by Michael O'Neill
September 27th, 2012

We are seeing an increasing number of Chinese companies expanding into overseas markets – but why is PR assistance so important?

PR assistance is important for any company going into a foreign market because it allows them to understand how to communicate effectively to the local audience. Just as any Western company entering the China market needs to learn to adapt to local market cultures, Chinese companies going abroad need to build effective communication campaigns that relate to the local market audience, while cementing strong stakeholder relationships. It takes a significant amount of time to build a brand and gain positive perception in a new market, and therefore tapping into companies such as Weber Shandwick, which have a strong local market presence, can bring them up to speed with cultural differences, how to handle the media, and deploying an effective brand communications campaign.

Trust  is a key issue impacting Chinese firms in foreign markets, especially the US. How can they best start to build trust with overseas regulators, policy makers and consumers?

Chinese companies that have never operated in Western markets may not necessarily understand the nuances of Western policy making and how public opinion influences those policies. As such,  research and understanding of the local market, especially in terms of how the public perceives Chinese companies, is crucial to how to approach policymakers and consumers.

Chinese companies suffer a lot from being associated with ‘Brand China’. In his article ‘Soft Power Weakens Chinese Companies Who Want To Go Global’, Will Brent pointed out that in an annual survey of 50 country reputations by the Reputation Institute, China was near the bottom of the pack, not far above Iran and Iraq. As such, Chinese companies who do not invest in building their own brand identity, will inherit negative brand attributes and market perception from ‘Brand China’. Building a strong global brand in a foreign market takes a significant amount of time and investment and it starts with identifying the target audience,  their expectations and communicating with them about the company and what it stands for. We would recommend a three-step process:

- Define the brand – what it stands for, and how it relates to the target audience.

- Conduct a stakeholder mapping and audit session – identify who the stakeholders are, and how they perceive your brand and products and what’s important to them. Where are the gaps and what can be done to close them?

- Engage an experienced and reliable PR agency to help develop an effective communication strategy to actively engage stakeholders.

Another issue in overseas markets, particularly for manufacturing companies, is cost and quality. How can Chinese companies turn this to their advantage?

Again it comes back to educating the customer about the company vision and values. Products manufactured by Chinese companies are considered low cost and of particular low quality. In order to turn this into an advantage, Chinese companies need to start educating the customer about how innovation, technology, and producing superior quality products is the key to company success as well as maintain loyal customers.

For example, when Suntech first engaged Weber Shandwick, it had the same concern of being generalised as a Chinese company that mass manufactured solar panels at low cost. But the company CEO was educated in Australia and is considered one of the best solar scientists in the world, while the management team is of international calibre. More importantly, technology and innovation was at the core of Suntech’s DNA, and there was an opportunity to communicate this better to their customers. And so Weber Shandwick developed a communications strategy to help key spokespeople push this message out to customers, partners and key stakeholders.

What are the other important factors for Chinese companies to consider as they push overseas?

I think there are many factors for Chinese companies to consider but the two most important are:

- Being open and transparent: In Western markets, the public, policymakers and stakeholders place a lot of emphasis on companies being transparent and open. Many believe that Chinese companies are opaque, thus lacking transparency and openness.

- Understanding and adapting Western business practices and culture, especially how to handle government and media relations in the West. Guanxi (a Chinese term referring to “personalized networks of influence”, and is a central idea in the Chinese society”) may not necessarily work as well in Western markets as it does in China.

- Chinese companies also need to understand that the role the government plays in the West is very different to the paternalistic role it plays in Asian cultures. While in Asia, the support of the government is critical to moving forward with a merger and acquisition, it is only the beginning in the West. The public has to be convinced of the benefits as well, which often requires comprehensive integrated communication strategy and programmes, the likes of which does not occur in China.

- Chinese companies going global need to understand the importance of going global by going local and the important role of communication plays in that.

 Natalie Lowe is vice-president, Emergent China practice, at Weber Shandwick

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