Sunday, November 25, 2012

Lacoste : a Chinese failure?

http://www.monalbum.fr/GroteFoto-ZC68A76O.jpg
In a former article about the Castel Group I told you that a company in oder to achieve in China should manage both:



I remember my marketing course and « the Kotler » : a company should penetrate a market in due time.

  • If the market is too young, then the demand is not present. You have no customers
  • If the market is mature, then competition is too strong

A big multinational company can offer the luxury of making some losses: It can arrive on a market before others, reinforce its brand, test and consolidate. This is what Mac Donald did. It arrived in China with a insufficient offer. Iy adapted, extended slowy, waiting for (the anticipated?) change of the market and customers tastes.



Lactoste Group lacked reactivity and vision.

Who knew Lacoste in mainland China 5 or 10 years ago ? 
Nobody. 
But this didn’t matter. Chinese except a few didn’t know any the brands (who knew Starbuck in China 5 years ago ?).

Who knew Lacoste in Hong Kong 5 or 10 years ago ? 
All the foreigners, french and europeans.

It was then important to strengthen this image targeting foreigners in China and extend to mainland. Chinese masses: build a strong brand in China.
How much did Lacoste invested in Hong Kong ?
How many shops did the group opened? What advertising campains were done?


Today Lacoste seems to me to be in a deadlock to devop in China.

The group didn’t do a lot in order to build on its unique assets in China: 

  • A famous brand recognized to the foreigners expetially in Hong Kong and in big cities like Shanghai, Beijing
  • A special logo that customers can remember
  • A unique story and history. The Tennisman René Lacoste and his nickname the Alligator. The famous Chinese brand Lining used the image and the story of a Chinese sportman to shape a strong brand. Chinese people love stories. When I explain to my students the story of Lacoste and who was called the alligator, how he sew a crocodile logo on his shirt, while playing tennis! And later on how he started to sell Lacoste shirts.



At the same Chinese competitors invested a lot in order develop and establish to their brands : 

  • They copied and improved Lacoste logo 
  • They simplified the brand
  • The used more suitable denomination for a Chinese public
  • Lacoste clothes were copied and even improved.


Lacoste didn’t worry enough about Chinese copies and kept the same product goal in term of brand communication. At the same time it is likely that the Group had other worries to deal with in Europe: its brand image was greatly threatened when poor customers from imigration started to wear it.

As I recently went to Hong Kong, I could see everywhere advertisements for the Brand Crocodile: one of the multiple Chinese imitations of Lacoste.
As the Chinese saying goes: there is only one place under the sun: only one main brand.
  


Today Lacoste could try to reconquer the Chinese market and to do so bet on a its faithfull western customers?
I think this would be very tough:

  • Many Chinese imitations have good quality products. Lacoste should lunch new revolutionary products and change its product quality standards
  • You don't have that many Lacoste faithfull customers as the brand had up and down

One thing for sure: if Lacoste wants to conquer the Chinese market it can not simply count on its brand and should not use a brand strategy! It is too late for this! 
Since Chinese brands like crocodile are already established and well known. Also they invest a lot to build their brand.

3 comments:

  1. The picture shown in the blog posted by you that is a Lacoste showroom or store.

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    Replies
    1. No it is a store from a "Lacoste copy". To my knowledge there is still no Lacoste shop here in Changsha Hunan.

      There are some Lacoste store in Hong Kong and I believe in some mainland coastal cities: Shanghai, Beijing...

      However in most places Lacoste let the competition take position while copying the products and logo. I fear there is little place for a come back now.

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    2. Also it is interesting to notice that this "fake Lacoste" established just inside the Carrefour which is also a french company.

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