China is set to dominate emerging market attempts to establish global brands, according to new analysis by marketing experts Nirmalya Kumar and Jan-Benedict Steenkamp.
In their new book, Brand Breakout – How emerging market brands will go global, Professors Kumar and Steenkamp, set out eight definitive routes for emerging markets to establish successful global brands and show why the next Samsung could come from China.
The Western, globally established brands of today are a tough act for emerging markets to follow. At the moment, many people would struggle to name a Chinese or Southeast Asian brand, and this is the challenge that businesses in emerging markets must overcome.
However, Nirmalya Kumar, Professor of Marketing, London Business School, believes that a pattern of change is imminent. He explains: “In 1990, emerging markets accounted for 20 percent of global output. By 2010, the share of emerging markets had doubled to 40 percent and this number is likely to surpass developed markets by the end of this decade.
“Many Chinese firms have already started the same transformation that Japan and Korea went through. Soon we will be buying Chinese-branded products just as we are buying “Made in China” Western-branded products today.”
The big challenge for Chinese brands is deciding the best course of action; whether their goal is expansion into other Asian markets close to home or making a play for the global stage, targeting Western markets to become international brands.
Eight routes to Brand Breakout
For Chinese brands looking West, Professor Kumar believes, “There is no reason why Chinese brands cannot have the same impact in the US, as US brands have had in China.” The authors advocate eight routes to brand breakout.
1. The Asian Tortoise Route: Migrating to higher quality and brand premium (e.g. Pearl River Piano).
2. The Business to Consumer Route: Leveraging B2B strength in B2C markets (Galanz, Huawei).
3. The Diaspora Route: Following emigrants into the world (Corona, Mandarin Oriental).
4. The Brand Acquisition Route: Buying global brands from Western multinationals (Lenovo, Tata Motors).
5. The Positive Campaign Route: Overcoming negative country of origin associates (Chang Beer, Ospop).
6. The Cultural Resources Route: Positioning on positive cultural myths (Havaianas, Shanghai Tang).
7. The Natural Resources Route: Branding commodities in four steps (Natura, Café de Colombia).
8. The National Champion Route: Leveraging strong support from the state (Emirates Airlines, China Mobile).
“The book is not about best practice”, Professor Kumar concludes. “It’s about next practice. Emerging markets have to move forward from simply being the manufacturing capitals of the world. And they might do this quicker than the West may think.”
Brand Breakout: How Emerging Market Brands Will Go Global, will be launched on 20 June at London Business School.
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