No Chinese brand can compete at a premium price - Tom Doctoroff
Tom Doctoroffby Fons1 via FlickrNo local brand can compete at a premium prices in America, Europe and Japan, says Tom Doctoroff in the Huffington Post. Doctoroff, CEO, Greater China, of J. Walter Thompson, has a wide-ranging look at the China-branding trends hit by the milk melamine scandal, pushed by the Beijing Olympics, growth areas like services and the online trends.
But on the capacities of domestic brands and their chances of going global, Doctoroff is pessimistic:
There are many local brands that boast strong distribution in emerging markets such as Southeast Asia, Africa, the Middle East and Latin America. However, with the exception of Lenovo (which acquired the IBM ThinkPad brand), there is not one local brand equipped to compete at a price premium in the developed markets of America, Europe and Japan. Their brand equity is not robust enough and the structure of their organization is too sales-driven. This will not change for many years and the first brands to break through will be mid-sized, relatively non-bureaucratic entities such as Anta and Lining shoes, rather than lumbering state-owned behemoths.More at the Huffington Post.
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Tom Doctoroff is one of the leading speakers at the China Speakers Bureau. If you want to have him as a speaker, do get in touch.
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1 Comments:
There is certainly a lack of brand equity,loyalty (and too much bad press) which would allow Chinese brands to compete better at a price premium in developed markets. Naturally, these intangible assets can only be built over time...just as strong global brands have grown over time to be at the height of (their relationships) and where they are and compete now.
There is nothing wrong with being sales-driven as eventually any brand building activity should lead to better, increased sales. Separating specific sales, distribution etc. activities (and thinking!) from the "world of nurturing the brand" is key for any branding expert consulting Chinese brand owners.
Agree, that mid-sized ones will be the new leaders in developed markets and globalizing their brands. We have just assisted a 80-year-old Chinese cosmetics brand to break into Western Europe - and it sells like hot cakes (and at a good premium as well). Currently the secret lies in the MARKETING and RE-INTERPRETING of
'Made-in-china' rather than in building brand equity the old-school-way (only).
Slightly pessimistic but highly insightful
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