From cookies to computers, companies make headway by focusing on the needs of key consumers
6/1/2012 - Global companies Kraft Foods and Lenovo may seem like two ships passing in the night. But they have one common port: China.
Almost a decade after introducing the Oreo to China, U.S. snack food giant Kraft tinkered with its iconic brand to win over Chinese palates. Today, the sandwich cookie is the number-one biscuit sold in the region. Meanwhile, top Chinese technology company Lenovo holds the number-two spot in the worldwide PC market. Going beyond its local roots, Lenovo is building a brand to appeal to global consumers.
The crossover stories of these two companies — one localizing a global brand to China and the other, globalizing a Chinese brand — were among the keynote talks at the May 18-19 Greater China Business Conference
. Execution and implementation
Simplification helped both Kraft and Lenovo achieve results — in and beyond the Greater China region. Instead of continuing to throw everything it had at the Chinese market, Kraft tackled stagnant growth by focusing on a few biscuit brands like the Oreo, said Sanjay Khosla, president of developing markets for Kraft. The company then localized its manufacturing technology in China to develop Oreo products that would appeal to native taste buds.
The too-sweet American Oreo became a reduced-sugar Chinese treat. Orange and mango and even green tea flavors now supplement the traditional Oreo white-cream filling. Khosla credits Kraft’s turnaround in China to its hiring of homegrown talent and then unleashing the team’s entrepreneurial spirit. He said, “It was all about execution and implementation.” Building a global brand
In 2011, China became the largest PC market in the world. Paralleling the demand for technology, Lenovo has seen phenomenal growth. “From a business standpoint, we are doing very well. The problem is that as we move into the global space, Lenovo just doesn’t have the brand [presence],” said David Roman, senior vice president and chief marketing officer. “It’s not only a significant problem for us, but also one for many Chinese companies.”
So Lenovo is doing what any company, regardless of its country of origin, should do: focus on key consumers. In Lenovo’s case, those people are members of the “Net Generation” or the age demographic of 16 to 34 — a global audience that expects brands to share its values. For Lenovo, the flexibility to make itself relevant to those consumers has been key to its growth as a global brand. Emerging global enterprises will need to be as
networked, polycentric and diverse as the next generation of consumers, Roman said.
The conference lineup included Bob Holden, former governor of Missouri and chairman of the Midwest-U.S. China Association, who delivered a keynote talk on outbound investment opportunities from China. Cheng Li, director of research and a senior fellow at the Brookings Institution’s John L. Thornton China Center, also discussed upcoming changes in China’s leadership and how those changes will affect the political and social climate in the region.