Posted: July 1st, 2015
The application of brand strategy in Chinese market
Abstract
This article will take WAHAHA brand as the main case study to analysis the application of brand strategy in Chinese market. There are many brand born and failed in today’s brand strategy . In China, WAHAHA is famous brand and it starting from scratch, from a small factory now has a very high position in the brand market(En.wahaha.com.cn).
This essay mainly through investigate the WAHAHA company’s brand strategy to discuss the successful reason of WAHAHA in the current increasingly severe market environment. In addition, according to the research results to discuss what kind of optimized strategy is needed in order to make the WAHAHA company doing better. This paper will base on the WAHAHA case study as the main method. Through comparing with the same kind brand and market questionnaire as auxiliary means.
Introduction
In today’s world, economic globalization and the rapid development of information technology make the enterprise faces from domestic and international competition which is increasingly fierce. At the same time, technology accelerated updates and product life cycle continuously shortening, this all requires enterprises must draw up a plan or adjust its strategy in time according to the changes in the environment to meet customer demand that increasingly personalized and diversified(Keyzer, 2012). Many research results have showed that attaching great importance to the market and focus on customer needs and interests is key factors to improve enterprise core competitiveness, cultivating and maintaining sustainable competitive advantage. In Chinese beverage market, “WAHAHA” has become a famous brand. It started with 140000 yuan in 1987, after nearly 20 years of development, from an unknown small factory developing now become China’s largest beverage production enterprise and it’s soft drinks production is the world’s fifth , among the top national large industrial enterprise (Chinabusinessreview.com). In the current market, the situation of market competition is increasingly fierce. How the enterprise become thriving and prosperous in the fierce market competition environment, the brand is the key factor to determine success or failure. Modern economic competition, in a sense is the brand competition(Neven, 2006).
This paper choose brand strategy of WAHAHA group as the research case, discussing how the enterprise according to their own actual situation to make effective marketing strategy,brand strategy and the safeguard measures to help enterprises improving. One purpose of this essay is play a certain guiding role to the brand strategy of WAHAHA group work. And second one is provide reference for other private enterprise’s brand strategy development.
This dissertation mainly research two question:
- Under the fierce brand competition in China, many brands eventually go bankrupt, what is key success factors of WAHAHA company.
- In order to let the WAHAHA brand strategies to do better, what strategy can be optimized.
Literature Review
(Framework made by author )
WAHAHA
WAHAHA, founded in 1987, now has become China’s largest and benefit beverage enterprises. In 29 provinces of China, with 58 production bases and 150 branches, has 30000 staff. The main production of dairy beverage, drinking water, carbonated drinks, juice drinks and other nine categories of more than 100 varieties(En.wahaha.com.cn).
In the past five years, the Chinese beverage market has become one of the fastest growing market in the part of food industry, the Chinese beverage grow 15% annually according to the Ministry of Commerce (eusme.centre,2013). Although once have experienced the baptism of the financial crisis, but in current beverage market of China, the total sales did not reduce, it is increasing. In addition to the international companies such as Coca-Cola, Pepsi-cola, the competition in domestic beverage market like WAHAHA, Master Kong, Nongfu spring, etc.brands is becoming more and more intense (Euromonitor.com, 2015).
Brand
A brand is a “Name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers.”
———-American Marketing Association
In primitive society, because of low level of productivity, there is no exchange of goods, let alone brand. With the development of production, the Commodity Exchange was appeared, some simple mark have been used in some commodities to distinguish different producers. In western countries, the brand as a real commodity marker to use is originating in Spain’s nomadic tribes. They stamped all of their own animals in order to distinguish others when in exchange.That why the word “brand” can be interpret as a mark that is burnt onto the skin of an animal such as a cow, to show who owns it(Schroeder, Salzer-Mörling, 2006).
Brand is a broad concept, it includes the brand name and brand logo. Brand logo is what can be identified from the vision without any language, which is often constituted by word, symbol, image, design, color and other elements, reflected the visual image of brand. Which mainly embodied in such part:1. Character(e.g., Haier, it formed a inherent brand image). 2. Image(e.g., bird’s nest and several bird of Nestle). 3. Color(e.g.,IBM’s blue and Tiffany’s blue)(Creative Market,2013).
Brand Strategy
Brand strategy is a tactic based on brand, to analyze the essence of the brand strategy must analysis the essence of the strategy firstly. Brand strategy is a kind of commercial competition, to attract or draw customers by relying on material benefits , so as to change the cognitive status of the customer to the product and increase the customer’s purchase intention, thus to achieve the business purpose of the enterprise(Murphy, 1990). The emergence of brand strategy is to win market share and profit, strategic result is reflected by consumers “monetary vote”.
Brand strategy is a kind of enterprise strategy generated by a variety of management and marketing elements. As a complete process of strategy, brand strategy should have the following three stages: brand creation, brand spread and brand protection.
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Brand creation stage is the initial stage of the brand strategy, it according to the manufacturer’s product competitive strategy, the early environment of the market and the initial resource of the enterprise to determine the brand planning, including brand naming, brand identity, brand positioning and so on. The results of this phase will be directly applied to the next stage(Mintzberg and Quinn,1991).
Spread stage of brand is the extension of creation stage, mainly includes the brand extension and spread strategy two pieces of content. Brand protection stage actually is the legal protection of brand rights and maintenance of brand strategy this two parallel stage. Brand asset is the new resources generated by the brand strategy implementation.
How to implement the brand strategy
■Set up a strong awareness of brand management and strategy
The enterprise operator need to keep on learning modern business knowledge and understand the situation of domestic and international business development, establish a strong sense of brand development strategy. Seize the opportunity in time and promote the brand strategy(Mintzberg and Quinn,1991).
■Identify market positioning
Market positioning means after confirmed target market, What kind of marketing methods, products and services will be chosen in the target market to show the difference between competitors(Park, Jaworski and Maclnnis, 1986). So as to set up the enterprise image, obtain favorable competitive position.
■Use capital and speed up development
Insufficient funds is the common problems that the enterprise will meet when implement and promote the brand strategy , but cannot give up development.
The current international common way is to operate capital and accelerate the pace of brand development.Capital operation is through mergers, acquisitions, transfer, franchising, paid use and so on to introduction of international and domestic brands(Mintzberg and Quinn,1991).
■Use information network
Brand once developed, will be get to the Internet in fastest speed. Because now is information age, through high speed information highway can achieve the fastest combination operation.
■Create a good enterprise culture atmosphere
Operate a commercial enterprise and promote the brand strategy is not easy.
The culture suggestions of the enterprise is one of the very important factor which can encourage employees, recruit and stabilize talents. In addition to a firm’s internal environment, it also need a good external environment. Business enterprise implement and promote brand strategy need to strive for government’s policy support in the first step, next is to win a good market environment.
Research Methodology
■Case study
The main purpose of this research is the application of the brand strategy in the Chinese market. So take one typical and successful Chinese representative brand do a case study will be the most appropriate method. WAHAHA is a very successful national brand on the Chinese market, especially in the part of doing brand strategy. It start a business from just only 3 people and with 140000 yuan by borrowing. But after ten years of ups and downs, WAHAHA now has become a large enterprise that more than 30000 employees, 4 billion RMB assets and 6.2 billion annual sales. Moreover, it is in the top of the beverage industry in China. WAHAHA group cannot has today’s achievement without the right brand strategy.
Ethics
There will be many deviations in the process of a case study, such deviation include distortion of facts, the limitation on the cognitive and personal subjective motivation, etc. Common deviation can be roughly divided into two sorts. One related to intuition and subjective experience, which people in the process of research, often using simple and direct way to make inferences by their own subjective experience. The another one is information collect. In the process of collecting data, ensure the information collected is related and fresh.
Limitation
Case study is a very broad research method, WAHAHA group is a large company with a long history, has a large number of real or imaginary information.
For China, after all the mass consumption industry is most vibrant, how this industry get sustainable development? How to become a century-old shop? Only through a case study is difficult to get reliable conclusion. Therefore, chose the WAHAHA enterprise as a case study research method it need to understand more deeper, more detailed. The comparison method will be used as auxiliary help. Coca-Cola company, the thumb of international beverage industry, can be chosen as comparison object. From the comparison to analysis the weakness of WAHAHA enterprise and what can learn from the Coca-Cola company. The market research method will as the another auxiliary method to analysis WAHAHA on consumer market, here will through the method of questionnaire to understand.
Data analysis
According to the result of comparison and questionnaire methods.
■Comparison method
Ethics
To make the comparison methods done fairly, the two compared object must belong to the same category and has the certain inner link, and can use unified standard to measure and evaluate. In order to ensure comparability, the comparison scope should be consistent and objective conditions should be the same. When doing comparison method, need to consider comprehensive, cannot be limited to list some simple phenomenon like similarities and differences.
Limitation
Coca-Cola company is a century-old company, but WAHAHA just a more than ten years brand on the Chinese market, there is a certain gap in the start. But the purpose of this comparison is not to say which one is better, through this comparison, get the place where the WAHAHA enterprise needs to progress and improvements.
Data analysis
By comparing the current development status, including scale, enterprise culture and so on, then analysis the result and do conclusion.
■Questionnaire method
Ethics
Market research mainly adopts questionnaire survey method, divided into online questionnaire and face to face give out questionnaire. Because the questionnaire involves people, so will adopt the ERGO. In order to respect the individual will, the content of the questionnaire is anonymous and promise not to disclose any personal information, to ensure the privacy of respondents.
Limitation
Questionnaire is a widely used investigation method, therefore, will not be noticed by the public’s attention. By sending E-mail, the online questionnaire could be as spam, so is a waste of manpower. Field give out the questionnaire, it is impossible to recycle all or even rejected.
Sometimes the questionnaire recovery rate is very low, sometimes even affect the work of market research, wasted printing paper and resources.
Data analysis
Collect and screen out the questionnaire,it is hardly be taken back all, then eliminate the false and retain the true. Next is doing describe statistics, understand the basic situation of the research object. After that,classify and divide the data into group, make the messy data become clear and businesslike. Drawn the obtained data into a chart for analysis through specific software, such as EXCEL, STATA, etc.
Timetable
As the timetable shows that the WAHAHA case study will be divided into comparison and questionnaire this two parts. Because questionnaire is belong to primary resource and need more time, so it is first be done. First of all, it is need one week to design a questionnaire and divide onto online survey and face to face. Finally, recycling effective questionnaires, analysis the data and summarize it . At the same time, the comparison method also will begin, the first thing to consider is the content of the comparison. Through the network and library search information and data. After comparison, analysis and comparison the results, give conclusion. After finish this two research methods, then analysis the result. Finally, come to a conclusion.
References
Chinabusinessreview.com,. ‘Wahaha | China Business Review’. N.p., 2015. Web.
10 May 2015.
Creative Market,. ‘Designing A Brand Identity’. N.p., 2013. Web. 10 May 2015.
En.wahaha.com.cn,. ‘Welcome To The Wahaha Website!’. N.p., 2015. Web.
10 May 2015.
Euromonitor.com,. ‘Soft Drinks In China’. N.p., 2015. Web. 10 May 2015.
Gapingvoid.com,. ‘What Is Corporate Culture? | Values & Visuals In Business Culture | Gapingvoid’. N.p., 2015. Web. 10 May 2015.
Keyzer, P. ‘LEGAL RISK MANAGEMENT IN THE AUSTRALIAN FITNESS INDUSTRY: IDENTIFYING THE PUBLIC LAW RISKS’. Injury Prevention 18.Supplement 1 (2012): A37-A37. Web.
Mintzberg, Henry, and James Brian Quinn. The Strategy Process. Englewood Cliffs, N.J.: Prentice Hall, 1991. Print.
Murphy, John M. Brand Strategy. New York: Prentice Hall, 1990. Print.
Neven, D. J. ‘Competition Economics And Antitrust In Europe’. Economic Policy 21.48 (2006): 742-791. Web.
Otronline.com,. ‘Corporate Brand Strategy Implementation’. N.p., 2015. Web. 10 May 2015.
Park, C. Whan, Bernard J. Jaworski, and Deborah J. Maclnnis. ‘Strategic Brand Concept-Image Management’. Journal of Marketing 50.4 (1986): 135. Web.
Schroeder, Jonathan E, Miriam Salzer-Mörling, and Søren Askegaard. Brand Culture. London: Routledge, 2006. Print.
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