CASE - CHINESE BRANDS STRUGGLE TO LIFT QUALITY IMAGE

How do low cost and high quality come together to make a brand image? Not very well when your emphasis is on low cost. Chinese brands are in a perception predicament with U.S. consumers. Americans view products made in China as high quality if they are designed in the United States, but if they are both designed and manufactured in China, the perception of the products quality is generally negative. Interestingly, Americans will respond positively to the quality of Chinese products when asked to assess them individually but not when asked about Chinese products. Furthermore, people will rate the quality of Chinese products highly if they don't realize that they were designed in China.

What can Chinese companies do to change this perception? Marketing and innovation are the key concepts. Chinese companies tend to take a follow-the-leader approach when it comes to creating products, focusing on a manufacturing or sales orientation rather than a market orientation. Instead of conveying to the American consumer something about the quality of their products and how it is something that could be of use to them. Chinese companies have tended to emphasize the fact that their items are low cost. When consumers see a low price without information about the quality of the product, they tend to perceive it as low quality. This is especially true when it comes to household appliances and electronics that are expected to have a long life. China also needs to work on letting the customer know that the quality of its products is guaranteed even after purchase. Implementing these aspects into its marketing mix could make Chinese brands top competitors in the international market.

Discussion Questions -

1. Why are Chinese brands struggling to break into the American market?

2. Why are consumer perceptions of brands so hard to change?

3. What might be some steps Chinese brands can take to improve perceptions of their brands' quality?