While this may sound obvious to a seasoned marketer, we have been consistently amazed at the corners many new entrants are prepared to cut in their haste to get their product to market.

A recent Economist Intelligence Unit (EIU) survey (1996) confirms this point. Given the chance to launch again in China (if only!), most companies wished they would have done more background research and positioned their brands differently. Pretty fundamental stuff!

So dust off the old Marketing textbook, it will probably be of far greater value than any of the many "How to do business in China" books (which on the whole seem intent on confusing the reader with tales of mystique rather than providing a useful context). While there will inevitably be any number of nuances specific to Chinese consumers within your product category, it is worthwhile to start thinking about the fundamental motivations that will drive purchase as a first stage.

Back to the battered old textbook, look up 'Maslow's Hierarchy of Needs'. What is the stage of development in your market? Are you going to be catering to primary needs, or are you fulfilling higher level secondary needs?

Take the example of S.C. Johnson's Toilet Duck. In most markets Toilet Duck is positioned on the basis of convenience - its unique shape developed to 'clean the parts other toilet cleaners can't reach' - a highly successful differentiation proposition in developed markets. In these markets however, toilet cleaners have undergone a 'proposition evolution' over many years. As basic 'germ killing' efficacy credentials became parity propositions, brands began to differentiate along the lines of secondary level needs, like convenience or fragrance.

S.C. Johnson initially wanted to launch Toilet Duck in China with a Hong Kong commercial based on the international convenience positioning. Unfortunately, consumers in China have yet to be persuaded that they should use a specialist toilet cleaning product, let alone one that conveniently cleans the nasties that hide under the rim! Currently the majority of consumers will simply use the washing-up water to clean the toilet, if at all. Unlike many companies entering China, S.C. Johnson were sensible enough to do the necessary research to identify this problem prior to launch, hence avoiding a very expensive mistake.

Another 'obvious' point is pricing where seemingly marginal differences can, in the Chinese consumers' eyes, be responsible for positioning a product anywhere from 'niche premium' to mass market. Chinese consumers have been educated to believe that more expensive international brands are better quality, but it doesn't mean they will necessarily buy them in preference to local brands.

While disposable income has been rising steadily, consumers remain highly price sensitive due to their low incomes. Often the gap between 'premium/International' and local products can be as much as 400% (Toothpaste for example, many local brands are around 3 RMB while Colgate is around 13 RMB). This in itself has created opportunities for marketers to fill gaps. Tide detergent is an example of a brand taking advantage of the demand for international products, tempered by the price sensitivity of the market. It promises international brand credentials at a mid price to the emerging quality conscious, price sensitive Chinese consumer.

In many FMCG markets there is a need to be aware of how consumers obtain their products - often Chinese will receive many basic products free from their work unit, and while your product may be vastly superior and 'worth paying for' check first - it's hard to compete against 'free'.

Some companies have demonstrated their ability to manage pricing issues with lateral thinking. Take the example of Instant Coffee - where the expensive nature of the product within the reference of 'hot beverages' to Chinese consumers (tea of course!) has meant that the product has been totally repositioned as a gift concept, complete with powdered milk - which also effectively positions the product as aspirational, appropriate for this stage of development in the category.

To fully comprehend the Chinese market it must be thought of as a multitude of different smaller markets, divided by extremes in demography and geography. Because of the realities of distribution in China and the extreme economic growth rates, the key urban markets are the inevitable starting point. Companies tend to focus on the primary markets of Shanghai, Beijing & Guangzhou (possibly Chengdu), then on to the 50 or so Secondary and 100 or so Tertiary markets that make up Urban China (400 million people - larger than Europe!).

That being said, in the long term, it will be the rural markets that account for the majority of sales. In India for instance (there are many similarities between the two markets), the rural markets account for in excess of 70% of sales for companies like Unilever. Many companies are already investing in this area for mass-market returns in the longer term.

The EIU survey revealed that while distribution was universally acknowledged as the most critical issue to success in China, the majority of companies significantly underestimated the difficulties. Most companies make the mistake of launching too early. Many companies have wasted millions of dollars by blowing their launch budgets in an attempt to drive distribution. One black and white statement from experience, advertising simply does not drive distribution in China.

Smart companies delay launching until distribution has reached around 80%. Even smarter ones will check penetration themselves, as guarantees of distribution from a JV partner's sales force are often based on saving 'face' rather than actual penetration.

One of the critical factors in successful distribution penetration is for Marketing to work very closely with Sales. Not an easy task given this is the traditional divide between a JV's foreign and local partners.

Companies also tend to underestimate the importance of Trade Marketing Communications. At JWT we typically work with Clients for several months on Trade Marketing Communications in order to help secure maximum distribution penetration prior to a launch.

These communication programmes supplement trade margins and incentive programmes (a critical area in themselves) and are specifically targeted at the multiple levels within distributor and wholesaler networks. The key objectives being to communicate the sales of the brand potential (brand positioning opportunity), the intended support activities and most critically, to provide sales materials that compensate for the lack of a sales culture, particularly within the wholesaler and sub-wholesaler channels.

Companies should not underestimate the importance and effectiveness of below-the-line communications in China. Both in terms of helping to secure trade support and as a means of generating sales. A well planned below-the-line campaign (particularly logistics planning), comprising Point-of-Sale, merchandising and particularly sampling are highly effective in this regard.

When it comes to above-the-line, TV is the most cost efficient media in China. However, it is also one of the most competitive and cluttered markets in the world. Commercial breaks are typically between 10 to 15 minutes long. In some cases, as was the case recently with a prime break on Shanghai TV, breaks can last up to 30 minutes containing well over 100 commercials! There is no mystery here for the ex-pat marketer, the importance of creativity and single-mindedness learnt in developed markets are just as important, if not more so.

Another consideration is the role of advertising in China. Very few brands have a long history in this market. Often advertisers find themselves in the position where they are faced with multiple tasks that are difficult to reconcile with the need for single-mindedness. While this in itself will sound familiar in China, the advertiser often has to take the lead and educate consumers about the need for the product category itself (a situation obviously fraught with pitfalls and well as opportunities), as well as building their own brand profile. This is in stark contrast to developed markets where the role of advertising is more often to reinforce brand awareness.

In this context, we often see the inappropriate use of 'reinforcement' media as advertisers attempt to break-out of the TV stranglehold. A good example of this is the over-use of outdoor in China where you will see logos plastered everywhere. While brand awareness is important, there is little point in building awareness of a brand name if consumers don't even know what you are selling or why they should buy it. Fundamentals again!

In our own business we have experienced the 'dream' exponential growth (in 1994 we billed US$5 million with staff of only 15, today JWT Shanghai is the largest single agency in China, billing US$ 45 million and a staff of 130) and in the process we've learnt - often the hard way - the need to adopt a 'back to basics' attitude.