Made in China 2008: The Challenge for Chinese Brands Going Global

There are a few Chinese brands like Lenovo, Tsingtao, Geely have continued reached towards the global market. However, the negative associations of poor quality, low safety, and cheap are deeply entrenched in the image of Chinese products. Now is the critical moment for Chinese business leaders to rethink the next stage of growth. This transformation must not only take place in technology, quality control and international cooperation, but in brand creation and brand management. This report provides a tangible assessment of the made in China label and the progress of Chinese brands.

Quality and safety issues and a “low price” image still dominate the perception of products from China. The Beijing Olympics improved perceptions, though gains were quickly erased by the milk scandal. The survey shows that only 6% of respondents agree that they like to buy Chinese products and brands. For all the hard work and investment put into the Olympics, 66% of respondents agree that the Made in China label hurts Chinese brands.

The transformation of the made in China label and the acceptance of Chinese brands overseas cannot be made overnight. The first challenge is to improve the quality and safety of all Chinese products.

For any Chinese brand to succeed, every Chinese brand must take responsibility to deliver on its promises to customers.

Among self-identified brand purchasers, brand personality is critical to success, but Chinese brands do not currently possess personalities that influence critical purchase intention.

Interbrand’s Made in China studies are designed to gain a greater understanding of global attitudes toward Chinese products and brands.

Interbrand. 4 Jan 2010 http://www.interbrand.com/

Library Research

The following references are useful sources for thesis development.

Available in both Toronto Reference Library and North York Library.

Roll, Martin. Asian Brand Strategy: How Asian builds strong brands. New York: Palgrave MacMillan, 2006.

Mooij, Marieke de. Global Marketing and Advertising. California: Sage Publication, Inc, 2005.

Keane, Michael. Created in China: The great new leap forward. New York: Routledge, 2007.

K. Yuan, James. Inch, Jason. Supertrends of future: Billion dollar business opportunities for China’s Olympic decade. Singapore: 2008.

Gunelius, Susan. Harry Potter: The story of a global business phenomenon. New York: Palgrave Macmillian, 2008.

Chadha, Radha. Husband, Paul. The cult of the luxury brand: Inside Asia’s love affair with luxury. London: Nicholas Brealey International, 2006.

Temporal, Paul. Branding in Asian. Singapore: Siak Wah Press, 2000.

L. CYR, Lisa. Innovative promotions that work. Massachusetts: Rockport Publishers, Inc, 2006.

Chua, Perry. Ilicic, Dann. Logo savvy. Massachusetts: Rockport Publishers, Inc, 2007.

Fishel, Cathy. Freelance design in practice. Ohio: How books, 2009.

L.CYR, Lisa. The art of promotion. Massachusetts: Rocport Publishers, Inc. 2005.

Zaltman, Gerald. How customers think: Essential insights into the mind of the market. Boston: Harvard business school press, 2003.

McKenna, Regis. Total access: Giving customers what they want in an anytime, anywhere world. Boston: Harvard business school press, 2002.

Marieke de Mooij. Consumer Behavior and Culture: Consequences for global marketing and advertising. California: Sage Publication, Inc, 2004.

Why can’t Chinese build global brands? Study Continue2...

Interband analysis dimensions:

Financial review - we studied each company’s financial size, profitability and overseas sales performance to assess their ability to sustain long-term brand building efforts

Brand survey - we analyzed the results of our survey to assess the awareness, attitudes and prognosis for Chinese brands.

Company audit – we studied the strategies, activities and media statements these companies have made, and the competitors and trends in their industries, to understand their market potential.

Based on these criteria and our analysis, 12 companies that are already achieving strong recognition for their brands overseas, or are likely to achieve success in the next 3-5 years.

Lenovo, Haier, Huawei, CHERY, TSINGTAO, ZTE, Brilliance Auto, Geely, Gree, Media, TCL, Baidu

LESSONS LEARNED FROM BEST GLOBAL BRANDS

• Understanding
• Relevancy
• Shared Responsibility
• Consistency
• Efficiency

Why can’t Chinese build global brands? Study Continue...

The Survey

Please indicate how much you agree or disagree with the following statement: "Chinese brands are..."

Please indicate how much you agree or disagree with the following statement: "In the next five years, a Chinese brand will be a leader outside of China in …"

Please indicate your familiarity with the following brands.

Why can’t Chinese build global brands? Study

Interbrand conducted a study on Chinese brands 2007 in an update of 2005 “Made in China” study, continue to analyze which Chinese brands are ready to go overseas markets.

Challenges in going overseas:

• Low cost manufacturing, leading to low prices in the marketplace.
• Lack of marketing experience
• Lack of knowledge of different tastes, purchase drivers and cultural cues overseas. (for example pronunciation difficulties)
• Brand awareness
• Suffer from quality issues
• With so many Western companies outsourcing manufacturing to China, and the high costs of shifting production to another country, consumers are left with very little choice in the short-term. Forty percent of consumer products imported to the United States in 2006 came from China.

Over the period of six weeks in Summer 2007, an online survey was made available via www.businessweek.com, www.interbrand.com and www.brandchannel.com. Over 700 business and marketing professionals around the world completed the survey.

• US/Canada 46%
• Europe 24%
• Asia-Pacific 16%
• Australia 7%
• Latin America 3%
• Others 3%
• Male 61%, female 39%

Do you believe "Made in China" helps or hurts Chinese brands today?

• Hurts 66%
• Neutral 4%
• Helps 30%

How often do you believe consumers look for the country of origin on the label of products they buy?

• Sometimes 43%
• Always 6%
• Never 1%

Book Review: Brand New China

The book Brand New China offers a unique perspective on branding culture of China. Wang shows the influences of American branding theories and models and explains the impact of new media in Chinese market. She shows where Western thinking works in China, where it does not. Most importantly, where is creates opportunities for cross-fertilization. Brand New China helps me understanding the pop culture, consumer segment and rapidly transforming Chinese society. It’s a very usefully source to start with.

Wang, Jing. Brand new China: advertising, media, and commercial culture. US: Harvard University Press. 2008

Avatar's Success In China Offer Universal Branding Lessons

Avatar reached a peak of popularity just two weeks after the film was released. The success provides a valuable lesson for anyone planning a product or marketing launch in the nation of 1.3 billion people.

Broader economic and social issues can have an impact on business in China in ways that they don't in the US. As a developing country, China has to be conscious about products and campaigns come into China, they may have an unexpected significance that can prompt a government crackdown and public backlash.

Avatar’s success in China shows the importance of market though it's not a guarantee that nothing will go wrong, it provides a branding and marketing strategy in such a complex culture.

Fitch, Laura. Brandchannel. 26 January, 2010. http://www.brandchannel.com/

Thesis Focus: Cross-culture Design-Branding

Cross-cultural design is designing technology for different cultures, languages, and economic standings and Ensuring usability and user experience across cultural boundaries.

Fisher, Linda. “China: Economic Powerhouse—and land of branding opportunities” AIGA. August 07, 2006. 20 January 2010 < http://www.aiga.org/content.cfm/china-economic-powerhouse-and-land-of-branding-opportunities >

This article raised the awareness of huge potential branding opportunity in China due to the growing products and services. However, there’re many challenges: Firstly, the development of new Chinese brands and revitalization of heritage brands within China itself; secondly, the push to position Chinese brands increasingly on a global scale, and lastly, the impetus to position Western brands within China itself. To conquer these challenges, we need a good grasp of Chinese language, well understanding of traditional Chinese culture, branding perceptions and globalize Chinese brand. This article helped me to redirect my thesis directions. My topic will be focusing on cross-culture branding to position Chinese brands go on a global scale.