Rare is the American pioneer who has ventured into a US-China business frontier that does not yet have a map- catering to Chinese companies heading West. Even rarer still are the ones who have held tightly onto this opportunity while lighting the way for others, despite what can be at times a rough and lonely ride. Meet Scott Markman, President of The Monogram Group, a branding firm based out of Chicago that has focused on Chinese brands since 2006 and conducts an annual survey of US consumer attitudes towards Chinese brands. Scott Markman is not only an enduring explorer in this nebulous territory; his candid approach, on-the-ground experience, and even a few “war wounds” make him an excellent person to ask for directions. And, let’s be honest, when it comes to building brands for a foreign market, Chinese companies could use a little help. To learn more from one of the very first in America to actively pursue this space, read on:

Let’s get straight to the point. Are Chinese companies ready to retain foreign firms like The Monogram Group to establish their presence in the US as recognized brands?
After 30 years of growth, some Chinese companies have reached the point where they are able and willing to consider the leap beyond private label status to build their own brands and service and distribution networks. There are literally hundreds of [Chinese] companies today that have the revenue size and product quality to consider the leap beyond OEM status. They have paid attention to paradigms from Japan and Korea and how some of the dominant companies from those countries went through a similar process 30, 40 and 50 years ago. However, the scale of this opportunity and the amount of companies in China that have the means to consider this would dwarf anything that we have seen from Japan and Korea combined. Many Chinese companies are actively considering the prospect [to build their own brands in the US] but because of cultural issues, very few have taken the leap to put into place the infrastructure and investment. They are looking for other models to follow. Companies like Lenovo and Haier were among the earliest to do this, and other Chinese companies are now sitting back and waiting to see how successful Lenovo and Haier are before they take the leap into the US market. Today is more about potential than reality. Again, you could probably count on two hands the Chinese companies that are actively pursuing this strategy. It is our opinion that, two or three years from now, this will be a much [higher priority]. The Monogram Group has seen this trend for some time and we’ve been building our relationships, our credibility, and our infrastructure in the process. Our objective is to become the dominant consultancy in this specialized expertise within two to three years.

What are some of the challenges that you are currently facing in this new frontier?
There are several. This is not an easy task. Some of the challenges are related to cultural differences between China and the US. There are also issues regarding corporate structure and the role of marketing and brands in the average Chinese company, versus [standard practice] in an American company. There are four or five things that I’d like to point out that [The Monogram Group] has experienced firsthand many, many times. The first is that many Chinese companies have a blind spot about paying for professional services. They very often don’t trust service providers because they put their stock and faith in tangible things- inventory, raw materials, people, factories. But, when it comes to getting advice from a law firm, a branding consultancy, an accounting firm or a management consulting firm, there’s almost a knee-jerk mistrust [which leads to questions like] “What are you telling me?” “Why am I paying this much?” “How do I know you put in all those hours?” “What am I getting in return?” And, “what’s the value?” Very often, they will bypass this type of expertise and counsel, whereas equivalent American companies would never consider bypassing a law firm for major issues like contracts and IP,  or a branding consultancy like ourselves. So, that is a profound difference between Chinese and American companies.
Second, it is a cultural issue with China that only the top person makes important decisions. So, if you have a hierarchy of people in an organization with employees numbered one through eight, for example, two through eight cannot and will not make a decision. It’s only the top individual that is allowed to do that in a Chinese company. Getting access to the top person in order to pull the trigger on decisions can take a while. Again, woven into that you have an inherent lack of trust and bias. [Employees not in the top position] within these companies avoid risk because they are not likely to be rewarded for making the right decision. But, if something does go wrong, they can lose their jobs. So, they tend to be very risk-averse and will overtly and consciously avoid making a decision such as hiring us or proving a budget or coming up with an action plan.
Third, Chinese manufacturing companies tend to be very manufacturing-oriented. They think about making products, negotiating price for products, distributing products, and competition in their category. Very often the mindset is, “I have a good product to sell. Can you go distribute it and get it sold for me?” as opposed to “Who may buy this?” and “What do they want or demand? What could they want but they can’t get a hold of?” This doesn’t really occur to them, so the whole idea of a brand- which is about a relationship and a promise and a value proposition- is not how they think. We’re really teaching them a whole new way of thinking. Eventually, we’re persuading them that, if they want to [establish their own brand], they’ll have to reorient how they think and how they fund certain activities like market research. They typically discount market research, which is at the heart of any American company showing up and being credible, especially on the consumer product side.
Fourth, their orientation towards timeframes and sense of urgency are very different from their American counterparts. If you have an American VP of Marketing whose job it is to hire an agency and launch a new activity, the longer they don’t pull the trigger, the more they’ll get criticized. Eventually, their job will be at risk. With their Chinese counterparts- actually, there probably won’t be a Chinese VP of Marketing focused on these issues- but timeframes and sense of urgency are just different in China. Things take a lot longer. Things are furloughed and considered infinitely longer than they are here.
Finally, because of the gap in hierarchy within a qualified Chinese company where marketing is not on the organizational chart, very often who the point person is on such projects can change more than once during the courtship process, the relationship-building process, and even after the project has been approved. So, who you work with may depend on who the boss decides has that responsibility from week to week. Continuity and the building of knowledge and skills can be fractured at times.
These are some pretty fundamental differences that can often get in the way of not only securing relationships, but also [may impede the process] of doing the work and doing it according to our best practices, which ensures the greatest chance of success.

Scott Markman has 28 years of experience in corporate design and brand development, including the last 19 as President of The Monogram Group. Since 2005, the agency has won nearly 15 awards for creative and strategic excellence. To learn more about Scott Markman, check out his profile on LinkedIn. To learn more about The Monogram Group, visit Monogram China and Monogram USA.

Interviews branding, china, Chinese outbound investment, Haier, Lenovo, Scott Markman, The Monogram Group