Becoming names in global game

A growing business environment means more Chinese companies seek to gain an edge through the power of brand recognition

What makes a brand "global?" According to the former head of marketing for Starbucks and Nike, a global brand "can travel worldwide, transcend cultural barriers, speak to multiple consumer segments simultaneously, create economies of scale, and let you operate at the higher end of the positioning spectrum - where you can earn solid margins over the long term".

Based on this definition we have yet to see any Chinese companies develop brands with global appeal. Even current "success stories" such as Haier, Huawei, Lenovo and Tsingtao have brand names that are more challenging for some Western consumers to pronounce than childhood tongue twisters.

But despite the current absence of truly global Chinese brands, I remain optimistic that Chinese companies will create globally competitive brands soon. This is due to an evolving domestic business environment that is beginning to reward competitive brand positioning combined with an emerging class of Chinese business leaders who recognize the importance of building a strong globally recognized brand.

The responsibility of marketing in any company is to strike the right balance between driving sales today and building a long-term brand for tomorrow. In the years of double-digit economic growth, Chinese firms focused almost exclusively on sales to drive corporate growth. Marketing was all too often focused on the next product launch rather than building a brand asset for the future. While researching for my book, a China public relations executive shared an industry joke used to describe the way many Chinese companies perceive marketing:

"'Branding' means designing a new logo, 'marketing' is the equivalent of purchasing ads on China Central Television, and 'PR' does not stand for 'public relations' but rather 'pay the reporter'."

While the joke is certainly a generalization, it does help illustrate how, for many Chinese companies, marketing was considered to be an expendable expense. As a result of its companies' previous growth strategy, China has been able to produce many large companies - 95 companies in the Fortune Global 500 originate from China - yet very few are recognized outside of China.

However, this is changing.