Can China overcome the difficulties of establishing successful global brands?

Abstract

Abstract It is clear to most observers that China is taking an increasing role in world trade not only through political interventions but as a result of its strategy regarding acquisitions. There have been a significant number of these recently, some of which like the Rover take over in the UK and more recently Geely taking over Volvo, have been high profile. This paper provides a brief overview of these developments. It is then argued that an important issue facing the Chinese companies involved in these take overs is one of brand equity and country of origin effects. This issue is of equal importance to China’s global competitors as well. A review of the literature shows that consumer perception constructs, such as perceived quality, have been well researched through numerous country-of-origin papers. A key issue to explore here however, is the extent to which the new nationality of brand ownership will have an impact on consumer perception constructs of brand equity. This paper discusses these two areas and examines their relationship in conceptual terms. A research agenda is then suggested, which forms the basis of a proposed interpretative project aimed at establishing the views of consumers regarding the phenomenon of well known brands being taken over by a new country of origin - evidence from the car industry draws on the progress being made in this area. The research aims to examine the implications for consumer based valuations of brand equity and the types of new strategic thinking this could engender. It is argued that the Chinese brand lacks the main components for global success in several areas though in time these factors will be addressed. .In the short term more focus will be made on supplying the local Chinese market though experienced gained from increased exports of components and collaboration in research from abroad as shown in the examples of the car industry will help strengthen the reputation of Chinese products in the longer term as well as helping to establish more Chinese global brands