"Effective Branding in Greater Bay Area Company Case Study Report" has been released in a media briefing held on 22 Jan 2022.
"Effective Branding in Greater Bay Area Company Case Study Report"
While the global economy, which has been plagued by the lingering COVID-19 epidemic, is gradually recovering, China has strode forward by a year-on-year real GDP growth of 8.1% in 2021, far ahead of other major economies. The Guangdong-Hong Kong-Macao Greater Bay Area (GBA) continues to serve as the main driving force of the Mainland economy. The local economy in the region has regained its growth momentum, resulting in impressive increase in purchasing power and the unleashing of high demands for consumer goods and services.
In order to assist Hong Kong industries to ride on the growth of GBA, the Hong Kong Brand Development Council (the BDC) and the Chinese Manufacturers' Association of Hong Kong (the CMA) have joined hands in implementing a large-scale brand promotion and research project namely "Organising 'Hong Kong．IN．Brand Greater Bay' serial activities to promote Hong Kong brands' collective image" (Brand Greater Bay Project), under the sponsorship of the Trade and Industrial Organisation Support Fund of Trade and Industry Department, HKSAR Government. Through a series of brand image-building, promotion and consumer engagement activities supplemented by multi-location, multi-dimensional market research and business strategy profiling, the Project aims to provide a holistic platform to support Hong Kong companies aspiring to "deep plow" the domestic market, especially helping them to keep abreast of the rapidly-changing consumption culture in the Greater Bay Area.
As a major deliverable of the Project, the BDC and the CMA commissioned a professional research team to conduct case study analysis on several Hong Kong and Guangdong brands with substantial operation in the GBA, in an attempt to analyse and document their real-life experience in developing domestic sales and building brands in the regional market. By placing emphasis on the overview of the current market environment, trends of technological development, as well as business models and promotion strategies of interviewed companies, this study has made particular efforts to establish role models and conceptualise their success factors as well as practical know-how pertinent to Greater Bay Area; and insightful suggestions have been put forward for Hong Kong companies' reference, which particularly shed light on the effective strategies to enter the market and promote brands in the GBA.
The present study is qualitative in nature. The research team adopted a case study approach to analysing brand management experience of six brands, four from Hong Kong and two from Guangdong province, including:
- "Bonjour", cosmetics retailer brand (Bonjour Holdings Ltd)
- "Lexington", daily supplies brand (Lexington Ltd)
- "Blesscuit", biscuit brand (Blesscuit Ltd)
- "百果園", fruit market brand (Shenzhen Pagoda Industrial Group Corporation Ltd)
- "SAGA", watch brand (Dailywin Watch Co Ltd)
- "Urban Revivo", fashion brand (UR Ltd)
Bonjour is a mature brand. Its experience illustrates how to cope with unexpected challenges created by disruptive changes in the retail sector and the outbreak of the epidemic. Instead of responding reactively, Bonjour has embraced a breakthrough vision and changed its modus operandi to turn the challenges to new business opportunities, which ensures sustainable growth of the Brand. Blesscuit is a small company that adopts a market niche strategy. Its brand-building experience in Guangzhou discloses the difficulties that SMEs commonly encountered. The story of SAGA alerts many OEMs the issues that they will encounter when deciding to develop their own brands and the need of changing the production-oriented mindset to a customer-oriented one.
The most important lesson we can learn from "Lexington" is the need of investing in organisational learning capability to update the firm's knowledge of China market. How to modify the brand's business model to access to the resources of local business partners and/or consultants is also of critical importance to successful promotion of a Hong Kong brand in Greater Bay Area.
Finally, the two brands from Guangdong "百果園" and "Urban Revivo" are rising stars and have been performing well in terms of both financial and marketing measures. Their experiences reveal how to ride on the new retail trend and use big data to restructure supply chain, explore emerging business opportunities, and design brand experience.
This Study has no intention to provide a granular understanding of the market and local consumers' buying behaviour based on the information given by these firms interviewed. However, the Research Team firmly believe the brand building and management experience of these six brands in Greater Bay Area can be benchmarked by Hong Kong based brands; in particular, the experience of how to capitalise the emerging changes in the Greater Bay Area to grow brands and business.
All in all, the strategic and management insights derived from the brand promotion and management experience of these brands can be summarised under three categories:
- Significant Changes in the Market Environment
- All participant companies agreed that the Greater Bay market was full of vicissitudes in the past few years. The market can be best described as dynamic, tumultuous, and promising. Major drivers of the market include advances in IT technology, increased use of big data for decision making and interactions with customers, changes in the landscape of e-commerce ecosystem, adoption of innovative marketing techniques like live streaming by local brands, seamless integration of online and offline channels, and the increasing influences of Z-generation. All these have concomitantly led to significant changes in consumers' brand learning, brand buying, and consumption behaviour.
- Given the aforesaid changes, the GBA market has become a terra incognita to many Hong Kong brand owners and managers. It is mandatory for those who anticipate to develop and promote their brands in the Bay area to invest in market research and improve their market sensing capability, enhancing their knowledge of the complexity of New Retail Economy and their impact on buying behaviour of consumer goods.
- Strategic Insights
- Today, local consumers there do not respond to Hong Kong brands in an ecstatic manner. Hong Kong business owners and managers have to change their management mindset and even business models. For instance, firms may modify business models to incorporate omni channels. In the past, many business process models/systems could be considered as a close system that helped control operation cost and improve productivity. In contrast, the pre-requisite of effective use of big data is sharing. If firms want to craft a strategy to integrate its information system with big data pools to support brand-building activities, they must understand that such a system should be an open system characterised by information sharing features, as evidenced in the case of "Bonjour".
Furthermore, consumers are no longer simply base on consumption experience to evaluate brand experience. Pre-consumption and post-consumption experience may also play a key role. This requires brands to adopt a holistic brand management approach to developing and managing brands in the Greater Bay Area.
- As local consumers still associate certain premium benefits with established brands, firms should consider investing in building brands to ensure sustainable growth of their business in the GBA market.
- The rise of Z-generation, rapid expansion of middle class, and influences of the pandemic and digitisation on consumer needs and buying behaviour have led to changes in market structure of various product markets. Brands should re-examine their segmentation approaches to track the evolution of the consumer market in the Greater Bay Area. This will enable the brand to understand the need of re-defining its target market and/or to identify new target market(s).
- Management Imperatives
- How to enhance the competitiveness of Hong Kong brands to compete and grow in Greater Bay Area is a compelling issue to brand owners. This requires Hong Kong brand owners to acquire new management and analytical skills and improve brand management capabilities and knowledge of the GBA market.
- Consumer and market data has become an intangible asset of strategic importance. To effectively use and manage big data, Hong Kong companies should not rely on public traffic channels solely; they should learn from GBA’s local brands to develop private traffic channels. Perhaps forming strategic partnership with local companies could be a solution good for instant impact on performance.
- One must admit that Hong Kong brands are no longer coveted by consumers in the Greater Bay Area. Luckily, the findings from consumer survey in the first phase of "Brand Greater Bay Project" and the case study results in the current phase reveal that Hong Kong brands are still perceived to have certain pedigree attributes like reliable quality, trustworthiness, integrity, and good design by the GBA consumers. Hong Kong brand owners should incorporate these values in their advertising messages to strengthen the identity and image of their brands.
- As affected by the pandemic, consumers in the Mainland China are nowadays more consciousness of public health, corporate social responsibility, and environmental sustainability. Hong Kong brand owners are encouraged to closely monitor these changes and incorporate the related elements to enrich brand experience to support the promotion of their brands.
- "Feeling Economy" and "Pet Economy" have increasingly become integral part of GBA's local economy. "People, Product, and Place" are still the central pillars of Feeling Economy. As such, Hong Kong brand owners should be more innovative and creative when designing the product portfolio and brand experience to cultivate brand preference and nudge consumers toward consumption.
(For a full report, please refer to the Chinese version「「大灣區品牌制勝謀略企業案例研究報告」)
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