Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Luxury Strategy Brand China Survey,Response To Chinese Brands


Published on

Luxury Strategy Brand China Survey,Response To Chinese Brands

Published in: Business, Technology
  • Be the first to comment

  • Be the first to like this

Luxury Strategy Brand China Survey,Response To Chinese Brands

  1. 1. Special Topic Building Global Brands
  2. 2. Why develop brands? <ul><li>Higher profit </li></ul><ul><li>Greater longevity </li></ul><ul><li>More potential for product extensions </li></ul><ul><li>Higher stock price </li></ul>
  3. 3. Leading global brands <ul><li>Coca-Cola </li></ul><ul><li>Microsoft </li></ul><ul><li>IBM </li></ul><ul><li>GE </li></ul><ul><li>Intel </li></ul><ul><li>Nokia </li></ul><ul><li>Disney </li></ul><ul><li>McDonald’s </li></ul><ul><li>Toyota </li></ul><ul><li>Marlboro </li></ul>
  4. 4. Brand Image Ranking 22 9 Honda 3 23 Rolls Royce 92 3 Pepsi Cola 4 20 IBM 85 2 McDonald’s 23 6 Toyota 14 7 Nestlé 5 8 Disney 9 5 Kodak 2 12 Mercedes-Benz 1 4 Sony 6 1 Coca-Cola/Coke Esteem Share of Mind Firm
  5. 5. Huge opportunity for China <ul><li>Two-pronged strategy: </li></ul><ul><ul><li>Buy established brands </li></ul></ul><ul><ul><li>Develop own brands </li></ul></ul>
  6. 6. Conditions now ideal for brands <ul><li>Capital: </li></ul><ul><ul><li>China now has the necessary capital to build brands </li></ul></ul><ul><li>Regulations: </li></ul><ul><ul><li>Chinese government now supportive of building brands </li></ul></ul><ul><li>Market: </li></ul><ul><ul><li>Chinese consumers now have discretionary income to invest in brands </li></ul></ul><ul><ul><li>Chinese consumers now more sophisticated and demanding of quality </li></ul></ul><ul><li>Production: </li></ul><ul><ul><li>Some Chinese manufacturers now have excess capacity </li></ul></ul><ul><li>Brands: </li></ul><ul><ul><li>China has domestic brands and the beginning of global brands </li></ul></ul>
  7. 7. Example: Lenovo <ul><li>27% market share of computers in China </li></ul><ul><li>Bought IBM PC division for brand name </li></ul><ul><ul><li>Rights to IBM logo for five years </li></ul></ul><ul><li>Building own brand based on </li></ul><ul><ul><li>Customer service </li></ul></ul><ul><ul><li>Innovative and entrepreneurial spirit </li></ul></ul><ul><ul><li>Accuracy and truth-seeking </li></ul></ul><ul><ul><li>Trustworthiness and integrity </li></ul></ul><ul><ul><li>Changed name to go global </li></ul></ul><ul><ul><ul><li>Selected blue as brand color </li></ul></ul></ul><ul><ul><ul><li>Using 2008 Olympics as springboard </li></ul></ul></ul>
  8. 8. Example: Bird <ul><li>China market leader in mobile phones </li></ul><ul><ul><li>#8 mobile phone brand in world </li></ul></ul><ul><li>Building own brand based on </li></ul><ul><ul><li>Phone fashion leader </li></ul></ul><ul><ul><li>Product innovation </li></ul></ul><ul><ul><li>Design and ergonomics </li></ul></ul><ul><ul><li>Fast response </li></ul></ul><ul><ul><li>Comprehensive distribution </li></ul></ul>
  9. 9. Example: Haier <ul><li>Chinese appliance giant </li></ul><ul><ul><li>Ranked most valuable Chinese brand </li></ul></ul><ul><li>Bought Maytag for brand name </li></ul><ul><li>Building own brand based on </li></ul><ul><ul><li>Local brand name in each market </li></ul></ul><ul><ul><li>Products adapted to different consumption styles </li></ul></ul><ul><ul><li>Entering niche markets </li></ul></ul><ul><ul><li>Speed and differentiation </li></ul></ul><ul><ul><li>Sponsoring Australian basketball team </li></ul></ul><ul><ul><li>Joint ventures with Fujitsu, Hitachi, Sanyo </li></ul></ul>
  10. 10. China itself is a brand <ul><li>Chinese brand survey </li></ul><ul><ul><li>Online survey by Interbrand </li></ul></ul><ul><ul><li>243 international brand executives </li></ul></ul><ul><li>Question #1: Does “Made in China” help or hurt Chinese brands? </li></ul><ul><ul><li>79% believe it hurts </li></ul></ul>
  11. 11. Brand China <ul><li>Question #2: Provide three words that represent your impression of Chinese brands today. </li></ul><ul><li>Ranking Attribute Rating Attribute </li></ul><ul><li>1 Cheap 6 Innovative </li></ul><ul><li>2 Poor value 7 Lack of track record </li></ul><ul><li>3 Poor quality 8 Dated / old </li></ul><ul><li>4 Unreliable 9 Largely unknown </li></ul><ul><li>5 Unsophisticated 10 Aggressive </li></ul>
  12. 12. Brand China <ul><li>Provide any comments on Chinese brands and their future for competing internationally </li></ul><ul><ul><li>“Need to overcome the lack of quality perception” </li></ul></ul><ul><ul><li>“Need to enhance communications to grow awareness” </li></ul></ul><ul><ul><li>“China is well positioned for brand success” </li></ul></ul>
  13. 13. Brand China: Survey conclusions <ul><li>Chinese brands suffer from negative perceptions of quality. </li></ul><ul><li>Attributes of prestige, trust and safety are not associated with Chinese brands (innovation and reliability are good). </li></ul><ul><li>Need to move away from being low-cost, original equipment manufacturers to creating and managing dominant global brands. </li></ul><ul><li>Chinese brands are competing solely on tangible dimensions like quality and price. They will compete more effectively once they inject personality and emotion. </li></ul>
  14. 14. Response to Brand China <ul><li>Distance company from Brand China </li></ul><ul><ul><li>Shanghai Automotive Industry Corp (SAIC) bought Rover </li></ul></ul><ul><ul><li>Fast and less expensive </li></ul></ul><ul><li>Change perception of Brand China </li></ul><ul><ul><li>Shanghai Tang promoting their line of luxury fashions as “A Chinese lifestyle brand that’s relevant” </li></ul></ul><ul><ul><li>Slow but ultimately more beneficial </li></ul></ul>
  15. 16. What country is the parent? <ul><li>Firestone Tire </li></ul><ul><li>Burger king </li></ul><ul><li>Rolls-Royce </li></ul><ul><li>RCA Electronics </li></ul><ul><li>Dr Pepper </li></ul><ul><li>Gerber </li></ul><ul><li>Holiday Inn </li></ul><ul><li>Japan (Bridgestone) </li></ul><ul><li>Great Britain (Diageo) </li></ul><ul><li>Germany (Volkswagen) </li></ul><ul><li>France (Thomson SA) </li></ul><ul><li>Great Britain (Cadbury) </li></ul><ul><li>Switzerland (Novartis) </li></ul><ul><li>Great Britain (Bass PLC) </li></ul>
  16. 17. What is a brand? <ul><li>“ The sum total of all that is know, thought, felt and perceived about your company, service or product.” </li></ul><ul><ul><ul><ul><ul><li> </li></ul></ul></ul></ul></ul><ul><li>“ A name, term, sign, symbol, or design, or a combination of these intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.” </li></ul><ul><ul><ul><ul><ul><li>Kotler and Armstrong 2006 </li></ul></ul></ul></ul></ul><ul><li>“ A ‘liking’ or a ‘friendship’ relationship between the customer and the brand.” </li></ul><ul><ul><ul><ul><ul><li>General Foods </li></ul></ul></ul></ul></ul>
  17. 18. What is brand equity? <ul><li>“ The positive differential effect that knowing the brand name has on customer response to the product or service.” </li></ul><ul><ul><ul><ul><ul><li>Kotler and Armstrong 2006 </li></ul></ul></ul></ul></ul><ul><li>“ A brand that has strong positive associations in a consumer’s memory and commands a lot of loyalty as a result.” </li></ul><ul><ul><ul><ul><ul><li>Solomon 2006 </li></ul></ul></ul></ul></ul>
  18. 19. A brand has a personality <ul><li>A brand is the personality of your service / product </li></ul><ul><li>A good brand is seen as a friend </li></ul><ul><ul><li>Trustworthy </li></ul></ul><ul><ul><li>Dependable </li></ul></ul><ul><ul><li>Understanding </li></ul></ul><ul><ul><li>Caring </li></ul></ul>
  19. 20. Brand Personality <ul><li>5 dimensions of brand personality </li></ul><ul><ul><ul><ul><ul><li>Aaker 1997 </li></ul></ul></ul></ul></ul><ul><ul><li>Sincerity </li></ul></ul><ul><ul><li>Excitement </li></ul></ul><ul><ul><li>Competence </li></ul></ul><ul><ul><li>Sophistication </li></ul></ul><ul><ul><li>Ruggedness </li></ul></ul>
  20. 21. Brand Personality <ul><li>Sincerity </li></ul><ul><ul><li>Down to earth, family oriented, small town </li></ul></ul><ul><ul><li>Honest, sincere real </li></ul></ul><ul><ul><li>Wholesome, original </li></ul></ul><ul><ul><li>Cheerful, sentimental, friendly </li></ul></ul><ul><li>Example: Coca Cola? </li></ul>
  21. 22. Brand Personality <ul><li>Excitement </li></ul><ul><ul><li>Daring, trendy, exciting </li></ul></ul><ul><ul><li>Spirited, cool, young </li></ul></ul><ul><ul><li>Imaginative, unique </li></ul></ul><ul><ul><li>Up-to-date, independent, contemporary </li></ul></ul><ul><li>Example: Pepsi? </li></ul>
  22. 23. Brand Personality <ul><li>Competence </li></ul><ul><ul><li>Reliable, hard working, secure </li></ul></ul><ul><ul><li>Intelligent, technical, corporate </li></ul></ul><ul><ul><li>Successful, leader, confident </li></ul></ul><ul><li>Example: IBM? </li></ul>
  23. 24. Brand Personality <ul><li>Sophistication </li></ul><ul><ul><li>Upper class, glamorous, good looking </li></ul></ul><ul><ul><li>Charming, feminine, smooth </li></ul></ul><ul><ul><li>Wealthy, condescending </li></ul></ul><ul><li>Example: Mercedes? </li></ul>
  24. 25. Brand Personality <ul><li>Ruggedness </li></ul><ul><ul><li>Outdoorsy, masculine, Western </li></ul></ul><ul><ul><li>Tough, rugged </li></ul></ul><ul><li>Example: Nike, Marlboro? </li></ul>
  25. 26. Brand Personality: Levis <ul><li>Original </li></ul><ul><li>Masculine </li></ul><ul><li>Sexy </li></ul><ul><li>Youthful </li></ul><ul><li>Rebellious </li></ul><ul><li>Individual </li></ul><ul><li>Free </li></ul><ul><li>American </li></ul><ul><li>Exciting and rugged? </li></ul>
  26. 27. A brand has a name <ul><li>A truly global brand name is… </li></ul><ul><ul><li>A translinguistic device - sounds & writing </li></ul></ul><ul><ul><ul><li>Lenovo, Sony </li></ul></ul></ul><ul><ul><li>Consistent underlying core themes </li></ul></ul><ul><ul><li>Executed for at least 15 years in a similar manner across a very large number of countries </li></ul></ul><ul><ul><li>Consumer needs are consistent for the product category worldwide (airlines vs. coffee) </li></ul></ul><ul><ul><li>Ad spending of at least $200 million per year world-wide and more probably $.5 billio </li></ul></ul>
  27. 28. Recommendations for international brand names <ul><li>Simple spelling and short </li></ul><ul><ul><li>2 or 3 syllables </li></ul></ul><ul><li>Easy to pronounce in any language </li></ul><ul><ul><li>Not Printemps </li></ul></ul><ul><li>Avoid unintended meaning in target languages </li></ul><ul><ul><li>Not Nova by Chevrolet. </li></ul></ul><ul><li>Loss of original meaning not a major problem </li></ul><ul><ul><li>Local consumers give name new meaning (which may fit intended local positioning) </li></ul></ul><ul><ul><li>Carrefour </li></ul></ul>
  28. 29. Unfortunate brand names <ul><li>Coors &quot;Turn it loose&quot; </li></ul><ul><ul><li>in Spanish &quot;Suffer from diarrhea&quot; </li></ul></ul><ul><li>&quot;Pepsi Brings You Back to Life&quot; </li></ul><ul><ul><li>in Chinese &quot;Pepsi Brings Your Ancestors Back from the Grave&quot; </li></ul></ul><ul><li>Clairol’s &quot;Mist Stick“ (a curling iron) </li></ul><ul><ul><li>in Germany mist is slang for manure </li></ul></ul><ul><li>Gerber baby food had cute baby on the label </li></ul><ul><ul><li>in Africa, companies routinely put pictures on the label of what's inside since most people can't read </li></ul></ul><ul><li>Soft drink in Korea (Pocarino?): “Sweat” </li></ul>
  29. 30. A brand is a friend <ul><li>A friend is… </li></ul><ul><ul><li>Comfortable </li></ul></ul><ul><ul><li>Enjoyable </li></ul></ul><ul><ul><li>Caring </li></ul></ul><ul><ul><li>Honest </li></ul></ul><ul><ul><li>Dependable </li></ul></ul><ul><ul><li>There for you when you need them </li></ul></ul><ul><ul><li>Someone who treats you with respect </li></ul></ul>
  30. 31. Brand Friendship <ul><li>Consumer research comparing 2 brands </li></ul><ul><li>Company A Company B </li></ul><ul><li>Sophisticated Easy going </li></ul><ul><li>Arrogant Modest </li></ul><ul><li>Efficient Helpful </li></ul><ul><li>Self-centered Caring </li></ul><ul><li>Distant Approachable </li></ul><ul><li>Disinterested Interested </li></ul><ul><li>Which would you like as a friend? </li></ul>
  31. 32. How to build a brand <ul><li>A commitment from top management </li></ul><ul><ul><li>A visible president like Branson? </li></ul></ul><ul><li>Consistent quality control to demonstrate reliability </li></ul><ul><li>Clear differentiation of product / service </li></ul><ul><li>Strong promotional program to gain positive recognition </li></ul><ul><ul><li>Consistent message: visual and verbal </li></ul></ul><ul><ul><li>A promise that is desired and believable </li></ul></ul><ul><ul><li>An emotional appeal </li></ul></ul><ul><li>Adaptability to local conditions (“glocal”) </li></ul>
  32. 33. Measuring Brand Equity <ul><li>Awareness : Aided (fill in blank) and unaided recall (multiple choice / top of mind) </li></ul><ul><li>Associations : words associated with the brand name </li></ul><ul><li>Attitude : general liking, inclusion in consideration set </li></ul><ul><li>Attachment : loyalty to brand (over generations?) </li></ul><ul><li>Activity : advocating brand to others, spreading word of mouth </li></ul>
  33. 34. Measuring brand equity <ul><li>“If a Coke bottle were a person, what kind would it be?” </li></ul><ul><li>“If you met that person, what would they say to you?” </li></ul>
  34. 35. Need to monitor brand <ul><li>Brand tracking </li></ul><ul><ul><li>Growth in awareness, familiarity, commitment, etc. </li></ul></ul><ul><li>Brand reputation </li></ul><ul><ul><li>Loyalty, satisfaction, trust </li></ul></ul>
  35. 36. Positioning <ul><li>Research to determine how brand is perceived compared to competition </li></ul><ul><li>Determination of where brand should be placed to compete most effectively </li></ul><ul><li>Research to determine success of repositioning </li></ul>
  36. 38. Copiers
  37. 39. Digital Camera Brands
  38. 40. Automobiles