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Gwyneth Roberts

Mainland companies will need to focus on their core advantages to swim against the tide of foreign competition in years ahead.

Pamela George, senior vice-president of corporate marketing at United States-based enterprise software firm Sybase, said: 'There is great value in local brand names. Companies in China right now really need to take a look at that and start getting passionate about how they differentiate themselves.

'[Then] they will be well insulated when some of the huge companies come to play in this marketplace.'

Under the rules of the mainland's accession to the World Trade Organisation, the insurance market has two years to open to foreign competition with liberalisation in retail banking taking place by 2007.

'Companies need to take the core attributes of their brand, such as dependability or integrity, and drive them down into all aspects of their business,' Ms George said.

'That is the overriding lesson for companies in China that are now facing enormous threats as the markets are opening up under the WTO.'

Working out a three and five-year plan was crucial to a company's development. A business that aimed to compete internationally or nationally would be run very differently from one aiming at a niche market in one part of the country.

'People need to be more thoughtful about what they want to be long term. You are never going to expand if people don't believe in who you are and what you are selling at the local level. And so, much of the brand has to do with word of mouth,' she said.

'Bigger is not necessarily better. They might offer you 100 different services at some particular bank. But who uses all those? Companies should be looking at why customers stay with them.'

Local banks with a satisfied clientele would not have too much to fear from a foreign behemoth handing out free toasters as a marketing gimmick to lure customers. At the same time, however, local firms needed flexible policies which would allow them to respond to competitive advances.

'Technology can really help you [keep an eye on the competition],' she said.

'China is in a wonderfully advantageous position right now because it can look at some of the mistakes [the US and Europe] have made. They can take the best practices, integrate what works, localise it and run with it.'

The dotcom days had been 'a very tragic waste of dollars' as companies, primarily in the US, took what were often good ideas but applied them without solid business practices in the scramble to compete. Companies in Asia could learn from those expensive mistakes, while at the same time benefitting from the evolution of digital marketing.

'Look at the first television advertisements. They were people standing in front of a microphone reading an ad. They were radio commercials done on TV. It took a while for advertisers to realise that they had a new medium and if they could show the experience of using their product, they could sell more.'

Similarly, online advertising had focused on banner adverts, mimicking traditional print media. When these early ads did not translate into sales, there was a sharp drop in spending.

'We have not even scratched the surface when it comes to digital marketing and the Internet,' she said.

One promising area was the effective use of search engines, with statistics showing people most often arrived at Web sites via a keyword search. Permission-based e-mails and the offering of online coupons were other tools with marketing potential.

In future, companies would be able to track the performance of their online adverts in real time and adjust the mix with television and print advertising if one medium did not perform as anticipated. Use of new technology would mean the ability to track marketing spending and use performance-based advertising with a strong focus on the bottom line.

With 17.5 per cent of the world's wireless telephones in China, Ms George believes online advertising and digital marketing offer great opportunities for companies to keep their edge. Online advertising spending in Asia is predicted to reach US$702 million by 2004, according to International Data Corp - and 50 per cent of that is expected to come from China.



Firm's best points key component to counter coming foreign assaults