More and more brands today are aspiring to become a “lifestyle brand”. Consumers are in the driver’s seat and are gravitating towards brands that embody the value, aspirations, interests and attitudes of groups and cultures. Therefore, brands should define success not only by how well they beat out traditional players in the industry, but also how to stay agile and competitive in the face of a consumer-centric, cross-industry, fast-evolving ecosystem.
Prophet and Alimama, Alibaba Group’s marketing technology platform, have joined force to unveil a new and evolved brand building model for China. META, which stands for Maintain, Evolve, Transform Approach, applies the core components of marketing but changes how these concepts are achieved. In this new digital ecosystem, we believe that brands need to evolve in order to remain on top in China.
With the emergence of digital ecosystems, the competition has become more diverse, the lines between sectors are getting increasingly blurred, and the touchpoints of a brand have become broader than ever. To fully understand the consumer’s needs and determine where value is truly being added, brands need to evolve from the traditional methods of target segmentation (which renders a limited amount of consumer personas) to more meaningful micro-segmentation. The driving force behind this is consumer data, which provides a means for brands to identify micro-targets within broader audiences and nurture potential brand advocates at an early stage.
“Digital gives more data in defining the target. The strategy used to be a brief, a strategy plan. But in digital, you have more specific specs – how do you tick the box? How do you make the choices with all the variables? This is marketers’ job today.” – Susan Ren, Data & Digital Development Senior Director, Unilever
Traditionally, consumer segmentation is done by first collecting data related to the consumer’s demographics, characteristics, behaviors, and attitudes, and then prioritizing the resulting segments according to their size and business value. When a market opportunity presents itself, brands can start their targeted brand building based on these identified segments. The data available in the digital age, however, allows brands to do much more. According to China National Bureau of Statics, in the first two months of 2019, total retail sales of consumer goods grew by 8.2% year-on-year to 6606.4 billion yuan (984.49 billion USD), of which 22.16% are from online retail sales and services, increasing 13.6% on a year-on-year base to 1398.28 billion RMB (208.38 billion USD). In terms of breadth, this widespread use of mobile commerce has brought brands more comprehensive and accurate snapshots of consumers at different stages of their purchasing journey: from knowledge, interest, purchases, to loyalty. In terms of depth, it is now possible to capture the full range of behavioral data throughout a consumer’s lifetime through tag-tracking and multi-dimensional data integration.
Micro-segmentation is based on the same broad characteristics of traditional market segmentation. But by utilizing data, it is able to subdivide targets into even finer segments, so as to tailor different promotions, communications and even products to make more personally relevant brand experiences.
But, as Prophet and Alimama’s META model points out, micro-segmentation must be done in a meaningful way. The method doesn’t derive value from the quantity of segments it identifies. Rather, brands must understand what these micro-segments stand for, and strike the right balance when it comes to the extent of micro-segmenting.
Expanding to The Customer Lifecycle
In the digital age, brands also need to take into consideration the role of influencers (even if they may not be within their target segment) in their business decisions and investments, shifting the focus from serving “impulse purchases” to attending to “the customer lifecycle”. The key in achieving that is to put continuous time and effort in nurturing relationships with the consumers—the purpose of brand building. Companies that lack a strong emotional connection with the consumers are likely to be ostracized or, even worse, become mere “production centers” with limited added value.
When Kindle launched its Youth Edition e-book reader earlier in March, the campaign slogan on its China official store was: “A Kindle cover makes your instant noodles taste better.” The inspiration came from a joke in which a user mocked how obsolete his Kindle became. Instead of using it to read books, he now uses it instead to cover and cook his instant noodles. The campaign was an instant hit and resonated strongly with the target audience. On Weibo, the campaign’s hashtag went viral and became the no.1 trending topic on the social media platform. While Kindle enjoyed success in terms of publicity, users on discussion forum Douban doubled down on the joke and became a trending topic on the platform. Users would tauntingly leave comments on the various book titles that corresponded well with different noodle flavors. The thread attracted a lot of users to share their own unique book and noodle combinations, extending the ongoing joke that three minutes you wait for the noodles to cook is ample time to read a book.
Instead of feeding the consumers with the message “It’s time to read”, Kindle’s campaign successfully captured the essence of “youth”, or the idea that you’re free to do whatever you want. This is a quality distinctive to Kindle’s target audience. Now, old users are taking their Kindles out from their dusty storage to read again, and potential customers are encouraged to buy a new Kindle due to the renewed hype and excitement surrounding the product and the brand.
Unlike the past, the digital age has brought about a change in the customer experience. Interactions with a brand no longer mean a combination of simple touchpoints, but a complex and multi-channeled presence. Therefore, brands also need to evolve from the traditional to the modern—from strategic planning based on a linear set of brand touchpoints to integrated planning based on multiple omnichannel and experiential presence; from isolated, random, dispersive content to accessible, deliberate, tailored content based on the target audience’s needs. Such a shift will help brands build strong emotional connections with consumers, and enable them to have a competitive edge over others in the market.
Whether it is the shift in market segmentation or the evolution of brand execution planning, they both require us to embrace technological advances. Only through embracing new tools and applications – such as big data, AI, connected products or consumer robots – are brands able to connect their product and services to consumers. But it is also important to remember that the foundation of micro-segmentation or execution planning is a brand’s fundamental truth – a clear brand positioning, precise brand messaging and tonality, as well as core competencies of its products and services.
Johnson & Johnson realized that although the rigidities of a fixed content plan can greatly impede the creative inspiration of the creative team, it was also the only way to ensure consistency over all of its communication collateral. To achieve the delicate balance of creativity and consistency, the company established the Global Content Lab, which aims to use best practices to guide internal brand teams to plan content and share ideas, rather than just setting up rules for content compliance. The digital age has opened up many new doors and opportunities for brands. To stay competitive in China’s consumer-centric, cross-industry and fast-evolving digital ecosystem, brands must maintain its positioning but also evolve to put their consumers’ needs above all else.
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About The META Model
Brand building in China is at a crossroads. The long-term equity-building playbook that once worked so well for Western companies is less effective now, as China’s increasingly tech savvy and bargain-hungry consumers navigate a digital ecosystem that’s unlike any other. And the approach many local companies have used–trying to quickly increase market share by focusing on speed to market, low prices and broad distribution, usually at the expense of branding—is also faltering. But there is a new way forward for brands in China. META, which stands for the Maintain, Evolve, Transform approach, is an evolved model for brand building that is adapted for the unique market forces in China.
To deepen its own expertise in brand building, Prophet conducted interviews with more than 40 marketing executives who are thoroughly immersed in the Chinese market. Then, in collaboration with Alimama, Alibaba Group’s marketing technology platform, Prophet developed the META model to help companies in China build both their business and brand equity. The model blends insight about what makes China unique and finds new ways to develop profitable and lasting customer relationships.
Alimama, a business within Alibaba Group, manages Alibaba Group’s core business data, aiming to build digital marketing platform designed for large-scale brand owners, agencies and small and medium-sized sellers. Alimama combined the functions of e-commerce and brand marketing and used Ali big data to achieve one-stop reach of digital media (PC terminal + Wireless terminal + Internet TV terminal), helping entire network clients achieve highly effective digital marketing.