs
 Purchase behavior
 Preferences
• Many companies apply a pragmatic city-
tier approach that differentiates
between 2-3 regional segments

43. 43
Some common factors in BRIC markets 1/2
• Higher heterogeneity and complexity to be considered
• Need to work with city tiers and regional clusters
• Sequential entry approaches ( it’s all about timing)
• Local relationships required
Huge geographical
size: The BRICS are
more continents
than countries
• Importance of proper market segmentation
• Understanding key brand drivers (e.g. status appeal, convenience, …)
• Different relevance of foreign brands
• Quick changes of segments and correct selection of growing segments
• High media cost (e.g. Shanghai as expensive as New York)
• Usual trap of communicating below the necessary level for perception
• Importance of clear and straight format positioning
• Importance of cut-through creative execution and PR
• Need for local competitor analysis / best practices
• Need for differentiated and relevant positioning + USP
• Understanding of ‘category killers’ required
• Need to maintain good relationship with local authorities / government
- Factors - - Implications / Selections -
Local champion
brands and
competitive
pressure
1
2
3
4
Fast transition of
economy: Emerging
middle class
changes behaviors
quite quickly
High competition
for share of voice

44. 44
Some common factors in BRIC markets 2/2
• Adjustment of specific marketing-mix parameters required
• ‘Educational’ marketing approaches ( e.g. brand academy)
• Storytelling and brand heritage is key to develop price premium
• Systematic lead generation and loyalty building required
• Awareness about local price sensitives and competitor prices
• Understanding ‘added value’ of the foreign brand correctly
• Consideration of brand stretching or creation of ‘value brand’
• Fact-based pricing and cost management
• Impact on global pricing scheme / brand architecture likely
• Extremely high importance of digital COM channels
• High overlap between higher incomes and digital access
• Higher activation through E-CRM
• The internet is mobile !
- Factors -
Generally lower
experience and
brand knowledge in
many product
categories and
lower levels of
brand loyalty
5
7
Higher digital and
mobile media
affinity
Pressure on prices /
higher price
sensitivity
6
- Implications / Selections -

45. 45
Importance of a strong and locally adjusted brand
Differentiation from other competitor brandsHigh competition for
share of voice
Downward pressure on
prices in many
categories
Cultural specific factors
Brand as an important
decision-criterion after
price for high-income
target groups

High share of customers
who have not yet chosen
a favorite brand
Building of long lasting brand preferences

Emotional benefit and appeal of foreign brands /
concepts if adjusted properly 
Strong impact on sales and leads

Generation of price premiums

Marketimpactfactors

46. 46
Local adjustment is not localization !
• Reducing the foreign appeal or even
pretending to be a local brand
• Fully embracing the local culture, and
local tastes
• Playing in the same field with local
heroes
• Limiting negative influences if
consumers’ patriotism or government
intervention is high
• High relevance for local target groups
• Utilizing local brand drivers
• Highlighting status appeal and
sophistication of the foreign brand
• Highlighting the Country-of-Origin (if
appropriate) to differentiate and create
price premium
• Avoiding inappropriate messages /
acceptance barriers
• Using locally effective and cost-efficient
marketing mix
Brand adjustment Localization
Optimizing performance, not becoming a
local brand !
Becoming a local brand
(can be functional in some extreme cases)


47. 47
Successful corporations recognize the need for careful
brand adjustment
• Launch of Crest toothpaste with jasmine
flavor. Chinese consider jasmine as a
universal remedy for bad breath.
• Packaging and shelf space differ according to
premium or middle brand in order to avoid
confusion and cannibalization.
• Development of a differentiated pricing
system with the aim to compete better with
local cheap brands as well as simultaneously
maintain the perceived value of the brand.
• The waiving of their famous “do it yourself”
approach in China. But instead offering of
assembly service at home for a low fee.
• Selection of store locations in the cty centers
and an offer of special delivery services.
• The name in Chinese “Yi Jia” means:
comfortable home for the family.
• Nokia was one of the most expensive mobile
phone brands until 2002.
• In order to approach and younger generation
and grow in the middle market Nokia
developed a new low-price range for below
1,000 RMB ($120).
• Simultaneously Nokia ensures to strengthen
the positioning as a premium-brand. For
example the Nokia 8800 was offered at a
price of 8,800 RMB (€ 880).
• Traditional offers such as sandwiches with
Beijing duck, tomato-egg soup and bamboo
sprouts were integrated in the menu.
• A breakfast special was introduced (not
available in the USA).
• Chinese holiday decoration is extensively
used during bigger festivals (especially
during the Chinese new year).
• Home delivery service.

48. 48
The preference for foreign vs. local brands depends on a
set of key factors
Status relevance
• Illustrating buying power and prosperity is one of the key drivers for many
purchase decisions
• In transitional economies: Consumers generally use foreign brands as a tool
to display status
• Motivators for the use of foreign brands:
 Social Prestige – (I can afford)
 Display of “Cosmopolitan Sophistication”
 “Being part of the global village”
 Overcome the shortcomings of the past
• Key goal: To experience a better treatment by
social reference groups
Source:
Product category
Patriotic
orientations
Income level

49. 49
The decision for a local versus foreign brand is heavily
dependent on the product category
Status relevance
• The product category is a key factor to decide between a foreign and a
Chinese brand
• Some product categories are close to local culture (e.g. food, medicine,
liquor for festivals)
• Other categories are not strongly bound to culture (e.g. more innovative
categories like cars, electronics, sports equipment and most B2B markets)
Source: Various sources compiled by globeone . Literature upon request.
Product category
Patriotic
orientations
Income level

50. 50
Consumer patriotism is also important for the individual
to make a choice
Status relevance
• Preference for foreign versus local brands also depends on the degree of
consumer patriotism
• There are certain segments in Chinese society that are more patriotic than
others (e.g. „traditional party elites“, lower income consumers, elderly)
• Chinese pragmatism: Even among patriotic consumers there usually is no
strict rejection of foreign brands or even Japanese brands
Source: Various sources compiled by globeone. Literature upon request.
.
Product category
Patriotic
orientations
Income level

51. 51
A higher income level is a precondition to a frequent
purchase of foreign brands
Status relevance
• The preference for a certain brand is highly dependent on the
target group’s:
 Income level
 Ability to afford foreign brands
• Having reached a certain degree of prosperity, the urban Chinese
consumers show a relatively high preference for foreign brands
across many categories
• The rapid growth of the Chinese middle class (“little rich”) is likely
to have a positive impact on the purchase of foreign brands
Source: Various sources compiled by globeone. Literature upon request.
.
Product category
Patriotic
orientations
Income level

52. 52
The emergence of the middle class: Consumption
behavior and brand choice is in constant flux
Source: : National Bureau of Statistics of China; Farrell, D. et al. (2006).
Emerging of
lower middle
class segment Emerging of
upper middle
class segment
Upper Middle Class (40.001 – 100.000 RMB)
Lower Middle Class (25.001 – 40.000 RMB)
Poor (below 25.000 RMB)
Mass Affluent ( 100.001 – 200.000 RMB)
Affluent ( more than 200.000 RMB)
estimation

53. 53
Excursus: Different countries, different target groups
- Example: Financial services for relatively affluent customers -
Germany China
Most affluent group: 42-62 28-40
Characteristics of key
target group:
Conservative, serious, experienced
Young, prestige-driven, curious, playful, willing to try
new things
Loyalty: High Low, frequent switching
Key dimensions for
branding:
Reliability, trust, security, service Prestige, services, high yield performance, excitement
Typical market approach: Mailings, traditional newspaper ads
“Hello Kitty“ co-branded credit card,
aggressive field promotion teams

54. 54
There are three major positioning configurations
Source: : globeone
Status Level: High
Product: Not bound to culture
Patriotic Orientation: Low
Income Level: Affluent
Status Level: Medium
Product: Not closely related to
culture
Patriotic Orientation: Medium
Income Level: Mass Affluent/Middle Class
Status Level: Medium/Low
Product: Close to local culture
Patriotic Orientation: Medium/ High
Income Level: Middle Class/Mass Market
Global
Hybridized
Local
1
2
3
4
1
2
3
4
1
2
3
4

55. 55
Examples for elements that might require selective adjustments to
boost market performances
What is a brand?
‘ It is the consumers’ idea of a
product or service’
Memorable
Meaningful
Likable
Unique
Brand name
Price positioning
Packaging
Claim / Slogan
Logo, design and colors
Brand association, key
visuals
Symbolism
(e.g. cultural symbols)
Positioning and key
messages, target group
Country-of-Origin (COO)
Brand
name and
CI
Brand
Values
Other factors
(selection)

56. 56
Importance of marketing and communication excellence in BRIC:
Why bother?
Source: : globeone Shanghai
Corporate
performance
and
shareholder
value
Enhanced brand value* More sales growth
Generation of price premium through
proper strategy and positioning
Enhanced stock market performance
through aligned story-telling
* More market penetration = higher brand value
1 2
3 4

57. 57
- Example for a consumer market segmentation-
High importance of understanding the market structure
and dynamics
Source: globeone, market research partners
• Lifestyle and value orientation are
important influence factors of
preference and purchase decision
• Correct identification of the main
preference of target group based
on qualitative and quantitive
researches
• Find ways to bridge tradition and
modernity
• Example luxury car:
 Researches show high
relevance and complexity of
social status in China which is in
the transformation
!
!
!
2010 ( current) Possible segmentation 2013
(Illustration)
Brand
Essenc
e
50
%



CO
O
Brand drivers of the modern business elite
1. Distance to the old system
2. Social status
3. Demonstration of superiority
4. Outstanding security
5. Technology

58. 58
Local values and consumption motifs heavily impact
positioning and messaging
Source: : globeone
Confucianism
Collectivism/
Social responsibilities
National pride
Transformation into
market economy
Foreign influences and
modernization
High relevance of status and social
prestige (strong desire to show
personal success)
Wish to be recognized as a driving
force of China (“movers and shakers”)
and to cosmopolitan sophistication.
Desire to “explore the world” and to
experience exciting things
(be part of the “global village”)
Strong perceived importance of family
and children as well as pressure to
meet expectations of
parents/ancestors

59. 59
globeone’s BAM®- Methodology – Fact-based
adjustment of leading brands
- Analytical process of brand adjustment translates in an optimised brand positioning that is transferable
into precise marketing plans-
Source: : globeone
Basic VP concepts
according to local
key preferences
Fine tuning
and test of
final concepts
Analysis of key
competitors
regarding brand
status and
communication
Global brand
essence and
brand status
Processinput
VP routes adjusted to
global brand essence/-
status (Consistency,
Reliability)
VP routes with high
degree of
distinction
(Differentiation)
VP routes market
potential
(Relevance)
Preferred concepts, which
could be tested with focus
group (optimised
concepts)

60. BMW 7 Series.
Recent example of a brand campaign with focus on brand heritage
Slide 60 | March 2009 | BBDO Consulting Shanghai

61. BMW 7 Series.
Slide 61 | March 2009 | BBDO Consulting Shanghai
Recent example of a brand campaign with focus on brand heritage

62. BMW 7 Series.
Slide 62 | March 2009 | BBDO Consulting Shanghai
Recent example of a brand campaign with focus on brand heritage

63. BMW 7 Series.
Slide 63 | March 2009 | BBDO Consulting Shanghai
Recent example of a brand campaign with focus on brand heritage

64. BMW 7 Series.
Slide 64 | March 2009 | BBDO Consulting Shanghai
Recent example of a brand campaign with focus on brand heritage