The name game

Chinese brands need a strong identity to connect with global consumers if they want to reach the ranks of the world's most famous products

If you were to ask people outside China how many well-known Chinese brands they can name off the cuff, there probably wouldn't be that many.

However, if the question were asked about US brands, then Facebook, Apple, Starbucks and Ford would likely roll off the tongue.

The name game

The number of valuable homebred Chinese brands is clearly not proportional to the country's status as the world's second- largest economy.

With China expediting its efforts to transform a manufacturing-led economy to a consumption and service-driven one, branding is increasingly seen as a key strategy to achieve this goal.

The importance of branding has been recognized by the Chinese leadership in recent years, as the country is determined to see a transition from low-quality to high-quality production, and from unbranded or weakly branded products and services to strong Chinese brands.

In 2014, President Xi Jinping indicated that China must undergo serious restructuring, including a movement from "made in China" to "branded in China".

In June, the State Council released a document on how to upgrade domestic supply and demand structures by enhancing the quality of product brands in China, including expanding publicity for brands with independent intellectual property rights, and encouraging consumption.

Experts say this is undoubtedly the right strategy for China and Chinese companies to capture more of the production value chain.

According to a report by Brand Finance, a London-based brand valuation consultancy company, China came second in a list of the world's most valuable national brands last year, valued at $6.3 billion, behind the United States at $19.7 billion.

The name game

"China is trying hard to win respect from the rest of the world and restore confidence that a great nation like China needs. If there is no successful national and corporate branding, this will be difficult to achieve in global markets and modern society," says Paul Temporal, a global expert on brand creation and an associate fellow at Oxford University's Said Business School.

Temporal suggests China create a national task force to oversee branding efforts throughout the country, similar to those of Singapore and Malaysia, as branding activities in China are fragmented - provinces and companies are all looking to create their own brands.

David Haigh, CEO of Brand Finance, says it is common for national and regional government organizations to proliferate brands, which can confuse the overall image.

"There is a great deal of fragmentation at the city, regional and national level within China, which weakens the overall message for Brand China externally," he says, whereas in the UK, there is one coherent and unified national brand campaign.

The Great campaign, supported by the British government, has simplified and focused the message for the UK. It is now used in all British embassies, trade promotion activities and tourism promotions to help British tourism, exports and foreign direct investment.

Wang Qing, a professor of marketing and innovation at Britain's Warwick Business School, holds a slightly different opinion. She notes that the Chinese government has indicated recently that it wants to promote a number of large, state-owned enterprises as national champions, similar to policies adopted by Singapore and South Korea.

"While I agree that there should be a more coordinated approach to brand building, especially for international markets, the highly centralized approach by countries like Singapore and South Korea will not be suitable for a country as large and diverse as China," Wang says.

She says strong national brands should emerge from a competitive domestic environment based on free market mechanisms, and the rise of both Huawei and Lenovo as strong national brands is a good manifestation of a free market approach.

Apart from resources and investment, Wang says brand building also requires craftsmanship, patience and perseverance. The government's role is to create a legal environment where brands can flourish, copyright and intellectual property can be protected, and counterfeit brands are strictly prohibited, she adds.

Temporal, who is also a visiting professor at Peking University's HSBC Business School in Shenzhen, says: "Every nation has an identity, and if that identity is very positive, then this will help companies coming out of China into the world market because it is a country-of-origin effect, and if they do well, then this spins back to the national brand.

"This is what happened with countries such as Germany. They are known for reliability, quality and engineering, and therefore if all the brands that come out from Germany, particularly in automobiles, are fine, people are quite happy," he says.

For a long time, China's economic growth has been heavily dependent on low-cost manufacturing rather than marketing and branding, and research and development. R&D, however, creates intellectual property and trademarks, patents and copyrights, making it difficult for competitors to imitate.

Similarly, marketing activities create brands and loyal customers, which produce differential advantages for the country, Wang says. "All major advanced countries have both innovation capabilities and strong brands."

In a 2015 Best Global Brands report by Interbrand, eight in 10 of the world's 100 most valuable brands were from the US, with Apple ranking first with $170.27 billion, followed by Google, Coca-Cola, Microsoft and IBM. Only two Chinese brands were listed in the top 100, Huawei ($4.95 billion) at 88, and Lenovo ($4.11 billion) at 100.

Temporal explains that the secret recipe for these valuable global brands is the ability to emotionally connect with consumers, and most Chinese brands do not have the knowledge and skills so ably demonstrated by Western companies in this aspect of brand building.

Powerful companies always develop their brands based on emotions of universal appeal, says Temporal, who cites the example of Nike, driven by the emotional brand drive of winning; Coca-Cola, based on the concept of happiness; and Walmart, associated with enriching people's life.

Chinese brands and businesses might have corporate visions that deal with numbers and market shares, but they do not have brand visions, he says. "Brand visions are all concerned with what you want to stand for emotionally in the minds of your customers."

Haigh from Brand Finance agrees, saying: "World-beating brands all attract passionate loyalty from their customers because they create an emotional relationship and attachment. Such loyalty is like a great friendship or love affair. Emotional brand loyalty leads to higher prices and more frequent usage.

"Brands work best when they combine design and manufacturing superiority, functional excellence, superb service delivery with emotional attachment and an attractive and unique personality," he adds.

While China is gearing up to build its brands globally, many Western companies are keen to break into the Chinese market as a result of Chinese consumers spending a great deal on high-quality, luxury products. Yet something as simple as a name can make all the difference in success or failure.

Product naming can be a minefield for many Western companies, due to culture and language differences.

"Many people don't realize that there is quite an art to the naming process. Brand names in China are extremely significant to consumers, much more so than in the West. It could actually make or break a product, and getting the right combination of brand meaning and pronunciation is a fine art when launching a product in Chinese markets," says Stephen Knowles, managing director of Industrial Design Consultancy UK.

Industrial specialists say naming a product is not just a simple case of translating a word, as Chinese characters can be interpreted in a number of different ways and there are many different dialects in China, which can lead to misinterpretation if the naming is not well planned.

Launching a product in China is a big investment for Western companies so it is important to get the name right. A bad name can jeopardize that investment, whereas a great name can significantly increase the return on the investment.

The key to success, Knowles says, is the creativity and cultural understanding to link Western values with the needs, culture and language of the Chinese market.

wangmingjie@mail.chinadailyuk.com

(China Daily USA 09/16/2016 page4)