18 Sep 2007  Research & Ideas

How Brand China Can Succeed

A series of recent setbacks including the Mattel toy recalls threaten China's new and improving image, says Professor John Quelch. There is just not enough preexisting brand equity among the world's consumers to inoculate Brand China against the current tide of negative publicity. What should the country do to polish its image? Key concepts include:

  • Recent setbacks threaten China's new and improving image. China looks like a country that loves the world's markets but does not play by the world's rules.
  • To fix the situation, China should:
  • Tighten and enforce nationwide manufacturing quality standards and health and safety laws.
  • Move towards an economy based on invention rather than imitation.
  • Use the Olympics as an event for national progress, not just Beijing progress.

 

Editor's Note— Harvard Business School professor John Quelch writes a blog on marketing issues, called Marketing Know: How, for Harvard Business Online. It is reprinted on HBS Working Knowledge.

As the British nineteenth century commentator John Ruskin astutely observed: "Great nations write their autobiographies in 3 manuscripts: the book of their deeds, the book of their words, and the book of their art." China has a long and proud history and a rich culture. In deeds, today's Chinese businesspeople and government officials can do better.

Clearly, China has come a long way during the past decade. Its double digit economic growth rates—especially for a country of over a billion people—have been enviable. China has become factory to the world. The Chinese are rightly proud of their achievements and the 2008 Olympics promise to be China's coming out party, much as the 1994 Barcelona Olympics helped Spain present itself to the world as a modern, up-and-coming member of the European Union.

However, a series of recent setbacks threaten China's new and improving image. As a result, China looks like a country that loves the world's markets but does not play by the world's rules. China is hardly alone in these behaviors, but its size as the third largest economy in the world now commands attention—and the expectation of better behavior.

Not until recently has China's government given serious attention to the country's international image. Though the number of tourists and foreign investors grows apace, there is just not enough preexisting brand equity among the world's consumers to inoculate Brand China against the current tide of negative publicity.

What should China do?

First, the central government must ensure that manufacturing quality standards and health and safety laws are tightened and enforced nationwide. Western multinationals have a role to play in ensuring their Chinese subcontractors deliver on quality, but Beijing must push provincial governments to upgrade and enforce existing laws. Tough sentences no doubt send a message of deterrence.

Not until recently has China's government given serious attention to the country's international image.

Second, China must move towards an economy based on invention rather than imitation. Japan and Korea have made the transition. Brands like Sony and Samsung are now respected worldwide. The global aspirations of cutting-edge Chinese brands like Lenovo and Haier suffer when the misbehaviors of corrupt Chinese businessmen and government officials drag China's image down. Pretty soon, China will be exporting cars. Cars are a benchmark product that consumers worldwide will use to assess Chinese production quality across the board. The cars China exports better be as good as Hyundais and Toyotas.

Third, China must use the Olympics as an event for national progress, not just Beijing progress. To spread the modernizing impact of the Olympics, China is rightly planning to hold many Olympic events outside Beijing. It is vital that, for 2008, all Chinese raise their game, not just in competitive sport but in commerce. It would be too bad if China is the largest medal winner in 2008 but remains an also-ran in business practices.

Do you think China will succeed in its effort to rehabilitate its brand?

Join the discussion on Harvard Business Online.

About the author

John Quelch is Senior Associate Dean and Lincoln Filene Professor of Business Administration at Harvard Business School.