China Branding

Cases from Zhejiang

Martin J. Liu, Jun Luo, Martin J. Liu, Jun Luo

• Publisher: Palgrave Macmillan
• Year: 2019
• ISBN:
  9789811393181
• Topic: Business
• Subtopic: International Business
• Index: Business

This book provides an overview of the brand construction process of manufacturing enterprises in Zhejiang province, China. There are now a number of industry-leading enterprises that are trying to build their own brands and manufacture products of higher quality in Zhejiang. The first chapter focuses on the place branding strategy employed by the Zhejiang Provincial Government in launching the "ZhejiangMade" brand to improve the perception of products made by Zhejiang manufacturing firms and promote them in the domestic and international markets. In the following nine chapters, the editors bring together case studies from nine leading enterprises in Zhejiang, including Baoxiniao, Shuanghuan, Feida, ROBAM, Xinhai, Yinlun, Weixing, Deli and Fotile, providing an analysis of their branding process.

© The Author(s) 2019

M. J. Liu, J. Luo (eds.)China Brandinghttps://doi.org/10.1007/978-981-13-9318-1_1

Begin Abstract

1. Place Umbrella Branding and the Provision of Quality: A Case Study of the “ZhejiangMade” Brand

Shengjing Yu¹ , Martin J. Liu¹ and Dandan Ye¹

(1)

University of Nottingham Ningbo China, Ningbo, China

Shengjing Yu (Corresponding author)

Email: [email protected]

Martin J. Liu

Email: [email protected]

Dandan Ye

Email: [email protected]

Keywords

Manufacturing industryZhejiangMadePlace brandingUmbrella branding

End Abstract

Introduction

Zhejiang province is a manufacturing center in China and the development of its manufacturing industry keeps on growing. It should be noted that a number of firms have already been equipped with the world-leading technical and quality management capabilities in producing their products; however, the majority of manufacturing firms in Zhejiang are in the low-end industrial chain with weak innovation capabilities and products with low added value which results in a low-profit margin, threatening their competitiveness, or even survival in the market. The Zhejiang provincial government has started to become aware of the eliminating benefits of producing low-cost products. In order to win the battle for customers in both the domestic and international markets, the government intends to help firms to establish a new competitive advantage. In recent years, Chinese President Xi Jinping posited the strategy of “Three Transformations”, which means transforming from Made in China to Created in China, from Chinese speed to Chinese quality, and from Chinese products to Chinese brands (CCTV.com 2017). Premier Li Keqiang has also advocated the “Made in China 2025” strategy (Chinanews.com 2015). The Zhejiang provincial government has employed a place branding strategy for improving the quality of products produced by Zhejiang manufacturing firms and promoting these firms and their products in the domestic and international markets.

The Zhejiang Provincial Party Committee and the People’s Government of Zhejiang Province launched a strategy of “ZhejiangMade” brands and initiated the “ZhejiangMade” brand building system. Around two decades ago, the government started to become aware that place branding could be a useful instrument to accelerate the upgrading and transformation of the manufacturing industry. In 2004, Xi Jinping, who was the secretary of the Zhejiang Provincial Party Committee, proposed to develop a provincial brand and went on encouraging to develop a provincial brand by attaching great importance to improve the quality of products made in Zhejiang province (Quality and Technical Supervision Bureau of Zhejiang Province 2017). The Zhejiang provincial government then provided policy support to enhance the quality of products manufactured in Zhejiang. In recent years, the Zhejiang provincial government continues to accelerate the efforts to build a provincial brand and issued a series of policies which affirmed the important role of the “ZhejiangMade” brand and stated that this brand is established as a “golden brand” of the Zhejiang economy.

This chapter offers an overview of the “ZhejiangMade” brand and its building system and examines the literature on place umbrella branding. It goes on to look at what actions the government has taken to ensure the transfer of the parent brand to its brand partners and examine the development of the “ZhejiangMade” brand to get a better understanding of how umbrella branding could be a good strategy to convince consumers and firms of product quality.

Literature Review

A place brand, according to Keller (2008), is developed to create an image of a place and improve the positive value of the place through differentiating the products and services from that place. As Hanna and Rowley (2008) suggest, a place can be a location, a region, a city, or a country. Scholars sometimes approach place branding from the perspective of the country of origin. The investigation of how a country of origin impacts on product evaluation was started by Dichter (1962), when the globalization of manufacturing was intensified. Verlegh and Steenkamp (1999) regard country of origin as a cognitive cue; that is the consumer perceives the products based on the perception of the country where the product originated from. Some country of origin cues can be found explicitly in the products, such as “Made in China” labels, and the other country of origin cues are implied in the products, such as language (Leclerc et al. 1994; Usunier 2011). The country of origin is used as a product evaluation cue by consumers when they are not familiar with a country’s product or other information of products is not easy to assimilate. Elaydi and Mclaughlin (2012) suggest that the firms should incorporate the origin of place to their capability development strategy and deliver products with the community’s core values, customs, and norms to obtain competitive advantage. Charters and Spielmann (2014) list four types of place brand, including country brands, regional brands, destination brands, and territorial brands, and they also conclude that a strong territorial brand will be supported by an effective brand manager, the willingness to co-operate, a common mythology, and local engagement.

Place branding has similarities with product branding and corporate branding, regarding branding management and development (Anholt 1998, 2002; Balmer and Greyser 1998). Domeisen (2003) states that similar to a company brand, a place brand is developed based on the customer’s perception of the quality. Frost (2004) suggests that the strategy for a place branding could follow the development path of company branding, such as creating a clearly defined vision, which needs to be shared with stakeholders. Establishing the link between brand image and brand identity is one of the main goals that place branding, product branding, or corporate branding intend to achieve. A brand identity means “a unique set of brand associations that the brand strategies aspire to create or maintain” (Aaker 1996, p. 68). Brand image is formed when the customers have their own understanding and brief of a brand based on the brand’s product and non-product attributes (Iversen and Hem 2008). Place of origin of the brand is an essential piece of information that may create or alter the brand image in customers’ perception (Thakor and Katsanis 1997). It should be mentioned that place branding, compared to product branding, is not only under the control of an authority and in fact a variety of stakeholders with conflicting interests are involved (Frost 2004).

Another essential strategy for firms to market their products is umbrella branding, by which a bundle of products is unified as a bond of quality using a firm’s reputation (Wernerfelt 1988). In the same vein, umbrella branding serves to support the marketing of products and services as a bond in the reputation of a place (De Chernatony 2008). The goal of umbrella branding is firstly the reduction of risk when introducing new products, and secondly the quality perception improvement of new brand partners (Aaker 2006; Laforet and Saunders 1994; Roehm and Tybout 2006). According to researches in the marketing field, the customers’ perception of the product quality of a brand’s extension depends on their experiences of the parent products. Customers are able to adopt their experiences with the parent as a signal of the extended products when they are not perfectly informed about them. De Chernatony (2008) points out that the provenance association of the place image is the core of umbrella branding and the transfer of quality perception depends on the degree of the congruity of the parent and the extent of the brand. According to Häubl and Elrod (1999), the signaling theory indicates that the parent brand perception is influenced by the extension and the quality perceptions of products which share the same parent brand and how they affect each other. Hakenes and Peitz (2008) have a different opinion, that umbrella branding is a useful approach to demonstrate to customers the product quality, only when there are serious defections in the quality of the product. In addition, Spielmann and Williams (2016) state that a territorial brand is a type of regional umbrella brand and find that the individual brand makes an effort to interact with the overarching territorial brand and attaches itself to a place of origin in order to leverage the marketing resources of territorial brands.

“ZhejiangMade” Brand

The “ZhejiangMade” brand is a place brand for products and firms, representing the highest level of manufacturing industry in Zhejiang province. The “ZhejiangMade” brand building system adheres to the combination of market-oriented operation and government-led promotion. The main goal of the “ZhejiangMade” brand is to develop and promote the place brand, which indicates superior quality of products and strong competitiveness of firms.

“Pin” is the logo of the “ZhejiangMade” brand, shown in Picture 1.1. The “Pin” logo is the image identity of the advanced manufacturing industry in Zhejiang. The logo is authorized to the firms and products to use once they get the certification of the “ZhejiangMade” brand. These firms can use the “Pin” logo in advertising materials, product introductions, and other promotional materials and can mark the “Pin” label on certified products and related packages.

Picture 1.1

The logo of “ZhejiangMade” brand

With the vision of “place brands, advanced standards, market certification, and international awareness”, the “ZhejiangMade” brand building system emphasizes the improvement of the supply capa...

Table of contents

• Cover
• Front Matter
• 1. Place Umbrella Branding and the Provision of Quality: A Case Study of the “ZhejiangMade” Brand
• 2. Branding in the Context of Globalization: A Case Study of Baoxiniao
• 3. From No Body to Some Body: A Resource Based View Approach for the Branding of a Manufacturer
• 4. Innovation in Environmental Technologies in China: The Case of Feida’s Power Plant Pollution Control Equipment
• 5. Customer Orientation and Brand Performance: A Study of ROBAM
• 6. Standing Out in the Crowd in the B2B Market: A Success Story from Xinhai Technology Group
• 7. Crafting a Successful Business Strategy: A Case of Zhejiang Yinlun Machinery Co. Ltd.
• 8. Weixing: A Plastic Pipe Industry Leader Who Succeeded with Manufacturing Upgrading and Long-Term R&D Investment
• 9. Deli Group: A Five Force Behavioral Culture
• 10. Unraveling the Myth of Fotile: The Critical Role of Strategic Positioning in Brand Building