As the living standards of the Chinese people is higher with greater economic development, national and international companies to rush to make consumers more choices. Nevertheless, decisions are not only new products but also by different brands with different attributes and images that attract the various segments of the population to be created. Brands represent quality attributes such as style or fashionable, but also the membership of a social class or group, and maytherefore be sold at premium prices, even if they are applied in the same production costs for non-branded alternatives.
In a developing country like China, there are also a large part of the market that still does not have a great purchasing power. With an annual per capita consumption expenditure of urban residents only CNY 8696 in 2006, we can not wait that the vast majority of Chinese people into regular customers of premium brands. Instead, the company can gain a lotgreater market share are the ones who made small investments in the creation of strong brands cheaper for the consumer goods market by the Budget affected Chinese people.
The sheer size of the consumer goods market in China is an incentive for intense competition in almost every industry. Small companies can cost effectively to market due to lack of IPR reinforcements to use their abilities to imitate existing products and successfully overcome technical barriers. At the same time, effectiveUse of mass production enables them to reduce production costs and retail prices. In addition, they can on unfair competition by reducing profit margins, which make up for lost revenue through the sale of large quantities of the same products.
Such an established consumer market is saturated and strongly discourages investment in the creation of a strong low-end brands and improve their market share. For dependent gain in a market long on price competition for consumers, create brand loyaltyeven for well-known and well established brands seem to be difficult. Many companies believe that it is better to cut branding expenses in order to have a price advantage. In this article, however, we argue that stays for cheap brand products, the distinctive factor for Chinese consumers make their purchase.
The benefits of branding Chinese Low Priced Consumer
In a market that is known for the replication of goods to be sold in large quantities, and very oftenwith little attention paid to, material quality, design or manufacturing process can function as a mark of quality mark. In other words, there is a small price difference for similar goods in the low-end market, the consumer products from a reputable brand, because it is perceived to buy higher-quality, partly because well-known mentally translated into "more People buy it, so it must be better "
In fact, the consumer is concerned the purchase of strong brands because they are seenas a mark of product safety. Studies show that factors such as product price and brand, in addition to name, mailing address, advertising channels, source credibility, the country of origin, type of product testing authority and guarantee any significant influence on the final choice of the consumer to similar product offerings. Therefore, to attract the targeted manipulation of these variables in the formulation of brand strategy manager for the large and growing market mindful of securityConsumers and gain a distinct competitive advantage.
In addition to product quality and safety, the mark may also have benefits and also has functional properties of differentiated products. In other words, the brand itself an instrument of product differentiation and a competitive advantage. Even if the brand is essentially the same as the non-branded one, there's the brand qualities.
Chinese consumers tend to have a short listpreferred brands for the products they buy regularly, and not easy to stray from it when making purchases. Can of course, and especially against the backdrop of the current economic crisis, consumers of cheap products are dependent on the price, and not always loyal to their preferred brands (purchased in-store offers and promotions to distract from the preferred brand). Nevertheless, on average, Chinese consumers are willing to buy a premium of around 2.5 percent for a brand to pay them regularly. ThusBrand building and development in this segment of the market is and will remain indispensable.
Challenges of successful brand building for low-priced goods
As already mentioned, the prevalence of price competition in the low-end market will have to face one of the biggest challenges for companies to develop a profitable and sustainable brand. This has enormous impact on the value of the brand primarily because of widespread piracy and copyright infringement. InNot invest Chinese market, many low-end companies in the development of an original brand in order to cut costs, but the use of brand name and visual identity, very similar to those of known existing and promotion of its products.
For example Whitecat (}+), the historical brand of domestic detergent, due to the existence of Dailycat "a +", copies the anger has not only the brand but also the logo and packaging design. Many consumers buy Dailycat by errors such asthey believe what they can expect is the famous brand Whitecat or a sub-brand – a little cheaper – its portfolio.
To overcome addition to competition from cheap pirated, low-end companies tend to manufacturers of imitators, if not counterfeit goods. There is a strong incentive to give up the brand strategy and focus on price competition for short-term profits in the low-priced consumer goods market. In other words, a strong commitment and consistent brandInvestments that are necessary for better long-term revenue for short-term profits in order to create really strong cheap brands. The problem is that many firms simply do not have the financial means to continue such investments over time.
Domestic Mobile Phone CECT brand is an example. CECT in the highly competitive Chinese mobile phone market by selling brand-low-cost phones. To remain competitive and gain market share, CECT quickly abandoned brandingand began to produce imitators phones – Nokia, Samsung, Motorola and more – and sell them at half the original price if not lower. Some of these models are not even branded "CECT". As you can see, it was easy and profitable to move production from CECT legitimate branded cell phones to non-branded imitation.
Strategies that are used for low-priced consumer goods
Even if the above challenges can seem insurmountable, there are strategies which have provedto gain success in building profitable low-end market brands to a large proportion of the budget-conscious consumers.
1. First, go high, go low
First and foremost, in the case of well-established companies, the mark may be introduced to target medium-to high-range markets before the start of the low-end market. A reputation of high quality in medium-to high-end products, the company can provide a sustainable competitive advantage if the same brand that introduced low-end market. Onone hand, a solid reputation enables the company to benefit from economies of scale in marketing and branding. On the other hand, low-end customers to the brand because it perceived as "high priority" because it is prevalent are also attracted to the center to the high-end consumers. At this point, the brand can beat competitors on both price and perceived quality.
For example, Nokia, no 1 in China in the mobile phone market, won the first major part of the high-end urban marketsell before the start of permanently cheap phones on the Chinese rural market. Nokia 1100, Nokia was the first low-end mobile phone in China, will be launched in 2003, when there was color screens already in the crowded Chinese mobile phone market. The phone featured a black and white screen, but it still one of the biggest cash cows Nokia. Craze Chinese farmers "for Nokia 1100 largely resulted from the well-known attribute of high quality matched with tailored properties – was the mobileProtection against dust and had a built-in flashlight, which are both very useful for functional properties in rural China. The customer-specific attributes have been carried out by the famous Finnish mobile phone brand, after extensive market research to understand the specific needs of the Chinese market to develop rural areas.
Of course, as in the case of Nokia, in order to successfully build a strong brand at low prices, the company must also understand how to meet the needs of the target consumer base.
2. NicheBrand
Secondly, companies are trying to strong low-end market, build its brand in China more successful if they produce the target consumers with unique and specific needs in this market bracket rather than products that are similar to the other non-branded, low-price segment.
Thus Chinese candy Yake V9 secured the market for candy lovers with strong concerns about the diet by the targeted advertising for the vitamin C content.
Another example is ASUS, the ChineseManufacturers of inexpensive computers and laptops that are a cheap, small, well-designed laptop, get the budget goals successfully affected consumers, which has developed carry a slim and light PC without having a significant amount of money want to have available, it .
Similarly Cortry cosmetics, a successful domestic brand to know the best targets its products to female consumers, who appreciate the healing power of traditional Chinese medicine. In fact, using the brand conceptthe "I1 (
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