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Experts offer tips for brand development

By Li Huayu (chinadaily.com.cn)
Updated: 2006-08-20 08:49

A seminar with the theme of "Promotion of Brands Along the Silk Road" was held in Xi'an, Northwest China's Shaanxi Province on August 18. Officials from the Ministry of Commerce, Shaanxi Provincial Department of Commerce, senior executives from local enterprises as well as experts on brand research attended the seminar.

At the seminar, Jia Mingde, vice director of the Shaanxi Provincial Department of Commerce, said to make Shaanxi's brands widely known outside, enterprises should place brand development as their top priority, increase input and continue with innovation.

The government should keep developing and improving the market system to create a better environment for brands, step up protection of intellectual property rights (IPRs) and streamline the market order, he added.

Jia also noted that the government should play an active role in brand development to support, guide, help and promote the cultivation and development of enterprise brands. "Technological innovation and system innovation are essential to create and lift brand value."

According to Gao Yang, director of the Quarantine Department under the Shaanxi Provincial Quarantine and Technology Supervisory Bureau, by the end of 2005 Shaanxi has nine Chinese Top Brands and 308 Provincial Famous Brands, ranking No.1 in Northwest China.

In 2005, sales revenue and tax revenue from the province's famous brands accounted for 27.94 and 31.29 percent respectively of the total from the province's industrial enterprises with annual sales of over 5 million yuan, and contributing 23.01 percent to the GDP of local industry, Gao added.

However, he said, the number of famous brands is still small - Shaanxi has nine Chinese Top Brands, only accounting for 1 percent of the nation's 925. Besides, most of the brands have a small scale and enjoy a low market share. In 2005, the average sales of the province's Chinese Top Brands were only half of that of similar products.

The province's nine Chinese Top Brands are all in Xi'an, and 80 percent of the 308 Shaanxi Famous Brands are in the Weihe Plain. The imbalanced distribution of brands fails to form advantageous industry clusters.

Gao Shanxing, a professor with the Xi'an Jiaotong University, said many factors combined result into the poor situation in Shaanxi. Lack of brand awareness is the primary reason, and as a result many famous brands are registered by other countries.

What's more, there are too many titles to evaluate brands, such as "Famous Brand", "Top Brand", "Well-Known Brand", "Excellent Brand" and so on. Though these evaluations help boost the development of local brands, they cause difficulty in solving related disputes and do not help consumers identify the really best brands.

To promote brand development, enterprises need to add more professional brand designers and more protection and management professionals, and launch an effective protection strategy, Gao said.

"Quality is brands' passport to the market," said Zhang Quanyu, an associate professor with the Xi'an University of Science and Technology. "Competition among brands is in fact the competition of product quality. Many factors contribute to brand success but the primary factor is product quality."

Zhang said, to create a successful brand, enterprises should better change their mission from "creating value for shareholders" to "creating value for consumers."