Michel Gutsatz: Reinventing for Better Brand Positioning

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Michel Gutsatz: Reinventing for Better Brand Positioning
intern journalist of whichmba.net

Michelle Miao

Intern journalist of whichmba.net

On May 31st, at the open lecture and program info session of KEDGE-SJTU Global MBA Program, Michel Gutsatz, Associate Dean, MBA Director of KEDGE Business School, the adjunct professor at China Europe International Business School and President Le Jardin Retrouvé  gave a speech about brand positioning in the unique Chinese e-commerce system.



Michel's professional experience has taken him back and forth between companies and academia. He has worked in fields from luxury brands to mass-market brands where he managed projects that encompass Brand Positioning, Product Innovation, Brand Identity, Design, Packaging and Edition. His recent experience has been taking him to Asia where he has developed an intimate knowledge of all consumer cum branding issues in China.


Chinese market and e-commerce is different and unique in the world.

According to Michel Gutsatz, Chinese market and e-commerce is different and unique in the world. Starting from copying, then creating something completely different, China is considered an intelligent "copycat". However, this digital eco system serves all Chinese well, and leads the world ahead. Unlike western social media, what characterizes Chinese model is UGC (user generated content). Meituan is a perfect example for UGC: tens or thousands of reviews are written by users, giving comments to the restaurant, to the hotels. 



The integration of Apps is another crucial character of the Chinese market. For example, the most pervasive App in China, Wechat, integrates all social platforms and other Apps including Uber, Facebook, Messenger, Skype, Paypal, etc.


Understanding how major online eco-systems work is crucial to the decision-making of companies.

Michel Gutsatz believes that understanding how major online eco-systems work is crucial to the decision-making of companies. In China, three major companies referred as BAT (Baidu, Tencent, Alibaba) make up the largest e-commerce systems, functioning more than just search engines, messaging service software and online shopping platform. 



Tencent has its own eco system including Wechat, Tencent news, Tencent video, QQ music, etc. While Alibaba has Alipay (Similart to Apple pay), Taobao, Tmall, etc. BAT each drives online traffic and convert the traffic to sales. Meanwhile, they all have payment systems and offline-to-online business models, which are trending nowadays along with cloud service and data analyst. For example, mobile payment a fundamental element of daily life in China, connects offline (buying things in real physical stores) to online (paying with money online in Alipay). 


Usually backed up by BAT, online retailers are powerful in China but each has distinct features. Recognizing these different features is crucial for brands. Retailers including Taobao, vip.com and Jingdong are really powerful in China and have become part of people’s everyday life. Nearly every Chinese has these Apps on his or her smartphone and shops online. 



However, each platform has different positioning and thus the shoppers are different. Taobao has a lot of discounted and even fake products, which creates challenges to the companies. But usually products on Taobao are cheap, so the business volume is huge. While T-Mall and Jingdong are more upscale, targeting consumers who focus on quality over price. All these features give distinct opportunities to brands while selling products outside their own websites. In fact, sales on these platforms are usually greater than on the brands’ own official websites. 


Chinese e-commerce systems make things convenient for the people. To some point, "it is time to copy China", as China is also learning from the world.


Chinese brands need to improve the marketing skills.

Michel Gutsatz also gave advice to brands in the Chinese market on how they should react in the developing e-commerce eco system: Chinese brands need to improve the marketing skills.


The key point nowadays is the accuracy. It is not 20 years ago anymore, when marketing and advertising was about spending tons of money on TV and newspapers, hoping to reach some of the target audience. A great part of that money was wasted. Now brands have to reach their target audience directly talk in a more accurate manner. Consumers are differentiated by tastes, profiles, and ages. Customized message for each distinct group is more effective than bombarding them with emails. Newmarketing method based on big data and AI, which increases the conversion rate, will become more pervasive.



Another point is for companies to reach its consumers like another human being instead of a lifeless brand. In order to do so, a brand needs to change its attitude, positioning and storytelling, and understand the trends of the customers. It is crucial to understand how the customers react, their journey and expectation. It is now the age of culture through selling the vision of the world to the customers instead of plainly selling the product. The only way to engage with consumers is to deliver culture contents targeting specific subcultures. For example, Dove had a campaign selling the vision that each woman is more beautiful than she thought. They had a profiler come over and he drew the face of a group women based on the description of their own and on the description of strangers who saw their faces. It turned out that women usually focus on the flaws on their face, and the pictures based on the description of strangers are closer to the real look of the women.



Chinese brands need to invest in marketing and make good use of the social media platform in China

With these key points in mind, Chinese brands need to invest in marketing and make good use of the social media platform in China. China is famous for its production industry but pays little attention to marketing. Many companies do not even have a marketing team. They have to learn what marketing is about and how to invest in marketing. Companies should keep in mind that marketing is more than just social media, but the use of social media is great to help the company build its brand. This is because most Chinese consumers are on mobile. With integrated apps like Wechat, China companies have access to both communication with consumers and selling online simultaneously. Just as Jack Ma said, in China Internet is not just a tool to make commerce more efficient; it has become a life style.


Chinese brands can learn a lot from foreign brands. The key to success of European luxury brands including Chanel and Dior is building a consistent brand image. Michel Gutsatz suggest that Chinese companies should bring in marketing talents who have experience in well-known overseas brands and invest wisely in marketing. 



While from many relatively new American fashion labels, including Michael Kors, Coach, Kate Spade and Tory Burch, there is a lesson to learn. These brands are pretty popular around the world and in China. They have strong styling and brand identity and are copying all the luxury codes. Meanwhile, their price is below entry level. Average Chanel ladies handbag is $3,000; average Coach or MK ladies handbag is $500, which is why these U.S. brands call themselves accessible luxuries. If people have a tight budget or a relatively low salary, of course people are going to buy these brands instead. These brands give the consumers an expression that they are buying into luxury but with less money. Bu these U.S. brands also face a problem now: they reach the expansion level that can be negative for them. People are starting to say that everyone is wearing MK. They have too big exposure and too many stores and they have to be careful about that.


Acquiring the marketing skills and identifying the brand identity are keys for the development of Chinese brands. China has not yet established some noteworthy luxury brands. We expect the emergence in the near future.


This also applies to brands worldwide when attempting to develop their identities, positioning and pricing.



It is key for these (luxury) brands to permanently reinvent themselves. The traditional brands have to think about how creative those brands can be in offering new products that the younger generation will appreciate. It is not a followers' market any more and it is not the question of money but style. Younger generation cares about unique identity and expresses such identity through the choice of brands. Some will go for MUJI (no logo and no color), others go for BV (same price as Chanel but no logo) or Korean brands. 



We have got a market with many competitors, different brand identity and price positioning. There are both the challenges and opportunities, because there is room for everyone as long as the brand has a strong brand identity. And in such process, reinventing oneself is the crucial factor. Gucci was thought to be dying two years ago, because no excitement. Then it changed the head designer, and within two years, Gucci is back as the hottest brand. 


A brand must not speak like an advertisement, not speak like a marketer, it must speak like a person. Methods could be content creation based on video platform. It should always be entertaining and create fun, not only advertising the product. A brand should always be reinventing.


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