Chi­nese brands need a strong iden­tity to con­nect with global con­sumers if they want to reach the ranks of the world’s most fa­mous prod­ucts

China Daily (USA) - - ANALYSIS - By WANG MINGJIE in Lon­don wang­mingjie@mail.chi­nadai­

If you were to ask peo­ple out­side China how many well­known Chi­nese brands they can name off the cuff, there prob­a­bly wouldn’t be that many. How­ever, if the ques­tion were asked about US brands, then Face­book, Ap­ple, Star­bucks and Ford would likely roll off the tongue.

The num­ber of valu­able home­bred Chi­nese brands is clearly not pro­por­tional to the coun­try’s sta­tus as the world’s sec­ond-largest econ­omy.

With China ex­pe­dit­ing its ef­forts to trans­form a man­u­fac­tur­ing-led econ­omy to a con­sump­tion and ser­vice-driven one, brand­ing is in­creas­ingly seen as a key strat­egy to achieve this goal.

The im­por­tance of brand­ing has been rec­og­nized by the Chi­nese lead­er­ship in re­cent years, as the coun­try is de­ter­mined to see a tran­si­tion from low-qual­ity to high-qual­ity pro­duc­tion, and from unbranded or weakly branded prod­ucts and ser­vices to strong Chi­nese brands.

In 2014, Pres­i­dent Xi Jin­ping in­di­cated that China must un­dergo se­ri­ous re­struc­tur­ing, in­clud­ing a move­ment from “made in China” to “branded in China”.

In June, the State Coun­cil re­leased a doc­u­ment on how to up­grade do­mes­tic sup­ply and de­mand struc­tures by en­hanc­ing the qual­ity of prod­uct brands in China, in­clud­ing ex­pand­ing pub­lic­ity for brands with in­de­pen­dent in­tel­lec­tual prop­erty rights, and en­cour­ag­ing con­sump­tion.

Ex­perts say this is un­doubt­edly the right strat­egy for China and Chi­nese com­pa­nies to cap­ture more of the pro­duc­tion value chain.

Ac­cord­ing to a re­port by Brand Finance, a Lon­don-based brand val­u­a­tion con­sul­tancy com­pany, China came sec­ond in a list of the world’s most valu­able na­tional brands last year, val­ued at $6.3 bil­lion, be­hind the United States at $19.7 bil­lion.

“China is try­ing hard to win re­spect from the rest of the world and re­store con­fi­dence that a great na­tion like China needs. If there is no suc­cess­ful na­tional and cor­po­rate brand­ing, this will be dif­fi­cult to achieve in global mar­kets and mod­ern so­ci­ety,” says Paul Tem­po­ral, a global ex­pert on brand cre­ation and an as­so­ciate fel­low at Ox­ford Uni­ver­sity’s Said Busi­ness School.

Tem­po­ral sug­gests China cre­ate a na­tional task force to over­see brand­ing ef­forts through­out the coun­try, sim­i­lar to those of Sin­ga­pore and Malaysia, as brand­ing ac­tiv­i­ties in China are frag­mented — provinces and com­pa­nies are all look­ing to cre­ate their own brands.

David Haigh, CEO of Brand Finance, says it is com­mon for na­tional and re­gional gov­ern­ment or­ga­ni­za­tions to pro­lif­er­ate brands, which can con­fuse the over­all im­age.

“There is a great deal of frag­men­ta­tion at the city, re­gional and na­tional level within China, which weak­ens the over­all mes­sage for Brand China ex­ter­nally,” he says, whereas in the UK, there is one co­her­ent and uni­fied na­tional brand cam­paign.

The Great cam­paign, sup­ported by the Bri­tish gov­ern­ment, has sim­pli­fied and fo­cused the mes­sage for the UK. It is now used in all Bri­tish em­bassies, trade pro­mo­tion ac­tiv­i­ties and tourism pro­mo­tions to help Bri­tish tourism, ex­ports and for­eign di­rect in­vest­ment.

Wang Qing, a pro­fes­sor of mar­ket­ing and in­no­va­tion at Bri­tain’s War­wick Busi­ness School, holds a slightly dif­fer­ent opinion. She notes that the Chi­nese gov­ern­ment has in­di­cated re­cently that it wants to pro­mote a num­ber of large, sta­te­owned en­ter­prises as na­tional cham­pi­ons, sim­i­lar to poli­cies adopted by Sin­ga­pore and South Korea.

“While I agree that there should be a more co­or­di­nated approach to brand build­ing, es­pe­cially for in­ter­na­tional mar­kets, the highly cen­tral­ized approach by coun­tries like Sin­ga­pore and South Korea will not be suit­able for a coun­try as large and di­verse as China,” Wang says.

She says strong na­tional brands should emerge from a com­pet­i­tive do­mes­tic en­vi­ron­ment based on free mar­ket mech­a­nisms, and the rise of both Huawei and Len­ovo as strong na­tional brands is a good man­i­fes­ta­tion of a free mar­ket approach.

Apart from re­sources and in­vest­ment, Wang says brand build­ing also re­quires crafts­man­ship, pa­tience and per­se­ver­ance. The gov­ern­ment’s role is to cre­ate a le­gal en­vi­ron­ment

Pow­er­ful com­pa­nies al­ways de­velop their brands based on emo­tions of univer­sal ap­peal, says Tem­po­ral, who cites the ex­am­ple of Nike, driven by the emo­tional brand drive of win­ning; Coca-Cola, based on the con­cept of hap­pi­ness; and Wal­mart, as­so­ci­ated with en­rich­ing peo­ple’s life.

Chi­nese brands and busi­nesses might have cor­po­rate vi­sions that deal with num­bers and mar­ket shares, but they do not have brand vi­sions, he says. “Brand vi­sions are all con­cerned with what you want to stand for emo­tion­ally in the minds of your cus­tomers.”

Haigh from Brand Finance agrees, say­ing: “World-beat­ing brands all at­tract pas­sion­ate loy­alty from their cus­tomers be­cause they cre­ate an emo­tional re­la­tion­ship and at­tach­ment. Such loy­alty is like a great friend­ship or love af­fair. Emo­tional brand loy­alty leads to higher prices and more fre­quent usage.

“Brands work best when they com­bine de­sign and man­u­fac­tur­ing su­pe­ri­or­ity, func­tional ex­cel­lence, su­perb ser­vice de­liv­ery with emo­tional at­tach­ment and an at­trac­tive and unique per­son­al­ity,” he adds.

While China is gear­ing up to build its brands glob­ally, many West­ern com­pa­nies are keen to break into the Chi­nese mar­ket as a re­sult of Chi­nese con­sumers spend­ing a great deal on high-qual­ity, lux­ury prod­ucts. Yet some­thing as sim­ple as a name can make all the difference in suc­cess or fail­ure.

Prod­uct nam­ing can be a mine­field for many West­ern com­pa­nies, due to cul­ture and lan­guage dif­fer­ences.

“Many peo­ple don’t re­al­ize that there is quite an art to the nam­ing process. Brand names in China are ex­tremely sig­nif­i­cant to con­sumers, much more so than in the West. It could ac­tu­ally make or break a prod­uct, and get­ting the right com­bi­na­tion of brand mean­ing and pro­nun­ci­a­tion is a fine art when launch­ing a prod­uct in Chi­nese mar­kets,” says Stephen Knowles, man­ag­ing di­rec­tor of In­dus­trial De­sign Con­sul­tancy UK.

In­dus­trial spe­cial­ists say nam­ing a prod­uct is not just a sim­ple case of trans­lat­ing a word, as Chi­nese char­ac­ters can be in­ter­preted in a num­ber of dif­fer­ent ways and there are many dif­fer­ent di­alects in China, which can lead to mis­in­ter­pre­ta­tion if the nam­ing is not well planned.

Launch­ing a prod­uct in China is a big in­vest­ment for West­ern com­pa­nies so it is im­por­tant to get the name right. A bad name can jeop­ar­dize that in­vest­ment, whereas a great name can sig­nif­i­cantly in­crease the re­turn on the in­vest­ment.

The key to suc­cess, Knowles says, is the cre­ativ­ity and cul­tural un­der­stand­ing to link West­ern val­ues with the needs, cul­ture and lan­guage of the Chi­nese mar­ket.


A visi­tor tries a ZTE Corp virtual re­al­ity head­set at the Mo­bile World Congress in Shang­hai on June 30. More big Chi­nese com­pa­nies such as ZTE are work­ing with PR con­sul­tancy firms to build their brands in the West.

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