Branding in China: McDonald's and Maxam on maintaining market relevance
Updated 11:14, 17-Aug-2018
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China's ultra-competitive consumer goods market means brands must move fast to stay hot. So what do the world's biggest fast food brand and China's best-selling hand lotion brand have in common? Our reporter Yu Wen met with people from the two brands to hear how they stay successful in China.
McDonald's and Maxam, or Meijiajing, are two internationally known brands with a common issue -- their leading product may well be better-known than the brand itself. McDonald's sold over 1.3 billion Big Macs last year -- that's 41 per second. By the same token, Maxam, established in Shanghai in 1962, is known primarily as a supplier of hand lotion products for which sales expanded by 130 percent in just the first quarter of this year.
YU WEN REPORTER "Big Mac from McDonald's and hand lotion from Maxam are two of what are called 'celebrity products' or 'hero products' of each brand. Well both brands didn't just stop with the products. They upgraded their outlets and did everything they could to promote their products."
McDonald's determination to build on its core product can be seen not only in product spin-offs, but in its auxiliary marketing strategy as well. The Mac coin it issued earlier this month has gone viral -- posts on Chinese social media platforms show crowds lining up for the coin which is worth one Big Mac hamburger. Maxam also works to vary their hand lotion products to keep them updated and in line with changing consumer tastes.
LI CHENKUN, SENIOR MANAGER MAXAM "A survey we did last year showed that consumers have various hand-care needs depending on circumstances. For example, when doing chores like dish washing and clothes washing, consumers' hands can easily be damaged by chemicals. So we came up with the idea of 'care as needed' last year, which was not only an upgrade to our hand care lotion but also offered customers more specific care. We are going to partner with White Rabbit to develop a milk candy-flavored lipstick in the second half this year. This takes advantage of our consumer base."
An industry watcher says that if a brand wants to upgrade itself based on a celebrity product, it has to offer more than just a different name or packaging. Not surprisingly, quality always comes first.
CLEMENT YIP, EXPERIENCE CENTER PARTNER PWC CHINESE MAINLAND & HK "I think the combination is everything, but the core is that do you actually have really good product, do you have something that consumer is really looking for, really like, and how do you develop global market strategy to push that to the consumers."
McDonald's most recent report shows 12 consecutive quarters of sales growth, and Maxam has become the strongest revenue contributor to its parent company, Jahwa. First quarter sales there were over 1.8 billion yuan, a growth of over ten percent annually. Yu Wen, ICS for CGTN, Shanghai.