Cashing in on the China brand

Many Chinese companies have implemented enhanced marketing strategies to chase after more global sales revenues. Meanwhile, they face stiff competition from their top rivals, which are multinational corporations.

Accordingly, shining a brighter brand image and launching an international advertising blitz has become more of a necessity for Chinese companies looking to expand globally.

For the past few decades, many US-based multinationals such as Apple, Coca-Cola, Nike and many others have enjoyed remarkable success by utilizing their brand names alone to sell products.

Millions of people flock to Apple stores to buy the latest upgrades of iPads and iPhones. Probably more than a billion people have bought at least one can of coke in their lifetimes. And numerous sports fans wear Nike sneakers just because superstar basketball legends – Michael Jordan and Lebron James – say it's a good idea.

Consequently, China is beginning to recognize the value of sizzling marketing campaigns to lure in buyers and keep customers loyal.

"In early October, Beijing-based Li-Ning signed Miami Heat guard Dwyane Wade as an endorser and minority owner," according to AdWeek magazine. "Wade joins the brand's other NBA pitchman, Evan Turner of the Philadelphia 76ers."

Wade's highly publicized deal has already generated a new buzz with sports fans. Ray Grady, general manager of Digital Li-Ning USA disclosed an "uptick in Twitter followers, Facebook friends and direct traffic to the brand's Website."

He noted that Li-Ning has more than 24,300 followers on Twitter along with 372,000 Facebook friends. It reported global revenue of $1.4 billion in 2011 and it's touting a new corporate slogan, "Straight out of New China."

However, Li-Ning's publicity campaign does not guarantee good results, especially since its main rival, Nike, is disappointed about losing a celebrity NBA basketball player from its long list of endorsement deals. So Nike executives have attempted to downplay the event.

Daily Finance News writes, "while Dwyane Wade is a big name loss to Nike, executives there and at the Jordan brand probably aren't losing any sleep over the new Wade line. Chinese brands have never held much sway in the US, and with a plethora of other athletes endorsing Nike, Jordan, and even other competitors, it's unlikely that Li-Ning will be the next big thing in shoes."

Maybe there's some truth to the analysis, but it ignores factors that Wade could inspire many young Chinese-Americans to purchase his line of shoes. Additionally, China's domestic retail sales market continues to expand rapidly.

Nevertheless, some Chinese companies would likely experience growing pains when experimenting with creative marketing plans. It can be risky since ads either attract buyers or make them apathetic or worse yet, frighten away customers if an ad has been deemed controversial, even if it was unintentional.

Chinese manufacturers should make products that are of good quality and that alone should sell itself, but in today's pop culture society, producing a glitzy ad campaign has become more important.

Chinese companies should hire consultants and research firms to create better marketing strategies. And apparently, some Chinese businesses have already embarked on this path.

Tom Toubridge, chairman of the China business group at PwC, told the Financial Times that, "the professional services firm has seen a surge of interest from Chinese companies … Chinese companies are hunting opportunities to target wealthier consumers in their domestic market, vying alongside Western designer brands to gain the affection of China's growing middle class."

As more Chinese consumers enjoy greater prosperity, they have more spending money. Hence, shopping no longer means buying the cheapest products, but instead goods that may cost more but have higher quality. Therefore building an attractive brand image can establish customer loyalty.

In the US, many Americans make buying decisions based on a catchy TV commercial or corporate motto. They "just do it" when buying Nike sneakers.

That's an important lesson for Chinese companies who seek a larger market share for their brands. It's time for them to seize the day and conduct marketing, marketing and even more marketing.

The views do not necessarily reflect those of China Daily.

McGregor@chinadaily.com.cn