Review of "Secres of business sucesses in China"

Just a few hours ago, in my office, I read an article published in Labelexpo Europe August Issue entitled: "Secrets of Business Success in China", authored by Dr James Chan. This article made me feel that entering into China market is like jumping into a fire pit. I would not say that I totally agree with the perspectives stated in this article. In response, I created this blog to address some of my thoughts. First of all, let me show you the entire article:

Secrets of business sucesses in China

With the approach of labelexpo Asia in Shanghai in December, China investment expert Dr James Chan believes that US label converters need to engage with China and take steps to enter the market.

The Chinese label printing industry grew 15 percent in 2008 despite the economic downturn. China produced 1.5 billion square meters (16.1 billion square feet) of printed labels in all industries including industrial goods, food-processing, electronics, beverage, and biopharmaceuticals.

China created 1,400 varieties of printed labels in 2008, 10 percent more than it did in 2007. There are 10 Chinese printers that possess advanced RFID technology.

The Chinese government is flushed with $2 trillion worth of foreign currency reserves. China has a lot of cash. This is an opportune time to sell American-made products and services.

In the following, I'd like to update the presentation tat I delivered at the 2008 LPIA Fall Management Conference in Las Vegas, in a Q&A format.

1. Will the fast growing China market be big enough to keep domestic Chinese label printers from coming to the U.S. and competing with us?
Nothing will stop entrepreneurial firms in China from entering Western markets. China is both a challenge and an opportunity. American companies that take proactive steps to enter the China market will prosper.

2. What are our strategic advantages in the West?
We are close to our customers. We can respond to their needs more quickly than firms in China. We still have an edge in technology, marketing, and design. however, China is catching up fast. We should take time and effort to study the China market to preserve or further develop our strategic advantages.

3. Can you make money exporting American-made products and services to China?
Selling American-made products to the Chinese is very profitable if you have the right product and are determined to succeed. We've made our China sales representatives millionaires in US dollar terms.

4. Are there ways to fight piracy in the China market?
Any product that works in the China market will be pirated, including products made by Chinese government-owned corporations. If the 'pirates' in China have the chutzpah to copy government-made products, they have no qualms copying anyone else's products.

The 'pirates' have weaknesses. We must rely on our Chinese partners and business associates to help us beat the pirates. Don't go it alone.

5. Do our Chinese competitors have weaknesses?
They have a short-term profit-seeking mindset. They undercut one another in pricing. They have quality and delivery problems. If you lose market share to Chinese suppliers, don't lose heart. Your customers may return to you in a couple of years.

6. What to do get ourselves established in the China market?
Recruit a China representative whom you can trust. We can't get anything done in the China market without someone on the ground who looks after our interests. I call these people 'insiders'. They are crucial to our success.

7. How to reduce risks of getting 'burnt'?
Don't take what people say to you at face value. Rely on your own 'insiders' to vet their information and advise you.

8. What are the organizations that we can join?
Contact your local US Department of Commerce international trade specialists. Work with your local industry associations that have a China program.

9. What should your China strategy be?
A company's China strategy should address the five elements of the Chinese mindset that are essential to success, namely, (1) Confidence, (2) Hunger, (3) Insider, (4) No, and (5) Acceptance. I created the acronym 'the C.H.I.N.A. formula' to make this easy for you to keep in mind.

10. How to work with the Chinese?
The Chinese culture focuses on personal relationships rather than written, legal agreements. Contracts can sometimes be merely written suggestions. Nothing beats having someone you can rely on to get things done.

Oberviously the impression of China market this author is under is still staying at 10 years ago. He needs to update his information instead of supporing consultancy advice to his clients.

CASH HANDOUTS TO JOURNALISTS SKEW CHINESE MEDIA COVERAGE

HSBC and the China Charity Foundation celebrated a decade of working together last month, bringing in the global bank's chairman and renting a room in the Great Hall of the People.
Organisers of the event extended the charity to Chinese reporters: donating Rmb200 ($26.40, £13) each to those who attended, according to people present.

Such payments – called “transport money” by public relations firms – are a ubiquitous feature of media events in China but one, critics say, that skews coverage in an increasingly competitive news market.

“It's awful. It's an embarrassment for Chinese journalism . . . and it's corruption,” says Ying Chan, director of the Journalism and Media Studies Centre at the University of Hong Kong. “It's not that journalists endorse this – people live with it knowing it is wrong.”

The handouts, which journalists call “red envelopes” after the envelopes stuffed with cash given to children on important festival days, are so routine they have become a significant source of income for many Chinese reporters.

Esmond Quek, managing director of PR firm Hill & Knowlton in Beijing, says payments – which can reach Rmb1,200 for television crews, since they have to “lug a lot of equipment around and usually have three crew members” – are at rates agreed with China's Public Relations Association. “The amount given is standard and specifically for transportation,” Mr Quek says.
Other industry executives dispute whether any formal industry agreement exists and a representative for China's Public Relations Association says: “You cannot say we encourage or discourage this practice.”

But no one contests that the payments are common or that, as critics point out, Rmb200 per journalist is considerably more than the average cost of a cross-town taxi in any Chinese city.
Ms Chan at the University of Hong Kong holds multinational companies that allow the payments at least partly responsible. But some companies try to stay aloof.

HSBC says it has a policy of never paying journalists and that it was not involved in organising the China Charity Foundation event. The event, featuring HSBC chairman Stephen Green, was hosted by the foundation and organised by local PR firm, Voice One Communications, which also said HSBC had no role in organising the payments.

Some of China's best- regarded publications, such as Caijing, a business magazine, and the Economic Observer newspaper, ban their reporters from taking the payments.
Other media are proving slow to follow, however, in part because of the need to hold down salaries. Fierce competition means tight margins for many of China's ever more commercially oriented newspapers.

As in other developing economies such as India and Indonesia where similar payments are common, low salaries increase the temptation for editors and journalists to accept straight bribes for other forms of overt corruption.

But in China, its spread reflects the endemic corruption that has flourished amid a Communist party-led embrace of the market economy. While Beijing has loosened controls on business news, the continuing clout of party propaganda commissars obstructs the development of independent industry standards.

The government has sought to clean up some abuses. Rules issued in April ban provincial reporters from taking kickbacks, extorting money for favourable coverage, or offering paid news.

The rules reflected the fact that while corporate payments to journalists can be a corrupting influence on the media, in some cases at least, news organisations may not be passive victims.
In one alleged incident last year, a Chinese real estate magazine called Hongdichan, or Red Estate, wrote an article accusing international property firm Jones Lang LaSalle of mismanaging a Beijing project.

When the company complained that it had not been contacted for comment, the magazine indicated it would run a second critical article unless the firm instructed clients to place advertisements with it, Jones Lang LaSalle and another person involved have claimed. Red Estate denied the incident occurred.

“There was a misconception [at the magazine] that we made decisions on advertising spending, but in fact we do not advertise on our own behalf and do not make decisions for clients on where they place their ads,” says David Hand, Jones Lang LaSalle's managing director in Beijing. “They realised this was not a sensible approach to take with us,” Mr Hand said.
The second article was never published.

This article was originally published in Financial Times by Jamil Anderlini and Mure Dickie 2007-08-06

International public relations firms in China: authentic Chinese, embrassed foreign public relations

Introduction:
Since the first overseas international public relations firm entered into China in 1984, the public relations industry has been increasingly approved by the Chinese market. Before international public relations firms simply provided short-term services for foreign-funded enterprises who just opened their market in China. But at present they have started to take up the whole Chinese business and inadvertently led the domestic industry and the rapid development of public relations. Developing till now, the increasing demands from international public relations firms in talents lead to a diverse structure of personnel, including former government officials, diplomats, senior officials, journalists and entrepreneurs who have formed the main force in this industry.

According to a survey by China International Public Relations Association in 2004, PR practitioners from international public relations firm are suffering from higher working pressure than those who from local agencies, with 45 working hours per week, although in return, they get better pay. For instance, an Account Manager from an international Top 10 PR company earns over 10000 RMB per month while the majority of local companies only pay less than 6,000 RMB per month.

Locolization is still a challenge:

Mr. Wang has been working as an AM at a well-known international public relations firm over two years. With these years, Mr. Wang feels the localization of international public relations firms is still facing a biggest challenge. When he just joined the company, Mr. Wang posed a number of suggestions based on the experience he gained from former company, but all were bounced back，which made Mr. Wang really depressed for a while. This was mainly for two reasons: first, the company thought his proposal was too direct. Simply helping clients sell goods doesn't match company's philosophy of building brand first. Second, in accordance with past practice, many procedures mentioned in his plan were not approved.

Xiangyang Chen, committee of China International Public Relations Association, comments that during the 20 years development in China, the process of localization of international public relations firms has never stopped. However, so far, reflection from the domestic market showes that international companies have not yet found themselves the right direction. Overseas agencies do not have a full understanding about China's domestic political environment, media environment and market environment. In the international companies, due to the decision makers mainly consists of foreign representatives, plus those companies who entered into Chinese market in general have long histories and their operation systems are quite mature and improved, if everything is carried out in accordance with China's national conditions then it will be unrealistic. Therefore, when handling a lot of things these companies failed to meet the needs of the domestic market.

International public relations is "picky eaters"

Many international public relations firms expresses that in order to ensure the quality of their services, the companies generally do not take contracts randomly. This approach makes clients always feel that they are superior but not completely close to the market. In contrast, the local public relations firms are more practical, covering a wide range of business and working towards a clear purpose of helping clients sell their products. International public relations firms generally provide indirect services whilst the demand from the domestic market is still at the stage of the need of direct services. In addition, the prices charged by local public relations firm are usually lower compared to the international public relations firms, depends on which local public relations firms successfully seized the market.

Advantage: global resource sharing

Yan Liu and Xiaoyun Zhang are Account Directors of International Communications Cousulting at Hillard Public Relations Consulting Co., Ltd. (China). Yan was a newspaper reporter and Xiaoyun previously worked at Hillard Hong Kong office, responsible for the regional co-ordination work of numerous technological and corporate clients. Their responsibilities generally include: liasion with the media, planning and organizing large-scale activities, product promotion, market research and so on. They are both deeply impressed by gloable resources allocation and management conducted by international public relations firms. Through the allocation and management of resources, working effeciency has been maximized. A project can be supported by colleagues from serveral cities even serveral countries; people shareing their advices and suggestions, which is an unique advantage from international agencies. In addition, international public relations firms focuse on exploring vast potential consumer groups through building clients' brand.

Co-operation with government

When China's Olympic video broadcasted in Moscow on July 13, 2002, , the whole world was amazed. As everyone knows, public relations contributed much to this event. In fact, the work of the government is permeated with public relations. For example, the 45 seconds video, Premier Wen's speech, etc are all related to public relations and are important subjects of the research in this field. The biggest difference to local agencies, internatinal agencies set up very high-end goals for themselves: long-term development strategy in China, the establishment of government relations, the dissemination plan of leading local market, and enhancing the market positioning are main businesses of international public relations. Peng Gao, GM at Blue Focus, a local public relations agency in China, comments: "the international public relations firm has reached the strategic level, whereas the domestic public relations firms still remain at the tactical level."

A "date pit"shape talent structure

In Peng's view, scitentific talent structure is supposed to be in a pyramid shape but current PR talent structure is more like a date pit. That's to say, there is a shortage of low-end personnel and high-end personnel. "Industry Report 2003" indicates that the shortage of senior professionals, especially senior management personnel and project management talents and training resources continuely restrict the rapid development of industry; the new company will continue to emerge and intensify the flow of talent; directors and Account Managersare in a shortage; the sharing of professional experience and knowledge needs to be strengthened; the company's own training and training system can not meet the needs of fast-growing business.

-END-

This article originally appeared on Beijing Daily Online in Chinese and has been translated and edited by Shujuan Zhang. http://lixing.blogbus.com/logs/122287.html

PR Consultancy or PR Consultant?

If you start asking this question then you probably have been aware that why you need a PR service. Continue reading might be of some assistance to you.

PR agency and freelance PR have their own features. Making the choice of going for which one really depends on the nature of your business and how you would like PR to help you. Basically, freelance consultants are independent consultants - one person who often works on various accounts and small projects, eg. press release/article writing, interview, activity evaluation,etc. at same time. They are flexible and able to offer short or long term support. On the contrary, agencies have the ability to provide more services to organizations and handle more massive campaigns such as a big show or a serious crisis. They can also build up either short or long term relationship with clients. Usually freelancer will cost you less than PR agency does, however it is not always.

In that case, when deciding going for an agency or a freelancer you need to be clear on the objective and deadline of your project, what and by when you want them do for you, what is the scale/time frame of the project, do you want them to be based in your office or from their own, etc.

When start using a PR service of course you will be looking to obtain maximum benefits from it. Choosing an appropriate person/agency to help you is important otherwise your project could be destroyed. Most people do not know how to measure if the service providers are really qualified or if they can fit in the job and work with. Some questions can be main factors for you to consider about you potential working partner: If they have professional background? Do they have experience in the relevant activities? Is there any likely conflict of interest with present clients? How do they charge? What is the fee? Are they individual members of any public relations institute? In according to my experience, some companies would requested PR agencies to do some small projects for them at beginning as trial campaigns in order to see if they are really able to handle the project and bring them the results as they wanted.

Why should I use a PR agency?

A business man was not sure whether he should appoint a PR agency. He asked a PR account manager: "What can you do for me?" The manager answered: "We can help to make your company on news". The business man said:" I can do that too!"

Ain't you sure whether you need a PR agency or not? Actually there is no hard and fast rule when a company decides whether to use a PR agency. To make things more clear, you need to make sure you know how to distinguish advertising and public relations. Compared with advertising, PR is more convinced and persuasive. Unlike advertising, PR is more likely make people walk up to you and say: "Hi, I want to buy your company's product as I have heard that it is very good." instead of you walking to people to say confidently: " Hi, come to buy my product because it is good". Once be clear of this point, you would understand what's the point of using a PR strategy. At this stage what you need to do is to condiser whether to manage PR by yourself or alternatively appoint a PR agency. The following questions are suggested to ask yourself:

• How confident/successful am I at dealing with journalists?
• How much cost and time I spend at managing my public relations?
• Is my response quick enough to cope with those news that damage my reputation?
• Do I have enough resource (staff or facilities) to handle a PR campaign?

Once get answers to those questions, you should consider using a PR service by a third party (PR agency or freelanc PR consultant) if:

• Your PR or advertising budget is over £10,000 annually. If that is a one-off campaign you can consider about a service based on a rate of £200.00/day or £20.00/hour.
• You are not satisfied with the media coverage.
• You are keen to know what does your public think of you.
  
• You have some local media contacts but your company actually is national or international. You need people who have relevant experience and contacts. It is difficult to diffuse the information to national or international media without a suitable PR agency.
• You need multi-language personnal to help to expand your reputation worldwide. It would be costy to hire several multi-language staff only doing PR in your company.
  
• Some bad news related to you company has been published on newspaper but you do not know what to do. You need skilled and well trained PR professionals who are specialized in coping with crisis. They know how to spin a bad situation into an advantage to the company.
• An event cost you so much time and money but it is not as successful as you expected. You hope to save your resource from some work that is not your core competency.

Yes, you can make yourself on news, however, is that the news that you hope to be seen by your public? Do you have sufficient time and money to support those PR campaigns? Or have you successfully turned around a bad news to be advantageous to you? If your core competency is not PR but you need PR, then working with a PR service provider probably would find you a good value for money.

What is Public Relations at all?

Just now I read an article on Wisegeek.com by a chance. The topic is: What is public relations. Actually each time when introduce my job title to some people I have always been asked such question: what is PR? For me, this article does not embed too much wise or geek, (I am not trying to be aggressive to the author) just because the author's explanation is not comprehensive enough. The original article is as below:

(1)The main goal of a public relations department is to enhance a company's reputation. Staff that work in public relations, or as it is commonly known, PR, are skilled publicists. They are able to present a company or individual to the world in the best light. The role of a public relations department can be seen as a reputation protector.

The business world of today is extremely competitive. Companies need to have an edge that makes them stand out from the crowd, something that makes them more appealing and interesting to both the public and the media. The public are the buyers of the product and the media are responsible for selling it.

Public relations provide a service for the company by helping to give the public and the media a better understanding of how the company works. Within a company, public relations can also come under the title of public information or customer relations. (2)These departments assist customers if they have any problems with the company. They are usually the most helpful departments, as they exist to show the company at their best.

PR also helps the company to achieve its full potential. They provide feedback to the company from the public. This usually takes the form of research regarding what areas the public is most happy and unhappy with.

(3)People often have the perception of public relations as a group of people who spin everything. Spin can mean to turn around a bad situation to the company’s advantage. It is true that part of the purpose of public relations is to show the company in a positive light no matter what. There are certain PR experts that a company can turn to for this particular skill.

(4)The public often think of PR as a glamorous job. Public relations people seem to have been tarred with the image of constant partying and networking to find new contacts. The reality is usually long hours and hard work for anyone involved in public relations.

There are certain skills necessary to work in the world of PR. These include a very high level of communication skills, written and verbal. The PR person must also be very adept at multitasking and time management. (5) He or she may also have some form of media background or training in order to understand how the media and advertising work. Organizational and planning skills are also important in public relations.

The PR worker must also be able to cope very well under pressure. He or she must have the ability to cope with a barrage of questions from the media and the public. If a company comes under critical attack, it is the PR department who must take control of the situation. They must effectively answer the criticism and turn it around in order to protect the company’s reputation.

(6)A public relations worker usually has some form of relevant college qualification. Competition for jobs in PR is fierce. A talented public relations person has the opportunity to work up from a junior account executive to an account director in around five years. This is not a nine to five job; the hours are long and can be stressful. However, for successful PR workers, the pay is good and the perks may be even better.

My thoughts:

(1)The Public Relations Society of America (PRSA) claimed: "Public relations helps an organization and its public adapt mutually to each other." Public Relations exists in every organization and institution, profitable or non-profitable. Here the public includes not only customers who will pay to buy an product or service but also those who will take action in other forms upon the information they receive. For example: An governmental department launched a series of anti-drug campaign, the key audiences are the people who used to take drugs, are taking drugs or intend to try drugs. The campaign itself is non-profitable and the key audiences are not expected to pay any penny to the organizer. Thus, the author of this article has made two mistakes:1. in a PR activity, the launcher is not must be a company, it could be a government, a society, an academic institution, or even an individual. The public are not must be buyers, they could be anyone who have the potential to be involved in the PR activity.

(2) When reading this sentence I had a strong feeling: does this guy refer PR to customer service? According to the PRSA, the essential functions of public relations include research, planning, communications and evaluation. Nowadays, in some big organizations, PR has been directly involved in the management level such as setting up annual goal, making decision and planning business strategy. It plays a big role in media relations, stockholder relations, investor relations, staff relations, as well as customer relations. So far I have summed up a conclusion, this guy conceives PR as Marketing.

(3) I would say that I agree with the author, especially in Crisis Communication. A PR practitioner uses his/her skill to turn around a bad situation into an advantage and display the organization to the public in its best light is a very tough and challenging task but not that difficult once the PR practitioner is well trained and skilled. In Chinese, crisis is interpreted as: danger and opportunity. To explore the opportunity embeded in the disadvantageous situation is exactly a PR practitioner is looking to do.

(4) Another truth.

(5) Again, the author mistakes advertising same as PR. Actually the difference between advertising and PR is: advertising is when you go up to the person and confidently talk about how fantastic your company is, how it is the greatest finishing company on Earth and perfectly equipped to make his or her every finishing dream come true. Public relations is when the prospective customer comes up to you and says admiringly, "I've heard how wonderful your company is, and I'd really like to get to know more about it."

(6) I am holding a Master degree in Public Relations and have been working in this industry for a while. My feeling is that as long as you love this job, it could be very exciting and rewarding. I never feel like I am working under pressure, the other way around, the fast pace of life makes me feel enriched.