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A weak branding does not inspire the trust in China, why and how to improve it ?

Last modified: August 15, 2016

Branding, what is it?

According to the online business dictionary, branding is the process involved in creating a unique name and image for a product in the consumers’ mind, mainly through advertising campaigns with a consistent theme. Branding aims to establish a significant and differentiated presence in the market that attracts and retains loyal customers.

 

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Why do companies need to brand themselves?

 

Branding allows organizations to create an emotional connection with their customers.

It leads to brand loyalty and brand advocacy.

Most decisions including most purchase decisions are made by people’s hearts and not by their heads. Without any brands, customers are not attached and see companies as companies only.

Strong brands enable to charge price premiums because customers are ready to pay more for a name. It is for them the guarantee that the product has a better quality.

Companies can thus increase their sales, market share, and profitability and so on.

 

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Best brands in the world

 

The worldwide biggest brands are all American as we can see in the image. Apple, Google and Coca Cola are on the podium and so represent the brands that people like the most in the world.

 

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Most Valuable brands in China

Alibaba is the biggest Chinese brand but it is far from these big emblematic US names.

We could here understand that U.S. has one clear advantage over Chinese competition, it is the branding. Chinese firms seem to have everything to win globally, but they clearly have to improve their branding and marketing strategies.

 

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Why American have a better branding?

 

Approaches to brand management in the United States have been created, tested, and refined by decades of brilliant strategists from varied perspectives and contexts.

We find some visionaries such as Steve Jobs among others who have created exceptional brands and have found branding tools providing the best capabilities in the country.

 

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Chinese firms develop limited branding capabilities

 

As China economy increased these last years rapidly, most top companies have not been in a competitive context in which branding was important.

Success was a matter of operations, costs, and delivering not of branding.

Business executives still misunderstand branding. Their instinct is not to build strong brands enabling them to create long-term customer relationships. It is a different mindset.

Then, most of the colossal firms in China are competing as B2B players where the value of branding is not obvious.

Chinese firms may be decades behind most global companies, and have a long way to go concerning brand strategy development and execution.

 

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Why is it now a problem in the Chinese market?

 

Chinese consumers are crazy about brands and are willing to pay more for branded products that they consider premium. They prefer to buy a product with a particular name because  it is a gage of high quality. Thus, the brand value is extremely important in China.

With the emergence of a wealthier middle class, people have money to purchase more expensive products and turn on great brands.

 

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How to implement a branding strategy in China?

 

In order to improve the process of branding, companies can buy firms with high brand management systems and people to upgrade their capabilities.

One example may be the purchase of Volvo by the Chinese car firm Geely.

 

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Otherwise, another approach would be to rely on consultants that will help you to build the perfect brand strategy according to the market.

In China most of the companies have copied competitors, that is why they do not have their proper positioning. At the opposite, they have to find a way to make their offerings compelling and unique.

Then, Chinese brands need some change in their structure, and top management would need a new mindset.

 

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Further readings:

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1 thought on “A weak branding does not inspire the trust in China, why and how to improve it ?”

  1. Yes!! I keep the idea that branding is everything in China. Where can I find more articles about branding in China please?

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