I think it can! A great example is Lenovo, who acquired the former IBM PC Company Division for approximately $1.75 billion, and is currently the largest seller of PCs in China with 28.6% market share. The Chinese PC maker was ranked sixth with a 5.6 percent market share in the U.S. market in 2010, with sales outpacing all competitors in the US.
I believe Chinese brands have to do the following to compete in the US Market:
#1- Upgrade quality standards.
#2- Communicate NEW quality standards through better advertisement and promotional efforts.
#3- Develop a customer relationship management system with “the customer is always right” mentality.
#4- Reevaluate their pricing strategy, as we all know it, in America cheap = low quality.
In addition, the Chinese American community represents the largest group of Asian Americans, accounting for 22.4% of the Asian American population in the US. Therefore, utilizing the following Chinese symbols in product development to communicate Chinese heritage can be a competitive advantage in the American market:
Red: For the Chinese, the color red symbolizes good luck and happiness.
Chinese Dragons: A symbol of authority, might and power. Chinese people consider themselves to be descendants of the dragon and proudly communicate that in several forms.
Chinese Characters: There are over 80,000 Chinese characters that illustrate the Chinese culture.
Given that this blog post is dedicated to my dear Global Marketing Strategy students at UCLA, I am interested in knowing what you think a Chinese Brand ought to do to make it in America?
I totally agree that chinese products can make it in US market. CHina is not longer a low quality producer or a "cheap labor" scenario. This country is growing apace, its people its educated, its universities are already among the rank of the best of the world, and certainly character, discipline, perseverance and tenacity.
ReplyDeleteI may not agree that Levono is a legitime example because it was basically an american brand before (IBM) purchased by a chinese group.
From my point of view what will it take for chinese brands start gaining share and popularity in US market?
Formality
Right, what I have found about chinese products is that they are so diverse, in names, functions, quality, that is hard to recognize when you are getting something good from them.
And basically after buying you never knew if the product was chinese, taiwanese, korean, or any other asian country.
Two years ago my parents needed to renew their celphones, and a friend of my family offered them the newest chinese phones. Even my parents were concern about chinese low quality finally they bought them. These celphones had Tv, radio AM-FM, camera, space for double SIM card, and other utilities that my parents will never know what they could be used for, because they only need to make and receive calls.
The point is, if the government can support private initiatives to promote around the world the good chinese products, so people wont have to wonder if they are making a good or bad choices when getting a chinese product. I think international fairs, trade shows, delagates, are a good starting point, after that making an extra effort to allocate resourses in stores, publicity, for their good products.
I personally think that Asian companies can totally enter in the American market and be completely successful. Lets face it, China is so far ahead of the united states as far as electronics. Like for example, the cell phones that they have in China, Japan and etc are far smaller, slimmer, and more intuitive to use than most of the cell phones that are created in the United states. I think a lot of has to do with how the culture is so full of pride and how they take their work ethics very seriously. There always about improving everything and never settling for anything that may be perceived as ordinary.
ReplyDeleteDuring past few years, I’ve seen that American brands are having a difficult time measuring up to European and especially some Chinese brands. The thing is Chinese-made brands can produce the best quality products with lower capital which means they can possibly make more profit. Besides, they are practically a huge producer for many brands such as Lacoste or Nike but it’s hardly seen that Chinese companies create the brand name themselves. With their potential in producing goods, I am positive that Chinese brands can succeed in the US market by the following ideas;
ReplyDelete- Using media communication as a smart tool to advertise positive perception towards products made in China. In other words, investment in advertising can establish the brand recognition
- The fact is that China has more intellectual people and students. This can lead consumers to believe that technology and ideas for Chinese products are more innovative than US products
- Understanding values, attitudes and culture, Chinese goods can possibly meet all the needs of American consumers.
I do too believe that Chinese (or any other Eastern countries) brands have potential to become successful in the U.S. however, as you’ve mentioned above, it would take various steps to transform their current image of products - mass produced, low quality and cheap labor. These stereotyped images are not only from products but also from other backgrounds (such as Nike’s children labor scandal) hence being deeply rooted in the U.S. culture that Chinese companies must come up with an innovative approach to alternate their brand image and their association.
ReplyDeleteThis may be a reason for Chinese companies to acquire established busineeses such as Lenovo, Volvo and Cerruti. Instead of changing their image, a better alternative solution might be to expand on already existing brand image for the world market. Also, many Chinese brands are entering ‘red-ocean’ markets. For an example, a consumer electronic appliances company, Haier, has entered the U.S. market and they are showing profit, however, the market is already saturated, leaving small amount of the pie to establish and grow. Lastly, in order for Chinese companies to ‘make it’ over seas, Chinese government needs to establish an environment for the Chinese companies to produce their own higher quality and standard rather than companies remaining as OEMs (original-equipment manufacturer).
I think that the association between low-cost Chinese products and low quality is very prevalent in US consumer culture, which reinforces the challenges to Chinese brands that Alex described above. To overcome this psychological barrier to entry in the US market, Chinese companies have recently followed the trend of buying out or merging with US brands. As Jessika commented, Lenovo’s purchase of IBM is a great illustration of the trend.
ReplyDeleteMy ideas for ways to strengthen a Chinese brand’s recognition in the US market:
1. Market research: Penetrate the market in new popular/trendy products in a timely manner, such as the tablet computer craze. However this strategy has to avoid the impression of a bootleg product.
2. Emphasize reliability, like a Ford advertisement, whether it be electronics or food products. The marketing campaign has to aggressively combat the stereotype of low-quality products. An example would be the foreign brand Toyota’s success in aggressively regaining brand trust after the recalls on vehicles last year.
3. Employ a familiar face, such as a Chinese celebrity recognized in the US. The classic example would be Jackie Chan, who has lent his face to a prolific amount of products in China. A newer Chinese celebrity would be Jay Chou, who recently co-starred in the “Green Hornet” movie.
Lastly, an example of a Chinese success story is the Taiwanese Asus brand of computers. Taiwan, like mainland China is also famously associated with cheap computer parts, but Asus distinguished itself from other computer makers by plowing ahead in new technology, specifically in the category of netbooks, which are a smaller, limited, and more portable version of a laptop computer. Netbooks were very popular for a short period, and now Asus is jumping into the tablet computer trend as well. Asus has also become associated with high quality yet affordable laptops and computer components such as motherboards and videocards. I was surprised to discover the extent of this company’s market penetration while I searched for a new personal computer in the past couple of months.
I agree with Alex.Chinese brand could be successful in America.Their economy is growing, and I agree with Jessika points, their literacy graph is also increasing.The Educated population and English speaking population is growing fastly in China.However,there are some challenges for the Chinese brand as follows:
ReplyDelete<1> Bad Reputation of the Chinese product: Americans believe that Chinese products are not good in quality. Even though,
Many, products are quite trendy and innovative but they are not durable.
Recommendation: They should apply Turn around Oriented Strategy. Years ago, Korean and Japanese products were treated with the same reputation as China is treating now days. If we take the example of Auto Industry like Hyundai (Korean) and Toyota (Japanese), either of these brands were not successful in the first attempt. Both of them applied an excellent strategy that made them successful. Toyota relied on quality and affordable price. They developed economy of scale by supplying more products and increasing their market share. Likewise, Hyundai was treated as a low quality and low cost cars in America. They improved their quality and developed more customer oriented approach like giving 10 year free services. Now, these two cars are one of the finest cars not only in America but entire world.
<2> Mature U.S market and smart consumers: US markets are mature where each and every product of different brands is available in all over US. Customers are smart enough to judge which brand in good in terms of quality, price and durability.
Recommendation: Chinese brands should be innovative in terms of technology, packaging, logo etc. depending on the sector they want to go. Best example is the Shoe and apparel industry: Li-Ning, one of the successful shoes brands of China, trying to establish in U.S market. Though they are successful in opening their first store in Portland, they are facing many copy right issues. Logo and Tag line is quite similar with the logo and tag line of Nike and Adidas respectively. If they want to successful in a short span, I would suggest them for Joint Venture or merger with the successful brand of America instead of copying their success mantra.
<3> Economic Down-Fall: Because of the Economic recession, US customers are more conscious on spending on new brands. They would rather prefer to spend on the well trusted brands in US market.
Recommendation: Chinese brand should invest on marketing, advertising and supply chain management of the product. I like Gabe's idea; it is good if Chinese well known celebrity would advertise for U.s market. Moreover, Depending on the product, they should establish partnership with the established chains of U.S like Wal-Mart, Target, Best-Buy, Costco etc. that is an excellent approach to marketing the product.
US market is a great opportunity for China to grow rapidly. If they are successful in this market, they would easily get entry in other foreign markets also. This would recognize their brand globally like Sony, Apple, and Google.
Here are some of my thoughts for what Chinese brand should do to become big in US:
ReplyDelete-- Take advantage of China' new reputation as biggest economic power in the world. Economic power can be marketed as quality and strength of product.
--Take advantage of China' reputation for efficiencies of production. US consumers can believe that efficient production will translate to best quality product at best price.
--Focus on new capitalism in China and avoid association with Communism in China. I think US consumer believe that capitalism leads to better product (and opposite in case of communism.
--Put attention on China's history. As a country China has existed for thousand of year, US only for 200 years. Focus on products that take advantage of tradition and history.
--Rely on China culture already popular in US such as food, art, design and incorporate already popular aspects of China culture into these products.
I totally agree, a Chinese brand can be success in the U.S. As you have seen many big Asian brands such as Toyota, Honda, Samsung etc., all entered to the U.S. continuous beautifully. Why a Chinese brand couldn’t be?
ReplyDeleteGenerally, a Chinese brand has bad reputation in term of low product quality. But in my thought, most of the U.S brands that we usually use are “ Made in China”. So, That means a Chinese brand will be able to make their brand reach the U.S. Standard then? Personally, I think it is not a problem to solve the quality issue. But my point is how to communicate this high quality of Chinese brand and how to make it enter to the U.S. acceptably in a good image.
3 years ago, Hi-phone in China, the imitated version of iphone, debut in China after iphone1 launched for 5 months. That could prove that the technology in China is advance as the U.S.
China is not only the country that has evolution and innovation of technology potentially but also they have culture, history and meaningful tradition. In my opinion, combination between technology and culture would be a great idea to communicate Chinese brand. However, government issues would be another point that needs to be concerned as well.
China dominates global manufacturing because its labor cheap. For now most Chinese companies are content to manufactured products for Western brands. But the government is now urging some of China's biggest companies to sell branded products abroad specially U.S. For many reasons they are trying to establish brands in developed countries. The home market is being struggling for constant pressure on prices, branded products can be more profitable, and competing in foreign markets forces can be more reliable.
ReplyDeleteThe world has changed, though, and Chinese companies have the potential to become global. Particularly I don’t know any Chinese brand that has kept my attention. The Chinese approach is not being convincing to western market. Between Chinese middle class and Americans middle class there a huge discrepancy in values, culture even in money.In particular, Chinese companies were wondering to get a piece of the U.S. market, but it’s not as simple as they think… They don’t know to do marketing!!!!!!!!!!!!!!!!!!! How to brand a product!!!????
I’m not going to be surprised if in 3 years I start seeing Chinese brands on the shelves and in different kind of sectors.
A brand is a very different thing between those two countries. For the Chinese, cachet or prestige drives demand. For the U.S. a brand is many things, but generally involves years of exposure and dollars spent positioning the brand into the market,” brand recognition”, (celebrities making advertising, influential face in the slogan…)
If a Chinese company wants to enter the U.S. market they need to understand that this can't be done, at least not yet, with a Chinese brand or with Chinese sales and marketing. They need to reevaluate the marketing strategy and focus on the targeting market to get in, keeping cost under control and eliminating their image as producers of cheap goods.
As we all know almost everything is “MADE IN CHINA”
Yes the can, Haier, China's biggest appliance maker, is selling appliances under its own name in the United States and has ambitious plans to win 15 percent of the US market in the near future.
ReplyDeleteAnother example sports-apparel maker Li Ning Co It is competing head to head with Nike (NIKE) and Adidas on design and product selection, and opened its first retail store in Portland in 2010.
It has even opened design operations near Nike's headquarters in Beaverton, Oregon, and is taking advantage of the downturn to hire American talent.
I also think there is a lot of potential for Chinese brands to make it in America but they still need to do a lot of work to make their brands compete and be successful. It is true that China is able to make a lot of things other countries can't and they sell it at a much cheaper price. In my opinion this just means that their products only look good from the outside, but the quality is very questionable.
ReplyDeleteOne example I can think of is stone tiles (for flooring, etc.) A lot of vendors now sell both Italian made and Chinese made tiles, and of course the Italian costs more. They look the same but as you can probably expect the Italian tiles last much longer.
So, I think it is really important for China to upgrade their quality and improve on their branding to make it in America.
For sure Chinese can enter the American market. In the last few years Chinese has dominate both import and export market throughout the nation. Entering the U.S market is not an issue for them, just how to market their product or services. We know that Culture is one of the main issue entering the U.S market, Chinese brand need to adapt to American standard. I do agree with Khim on combining Chinese culture and their innovation cause that will give them a lead on entering the U.S market. In my opinion culture do play a very important role, especially entering a new market segment. The other thing about Chinese, are their low quality products. For sure they will need to improve in order to make people recognize their brand. As when McDonald enter the Chinese market. " Drive Through " is very new to the Chinese people they will adapt the American way of ordering food. But that's not only the issue, Mc'd also need to adapt on how the Chinese people likes to eat. Like creating variety menu customized for the Chinese people. And THEY have done it!
ReplyDeleteThis is the sort of thinking or strategy that Chinese brand need to adapt, like what i said before culture does play a very important role.
fatma berna said...
ReplyDeleteI totally agree that Chinese brands can enter to US market. The first reason is that there are pretty huge Asian and Chinese population in US and people like to buy products and brands that are similar to them. Also, in worldwide many products such as glasses, toys, phones etc. would be produced by China ,even in US especially in clothing we can see made in China label so often. It helps them to create awareness and in addition assiduity lead them to be successful in US market. They produce products appropriate for buyer's purchasing power so they attract consumers. Some successful brands such as Lenovo computers, Haier appliances, Tsingtao beer can be shown that people named them easily. Especially Lenovo computers is looming large and it promulgated its name with " Olympic& Lenovo thousand country tour". The other example is China Mobile. They boast more than 200 million customer and making world largest mobile phone operators and has strong partnership with Sony Ericsson MObile communucation and now boosts its profile overseas market.
On the other hand, if they want to enter US market, they have to clear their image " low quality- low price".If they sell their products much less than products in retail America, they can lose the market. It is seen an inexpensive way to gain market from Chinese companies.However, they have little experiences with marketing and branding and the gap between them is huge about cultural norms. They have to understand US cultural norms and adopt them.
Anyhow, in following years, it will be commonplace to buy Chinese brands in US.
I totally agree with you and believe Chinese people can make it to the US market and be successful because Japan did and I myself being Japanese, I personally think China has more advantage in many ways such as, China is such a huge country unlike us Japan!
ReplyDeleteThey have so much more manpower and land which is a huge advantage for them. They can make many things in their own country and many countries make factories in China so they drop money as well. As you said in your blog, the high Chinese American population will also contribute to the sales. If they make a similar quality product I think Chinese people will choose their own brand. Japanese people will have to always make a BETTER one to get them to buy it but it only has to be the same not better.
As you mentioned, to be successful, I think there are several tips, to work on the quality and changed the strong image that they have for being cheap = low quality. This could be hard so I think the fastest and the smartest way is to buy a well known company that already has the brand, quality, loyal customer which is what they did with IBM.
Now that the GDP of China has beaten us Japan and became the 2nd in the world, I believe we will see more and more Chinese brands taking over the world's market in the near future.
Johanna Sauer
ReplyDeleteIn general, I agree that a chinese brand can make it in America.
But I have a doubt on 2 points :
- Lenovo succeed in the US because, for a long time, consumers thought that it was IBM and after the genius mechanism to change the brand, people might think that you have the caution of an american brand behind the chinese name. In my point of view a chinese brand can definitely make it if there is an american caution which can help a lot for the notoriety, the brand image and also the quality perception.
- I also think that for the moment, even if we have exceptions, chinese made for american brand is definitely more famous in the US than chinese brand. The fact that chinese produce for american brands can influence the perception of chinese brands. To explain, american consumers may think that chinese can produce products (of various range of price and and quality) but they don't have the strengh to create a whole brand by themselves.
Only few chinese brand have made it in America and well-known by the mass-market. For example, Haier which produce house equipment like fridge. It offers a sufficient quality compare to its competitors (Samsung, Whirlpool) with a lower price.
Maybe chinese brands are for the moment more developed in the B-to-B market.
To conclude, I think that chinese brands can make in the US but in few years when they will evolve their quality standards and their capacity of communicate their efforts on diverse criteria like image, price, quality, the image of the country, etc...
Almost everyone in the United States concerns about the products’ quality if they see the sign of “Made in China”. Therefore, we can easily say that to enter a market like the United States, you have to improve your quality as our instructor mentioned. If you manufacture a tangible product, improving the quality of raw-materials and manufacturing processes will automatically improve the quality of the product. It is just that simple. But the thing is, if you do these arrangements, you cannot sell your product with the low price as you sold before, because they create a certain amount of cost to your company. In our China case, I believe that while they are working on solving the quality problems, they can use the advantage of low labor cost to keep their prices under the average. Besides, I think they have to improve their marketing and selling ability to reach customers in foreign markets. I read an article which talks about the Mexican beer company called Corona. It points out that when Corona try to enter to American Market, their first purpose is reaching Mexicans who live in the United States. After they become successful in first strategy, they expand their target market and use different kind of marketing strategies for Americans. Therefore, when we think the Chinese population in the United States, they may use the same strategy with the Corona. But, first of all, Chinese companies should change the perception of people about Chinese brands and products. This is not an easy step and may take a lot of years.
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ReplyDeleteThis comment has been removed by the author.
ReplyDeleteYes i think Chinese Brands can make there way into America ,
ReplyDeleteThe process is going on and most of us are not aware of it , as of now china is the biggest manufacturer in the world because of it low cost labour , they not only manufacture finished good such as electronics , textiles .
China is even know for it Industrial Machinery and a poeple from all over the world are going to China to buy Industrial Machinery and industrial tools as they are of high quality and they have a price tag which is low compared to other companies in other countries .
A lot of Furniture and chandeliers are being imported from China these days and are being used in homes and hotels .
i Strongly think that over a period of time we will be buying products that are not only manufactured in China but are also being sold by them under there name .It is a perception that we have created in our minds of china as a country which has low quality , that is not true . China is a country where we can get from the best quality products to the worst.
A chinese company which is into home appliances Haier has been doing business in the US under its own name has been doing significantly well in the US for the past years and claim to have a top spot in the US
Although Chinese brands need to do a lot of works to develop their image of products, I also believe that they have potential to become successful in the U.S.
ReplyDeleteLike Alex mentioned above, Chinese brands have several merits to compete in the U.S. market: a large population of Chinese Americans, an increasing number of educated people, and the cultural uniqueness with oriental images. As the community of Chinese American is extended and more educated Chinese are involving in American society, their potential purchase power in the U.S cannot be ignored. Besides, Alex mentioned that Chinese heritage can be a competitive advantage in the American market; among several Asian countries, relatively China has strong cultural aspects and unique characteristics because China was historically one of countries that influenced on other Asian cultures.
Mainly, providing good products and utilizing their heritage with effective marketing strategy would be the key for Chinese brands to be successful in the U.S market. But I would like to emphasize at this point that Chinese brands fundamentally need to improve their products and services before taking steps to marketing strategy. To advertise their cultural heritage successfully in the U.S market, upgrading quality standards, achieving better image of products, and providing better customer services would be required for Chinese brands so that every consumer can trust Chinese products. If the reliability of Chinese products would be increased, potential consumers would be willing to purchase their unique products delightfully.
I agree that that chinese products can make it in US market.
ReplyDeleteGenerally today the big global brands owned by Chinese companies doing well in US by offering low prices but good quality. So they are trying to change their negative “country-of-origin” which included; inexpensive materials, value pricing, unskilled labor, and, low-quality products.
Recently, they are changing their brand names into English and setting new positioning and marketing strategies. They begin to focus on having a valuable brand like LENOVO and promoting those actions they take in order to clear the bad reputation.
They also know that it is not an easy and quick process. If they continue to be brand focused, probably after at least 10 years later they can make it in U.S and in other countries with hard efforts.
Although it seems we can't come up with many Chinese brands here in the U.S., I think they will start to invade the American market soon. Chinese companies have been putting lots of money into research and development and I think it'll be just a matter of time when we start to see their products in stores like Target & Wal-Mart. A few of us mentioned Nike, and I just want to point out that Chinese sportswear and equipment - Li-Ning - is making its way into the U.S. market and is competing with Nike and Addidas. (An article on the WSJ http://online.wsj.com/article/SB10001424052748704678004576089553357777300.html
ReplyDeleteI believe that Chinese products can enter the US market easily and also adapt to the market successfully. But to be successful and to have a long term market share the image of the Chinese products for the American customers have to be reshaped by Chinese brands. First of all, the most important misunderstanding or the first thing that has to be changed is that the image of low price, low cost and low quality. Most of the customers do not want to buy the Chinese products. The customers think that, the quality of the product or whatever it is very low and it won’t be worth it to the price they are willing to pay. But there is a dilemma, first they do not want to buy the Chinese products just because they have low quality, but everything they use even their clothes, computers, mobile phones almost the half percentage of these products are made in China. To change this image they have to understand the culture, the attitudes and the values of the country they want to enter. And with understanding and applying these things they can manage the reshape the image. The adaption to the culture must be completed.
ReplyDeleteYuriko Tampi:
ReplyDeleteI think that in the near future only some Chinese brand could enter the United States market. Electronic products have less barrier of entry in teh United States than other consumer products. For example, Lenovo has established itself in the US Market. Moreover, some of the leading US brand manufacture its product in China, such as Apple. Chinese product is known for the low price and bad qualities, however this phenomena has changed. On the article, USA/China/Japan: Established TV names under pressure from low cost brands discuss that Chinese Brand LCD TV, Hisense, has gained market share in Japan. HIsense product must be low cost and good quality to enter the Japanese electronic industry. The chinese have enough experience in manufacturing quality electronic products for US brand, however not in establishing its own brand in the United States. In order to established its own brand in the United States, Chinese company should be innovative and bring in the latest technology that adapt and cater US consumers. On the other hand, CHinese products have harder barrier in entering US fashion industry or food industry. This is because products from other countries are very known and established globally. In conclusion, other top Chinese electronics could enter US brand if the product is low cost and good quality.