Chinese Brands going global.

When I ask you what Chinese brands you know, what is your answer?

I did this to several classmates. Most Americans could not say one. Few can say Lenovo or Haier.

Isn't it sad to Chinese companies? China exports more than 60% of World total yearly consumption of shoes, microwave ovens, home aircons, PCs......When you go to Walmart, Macy's or Bestbuys, "Made in China" products should be much more than products made in any other single country. No doubt that China is the world factory. But, none of Chinese brands are well known. Isn't it weird?

It is a very serious problem for Chinese companies. Since most of their business are under OEM for big brands right now, they make really limited margin in the whole supply chain. Without enough profit, they have very limited resource for innovation, quality improvement, production process upgrade and worker's welfare ect. What they can do are endless cost reduction driven by outsourcing, knockoff caused by lack of innovation, poor worker's welfare and price war. This is a very unhealthy, vicious cycle.

Most Chinese Companies realized the problem. They are trying to make some changes. Beside OEM business, some big Chinese companies license foreign existing brands like Admiral, Polaroid or even Whirlpool for some particular brands. The difference from OEM is Chinese companies have absolute control in pricing, choosing sales channels, making marketing campaign, providing service and so on. 

The next stage is to build up their own brands. At this stage, there are still several challenges stopping that move.

1, Globalization for most Chinese companies is still at early stage-OEM. It haven't developed to stage of overseas production, the stage of overseas merchandise management and stage of real multinational operation. At this stage, it is not that urgent to develop own brands.

2, no systematic supporting for marketing. Brands building are not only based on megabucks invested in marketing campaign but also based on the whole package companies can offer to consumers including quality products, excellent after sale service, fast logistic and so on.

3, Lack of professional markers and global leaders, which cause lack of clear global marketing strategy. 

Anyway, there is still a long way for Chinese to build their brands globally.

Five websites for marketing imagination

http://www.brandingstrategyinsider.com/

http://www.brandchannel.com/home/

http://adage.com/ 

http://www.facebook.com/InternationalMarketing?v=wall

http://adsoftheworld.com/

Chinese Cultural Codes

After reading the book of Culture Code, I was thinking to make a list of Chinese Cultural Codes. I knew how hard it is without enough raw data like interviews and observation. 

However, I still want to make one with my limited knowledge about my own culture. 

A interesting thing popping up when I made the list is that China is experiencing pretty dramatic cultural changes  along with the 3 decade economy boom. Everything changes too fast to adapt for Chinese. 

Again, all these are just my personal view of points. 

  

Chinese wedding fleet. Try to show off to others. 

The relation among "Culture, Consumption and Marketing"

The three things has a interesting relation among them. 

•    great Marketing should be able to create Culture and fantasies like what Harley-Division did.  
•    The other way around, Culture guides Marketing  

Harley-Division created an iconic American culture-freedom, individualism, rebel and liberation. It became one of the most iconic symbols of American lifestyle. Its cool design and loud noise give riders unlimited amount of fun and enjoyment. 


However, the changing culture (consumer behavior) reversely affect the brand and guides its way. As reported, 
Negative news stories regarding motorcycle noise have increased 400 percent over the past 10 years. In the last year, communities across the United States have upped their efforts to curb motorcycle noise-one element of HD soul. Some communities have instituted outright bans on motorcycles. Even traditional motorcycle rally locations like Laconia, Daytona, and Myrtle Beach have had controversies regarding noise at their events this past year.

Worldwide, motorcycle noise is becoming more heavily restricted. Europe and Japan now require lower than U.S. dB(A) levels for new motorcycles right out of the box. In Australia, for example, a permanent label must be affixed and remain on to signify legal pipes. Annual inspections are also required. 


In a message posted on the Harley-Davidson website, CEO Jim McCaslin asks riders to recognize and consider the consequences of loud exhaust pipes. With this step, Harley returns to the forefront in addressing the issue of motorcycle noise by persuading riders to change for lower noise pipes



COO of HD

American Cultural Traits VS Chinese Cultural Traits

America is like an adolescent-grandson

China is like an old man-grandpa

A: America


C: China

A:Intense focus on the “now”

C:Focus more on "future"-High saving rate, Always work hard 

for future fantasy.  However, global cultural flow is changing 

the Gen-X and Y to focus both on the "now" and " future". 

A:Dramatic mood swings

C: Pursuit the stable mood. Chinese philosophy is " if you are 

too happy now, you will be definitely sad in next second, and 

vice versa. " It is like a stock index charts. The peak means 

drop in next second. The bottom means rise in next second. So 

you need to keep your mood as the a horizontal line.  

A:Constant need for exploration & challenge to authority

C: Lack of exploration spirit because of the big country with 

plenty resources. Fear to challenge authority due to present 

political system and nature of people-care more about their

 own lives. 

A:Fascination with extremes

C: Avoid extremes by any mean. The extremes always lead to 

the opposite backlash. So always stay moderate！For example, 

eating too much cause much more problems than eating right 


amount. 

A:Openness to change & reinvention

C: Ok but uncomfortable with changes. 

A:Strong belief that mistakes warrant second chances

C: Same 

The interesting thing is that from my obeservation,  points but

the first one have not been much influenced by global spillage . 

I guess the reasons are

1, Chinese agree with its deep-rooted culture

2, It takes time for culture communication at a deep level. If I 

did not study in the US, all American culture I know might be 

just KFC and Hollywood. 

Image of " Made in China"

 
Made in China is the most recognized label in the world since China has become the biggest exporter globally.  How to maintain the label image has been a huge challenge to China government. 

A series of highly publicized quality scandals in exports from China in the late 2000s has harmed the "Made in China" brand abroad, during which time 40% of product recall in the United States were of imports from China. We all heard the toxic pet food, milk formula, kid toy. All these scandals really damaged the image of "Made in China"  and aroused anti Chinese product mood. 

How did China cope with the challenge? 


1,  Launching a marketing campaign. - "Made in China, Made with the World", 
a 30-second advertisement promoting Chinese-made products has been shown on CNN and other media agencies since Nov. 23, 2009. It tried to delivery a message that  "made in China," are actually " made in China but Designed by world famous companies".  for example, apple choose to label their products with "Designed by Apple in California, Assembled in China" to indicate that even though the products are made in China, the original design was from the US.

2, As more and more Chinese companies emphasize innovation and own their own IP, China is signal the shift of soft power from "made in China" to "created in China". 


3, China is trying to build a national image in the world arena-a modern, peacekeeping and responsible nation. During President Hu's visit in the USA this year, a series of China promotional video were constantly broadcasting in Time Square. 

China is too big to set up a uniform " made in China" image or quality standard. As the economy develops, the image will change positively as that of Made in Japan did.