Coal, mature vinegar and wheaten foods from
Shanxi, an inland Chinese province, are all famous home and abroad. However,
people find it hard to figure out many of their specific brands. Why?
Professor Wei Hulin from the Shanxi University of Finance and Economics
attributes the situation to the lack of brand development and brand marketing as
well as absence of brand protection.
Shanxi created quite some widely-known brands in the 1990s, such as
"Chunshun" TV sets, "Haitang" washing machines, "Taihang" sowing machines and
"Huajie" digital watches. But now, these brands are rarely known.
Statistics show that China rated 60 Most Valuable Brands in 1996, and Shanxi
only had "Xinghuacun" Fen Wine on the list. In 2002, only "Keon" detergent and
"Gucheng" dairy of the province made their ways onto the 123 Famous Chinese
Brands.
At present, altogether 161 product categories enter the catalogue of Chinese
famous brands. Some 925 products nationwide have become top national brands,
while only nine brands from seven Shanxi enterprises won the honor, accounting
for merely 0.97 percent of the country's total famous national brands.
As of June 2006, Shanxi had 9 Famous Chinese Brands including Shuita (Water
Tower). In 2005, the number of famous Chinese brands in Shanxi only ranked the
20th nationwide.
Among the various products on sale in the five major shopping malls in
Taiyuan, the capital of Shanxi Province, those independently developed by Shanxi
only account for 1.4 percent. Why did the status of Shanxi-grown brands slip?
Professor Wei said due to lack of brand awareness, local enterprises do not
invest much effort in developing and marketing brands.
He gives an example. The production of edible vinegar in Shanxi ranked the
top nationwide, and vinegar is the province's representative advantageous
industry. The top three mature vinegar producers - Shanxi Old Mature Vinegar
Group, Yuci Shanxi Mature Vinegar Group and Shanxi Siyanjing Mature Vinegar
Group - are large-sized enterprises. However, people outside Shanxi only know
Shanxi mature vinegar tastes good, but know little about specific vinegar brands
from Shanxi.
Amid advertising craze in China, we find very few ads on other Shanxi brands,
except Shanxi Fen wine and Keon detergent, on the CCTV. However, take a look at
other brands that have become popular. Most of them invested a huge sum of money
in advertising. For instance, the Inner Mongolia-based dairy producer Yili Group
shelled out 1 billion yuan for advertising from 2001 to 2002, making the brand a
household name.
It takes much time and effort to make a brand popular, but takes more to make
it stay in people's minds for a longer time. Therefore, brand protection is
essential, too. Enterprises must strive for innovation, continuous brand
promotion and IPR protection to keep their own brands always fresh and hot.
At the seminar on brand promotion August 11, Professor Wei offered some tips
for the development of Shanxi brands.
He said, enterprises should cultivate brand loyalty but not simply pay much
attention to brand reputation, because only brand loyalty can trigger repeated
purchases and thus boost further growth of the brand. To improve brand loyalty,
product designers must take into full account consumers' needs and improve pre-
and post-sales services.
Professor Wei added that government support is essential for brand promotion.
Besides efforts made by the enterprise itself, a brand needs a good social
environment. The government plays a big role in improving the environment, such
as changing the regulatory systems and reducing administrative cost; creating a
fair environment, protecting famous brands and reducing enterprises' operation
cost; as well as strengthening e-government development and reducing
enterprises' transaction cost.
