Novelty holds key for local brands abroad
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[By Liu Rui/Global Times] |
As international brands make further inroads into the China market, Chinese enterprises are girding themselves up for business growth overseas. A few hardy pioneers have racked up a ton of experience in overseas marketing strategy. There have been many failures, but also some inspiring success stories that encourage latecomers to jump on the overseas branding bandwagon.
A recent US audience-targeted commercial of Li-Ning, a leading Chinese sportswear manufacturer, tried some new ideas.
The new commercial attempted to make the name of Li-Ning easier to remember by associating it with the word "Leaning." The commercial, which also includes some other humorous elements, was a hit on Youtube.
The overseas branding experiences of the first movers can generally be classified into three categories.
Strategy No. 1: Occupy the market with a low price and then stress the brand. This was the path chosen by Chinese home appliance manufacturer Galanz. In the 1990s, the company decided to expand overseas. It knew its strong points - low prices and a strong sales team. Most global companies focus on marketing, but Galanz put the emphasis on its sales department. Buoyed by strong sales, around the year 2000 it became the largest microwave oven manufacturer in the world, with 35 percent of the global market.
Lots of toy, shoe and bag producers from China have since adopted this method. Despite Galanz's massive success, the weak points in this strategy are obvious. Insufficient branding input during the early years of expansion means that Galanz still lacks brand personality and a specific brand image. Customer awareness of Galanz is tied to its price. In other words, customer loyalty is very fragile. The Galanz model, which gives away a big proportion of profits to foreign retailers, depends on the scale of its operations to come out on the winning side of the ledger. Its margins are always under pressure.
Strategy No.2 is the Midea model, another home appliance producer.
Initially, Midea served as an Original Equipment Manufacturer for international companies. Most of its export products were labeled as foreign brands at the time. Midea's founders realized branding was bound to be a gradual, long-term process. They built strength, then bought into a second-rate international brand, and ultimately became an international brand operator themselves.
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