Durham E-Theses Antecedents of Brand Equity: The Chinese Path to Building Brands A Case-study of GEELY and BYD Automotive Brands MOHAMED, NOHA, AHMED, ALAAELDINE How to cite: MOHAMED, NOHA, AHMED, ALAAELDINE (2013) Antecedents of Brand Equity: The Chinese Path to Building Brands A Case-study of GEELY and BYD Automotive Brands , Durham theses, Durham University. Available at Durham E-Theses Online: http://etheses.dur.ac.uk/10670/ Use policy The full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that: • a full bibliographic reference is made to the original source • a link is made to the metadata record in Durham E-Theses • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders. Please consult the full Durham E-Theses policy for further details. Academic Support Oce, Durham University, University Oce, Old Elvet, Durham DH1 3HP e-mail: [email protected] Tel: +44 0191 334 6107 http://etheses.dur.ac.uk 2 Antecedents of Brand Equity: The Chinese Path to Building Brands A Case-study of GEELY and BYD Automotive Brands Thesis Submitted to Durham University Business School DURHAM UNIVERSITY In Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy Noha A. Alaa El Dine Mohamed, MBA May 2014 STATEMENT OF COPYRIGHT “The copyright of this thesis rests with the author. No quotation from it should be published without the author's prior written consent and information derived from it should be acknowledged.” COPYRIGHT: NOHA A. ALAA EL DINE MOHAMED© 2 ACKNOWLEDGMENT For all the tough time that made me stronger, I thank you GOD, the most gracious, the most merciful. I wouldn’t have been able to finish this work without the support and guidance of my supervisors. I thank Dr. Mike Nicholson for his continuous encouragement; he kept saying all the time “you are worried too much” and was always adjusting the direction. I am also so grateful to Ms. Anne Woodhead, for me she was a bless, always in touch and always giving positive feedback. I wouldn’t have done it without both of them. Thank you. I would like to acknowledge as well the PhD supporting staff at Durham University Business School more specifically Louise and Rebecca for their continuous and persistent follow up to get things done. I also would like to thank my family for their continuous support; my mother for her continuous prayers, and my beloved sisters for their continuous encouragement. I would like to extend my gratitude to my beloved husband who provided me with encouragement, support, and put up with all sorts of difficulties that I had to deal with. Moreover, he helped me a lot during the literature development, his guidance throughout the thesis, and support and companionship, made this work come to light. He was my real comfort zone throughout this tough uncomfortable period. Last but not least, I would like to thank my mentor and manager Dr. Ahmed Taher for his generous support and continuous feedback, as well as my subordinates for their understanding and support at work, without their support my doctoral study and the completion of this dissertation would be a prolonged task. 3 ABSTRACT Foy many years China was flagged as the world’s premier factory neglecting significant aspects such as brand equity. This study explores the antecedents of brand equity of Chinese brands. The main purpose of this study is to examine the evolution of Chinese brand equity and the impact of selective marketing mix elements and the Country of Origin as attributes preceding the creation of Chinese brand equity. A qualitative approach has been adopted in order to acquire an understanding of Chinese path to building brands. A case-study methodology was applied, with the unit of the analysis being two Chinese automotive brands: GEELY and BYD. The researcher proposes a conceptual framework in which brand differentiators composed of selective marketing mix elements and the COO (Antecedents) are related to the dimensions of brand equity; brand awareness, perceived quality, and brand associations. Throughout the course of study, five questions were explored. The results of the research confirmed that some of the Chinese companies are moving towards building strong brand equity with their steady steps in product quality, joint ventures and co-branding. The researcher also confirmed that Chinese Country of Origin is no longer an obstacle to building strong brand equity. Two research questions - geographical presence and perceived value - were not supported by the cases of GEELY and BYD and were not accepted as positively affecting the brand equity of Chinese brands during the course of the study. While some literature supports this direction, the two cases understudy failed to support them. The research affirmed that certain Chinese brands are on the rise and that the strategic focus of Chinese companies recognizes the fact that brand building is the path to sustainable competitive advantage. For the purpose of triangulation and control for reliability, the accepted questions were further investigated by an external researcher. Discussion, conclusion, recommendations, and future work will then be explored. 4 KEY WORDS: Brand Equity, Country of Origin, Marketing Mix, Chinese Brands, Automotive Industry. 5 LIST OF TABLES Table 2.1 The Functions of the Brand for the Consumer – Source: Adapted from Kepferer (1997)..........................................................................................................................46 Table 2.2 Common Descriptions of Brand Equity......................................................................54 Table 2.3 Agarwal and Rao’s Measures of Consumer-Based Measures Brand Equity - Source: Agarwal and Rao, An Empirical Comparison of Consumer-Based Measures of Brand Equity,1996.................................................................................................................61 Table 2.4 Joint Ventures and Cooperative Strategies in Operation as a Percentage of all Activity over Time in Selected Industries...................................................................93 Table 3.1 Major Joint Ventures in the Chinese Automotive Industry.......................................140 Table 3.2 Different Expectations of Foreign Investors and Chinese Partners..........................143 Table 4.1 Procedures Followed Throughout the Case-study.....................................................169 Table 5.1 China’s 10 Largest Passenger Vehicle Makers - Source: China Association of Automobile Manufactures.........................................................................................230 Table 5.2 Plug-in Cars since 2009 - Source: Madslien, 200; Plug-in America.org..................231 Table 5.3 Differences Between GEELY and BYD...................................................................260 Table 5.4 Similarities Between GEELY and BYD...................................................................262 Table 5.5 Summary of Accepted/Not Accepted Propositions...................................................263 Table 5.6 Rival Interpretations..................................................................................................264 Table 5.7 Major Findings on the Antecedents of Brand Equity & a Comparison with the Results of Existing Studies.....................................................................................................269 Table 5.8 A Framework for Measuring Brand Equity for GEELY and BYD..........................279 Table 5.9 Example of Data Organization & Display................................................................281 Table 5.10 Questions, Propositions & Themes...........................................................................284 6 LIST OF FIGURES Figure 1.1 Conceptual Framework of the Study...........................................................................25 Figure 2.1 The First Stages of Classical Marketing......................................................................38 Figure 2.2 Illustration of Consumer Process over Time...............................................................43 Figure 2.3 Symbolic Terminal – Rokeach................................................................................... 43 Figure 2.4 The Relationships Between the Different Concepts of Brand Analysis.....................47 Figure 2.5 Urde’s Brand Hexagon................................................................................................48 Figure 2.6 The Shift from Traditional Brand Asset Management................................................50 Figure 2.7 The Brand Asset Management Process.......................................................................51 Figure 2.8 Brand Equity as Brand Assets.....................................................................................58 Figure 2.9 Keller’s Customer-based Brand Equity (CBBE) Pyramid..........................................59 Figure 2.10 A Framework for Measuring Brand Equity................................................................60 Figure 2.11 Global Brand Equity Valuation Model - Source: Motameni and Shahrokhi, Brand Equity Valuation: A Global Perspective, 1998...........................................................63 Figure 2.12 Moran Brand Equity Methodology.............................................................................65