Money Down the (Brand) Drain : An exploration of the constraints of the adoption of brand strategies and the adversity facing investment in brands by Chinese suppliers

Abstract

This paper explores the perception by Chinese marketing academics and consultants of benefits and constraints of the adoption of branding techniques. We explore the lived experience of Chinese branding experts to capture their experience of branding in China by means of 19 phenomenological interviews. There are differences between the Western and Chinese conception of brands, these in China serve a more social function and are associated with social processes. The Chinese economy has the characteristics of a large state economy and has large state-owned conglomerates which have strong brands as a result of Government support. Non-state owned businesses have much more difficulties innovating and building brands because of scarce resources. Business leaders in China seem to have a short term orientation, and there is evidence that they tend to select strategies based on imitation of leading brands, as well as that of manufacturing and marketing mass produced, low cost products. This proliferation of generic products and “me too” brands is complemented by a plethora of counterfeit goods. Chinese leaders do not have incentives to invest in long term innovation and brands, nor in brand management as they feel these investments cannot be protected from counterfeiting; at the same time, the competitive climate means that Chinese non-state owned companies need to be very responsive and achieve fast returns in order to survive. Policy makers should strengthen IPR protection legislation and counteract counterfeiting; foreign investors and local companies are advised to adopt mobile defense strategies for their brands.