Strategic Marketing, Chinese Style

The first question that is asked in Western style strategic marketing process is ‘what is the problem that needs solving?’

Does the product or service need to be cheaper, better, re-packaged or easier to buy? What does the customer find annoying?

A professional innovator can ask these questions of any Western business leader or any set of Western customers, and get answers that may lead to innovation.

Thereafter follows the usual processes of strategic marketing and innovation – brain storming, benchmarking, the R&D process, the 4P’s, and 4C’s, planning, yada, yada.

However, ask a Chinese business leader the same question and you will usually find that there isn’t a problem. The product or service is quite fine as it, thanks, and will remain so until the customers think otherwise.

The focus of the Chinese business leader is more often to make the company too big to fail.

Innovation is done by others and then copied only after it has been successful in the market. This approach just about completely de-risks innovation.

Strategic marketing becomes bloody simple under the Chinese model; just copy anything new-ish from the West after it looks like it’s working.

And indeed they have even invented a new style of a ‘patent-like system’, one where the Chinese government makes it hard for Western companies with new IT products to access the super-large Chinese market.

I call this a ‘patent-like system’ because it grants Chinese companies a period of operating monopoly (or oligarchy) in which to create business success, free from competition from the original Western source of the innovation.

They don’t have to do this for manufactured goods because they are so cost competitive that there is little incentive to import manufactured goods into China.

We in the West believe that the first-mover advantage in innovation is far more valuable than it really is.

In times past we have even propped up the first-mover advantage with patents.

But in this IT century the first-mover advantage is greatly diminished because of the weakness of the value of IP in the IT domain.

Patents; they have little value in IT due to the often obvious or abstract concepts behind IT innovation. Trade secrets; well they hardly exist in IT because just about anyone can code up a solution from scratch once they have seen it in action.

The first-mover advantage in IT is far less important than access to capital and access to markets, of which the Chinese have plenty.

My personal view is that we in the West are addicted to the concept of innovation because of three hundred years on confirmation bias since the Enlightenment.

Essentially we selectively re-run success stories of innovation and first-mover advantage to such an extent that we don’t stop to question the business value of new ideas in this IT era.

I believe that an innovative solution to this problem is to redefine innovation as access to both capital and markets, and to de-emphasize the creation of new ideas, maybe to zero.

The problem in Australia of course is that we don’t really have much access to risk capital. Nor do we have much of a market to play with.

If I were to share these views with any local experts in marketing communications they would counter that true innovation is the creation of the perception of brand value.

Long being a services-led economy we have been world leaders in the dark arts of marketing communications. Over many decades, for example, we have been harangued into believing that our oligarchical service providers are soft and cuddly pseudo-charities with world-leading products and services.

But even in marketing communications the Chinese have skipped ahead of us in their use of social media instead of broadcast media in order to promote the more useful concept of democratic brand value, which is far closer to the true value of a product or service.

To be honest, we in Australia have much to learn from the Chinese in respect to innovation in the 21st century. We would be well-placed to copy their approach rather than believing that we have great innovation skills to offer them.