Story of the Month Identity Side by Building Emotional Connections with Customers
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NEWSLETTER July/August 2007 Story of the Month identity side by building emotional connections with customers. Growing Chinese Branding Take Samsung Electronics, as an example which has become on the World’s most valued electronics brand. When SAIC Motor Corp launched its Roewe sedan in Samsung’s genius is that it managed to make its brand March, nobody expected that it would become one of synonymous with digital age fashion, and as a result the China’s best sellers. In the first three months alone, younger generations are drawn toward Samsung mobile SAIC received 8,000 orders and some buyers were forced phones or MP3 players. to wait for half a year to get the car. The model is based on the Rover 75 technology brought from failed British carmaker MG Rover. The hot sales reflect SAIC’s success in branding: Though the MG Rover was a declining brand in Europe, its British background makes it popular with Chinese consumers. Few Chinese companies are as brand-savvy (Source: Interbrand) as SAIC. But the importance of branding is recognized throughout Chinese business. Branding is a combination of relevance and differentiation. A brand should be relevant to “The role of branding has become increasing important customers’ needs and fall into a specific category, but at in China.” said Charlie Wrench, CEO of Landor the same time it should be different from competitors. Associates, a well-known brand design and consultancy Many Chinese companies know how to stay within a firm. Despite higher brand awareness, China companies boundary but they don’t know how to, or dare not, still lag behind western counterparts like Coca Cola and break the category, because they do not have sufficient Nike in terms of strategy sophistication. branding expertise. In China’s PC market, vendors want to be different from others, but going too far from When Chinese companies woke up to the idea of the mainstream requires a good idea of just how far they branding in the early 1980’s, it was simply to have a can go. With poor execution, differentiation may also name for a company or product. It served manufacturing mean losing customers. and sales functions, and as a result products were almost identical and packages were similar. Price setting was Building brands does not only happen between the almost the only weapon against competition. manufacturer and the consumers; effective branding means using all stakeholders in the supply chain. For However, with increased choices, consumers usually some Chinese companies, branding is synonymous with choose the cheapest, which puts more pressure on costs advertisement, so they identify media with access to and erodes profitability. Companies were forced to their customers and place advertisements with them. But find ways to add value to their products, and the answer in an increasingly connected world, there are many was found in branding. “Products are built in a factory, brand stakeholders. They can be retail chains like Wal- but brand is built in the mind,” Wrench quoted after Mart, fast food stores like McDonald’s, and online Walter Landor, the company founder. communications like YouTube. Chinese manufacturers have done a good job on the In 2006, Coca Cola worked with Shenzhen based Tencent, utility side of branding and now they must work on the the largest operator of instant messaging services in China with 130 million active users, in a deal where Located in City of Industry and founded in 2003, Launch users could buy avatars of Coca Cola spokespeople, Tech (USA) has achieved a successful market entry of mainly singers or sports stars. Users could also join an diagnostic tools and equipments in the automotive online community and trade for virtual money with aftermarket industry. By localizing its management codes on Coca Cola tins or bottles. and sales team, the company has built up its distribution channel in the U.S. It entered AutoZone and also set up The model became an immediate success, boosting sales joint ventures with strategic partners. All these efforts of both Coca Cola and Tencent. However, in spite of all help it develop a solid reputation in the market. these challenges, Chinese companies are moving to build their brands- and they are moving quickly. In the past few years, TV maker TCL acquired the French firm Thomson’s TV business, while Lenovo bought IBM’s PC business and Haier’s bid for Maytag. These moves demonstrated the companies’ intention to obtain international brand credentials. (Source: China Daily) NAROS Update NAROS Pays Visits to KONKA USA and Launch Tech (USA) Inc. Recently, NAROS' Chief Representative Andrew Pan, Business Development Specialist Alex Cree and (Photo: NAROS team with Jeff Qu, CEO of Launch Tech USA) Investment Promotion Trainee Katrina Liu paid visits to KONKA USA, Inc. (KONKA), the U.S. subsidiary of NAROS Co-Sponsors APUCC 2007 China Shenzhen based KONKA Group, and Launch Tech (USA) Global Conference Inc., the U.S. subsidiary of Shenzhen based Launch Tech Company. On July 12 and 13, 2007, NAROS co-sponsored and exhibited on the 2007 China Global Conference. Organized by Asia Pacific-USA Chamber of Commerce (APUCC), this two-day event brought together a large and diverse audience of business professionals from the Los Angeles area for keynote presentations, panel discussions, and networking. NAROS staff in attendance included Andrew Pan, Alex Cree, and Grace Chen. NAROS would like to thank the organizers for a job well done and for their sustained commitment to cooperation as strategic alliance partners. (Photo: NAROS team with Ben Liu, President of KONKA USA) KONKA, located in Irwindale, California, was set up in 2005 which specializes in distributing LCD TV sets in the North American market. In the year of 2006, KONKA USA has sold over 800,000 sets, totaling a worth of $90 million into the highly competitive market under its own brand name. KONKA USA plans to increase the sales in 2007 by expanding its manufacturing facilities in Mexico. (Photo: APUCC China Global Conference) U.S./China/Shenzhen Business News The plant will begin production of ChangAn's full size pick up truck, Champ, and a medium size truck, Leopard. 20% of the products are certified by the U.S. China Knows What it Wants to Invest In Environmental Protection Agency and California Air Resources Board and will be available to the U.S. market. The Chinese government will look kindly on outbound This trend will bring jobs and businesses to the U.S. and investment in four sectors: infrastructure, overseas also create more job opportunities in the U.S. resources, service industries, and research and development (R&D), said Zhang Xiaoqiang, vice minister of the nation’s top economic planning body. First TPM Asia to be Held in Shenzhen “The government will offer preferential diplomatic, In May, Shenzhen and The Journal of Commerce signed foreign exchange, tax, customs, credit and insurance the official host sponsorship agreement, confirming that policies to companies investing in these sectors,” said the the first Trans-Pacific Maritime (TPM) Asia Conference vice minister of the National Development and Reform will take place on September 17-18, 2007 in Shenzhen. Commission (NDRC). The TPM Asia will be held in Shenzhen for five consecutive years beginning this year. He said that investing in the four recommended sectors would help China solve economic bottlenecks, promote exports, train human resources, upgrade industrial structures, and sharpen the country’s competitive edge in international trade. China’s outbound investment topped US$16 billion last year, up 32% on the previous year. It now ranks 13th in the world, up from 17 th in 2005. NDRC sources show that Chinese companies are expanding their business scope from general trade, catering and processing industries to logistics, resource tapping, manufacturing and R&D sectors. Their businesses reach out to more than 160 countries and regions in the world. (Photo: Shenzhen and TPM agreement signing ceremony) (Source: Asia Times Online) U.S. Plans More Flights to China More Mainland Chinese Companies Reach Global 500 List American Airlines and Continental Airlines Inc. plan on operating non-stop flights between U.S. and China Results published for 2007 Fortune Global 500 List starting in March 2009. The Houston based airplane added three more mainland Chinese companies. Now, Continental requested flight from Newark, New Jersey, a total of 22 mainland Chinese companies are listed on and Shanghai. The largest U.S. carrier American, the world's 500 largest companies. Sinopec had the applied route from Chicago’s O’Hare Airport to Beijing. highest ranking and broke the top 20 at 17th. Sinopec U.S. airlines gather support from politicians and reached $131.64 billion in revenue in 2006. China customers to sell their proposals and plans in Minmetals and China National Offshore Oil entered the competition for the limited Chinese routes. top 500 for their first time. Fortune Global 500 hit total revenue of $21 trillion making it almost half the World's China Encourages Foreign Investment in total GDP. Hospital China Automobiles Are to be Made in U.S.A. "The Chinese government encourages foreign investment in the setting up of joint ventures hospitals in China's third largest automaker, ChangAn Automobile the country, offering a maximum 70 percent ownership Group will be making light trucks in Poteau City, share in such hospitals," the China News Service Oklahoma. This 112,000 square foot plant will hire 100 reported on March 21st. Chinese Health Minister Gao employees this year to produce 7,500 vehicles in 2008 Qiang made the statement at the China Development and grow to 300 employees by 2009. Forum 2007. Gao Qiang affirmed that foreign invested hospitals will by business leaders.