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Corporate Branding in China

I have been working with Chinese companies for the last 25 years and lately I have been sensing a certain “malaise” in the Asian manufacturing community. I believe that we are heading for a major problem in the area of medical diagnostics manufacture in China.

Historically, Chinese manufacturers have not “sold” products, but have rather “answered to demands”. This means that they basically had no “selling” costs. Now, with the globalization of buying from large groups and with the increased internal competition and costs in China, the fragile balance that exists between the buying price and the quality control is starting to be disturbed. An entire buying and manufacturing industry is walking on the edge of a knife. We, as Western Brands, have put so much pressure on transfer prices from China that there is simply no margin left.

This reinforces the need for Chinese manufacturers to sell “concepts” rather than just “products”. And the only way to achieve this is to develop a strong corporate identity that reflects the real values of the company. The problem is that most companies in China are confusing corporate identity with visual identity.

Corporate Branding in China?

There is no such thing at the moment in China (or if it is there, it is never a long term strategy). Chinese manufacturers confuse a clear vision with a short path and are unable to think long-term in terms of Corporate Identity, not understanding that there are two different components of Corporate Identity, which are visual and behavioral.

Corporate Identity is the reality of a company. It is an investment in the company’s future. It is one of the company’s most valuable assets. It is the unique, individual personality of the company that differentiates it from other companies.

A strong Corporate Identity is a way of communicating the values of the company and services to the rest of the world. Simply put, the value of any company is the result of the impression formed at every point of contact with prospects and clients.

It is a means of distinguishing a company’s products or services from competition and of creating and maintaining an image that encourages confidence in the quality and performance of the people that work at the company.

It is a long-term process, lasting several years… in China at the moment, most companies that embark on a Corporate ID exercise view it as a necessary evil, and not as a long-term commitment to the betterment of the company.

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It is becoming more and more important for companies in China to significantly alter their strategies to better compete and survive. This change will have to include the development of strong Corporate Identities and Culture, so that the customer buys the brand rather than the product.

The problem is that even if some Chinese companies are realizing this, they don’t yet understand the concept of Corporate ID. Many companies think that all they need to do is to have a new logo and a couple of nice presentations and all will be OK.

Corporate ID has two different parts: the “visible” part (logos, presentations, visual stuff) and the “behavioral” part (how you do business, how you treat your customers, how you treat your staff, how your customers think of you, how you do sales, etc). Many Chinese companies do not yet perceive the need for the second “invisible” Corporate ID.

And until they do, they will continue to sell pieces of plastic, rather than tremendously valuable devices that will change the rapport that people have with their health.

Uwe Diegel
www.medactiv.com

uwediegel@mac.com