Chinese Brands Are Coming to America

Chinese Brands Are Coming to America

February 14, 2007

    BOSTON, Feb. 14 /Xinhua-PRNewswire/ -- It's already
happening.

    Chinese companies are bringing their brands to America
seeking the rewards of the largest economy on earth.
Conversely, leveraging their knowledge and success building
brands, American companies are bringing their newly acquired
Chinese brands back home. 

    While this is all very exciting, regardless of sponsor,
Chinese brands face some barriers to entry. 

    When introducing a Chinese brand, China, the nation, is
perceived as the master brand. It is the primary indicator
of the offering and the key point of reference. By default,
the corporate brand is relegated to that of a sub-brand. 

    Significant research has been conducted on the
'country-of-origin' effect, concluding that the country
image is an integral component in the set of extrinsic cues
consumers use to evaluate products. Others include price,
packaging, seller, and prestige. 

    Phillip Kotler, the S.C. Johnson Distinguished
Professor of International Marketing at the Kellogg
Graduate School of Management at Northwestern University,
defines country image as "the sum of beliefs and
impressions people hold about a place. Images present a
simplification of a large number of associations and pieces
of information connected with a place. They are a product of
the mind trying to process and pick out essential
information from huge amounts of data about a place."


    American universities, French champagne, Italian suits,
German automobiles, English beer, and Scottish whiskey are
just a few examples of country images that generate
positive associations and influence purchasing behavior. 

    Evolving the Brand "China"

    So what is the country-of-origin effect for the China
brand?

    Anecdotal evidence suggests existing associations that
include: value pricing, low-cost labor and inexpensive
materials. Think about it: today China is perceived no
differently than was Japan in the 1950's and 60's. Yet, by
the final decade of the 20th century, Japan was able to
slay its country-of-origin curse and emerge as synonymous
with advanced technology, manufacturing quality,
competitive pricing, style, and even status. 

    In fact, what took Japan nearly fifty years to
accomplish in the 20th century, China is on-track to
accomplish in the first decade of the 21st century. China
is doing so by leveraging the deep reach of the media and
the ubiquity of the Internet to build a new set of positive
associations. 

    Another key way in which China is recasting its image
is by benefiting from positive word-of-mouth from the
growing number of business executives and tourists who have
had favorable experiences there. The positive comments are
being reinforced by the numerous optimistic reports on
China written by respected consulting firms such as
McKinsey and Accenture, as well as equally encouraging
stories detailed in the media.

    These new positive associations characterize China as
having an urban, middle-class which desires consumer goods,
with a five-thousand-year heritage that can be traced back
to the beginning of culture.

    If there is any one single attribute of a brand that
provides sustainable competitive advantage, it is heritage.
Heritage speaks of status, character, social class, and a
history. It connotes a traditional way of life that is of
value to present and future generations.
    
    Who Will Be First?

    The race to be the first to steward a Chinese brand
into the American marketplace is well underway.

    An article published in the New York Times on August
26, 2006 reported that Lenovo, the world's third-largest
computer maker, paid $1.25 billion last year to acquire the
personal computer business of IBM. Furthermore, the company
has been aggressively strengthening its executive ranks as
it tries to transform itself into a global computer giant.

    Lenovo is also trying to become one of China's first
home-grown global brand names as is evidenced by its
signing up as a sponsor for the 2008 Olympic Games in
Beijing, enlisting celebrities to promote its products,
hiring foreign executives and refashioning a company that
grew out of a small computer shop in Beijing.

    So, it appears that a Chinese company may be the first
to steward a brand from China into the biggest economy in
the world. How should they position their brand leveraging
new and positive associations for the brand China?

    Recasting China Through Branding

    Personal computers are designed for, and largely
purchased by, the middle-class. And the urban Chinese
middle-class is now going online. So, are we to believe
Lenovo is the Chinese brand that promotes the shared
experiences that bind citizens of many different cultures,
but principally of one economic class?

    It's reported that the abacus, the oldest known
calculating device, was invented by the Chinese around 2600
B.C. Therefore, a case could be made that Lenovo is born
from a people who were managing the meaning of numbers for
over 4500 years. And that is a heritage anyone would be
proud of.

    But America is not China and the category of personal
computers is cluttered by many well-known brands.

    So would these new positive associations create
meaningful points of differentiation for Lenovo from Dell
and Apple and HP?

    Could brand China result in a sense of pride of
ownership in the minds of American consumers?

    Time will tell.

    Though we know one thing for certain. Chinese brands
are coming to America. And in order to achieve success,
branding experts must determine exactly how this story
should be told.

    About the Authors

    Messrs. Levinson, Benson, and Allison are principals of
Brand Blueprint, a Brand Consultancy located in Boston, MA.
Their key areas of expertise include, respectively, brand
positioning, brand strategy and creative expression.

    CEOs, CMOs and other marketing leaders turn to Brand
Blueprint when they seek to reposition, fortify or simply
update their brand.

    Collectively, Brand Blueprint principals have over
sixty years of experience advising category-leading brands
such as Allstate, Bose, DeBeers, Disney, General Electric,
Gillette, JP Morgan/Chase, Pitney Bowes, Rolls
Royce, Seagram and Staples.

    For more information, please visit
http://www.brandblueprint.com .



    For more information, please contact: 

     Joseph Benson
     Brand Blueprint
     Tel:   [phone]
     Email: [e-mail]


SOURCE  Brand Blueprint