Marketing in China: In the Red Zone

China – country of contrasts, records and superlatives. Here, purchase decisions are made that safeguard German jobs. Therefore it’s good to know based on which emotions these decisions are made. A comparison between western and Chinese purchase  criteria expose critical information for efficient marketing communication.
– Daniel Szkutnik

Chinese B2B buyers are only human too.

How companies need to communicate to be successful in the Middle Kingdom

China – the country with the largest investment potential worldwide and the fastest growing industrial societies in the business-to-business sector. China is the market 61% of the future and of visions for many products and services. With an  annual growth rate of twelve percent, the past few decades were golden times for China’s economy. But t he euphoria in the land of smiles is clouded. The growth is rapidly declining. Is this the end of the dream of German entrepreneurs and investors to continue to capture the Chinese market and to tap into new target groups for the marketing of industrial goods? The answer is no, because German companies remain incomparably strong at the Chinese market. But how can German businesses keep gaining customers in the B2B sector in this altered situation. How must marketing change?
Let’s begin with the starting situation: With a trading volume of over 160 Billion Euro, China represented Germany’s biggest trade partner in 2015. And there is much potential in the future for the Chinese industrial goods market as well. But the harsh winds of Chinese competition demand a bigger commitment of German industry managers. The pressure among suppliers grows, also due to domestic competition. Especially in the struggle for the client’s attention, marketing communication depends on subtle nuances. A brandsync survey shows that sociocultural differences on the German and Chinese market require different marketing strategies. In order to be successful, western suppliers need to gain a better understanding of Chinese buyers in order for their emotional branding messages to touch the hearts of Chinese clients.


Many western suppliers translate their communication and promotional materials into Chinese. straightforward. But this approach misses its target and not uncommonly leads to confusion of the target group and economic losses for businesses. To compete with the fellow contenders of the People’s Republic, western companies need to analyze and respect the needs of the local target group against the background of the ever-increasing competition and complex procurement processes. Successful B2B brand management aiming at the right emotional codes of the target group, requires a detailed understanding of the thinking style of Chinese buyers in regards to their socio-cultural background.


The B2B purchase is often seen as a business transaction free of emotion. Decision matrices illustrate the buying process. Thereby, buyers are characterized as individuals whose thinking style is shaped by rational motives above all. But a study about the buyers in western companies show that buyers can differ greatly in their thinking styles as well. The blue and green synctype-thinking styles dominate slightly, but by far not as much as it emerges from the description of many buyers. Buyers have feelings as well and are influenced by their emotions.


The fact that western companies need to approach B2B clients on the Chinese market in different ways than in our cultural circle , was shown by a brandsync survey of Chinese buyers. The results demonstrate that in a comparison of the thinking preferences of German and Chinese buyers, different thinking preferences prevail in different cultural circles.

Following the message of the marketing communication is syncronized with the emotional needs of the target group.

By means of a personality-typological questionnaire, a sample of Chinese buyers was also surveyed regarding their emotional thinking disposition. This way, dominance of the mindsets could be assigned to the respective SyncTypes – with surprising results. The findings of the brandsync study showed how personality- typological findings could help establish a synchronization of brand, human and media – and that beyond the European-cultural scope right in the middle of the MiddleKingdom. The main point: Chinese buyers have a strong tendency towards the emotional field in their implicit way of thinking, which differentiates them clearly from international B2B buyers. While western buyers gravitate towards the green quadrant with the emotional field safety in their first value preference and rated the aspects control, planning, accuracy and organization highly, Chinese buyers have a different inclination. Their first value preference clearly lies in the red quadrant and in the emotional field of attachment. Aspects rated as important by B2B buyers of the People’s Republic are interpersonal, communicative and understanding.


This outcome is substantiated by the results of another study, the Globe Study (House, Hanges, Javidan, Dorfman, Gupta 2006). According to the large-scale examination, Chinese people consider the aspects of humane orientation, in-group collectivism and institutional collectivism to be of particular importance. Humane orientation describes values such as fair, altruistic, generous and supporting. In-group collectivism aims at pride, loyalty, solidarity in organizations and families. However, institutional collectivism refers to the collective distribution of resources. These three manifestations characterize the fundamental emotional tendency of Chinese buyers, whereas western-influenced clients set very different priorities, i.e. in categories like assertiveness.


By and large the study results of the Globe Study backed the findings of the brandsync survey regarding their statement about the value preference of thinking in Chinese Buyers. The emotional thinking style that seems to be typical for Chinese buyers has a tendency towards interpersonal connection. How come the B2B client in the Middle Kingdom thinks obviously different than his western counterpart? How can we gain a better understanding of the gravitation towards the red SyncType and the preference for social comfort and interpersonal loyalty? A closer look at the history and cultural influencing factors of the People’s Republic of China uncovers a deeply ingrained community-centered mindset. Constructs such as recommendation marketing and the traditional Guanxi, the network of personal relationships, stand for the social need for solidarity. It’s a part of Chinese reality. No comparable systems can be found in any of the western cultures. The values exemplifying Guanxi that have been culturally developed over hundreds of years, leave traces in form of unconscious needs in the minds of natives.
Therefore, emotional B2B marketing communication in China should address the reward and avoidance system of Chinese clients differently than the one of western buyers.


Given these distinctive cultural features, it becomes transparent that a Chinese buyer considers the implications for his relational structure before making a decision, as he is responsible for any decisions made. He will only recommend a business partner, brand or product when he has a good rapport with the provider and trusts his counterpart to place equal value on the good relationship and to keep his word. Even an intermediary in the Chinese market will only introduce people whom he trusts. When a Chinese buyer does decide to pass on a recommendation to his personal network, it carries a congruous big weight. Taking advantage of recommendation marketing is a significant key to success for native and foreign suppliers in the industrial goods marketing in China. Reciprocal courtesies spread quickly through the close bond between native business people. Recommendation marketing is a principle of give and take and is based on different values than business relations in other cultural circles. It’s important for foreign B2B companies on the Chinese market to be aware of and utilize this dynamic that originates from the collective need for interpersonal connections. What does it mean in specific to appeal to a red SyncType characteristic with particularly high rated aspects of interpersonal, communicative, emotional and empathetic?


New and not yet established B2B companies on the Chinese market can’t use any confidence-building arguments, as there are no shared experiences or routines and therefore no sound reasons for the local buyer to place trust in a foreign company. So rational arguments do not build any bridges of solidarity to our Chinese buyer. The only way to achieve this, is through unconsciously conveyed emotions. According to a research report from the Max-Planck-Institute for Social Research, the only strategy is to overcome existing uncertainties: “For reflexivity as a foundation of trust in business relations, we often lack the shared experiences and from the perspective of the foreign partner, first-hand experiences in China. You need to familiarize yourself first, but risk a lot at the same time. The consequence is that during the development of business relations in China, a high degree of uncertainty needs to be set aside ”emphasizes Guido Möllering of the Max-Planck-Institute (MPI) for Social Research in Cologne.“ The one who trusts overcomes uncertainty by blocking it out or creating positive fiction”, says Möllering. In that sense, trust becomes conceptually much closer to belief.“ It implies a leap of faith requiring a foundation, but cannot be fully explained in itself”


A basis for this positive, shared vision that strengthens the faith in your counterpart comes the emotional marketing management, that feeds into the thinking preference of Chinese B2B buyers and establishes a bond between business partners. When the positive thought of a successfull business relationship based on trust is conveyed, it represents an invitation to take a not-rational leap of faith, that the Chinese client takes to establish trust, without the foreign B2B company being already part of his personal network.


Another possibility to convey solidarity through brand communication in China are face-to-face conversations. They are the foundation for getting accepted into the circle of people Chinese B2B buyers trust. Direct personal contact, a look in the face and eyes, gives the counterpart the feeling of sincerity and therefore the possibility of trust. The one who shows his face in contact with his Chinese B2B client, conveys that he takes responsibility for his words. The p ath into the circle of trust of Chinese B2B buyers is based on the emotional approach on various levels. Rational arguments play almost no role. When the emotional code is received, the autopilot jumps into action and flips the switch from rational to emotional, resulting in a positive, unexplained belief in the trustworthiness of the foreign business partner that can be the basis of a long-term business relationship.


The consequence is that the communication with our Chinese B2B clients must feed into the personal connection at all times and through all channels. Western companies have to emotionally edit their marketing and communication materials for the Chinese market.

Effective emotional brand management in China is a strategic venture for w estern B2B companies that requires lots of empathy as well as the willingness to adapt to the emotional thinking style of the local target group. A target group with a particularly implicit thinking style determines the marketing communication in the People’s Republic. Personal closeness, tradition, loyalty, trust – these factors address the right emotions in the red SyncType and should be conveyed at every touchpoint of the brand communication.
Western B2B companies can withstand the growing pressure of competition on the Chinese market by establishing their products with the appropriate reference groups through the right emotional messages. This realization allows international companies to position themselves as a powerful brand that local clients within industrial goods marketing will feel connected to.

Excursion SyncTypes:
Due to major neuroscientific progress, emotional behavior can now be schematically depicted. With the goal to practically prepare new marketing strategies, brandsync was able to illustrate the fundamental characteristics of human ways of thinking and provides insight into accompanying reward and avoidance tendencies.

Brandsync’s work is based on the “Herrmann Brain Dominance Instruments” (HBDI), findings from Norbert Bischofs Zür'cher’s model of social motivation, as well as the motif and decision model by Limbic von Nymphenburg. The four SyncTypes are autonomy, arousal, attachment and security. The preference for one of these emotional systems s hows, which kind of emotional marketing address the person is receptive to and which one’she is less receptive to. The SyncTypes and the underlying emotional values form the basis for our purchasing decisions. The right approach to reward values controls the communicative success of the measures employed.

Excursion Guanxi:
Guanxi developed from the old Chinese tradition of saving one’s face and the constitutional history

Rule of law, because in earlier days, the Chinese people could not always rely on legal protection for political reasons. Therefore, they had to come up with other ways to create a safe framework for business and personal decisions. The safety that Guanxi provides lies with the impending loss of face and social standing if rules were broken. The advantage of this Chinese bond of faith i s a close-knit social network that is based on personal closeness and trust and within which participants do each other favors and give recommendations. In China, way more economic decisions are quietly influenced by Guanxi than we’re aware of in Europe. The connections are not based on professional roles such as businesses and institutions, but always on ideally pure relationships between individuals who build mutual trust on a personal level. Guanxi is one of the most important economic driving forces in China.

An Interview with Rossella Pfundt

Mrs. Pfundt, what are the current trends in the marketing of industrial goods in China?

Rossella Pfundt: I can see two trends. First: B2B marketing has become more important, because the competitive environment in the industrial goods sector has become tougher. Second: local social media channels gain more members and users than before.

Does the social media boom hold any opportunities for western companies?

China has the most Internet users worldwide with about 650 Million last year. And this number will only increase over the next few years. The search engine Google and western social media network are blocked in China and cannot be used. Instead, they have local tools: Weibo instead of Twitter, WeChat instead of WhatsApp, Baidu instead of Google and Renren instead of Facebook. Buyers in China vigorously use these sources to inquire about companies and trends. That’s why a carefully considered social media strategy is crucial for western businesses to succeed on the Chinese market.

What role does content marketing play?

Content marketing becomes more and more important, especially in connection with social media. Companies reduce their marketing expenditures for traditional media channels and focus on informative real-time posts on social media channels. This trend will continue to intensify in the next few years and the significance of social media and content marketing will increase in the Chinese marketing mix.

How do you gauge Guanxi in its importance for the market presence of western companies?

First of all, the most important thing: Investing time to establish a relationship to your business partner always pays off in China. Because only with Guanxi, good personal relationships, you can get access to truly important information. That is the biggest difference in China. Whereas in our culture we’re used to being presented with lots of information with high levels of authenticity, in China, everybody gathers the information relevant to them through an appropriate network and has to evaluate its authenticity by him or herself. You need to invest a lot of time to develop a relationship of trust to your respective business partners in order to develop a good network of relationships.

Rossella Pfundt, Expert on Asia

Rossella Pfundt successfully completed her MBA in 2009 at the Fudan University in Shanghai and conducted a brandsync study among Chinese buyers in 2015. The graduate economist offers individual consultation, mentoring and seminars on the topics of preparation, market entry and market expansion for B2B and B2C sectors in Asia.

As an expert on Asia, Rossella Pfundt supports industrial cross-sector companies in the Far East with the development of market entry and market cultivation strategies using her Asia Experts Network. She offers individual full-service consultation, mentorship and seminars on preparation, market entry (analysis, market research, marketing, social media, communication, distribution) and market expansion (analysis, market research, marketing, distribution) for B2B / B2C sectors.

... and what about recommendation marketing?

Recommendation marketing is essential for brand development and purchase decision. In China, the so-called reference group plays a much bigger role than it does here. The reference group encompasses family, friends and closest advisors. It has a bigger influence on the purchase decision than in western cultures. Over the past year, we interviewed 500 Chinese and European purchasing managers. The result was that 70 percent of Chinese purchasing managers would make a decision to purchase based on recommendations from their reference group. Among the European managers only 35 percent would act similarly. So recommendation marketing has a much higher priority in China than it does in Europe – which was already established by a number of studies. It is important for western companies to take the phenomenon of recommendation marketing into account when planning a marketing strategy.

What could that look like in specific?

Effective measures are, for example, free product seminars, which multi-national corporations in China have already implemented successfully. Thereby, the product was already positively received by respective multiplier. In turn, it had an immediate positive influence on the reference group and purchase decision of the target group. Mainly, German products are sold in China when the respective reference group accepts the products.

What else do German companies need for a successful collaboration with Chinese buyers?

That’s the question we asked ourselves too when we coordinated a brandsync study among Chinese managers last year. The positive thing was, that all respondents judged the product quality of German companies to be very high. However, according to 75 percent of all respondents, the service was judged as too rigid and too little customer oriented and therefore worthy of improvement. At 80 percent, even more Chinese managers were bothered by the as arrogant perceived demeanor of German companies. So: even if the product turned out well, German suppliers have not yet adapted to the desires of Chinese clients and are wasting important potentials. They need to understand that different cognitive and emotional factors are relevant in the decision making process of their Chinese business partners than for western partners. The difference lies in the conception of oneself. In western countries, the individual is paramount, whereas in China, it is the entire reference group. Individualisms versus collectivism. Therefore, western suppliers need to take the Chinese value system into consideration and include it their marketing and communication decisions.

Social Media in the Land of the Big Firewall

The proverbial “Great Firewall of China“ – an ironic allusion to the Chinese wall – blocks all western social media providers from the country. Nevertheless, there are more than 600 million active social media accounts in the Middle Kingdom.

Although there is no tweeting in China, micro-blogs called Weibo are nonetheless very popular. The largest micro-blog provider is Sina Weibo, with about 20 million active users every month. As on twitter, a maximum of 140 characters are allowed. The website Renren appears to be a true clone of Facebook, with the layout and colors strongly reminding of the American site. Renren is mainly used by college students, but has been experiencing an increasing decline in members. Many Chinese prefer the website “Qzone”, which is also similar to Facebook but offers far more features than the American giant. It allows users to create their own blogs, exchange multimedia contents, listen to music and watch videos. About 650 million people use Qzone every month . There’s also no need for China to hide away when it comes to instant messaging. WeChat, an alternative to WhatsApp, has more than 650 million users every month. The app is considered a serious competitor for the US provider, as WeChat is also very popular outside of China. The messaging platform QQ, comparable to Skype, counts even more than 860 million active users every month. The biggest Chinese alternative to the video portal YouTube today is not Youku anymore, but iQiyi and belongs to the company Baidu, which also happens to be China’s search engine market leader.