The recently published 2012 BrandZ report on the Top 50 Most Valuable Chinese Brands found that the value of the top 50 Chinese brands has grown by 16 percent to US$325 billion, representing more than five percent of the Chinese economy. Combining both financial data and opinion gathered from interviews with over 35,000 Chinese consumers, the survey also indicated China’s shift from maker to innovator, the phenomenal rise of online and FMCG brands, and an increasingly brand savvy group of middle class consumers. The list includes China Mobile, the world’s largest telecommunications operator; the four major Chinese banks; and a number of consumer brands, such as Mengniu, Sunning and Lenovo. (Find out more by clicking here)

Although there remains considerable debate as to which of these brands, if any, can become established as global brands, many Western competitors are beginning to realise the long-term threat from their new Asian competitors. In the face of stagnant economic growth in Europe and the US, and the lingering Euro-zone crisis, it is the Asia-Pacific region where many organizations are looking to try and substitute declining revenues elsewhere. The increasing power of Chinese brands within the Asia-Pacific region, not to mention other rapidly developing regions such as Africa, raises several questions for Western businesses intent on growing market share in new international markets:

• How can Western brands compete effectively with strong Chinese brands in local Chinese markets?

• Should premium-, mid- or low-end brand positioning be adopted in developing markets such as China?

• How should Western brand propositions be adopted for the local Asian market?

• What measures should be taken to defend brand position and market share in home markets from Chinese competition?

• Which Chinese brands represent the most significant competitive threat?

• How can social media in China be exploited to build brand presence?

As Western corporations tackle these important issues, it is clear that the challenge of Chinese brands is only set to grow in the future. However, while this rise represents a challenge, many Western firms are also looking to take advantage of the opportunities presented by Chinese brands. As Chinese brands aspire to compete more effectively with their global competitors on the international stage, the demand for high quality suppliers, product components, and consultancy services has never been greater. While marketing to Chinese businesses brings its own set of particular challenges for the uninitiated, over the past few years Western firms have begun adapting to China’s unique environment and have made inroads selling to some of China’s largest firms. As Chinese brands continue on their relentless march forward, it will be those firms that are able to grasp the characteristics and requirements of Chinese organizations that are likely to see the greatest success in the long term.

Emma Flood this week weighs up the merits of brand partnerships.

On a recent lunchtime browse through research-live.com I stumbled across an article by Lyndsay Peck (click here to read the full article) discussing the benefits of brand partnerships:

Although brand partnerships have been around for years – some successful, some less so – I was intrigued by the news that Heineken and the relatively new national newspaper i are launching a joint hybrid app that will give readers the chance to read the paper’s content in selected pubs and bars.

The initiative forms part of Heineken’s Hub initiative, which kicked off in April and involves providing superfast broadband in selected premium bars and pubs across London and Cardiff. The brands will also offer monthly competitions with prizes such as new gadgets and technology.

Stirring my interest in brand partnerships, or co-branding as they may also be known, I dug a little deeper to find out more about why organisations enter brand partnerships, and what the potential benefits could be.

Although the author of the article recounts recent examples (such as McDonald’s Flurry and Smarties as well as Apple iPod and Nike), it would appear that co-branding has been in existence for some time, seemingly dating back to 1956 when Renault had Jacques Arpels of jewellers Van Cleef and Arpels turn the dashboard of one of their newly introduced Dauphine’s into a work of art.

So, if brand partnerships have a fairly long history dating back over 50 years, there must be some significant advantages – reducing costs through shared advertising/promotion, increasing sales revenue through broadening your reach and targeting new audiences, further increases through positive association with another brand…?

In returning to the perhaps unlikely brand partnership between Heineken and i, it draws us to think about what we would be looking for in a brand partnership. Would we want to go for an unusual partnership to stir up interest in our own brand and raise questions on our motive, or would we stick to the traditional approach of synergy and brand fit, which is summed up in the article:

Brand partnerships in FMCG can work nicely if you are a brand that goes together, although often this is retailer-driven, unless you are Unilever or P&G and you can cross sell your brands by giving freebies or vouchers of one onto another. In the media sector, publishers often bundle magazines to encourage trial but ultimately the partnership has to offer a degree of synergy and consumer benefit.

What the article does not cover is the potential detriment of a brand partnership. What if the brand you have partnered with and invested alongside suddenly, for example, becomes embroiled in a scandal? How easily could you be disentangled from the partnership, and would you exit unscathed? Perhaps there is an argument for conducting due diligence into whether the company’s mission, objectives and ethics are congruent with your own company. Or is there a safer method yet; that of same-company co-branding? This offers merit in providing economies of scale, etc. and Proctor & Gamble offer an example of this in their marketing of Gillette M3 Power shaving equipment (which require batteries) with Duracell batteries, where both brands are owned by P&G.

In closing my thoughts on this article, I am mindful that the author did not explore how brand partnerships are measured in order to understand whether they have truly been successful or whether there was no significant benefit. Given that activities such as brand partnerships require significant investment to deploy, any branding activity should be well evaluated before investment is made. B2B International is an expert in branding research and has written multiple white papers on the subject. To read these white papers and learn more about our experience in branding, click here

In the first of an exciting new series of articles by B2B International, Nick Hague asks you to take a seat in the Business Surgery where we will prescribe remedies to get your business fit and healthy. Are you sitting comfortably? Then let us begin…

I recently read with great interest the Financial Times Special Report on Global Brands. It backed up a lot of what I already knew about the importance of branding and what we continually preach to our clients; that investing, developing and managing a strong brand will not only differentiate a company from the competition but also result in increasing financial returns.

“The obituaries proved premature. In the era of austerity, complete with subdued consumers and cost cutting companies, big brands are flourishing…… investing in brands through recessionary downturns pays off.”

At first glance, the Top 5 global brands for 2011 as stated by WPP’s Brandz survey don’t hold many surprises:

It is only when you start to look down the list at the 9th largest global brand; China Mobile, that you start to get a feel for the changing landscape of brands in the global arena. Indeed, China brands figure strongly in this year’s Top 100 Brands including just in the top 50 the brands of ICBC (No.11), China Construction Bank (No.24), Baidu (No.29), China Life Insurance (No.33), Bank of China (No.37) and Agricultural Bank of China (No.43), but what does this really mean?

As stated in the report:

“China is on the verge of becoming a global brand powerhouse”

Or is it?

Is it really the case that the Agricultural Bank of China is a stronger global brand than Mercedes (No.50), Nike (No.57), Pepsi (No.63) or even Gucci (dropped out of this year’s Top 100) – I don’t think so!

Most of the brands mentioned are state owned companies and most have the positions in the Top 100 because of the scale they have in their home Chinese market. Of course, there are always going to be questions to the methodology of how such a top 100 is created – but what I do think it shows is the increasing consumption (and thus importance) of brands in China and indeed the other BRIC (Brazil, Russia, India & China) nations. For example, currently the brand Baidu will not mean much to Western people when Google is the most widely used search tool. However, with China’s internet growing in both influence and sophistication, could Baidu challenge Google for global supremacy in the future if they decide to look outside of China?

One thing we do know is that through globalization, the branding landscape of Western dominance is starting to change. Therefore, if you are thinking of rebranding or developing a new brand, focusing on the global picture rather than your usual country specific focus will deliver greater profit and growth in the years to come.

For more information on how B2B International can help your company’s branding strategy, visit it by clicking here or contact one of our branding team at brandingteam@b2binternational.com

Nick Hague 2011 ©

A unique ‘new’ concept to hit the UK inspires Caroline Harrison this week to think about branding opportunities.

Having watched the movie Grease a gazillion times, I’m more than familiar with John Travolta belting out “Stranded at the drive-in”, having just tried to woo Olivia Newton-John and having had his over-enthusiastic advances rebuffed in a rather painful way.

Sadly, I myself have never had the chance to go to a drive-in movie. There doesn’t seem to be much of a market for it in the UK. Maybe that has something to do with our dismal weather. Or maybe it’s simply because I didn’t grow up in the 1950s… Either way, for me, there’s something eternally ‘romantic’, ‘cool’, ‘American’ or just plain ‘novel’ about the idea of a drive-in movie. All of which is leading up to my telling you about something that recently caught my imagination.

Apparently, a new drive-in movie concept has hit Britain’s capital. The Starlite Urban Drive-In, in East London, lets cinema-goers watch films while seated comfortably in one of a range of shiny new Volvos.

In a city where many people rely on public transport to get around, the good news is that the 25 Volvos are all permanently pre-parked, so (a) you don’t need to drive to the venue and (b) you don’t even need a drivers’ license. A maximum of two people are allowed in each car (how romantic!) and, for £25 per ticket, you get a drink and some popcorn as well as a seat.

Meanwhile, the film’s soundtrack is broadcast through the car’s radio and waitresses on roller skates wheel around taking and delivering food and drink orders (how cool!). The only downside is that tickets seem to be the hottest thing in town – two initial screenings of Grease and Dirty Dancing sold out online in 30 seconds – so my chances of going any time soon are fairly slim.

As the sole provider of the vehicles, Volvo sees the partnership as a good fit for the brand. It also provides a unique and novel opportunity to reach a younger audience that may not have been exposed to the Volvo brand before. So successful has this new concept been that several major film studios have apparently approached Starlite asking them to show their movie premieres, and a number of other companies are keen to get involved with future sponsorship.

When it comes to any kind of promotional, sponsorship or branding opportunity, companies do have to consider their options carefully. Obviously price and anticipated return-on-investment play a large part in the decision, but the arrangement must be relevant to the business, the brand or the company ethos. What’s more, it is also vital that the opportunity puts them in contact with, or firmly places them in the mindset of, their potential target market. But, beyond that, it’s also a great idea to associate your brand with something that’s unique, will have impact and is likely to create a real buzz.

As far as I am concerned, that’s just what Volvo has done here. And, who knows, next time I’m on the lookout for a new car, the fun and funky brand that Volvo would appear to be might just now enter my consideration set. Indeed, it might even prove to be “the one that I want.” (Sorry!)