Global branding for Chinese companies

Every company has a name they put on their products, but is it a brand? For smaller companies the name of the owner may be used, and Chinese companies often have descriptive names: ‘First Shenzhen Rubber Tyre Corporation’. If you start thinking about a shorter name or abbreviation and a logo, then we mostly start talking about brands.

A brand helps with informing a customer about a product or service. The same it works with people. If you have heard about Wendy that she is intelligent, enthousiastic and polite, you are more eager to connect with her than with someone you don’t know. BMW sells better than an unknown brand because it is associated with success, reliability and design.

Investing in a brand creates value

But the BMW brand has not achieved its status without investments. Every few years the company has to rethink how to stand out from the crowd. They have to define their promises, but also live up to it. And they need to advertise massively to keep their name known, also to new potential customers.

The brand equity model of Young & Rubicam defines four elements that determine the value of a brand:

  • Differentiation: what makes the brand different from its competitors?
  • Relevance: you may be different, like being the most customer-friendly, but is that relevant, e.g. for a supplier of garbage bags?
  • Esteem: how do people perceive your brand? Do you live up to the expectations that you raise?
  • Knowledge: how many people know your brand and also associate you with your brand values? It’s no advantage if people know Volkswagen only from ‘Dieselgate’.

Brand value directly translates into higher margins because people specifically want to have your brand. It also increase that chances that retailers or other distribution channels will sell your product. If you would be an unknown brand, or if they put their own brand on your product, they can easily replace you.

Can you take your brand outside of China?

Successful Chinese companies know that their sales in China also took a lot of investments in marketing. So if you want to go abroad, do you want to have a similar brand value as in China or do you go ‘white label’?

First of all you need to realise that your China brand may not have any value abroad. The brand name may be unpronounceable or sounds like something bad. Associations that are positive in China, like modesty or the color red, may not do so well in other countries. So you may have to come up with a new brand name and start ‘loading’ it with different associations.

This also gives new chances. Heineken is ordinary beer in the Netherlands, where it comes from. In other countries it is sold as a premium product. Xiaomi first became successful in the Indian market with offering a very cheap smartphone but now also offers high-end phones around the world. The Mi sub-brand has now been abandoned and on top of the lively orange color, now black and silver have been added in the logo to underline this high-end positioning.

How much to invest in your global branding?

As we can see, putting effort in creating brand value has two big advantages: your margins can be higher and you will be less dependent on retailers or other distribution channels. Have you ever seen a supermarket without Coca-cola or Colgate? The disadvantage is the investment that you have to put in setting up a great brand and marketing it.

The first steps are always the same: finding a brand name, or checking your current one, find values and promises that differentiate you from the rest and ensure this is relevant for you buyer. Then you need to bring the rest of your communication and behaviour in line with your promises. The only difference in B2B and B2C is that the investments in a B2B setting are mostly smaller: you can target a limited set of businesses through specific media, such as trade magazines, or through Search Engine Advertising. In case of B2C, there is a much bigger audience to reach and this will ask for large budgets.

We always advise to do this country by country, or in the USA, state by state. Your investment will be lower and you will have the opportunity to evaluate and correct. We can’t tell in advance how much you should invest to become successful, but we can monitor the progress and guide you in every step.

 

 

This entry in Asia was updated on 16 November 2022 by specialist.