Jwt China 1v6w30

JWT CHINA: ADVERTISING FOR THE NEW CHINESE CONSUMER

By Deba

CASE SUMMARY: • JWT (J. WALTER THOMPSON): HEADQUARTERED AT NEW YORK, ALSO RUNNING SUCCESSFULLY IN CHINA • OFFICES IN CHINA: •

SPECIFIC LOCATION: SHANGHAI, BEIJING, GUANGZHOU AND CHONGQING.

• PLANS FOR FURTHER, AND FASTER GROWTH THROUGH THE “TEAM JWT”SOLAR SYSTEM. • FURTHER IN-DEPTH ANALYSIS, RELATED TO THE FOLLOWING TOPICS HAS ALSO BEEN COVERED: •

1) ADVERTISING

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2) REGIONAL DISPARITIES

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3) CONSUMER CULTURE

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4) MEDIA LANDSCAPE

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5) ROLE OF OLYMPICS

KEY ISSUES To decide upon their expansion strategy Gaining specific insights on local Chinese consumer in of social, economic and cultural development. ( Brand positioning)

To work on its turnover rate which was much less then that of the industry turnover of 50%. Hiring and retaining talented junior people.

Local clients were primarily sales driven, which made it difficult to convince them to implement advertising strategy. Difficult to develop loyalty of local customers than their western counterparts.

Discrepancy in consumer spending and consumer behavior required different advertising strategy to be developed for each targeted segment. Tight state control on various advertising media.

QUESTION1-IT IS DISADVANTAGE TO BE A MNC ADVERTISING AGENCY IN CHINA Chinese culture is quite different. No way it matches the west. Hence, new team is required.

Short history of marketing in Chinese Economy

Laws are very strict.

Local Company dominancy.

No long term brand vision exist. They believe in quick returns, sales driven and price sensitive.

Consumer believe in protection and safe secure future ads

Very high sensitive towards Chinese culture and believe and its history

Still believe in old media

Problem with recruitment. English 6th level certification, college degree with creative mind is needed

JWT entered in1990, still could not succeed as it did in other counties. Its 50% revenue is generated in form of nontraditional services

ANALYSIS FOR JWT CHALLENGES Chinese hangover from socialist era, exercising too much control Political Less number of Chinese in top management positions in JWT Mandarin unknown to most foreigners. Mandarin was the ad language and also first language of many employees. Price-sensitive clients(only mid and large level companies opted for JWT) Mainly sales driven, short term focussed clients.

Economic 80% Chinese ad market controlled by local low cost players but JWT charges a . & Leadership China is growing very fast, what if growth bubble bursts and CAGR goes down, economic downturn sets in, How JWT will

manage

Brand building and creating sustainable brand Absence of creativity oriented Chinese education system so talent pool becomes difficult to categorise Outspokenness was not a quality in Chinese which was essential in advertising field

Social

Marketing was not conceptualised as integral to business because of socialist mindset Low level of loyalty among Chinese clients as compared to the West Divide of haves and have-nots, Income disparity(Gini coefficient increase) which made it difficult to target market with uniform ads Erratic Shift of consumers from socialism to individualism(difference between high social class consumers versus middle class ones) Traditional ad methods preferred by state owned enterprises which limited scope of advertising Online and mobile phone ads had potential but dependent on Infrastructure development for increased penetration

Technological Synergy among Team JWT(issues of nomenclature, sharing of financials). Advertising towards reinforcing public and political sentiments(teenager ads,Nike LeBron James ad)"instinct for boundaries”

Legal

Regulatory guidelines, sometimes vague guidelines like "social public order", "good social customs"

OUR ADVICE TO MR TOM DOCTOROFF • PROPERLY UNDERSTAND CHINESE CULTURE • CHINESE ARE VERY SOCIETY ORIENTED • VERY PATRIOTIC AND NATIONALISTIC

• DESPITE BECOMING MODERN AND EXPERIENCING AN INCREASE IN INCOME, CHINESE STILL DISCARD THE INDIVIDUALISTIC BEHAVIOR • CHINESE PEOPLE ARE VERY STATUS CONSCIOUS , SO INSTEAD OF PORTRAYING PRODUCTS AS HAVING VALUE , PORTRAY THEM AS BEING LUXURY ITEMS AND GIVE THEM A SENSE OF EXCLUSIVITY • PRODUCTS WHICH ARE FAMILY ORIENTED AND DISPLAY SOCIETAL AND FAMILY VALUES ARE MORE LIKELY TO SUCCEED IN CHINESE MARKET • STATUS IS THE ULTIMATE WEALTH FOR CHINESE CONSUMERS , SO PORTRAY YOUR PRODUCT AS A MEANS OF ENHANCING THEIR SOCIAL IMAGE

THANK YOU