Branding in China

Published: 2021-07-01 07:20:07
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Category: Brand, Globalization, Reputation

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A great deal of discussion has taken place regarding the best approach to build a successful brand in an increasingly globalized market. A globalized market is defined as including emerging markets, which are quite different from the markets found in the developed world. Prior to the influx of the globalized market place, corporations did not concern themselves with geographically distant marketplaces. (Ayala, 1996). In today’s market, a majority of the established brand names come from the Western world. (Chan, 1997).

However, as these Western brands expand into the international market, and thus into new markets in developing nations, these companies have realized that foreign markets are often more attractive than their domestic counterparts. In 2004, for example, 40,000 new companies were started in China as the result of approximately $57 billion in foreign investment. (Eisenberg, 2007). For this reason, Western brands have been moving towards creating a brand recognition similar to what they created in their Western origins.



The three regions that have been identified as dominating the future global marketplace include the Pacific Rim with emphasis on China, North America and particularly Canada, and the European Union (EU). (Eisenberg,2007). Due to a combination of China’s reputation as a challenging country to break into, lengthy history and recent rapid movement of development attract foreign businesses to the nation. Commencing with Deng Xiaoping’s open-door reforms, China has moved into the spot of “world’s biggest market”.
Part of this has to do with its population of 1. 2 billion. Once the market doors opened, many international businesses moved in and established a market presence with the hope of earning a significant profit. Surprisingly, this was easier said than done. A vast majority of businesses failed due to a general lack of knowledge as to both the Chinese people and the Chinese way of doing business. (Ayala, 1996). Those who did succeed still initially eventually found themselves withdrawing from the market.
In the big picture, very few foreign companies have succeeded in building brands in the Chinese market. Those who have succeeded did so by working to enhance the status of their brand by adopting culturally appropriate strategies and establishing economically sensitive business operations. (Muhlbacher, 1999). Thus, when it comes to establishing a successful brand in the Chinese marketplace, the question is “What can be learned from these past attempts? ” First and foremost one has to consider the companies themselves and evaluate the mistakes they made.
Second, the companies that were somewhat successful should be evaluated as compared to the first group, taking particular note as to the critical differences that have led to their success. When doing this, the differences can be summarized into two broad categories. First, many firms make the mistake in believing that the Chinese market is similar to the Western market they are use to operating in and therefore utilize the same branding strategies. (Hines, 2001). The second group is the companies that spend a majority of their time observing the market, trying to comprehend the method of Chinese business from the outside.
Needless to say, both of these groups ultimately fail at doing successful business in the emerging Chinese market. In order to succeed, one needs to first understand the cultural issues and then reorganize so as to adapt to these issues. (Hines, 2001). Understanding Cultural Issues Globalization does not eliminate differences in language and culture. One of the essential elements of expanding business across cultures is the introduction of a product or service that is easily identified with the brand while remaining consistent with local tastes and tolerances. (Eisenberg,2007).
In order for a traditionally Western corporation to do successful business in the Chinese market, several issues need to first be clarified. First, one needs to understand the essential differences between the Western and Chinese markets. Second, one has to understand how to deal with these differences. (Hines, 2001). A. Collective Society One of the primary differences between Western and Chinese culture is the role that the individual plays in society. Whereas in the West, individualism is the dominate trait of the typical consumer, in China the consumer is much more a collective.
(Hofstede, 1994). The Collectivist culture is characterized by a reverence for the common good as opposed to self interest, valuing of group and family identity more than individual achievement, and tends to respect vertical status hierarchies. (Eisenberg, 2007). This significantly changes the way businesses should approach the consumer. Take for example the computer corporation, Dell. Dell has done a successful business in the West by branding itself as a customized computer provider aimed at meeting the needs of the individual consumer.
However, this branding strategy has not been successful in China. In China, because of the collective mentality of society, the Chinese consumer prefers a standardized product as opposed to the customized product. (Apadu, 1991). Clearly, collectivism continues to play an important role in Chinese society. For example, it is quite common for three or four generations of a family to share a house. Respect for the elderly is another characteristic of the Chinese culture. People show more concern about their parents or grandparents than is often seen in the West Likewise (Usunier, 2000).
An example of how family values are reflected in a China campaign for Ericsson is a commercial in which a well-meaning son buys his father a remote-control TV set and a microwave oven, but declines to stay for dinner. On reflection, the son changes his mind and chooses to spend the time with his father rather than his friends. The tagline is “Communication is caring. ” (Chan,1997). B. Brand Perception Despite the state-controlled market, the average Chinese consumer is quite aware of the brands. In fact, long-established brands are considered more reliable than recent entrants into the market place.
(Pan, 2002). Further, foreign brands carry a high regard by the Chinese consumer. Partly due to the low levels of technological development in the nation’s past, foreign brands carry a reputation of being better than the local brands. For this reason, foreign brands have a foundation of success and reputation from which to work from. More so, foreign brands are often regarded as being more fashionable and therefore have a higher demand. (Schmitt, 1994). One example can be found in the food products made by Proctor and Gamble.
For this company, the entry of the Pringles potato chip brand into the global market was as easy as translating the packaging to a foreign language, but when the unique product became an instant success, meeting the demand became a liability. Rather than a market to rid themselves of surplus product, the company found it necessary to quickly obtain overseas manufacturing plants to keep up with the new demand (Smith 2001). However, it should be noted that this reputation is not as strong as it once was. As the Chinese marketplace has continued to develop, so has the reputation of its homemade products.
Thus, today the Chinese consumer places more emphasis on the quality of the product than just the brand on the packaging. Likewise, the Chinese are careful shoppers, often sampling several alternatives of a product before making a decision as to which brand they will purchase. (Yan, 1994). One reason for this change towards local products is that, with the increase in technology, the average Chinese consumer feels that it is easier to get something serviced if it is a local brand. (Pan, 2002). For example, IBM, Apple and Compaq were once the biggest players
in China’s computer market, but this was when the entire computer industry was still a high- margin and high-tech industry. The technology has become more widespread, and production volumes have increased, computers are no longer considered to be a high-tech product by Chinese consumers. With the development of many local players in the market, such as Great Wall (which operates a joint venture with IBM) and Legend (cooperating with Toshiba), the costs of R&D and production have been cut dramatically. PCs with big brand names are no longer the only option for Chinese consumers.
More importantly, people think that it is easier to solve any problems arising after the purchase with a manufacturer who is based locally. C. Language One of the most significant barriers to do successful business in the Chinese market place is language. As all business transactions center around the ability of the parties to communicate, a fundamental understanding of the language is essential. Without language, a corporation cannot build a brand image or deliver marketing information to the consumer. (Melewar, 1999). Clearly, the Chinese language system is significantly different from that of Western cultures.
Within this difference in language is the difference in the thinking process of the Chinese people. For example, each character in the Chinese language has its own specific meaning. This fact poses a challenge to the Western corporation who is trying to introduce their brand into the Chinese market because the foreign brand name itself does not mean anything to the Chinese consumer. Thus, the Chinese consumer will often view the brand symbol to the product itself, meaning that a company who uses a meaningful brand name will have that name associated with the product and thus is more likely to be remembered by the Chinese consumer.
A key characteristic of successful companies in the Chinese market is their ability to understand the language and in finding a brand name that fits both the product and the meaning of the brand. (Fan, 2002). For example, In China, the Coca-Cola means ‘tastes good and makes you happy’, Keebler means ‘rare treasure’ Ford means ‘happy and unique or special’ and Marlboro means ‘a road with 10,000 treasures’. The well-known auto brand BMW is translated into ‘Bao-ma’, meaning ‘precious horse’, implying that it runs fast and runs for a long time.
‘Horse’ has a favourable image among Chinese consumers and is a very popular subject in Chinese paintings and other art forms. Thus this is a very successful translation. It relates to the product category of transportation and it fits the Chinese culture (Dong, 2001). These US brands enjoy success in the Chinese market due in large part to their well-translated meaning. As recognized by Peter and Olson, ‘the choice of a brand name can be highly important for success of the product because of the various meanings the brand name can activate from consumers’ memories’.
Because Chinese customers purchase these products not only for their personal consumption but also as gifts for holidays and special occasions, the symbolic meaning of a brand name may greatly influence their purchase decision. Therefore, choosing a brand name is more than simply a translation exercise. Culture, norms, values, traditions and history must be considered when translating a brand name into Chinese. A well-known taboo in gift giving in China is giving a clock, because ‘sending someone a clock’ sounds exactly the same as the phrase ‘sending someone to death’.
If a brand name has a similar cultural effect like the word clock, both the brand’s image and its sales will suffer. Some translation problems in the Chinese market result when there is not a fit between the brand name and the product category. Maxwell House coffee was introduced as ‘maishi’ in China, meaning ‘the mai family brand’ or ‘related to wheat’. While the name sounded Chinese, China is not known for growing coffee. The Chinese people were confused and did not know what brand it was or whether it was a good brand.
Since coffee is something exotic to the Chinese, a Western-sounding name may create a better or more fitting image of the product. About six years ago the brand name was changed into ‘mai-ke-si-wei-er’ which is very close to the original sound but with a foreign flavour without any specific meaning attributed to the name. Thus the fit between the brand name and product category deserves attention by brand managers (Ricks, 2000). Even though their brand is the most popular, Coca-Cola took over 11 years to make a profit, in part due to a poorly chosen brand name, when it entered China in 1979 (Hatfield, 1997).
After introducing an improved name, Coke now dominates China’s vast soft drinks market. Coke is not alone in making translation mistakes, international business texts and popular press books are filled with examples of branding and translation blunders. The examples stress the importance of appropriate global communication plants that consider cultural differences and adaptations. Developing one world brand may be a marketing ideal, but it is extremely difficult because words and meanings vary greatly across languages and cultures.
While consumer behavior researchers have found that consumers from different cultural backgrounds react differently to the same stimuli (Peter,1999), the meaning and image associated with the brand name also depends upon the cultural context. While William Shakespeare in Romeo and Juliet believed ‘that which we call a rose by any other name would smell as sweet’, the same does not apply to branded commercial product. The issue of language also has a significant impact on the business end of branding, or in the negotiation part of gaining an entrance into the Chinese marketplace.
The style of Chinese negotiating is very different from that traditional in most Western, and even Japanese, business settings. Although China’s extensive building modernization process has altered its traditional negotiating system, it still remains uniquely Chinese. What is interesting is that instead of seeing China alter its negotiating style in order to compete in the global economy, which is currently Western dominated, the Western nations are altering their negotiating style in order to compete in the emerging Chinese marketplace.
Instead of the typical Westernization of a new market economy, as occurred in Japan, in China there is a unique China-ization of the market place, which is changing how business is done on the global scale, and giving the Chinese the upper hand. Since China’s implementation of the open-door policy and its emergence into the global community, much work has been done on the uniquely Chinese negotiation style. However, much of this information is based on stereotypes and traditions that are no longer dominate in Chinese culture.
For example, most Western studies focus on the importance of relationships and trust in the Chinese negotiation process. However, although these were important components in traditional negotiation styles, they are no longer as central in the new, global China. For this reason, in order to truly understand the Chinese negotiation style and how it compares to those found in the Western world, one must get past the stereotypes and look towards modern China. D. Aesthetic Sense The Chinese people carry with them a strong aesthetic sense, based on their perceptions of nature.
To the Chinese consumer, in general, images of the natural form are highly attractive. For example, mountains and animals are often used in association with brand names in order to create attractive brand imagery and visual displays. On the other hand, abstract symbols are not favored as they are inconsistent with the Chinese cultural preference for natural aesthetics. Further more, the marketer needs to understand that the Chinese people enjoy complicated forms and shapes and certain colors. For example, the color red is seen as being the most cheerful color and thus can be successfully used to attract people’s attention.
Another example is the Chinese preference for peaceful imagery, largely a result of the influence of such religions as Confucianism, Buddhism and Taoism. (Kleppe, 2002). When a company is designing a strategy for marketing their brand in the Chinese marketplace, all of these aesthetic considerations must be made even if they hadn’t been a pressing concern in the home country. While a particular phrase may indicate a product is fun and safe to use in one area, it may translate to something completely different in another language.
Images, colors and phrases must all be carefully considered before being applied to new markets, which presents a significant marketing barrier to large global brands that cannot just change their image depending upon the country they enter. It also remains true that there is no single image, language or cultural heritage that applies to all people, all countries and all age groups. Therefore, it is important to use specific colors and imagery in order to strengthen the brand’s market presence and thus increase overall company profits. (Yan, 1994). E. The conjunction of music and culture as an essential attribute of Chinese branding
Describing the major attributes and characteristics of Chinese markets and branding, it is essential not to forget the meaning of music, culture, and youth’s attitudes towards music as a part of branding within Chinese markets. “The intimate link of cool culture to alternative music, which seems a marketing reflex in the developed world, is a risky ploy to adopt in China” (Wang, 2005). It is not only important to pay attention to how music can be used in Chinese branding, but to pay attention how culture and youth combine, and how this combination can make any branding more effective.
Youth, culture, and music are excellently researched within the mobile phone market in China. Moreover, this research can be limited to the market represented by Motorola and its products. “Motorola serves as an excellent vehicle for navigating the mind of cool youth in metropolitan China, as the mutation of Motorola from a technological brand to a ‘cool’ brand in the world’s largest market relates three stories simultaneously: the shifting brandscape of China’s mobile phone market; the allure of music marketing for transnational handset makers; and the link of mobile music with cool culture. ” (Wang, 2005)
Asking why Motorola has become the leader of the Chinese mobile market, it is easy to state that not only company’s management understood the implications of the Chinese market, but also realized the importance of directing significant finances at advertising and branding campaigns. When aesthetics has been mentioned as one of the essential indices of branding success, it is difficult to conceal that the crucial shift has already taken place within the marketing culture in China: this shift has replaced technology with not only aesthetics, but music as a part of this aesthetics, too (Wang, 2005).
Music has acquired new marketing meaning in China, and the leading companies have received the chance to turn music marketing into one of the best selling points. Music has become not simply an integral feature of Chinese culture; it has become the indispensable component of the Chinese branding and marketing. It is already more than a demographic index in the developing countries: it is more the tool for developing transnational handset carriers (Wang, 2005). However, music should not be recognized as a separate feature of the Chinese marketing and branding.
It is only the means of making youth a part of the Chinese marketing audience: to make youth interested, attracted, and modern. Branding in China is rapidly changing from being traditional to being modern, entertaining, and challenging. In his article, Wang (2005) referred to punk as more sociological than musical phenomenon; as a result this phenomenon could be used for the benefits of branding. However, it is also important to make certain generalizations, and to recognize that music in general has become more sociological than cultural.
“Different age groups develop and define their own cultural preferences and cool standards (for musical taste)” (Wang, 2005). These preferences can and should be researched to understand the implications of the Chinese branding and marketing. Music should be used as a determinant of the marketing strategy in China, but marketing specialists should take into account that music is an unstable category. “In China, music is seen primarily as an entertainment culture rather than a vehicle for serious-self-expression.
The music club culture at Sanlitun flourishes because young people use clubs as a networking venue where they party for fun and for a quick accumulation of human capital” (Wang, 2005). Yet, though researchers risk rejecting the idea of music being the determinant of branding and marketing, it is understandable that separate categories of music clubbers are specially oriented by transnational cell companies. In this case, music is again confirmed as the tool of delivering marketing strategy, and is again referred to as an important feature of Chinese branding and marketing approaches.
Moreover, it is not only used in marketing, but is viewed as the cause of the small subcultures’ formations: these formations are concentrated around the promoted brands. Within the extremely challenging market environment, Chinese culture should not be neglected, but should rather be perceived as a part of the marketing strategy design and implementation. This research has proven that marketing and branding in China is considerably different from what companies should perform in other markets. Chinese markets undertake a major shift from being traditional to being more modern.
These markets become more home0oriented and prefer products made locally. They take into account language difficulties and make emphasis on the role of aesthetics in branding. Music is the feature of the youth culture, and even in the light of its instability as a marketing category, it displays significant stability as a notion of sociology. Moreover, while the leading brands attract youth by offering affordable music products in combination with their traditional products, they not only promote their brands but significantly contribute into formation of small subcultures around their brands.
Ultimately, the close connection between music, culture and branding is the distinctive feature of Chinese market which should not be neglected. Conclusion If one thing is for certain, it is that the Chinese market is rapidly changing in light of the increasingly global market place. As a result, not only are foreign markets changing to adapt to the Chinese marketplace needs, the Chinese marketplace, and consumer, are likewise adapting and changing to meet the needs of the global market. For instance, the economic boom in China’s urban areas is creating a new consumer culture where the consumer has more disposable income to work with.
This itself has effected consumer preferences and patterns within the Chinese marketplace. The general result is that a more sophisticated Chinese consumer is emerging and foreign companies need to market to their sophisticated needs while at the same time marketing to the general population’s needs. Therefore, the most effective way for a company to build a strong brand name in the rapidly emerging Chinese market is to adapt itself to the rapidly changing Chinese culture. To do this, it is important that the foreign company create a local presence and thus shed some of the “foreign corporation” reputation away.
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