One way brands achieve this is by associating themselves with either a category or a place. The latter is usually referred to as country branding. French wine, Danish designs, Swiss watches, German engineering, and Italian haute couture are results of very aggressive country branding.
Traditionally the place of branding has conveyed very positive perceptions as in these cases. However, with emerging economies getting integrated into the global economy, brands from these countries are often seen carrying the burden of potential negative connotations of their origin.
Among the many emerging economies, China is usually discussed as a pin-up example for demonstrating negative effects of country branding. China is an economic powerhouse. Every global company aspires to a fitting presence in the Chinese market. The enormous Chinese domestic market, the manufacturing boom that has elevated many sections of the society into middle class and even affluent class and the many untapped customer segments have only increased the global rush to get a piece of the Chinese market.
Despite such corporate frenzy, customers have been very wary of anything that is labeled “Made in China”. The quest for many local Chinese manufacturers of myriad products to cut cost and enhance exports has lead to cutting corners in quality of the products and thereby safety to the customers. Only recently, metal oxides found on toys for toddlers created a huge furor and strongly dented the already negative “Made in China” tag.
Along with such firms are also those who have excelled in the global scene. Lenovo acquired the PC division of IBM and emerged as one of the top three PC makers in the world. Haier has successfully emerged as a powerful player in the home appliances industry in the tough US market. Many other Chinese companies have made bold acquisitions around the world. All these activities have gradually help boost the positive perceptions about brands from China.
However, with the Communist party in control of almost all corporate activities directly or indirectly in China, such consistent progress on improving the country image becomes challenging. This begs the question: How does government intervention impact country branding?
As companies from China struggle to turn around perceptions, how can they manage intervention by the government that can have far reaching effect on worldwide perceptions of doing business in China? This is an important question for both local Chinese companies and also global companies that aspire to do business in China.
Legitimacy through strategic associations: Chinese companies will have to establish a high level of credibility with the global customers. Apart from the factual things about quality and cost that most Chinese companies have been challenged on, the increasingly challenging scenario has been the perceptions born out of the Chinese political system, its interaction with other countries and the lack of control over such things by any local company. One important way for companies to counter this would be through strategic associations.
Enhancing global presence: Even the mighty Japanese brands such as Honda and Toyota and the South Korean brands of Samsung and LG have had to overcome negative country of origin perceptions initially before emerging as global brands. Chinese brands, given their enormous resources, should aggressively increase their global presence.
With a thriving domestic market, such a move may be seen as unnecessary from a profitability perspective. However, from a legitimacy perspective, global presence can help bring these brands in close contact with global customers. Such awareness with and familiarity of Chinese brands will surely reduce the perceptions as brand experiences may alleviate some unjustified concerns about the “Made in China” tag.
Consistent demonstration of quality: Probably the most fundamental strategy to minimize the negative perception is to actually demonstrate consistent top quality of products and services. As important as symbolic actions are, nothing can substitute for substantive worth. Chinese companies should embrace a new orientation where in long term legitimacy through quality of products and adherence to well respected business practices should take precedence over short term profitability through lower costs and questionable quality. Furthermore, such a substantive shift in orientation should be aggressively communicated to the global audience through appropriate events and credible endorsers. Such actions would greatly help Chinese companies to overcome the negative connotations of government intervention.
Managing the actions of the government is a tricky task. Chinese companies, with their inherent links to the government may even be very wary of challenging the actions of the government. As such, the basic steps discussed here can indirectly help these companies overcome the negative associations with the “Made in China” tag and directly help them in developing a long term strategy of gaining global legitimacy.
* Credit : Martin Roll (CEO,Business & Brand Strategist)
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