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You cannot get ahead by standing still. For companies, that means constantly entering new markets.

China is the biggest new market of all, and the success stories of high-performance businesses there can teach companies everywhere about entering new territory.

Woody Driggs, managing director of Customer Relationship Management (CRM) at Accenture, the global management consulting, technology services and outsourcing company, says that China is a market that is “very, very” open.

"There's a chance for any product to get into the market and be successful. All the promise of China being the market of the future is very true. But you need the appetite to stay, to learn and to adapt," he adds.

Multinational companies have been thirsting to capture the Chinese market since the mid-1990s.

It is only now that consumers have the disposable income for the market to finally take off, but foreign companies are finding success more elusive than expected.

Accenture's ongoing high performance business research reveals that a key building block to achieving high performance is achieving and maintaining a competitive position in attractive markets.

Accenture recently conducted a world-wide study of brand building and marketing effectiveness, with special emphasis on China, the biggest and most attractive emerging market.

It found that the most successful companies targeted specific segments within the market, adapted their marketing, and surmounted distribution challenges.

Not monolithic

Lay Lim Teo, Accenture managing director for CRM in Asia-Pacific, says that China is not a big market for everyone.

“There's a right size and a right place for everyone in the market. Companies have to avoid making assumptions about what Chinese consumers value most because that can be very different from one segment to another," he explains.

Even within the segment of high-income, Western-oriented consumers, Accenture's research found differences between "young royals"—those with the highest incomes and education, who want the latest technology and fashion—and "established money"—who, while wanting the latest technology, value brands that have been in the market a while.

"Patriots" favour Chinese brands out of loyalty, while "value players" favour Chinese brands for offering both quality and affordability.

Mike Matheis, Accenture managing director of the CRM marketing transformation consulting service line, says that people talk about China's 1.3 billion consumers as if they are all the same, but he points out that they are by no means so.

Companies that entered China thinking they could sell expensive products to the top of the market have faced an unpleasant surprise, the experts agree.

Chinese products have improved vastly in quality, and Chinese consumers do not automatically think that foreign products are better. Thus, they are not always willing to pay a premium.

Peter Williamson, professor of international management at the Judge Business School of Cambridge University and co-author of the book "Dragons at Your Door: How Chinese Cost Innovation Is Disrupting Global Competition", says that focusing on the elite segment “isn't profitable because there isn't enough volume to cover the fixed costs”.

"Many companies have understood that in order to compete in China, especially in a very tight price market, they have to serve the mainstream market and even the bottom of the market," he adds.

That does not mean dumping cheap goods, however, Accenture's Teo says. Chinese consumers look for quality and value and spend time on research before buying.

She says that there are not a lot of impulse purchases. "The Chinese study things a lot. They have a lot more choices than in many other countries," Theo adds.

Making sense of the segments

Nokia Corp. of Finland has mined market niches with finesse, giving it first place in phone sales in China with over a 35 percent share.

Nokia's phones are the same as those it sells elsewhere, but the company has made adaptations for the Chinese market.

To make text messaging easier, Nokia gave some phones a pen and scratch pad so that users could write out Chinese characters, rather than have to transliterate them into letters - an effort that had put off rural customers.

"It helped us bond with Chinese consumers," says Colin Giles, president of Nokia China. "They had a feeling that we understood the Chinese market."

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