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22 APR. 2016

Best Branding Actions in China: A Methodical System of Innovation

Charlotte Zhang and Feifei Xu

Introduction

How brands become strong – not how strong brands are.

Nearly four decades since the opening of China’s economy, consumers are beginning to reach a newfound level of sophistication. Valued brands are those willing to invest resources to improve their products or services. “Made in China” is being phased out for a new mentality, one rooted in a desire to innovate.

Meanwhile Chinese netizens are extraordinarily advanced in their digital behavior and are open to many online interactions seen only in China. These new approaches call for digital investment that is integrated at its core with strategy and consumer insights.

Because of China’s unique cultural background and economic dynamics the process of brand building is different here. Even as e-commerce and consumer spending explodes across the nation, there remains permeating question: how have some local Chinese brands grown so strong?

At Labbrand, we believe that branding is not mysterious terminology. It should be translated into tangible actions.

In this five-part series, we will recap our BBA 2015 study with an analysis of five top-performing brands that registered high on our Brand Action Index, 4/5 of which are local to China. Look for this year’s brand-focused research study released annually in September.

What are Branding Actions?

When you hear branding, you may think of the brand name, the logo or visual identity, sometimes even a unique sound or scent. But if we imagine a brand as a person, these are just his basic external characteristics – his name, his appearance, and his voice. Beyond this, a person also has his or her own personality, values, intelligence and aspirations, which equate to the brand positioning and value proposition. And branding doesn’t stop there.

BRANDING = BRAND + ING (actions)

The formation of the word “BRANDING” provides a straightforward definition – a BRAND infused with actions (-ING). Many companies stop at intangible attributes and believe these are enough to define their brand. But if you do not communicate through tangible actions, how far can your brand truly spread?

Brand actions need to be implemented across all touch points: from products to pricing, store location to advertising channels, marketing campaigns to signage, company culture, and more. Most importantly, those touch points should not be considered stand-alone, but should always follow a strategic brand roadmap.

In order to evaluate these actions and guide brand practices, we adopt a four-petal framework that categorizes brand touch points into four dimensions, or “petals”.

A good branding action is not only able to activate one petal, like launching a generalized brand campaign, but is also able to integrate with actions on  other petals, like creating a new product to specifically target an emerging niche market. A brand positioning must consider its implications for all branding petals. 

BBA: 2015 Study Recap

With a solid understanding of the economic and cultural context, Labbrand investigated the best practices among strong Chinese brands. In 2015, we surveyed 800 Chinese consumers from 12 cities regarding 8 key industries. The ultimate question: what are the best branding actions of the year?

In this article, we showcase several of the greatest branding actions based on our key findings, and discuss why they are meaningful in the context of brand strategy. We hope that through this rigorous methodology and informed perspective, brands in China and abroad will find inspiration and strength.

Culture & Behavior
Huawei: A Methodical System of Innovation

Brand: Huawei     
Innovation: A Culture of Success

WHY
With persistence and firm beliefs, Huawei has proven to the world how a Chinese brand can break through in a competitive industry. At the company’s roots, Huawei understands that innovation is fundamental to their product and service offerings. In 2015, the company invested RMB 40.8 billion (USD 6.6 billion) in R&D, surpassing the world’s top tech companies including Apple, Oracle and IBM.

A strong internal culture has been placed alongside R&D since the beginning. Huawei believes that employees are the most important touch point for a brand and focuses heavily on employee training and cultivation. In return, the performance and efficiency is boosted from the inside out.

When a brand has such a strong culture and all members are aligned and working together, visionary goals like becoming the largest smartphone supplier in the world all of a sudden are not that far-fetched.

HOW
Huawei for 25 years has dedicated itself to achieving what it believes in: creating value for its customers through efficiency. Whether efficiency of time, money, or convenience, this idea has been realized through consistent innovation and forms the foundation of the brand’s success. It has strived to develop its own advanced technology and optimized management system by heavily investing in R&D and technological maintenance, and now has 16 research institutes around the world with45% of its employees working on product and solution development.

These employees are highly valued and a unique force. Interestingly, they share the ownership of the company. According to Financial Times, over 50% of Huawei’s employees hold a total of nearly 99% of Huawei’s stock, leaving the CEO Ren Zhengfei only a little over 1%.

Secondly, employees go through specific training and coaching programs. All receive centralized training on company culture, policies and specialized knowledge before beginning their work. Moreover, Huawei’s detailed, structured policies lay out clearly defined rules for positional objectives, responsibilities, and promotions that allow for maximum efficiency.

The crux of Huawei’s managerial flair comes from a combination of eastern and western practices, and also from military thinking, operational development, and unique regional cultures.

SO WHAT
Brand positioning and value propositions should not only be communicated outwardly, but built internally as well. Many brands in China are unsure of how to foster company culture and behavior in a sustainable way, distracted by eye-catching “sexy” marketing and advertising trends.

A brand should never forget that employees are the most tangible and personable touch points available. Systematic planning of internal brand engagement programs is an effective way to create a deeper connection between your employees and your brand. As Huawei now expands into the B2C space, this brand ambassador culture will hit the center stage.

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