Martin Roll: How Country Branding Can Add New Shine to ‘Made in China’ Tag

Differentiation has become a core element of any brand strategy. Central to differentiation is to demonstrate both points of parity and points of difference from competing brands.

One way brands achieve this is by associating themselves with either a category or a place.

The latter is usually referred to as country branding. French wine, Danish designs, Swiss watches, German engineering and Italian haute couture are results of very aggressive country branding.

Traditionally, the place of branding has conveyed positive perceptions, as in these cases.

However, with emerging economies getting integrated into the global economy, brands from these countries are often seen carrying the burden of potential negative connotations of their origin.

Among the many emerging economies, China is usually discussed as a pin-up example of demonstrating negative effects of country branding.

China is an economic powerhouse. Every global company aspires to a fitting presence in the Chinese market. T

he enormous Chinese domestic market, the manufacturing boom that has elevated many sections of its society into the middle class and the country’s many untapped customer segments have only increased the global rush to get a piece of the Chinese market.

Despite this corporate frenzy, customers have been very wary of anything that is labeled “Made in China.”

The quest of many Chinese manufacturers to cut costs and enhance exports has lead to cutting corners in quality, and thereby safety for customers.

Only recently, metal oxides found in toys for toddlers created a huge furor and strongly dented the already negative Made in China tag.

But along with such disreputable firms are also those that have excelled on the global stage.

Lenovo acquired the PC division of IBM and emerged as one of the top three PC makers in the world.

Haier has successfully emerged as a powerful player in the home appliances industry in the tough US market.

Many other Chinese companies have made bold acquisitions around the world.

All these activities have gradually helped to boost positive perceptions about brands from China.

However, with the Communist Party in control of almost all corporate activity in China, directly and indirectly, such consistent progress in improving the country’s image becomes challenging.

This begs the question: How does government intervention impact country branding?

As companies from China struggle to turn around perceptions, how can they manage the government intervention that impacts on worldwide perceptions of doing business in China?

This is an important question for both Chinese companies and global companies that aspire to do business in China.

Chinese companies will have to establish a high level of credibility with global customers.

Apart from issues of quality and cost, the increasingly challenging scenario for Chinese companies has been of perceptions borne out of the country’s political system, its interaction with other countries and the lack of control over such things by any local company.

One important way for companies to counter this would be through strategic associations.

Even mighty Japanese brands such as Honda and Toyota, and South Korean brands Samsung and LG initially had to overcome negative country of origin perceptions before emerging as global brands.

Chinese brands, given their enormous resources, should aggressively increase their global presence.

With a thriving domestic market, such a move may be seen as unnecessary from a profitability perspective.

However, from a legitimacy perspective, a global presence can help bring these brands in close contact with global customers.

Such awareness of and familiarity with Chinese brands will surely reduce the bad perceptions as brand experiences may alleviate some unjustified concerns.

Probably the most fundamental strategy for minimizing negative perceptions is to actually demonstrate consistent quality.

As important as symbolic actions are, nothing can substitute for substantive worth.

Chinese companies should embrace a new orientation where long-term legitimacy through quality of products takes precedence over short-term profitability through lower costs.

Furthermore, such a major shift in orientation should be aggressively communicated to the global audience.