ANTECEDENTES TEÓRICOS

As discussed in Chapter Three, ‗Global brand‘ has become fashionable in marketing circles; many companies have tried to create global brands for the world they view as their market since Levitt‘s 1983 article ‗The Globalization of Markets‘ . . Since then, Aaker and Joachimsthaler (1999:137) have defined global brands as: ‗brands whose positioning, advertising strategy, personality, look and feel are in most respects the same from one country to another country‘. Subsequently, the term ‗glocalization‘ has been a new approach to

globalization due to the critical side of globalization. With either ‗globalization‘ or ‗glocalization‘, to be global, a brand should have at least a minimum level of awareness, recognition and sales all over the world (Quelch, 1999).

Many Chinese brands have recently appeared in different brand rank lists. A number of different ranking institutions undertook surveys employing a variety of ranking methodologies. The Millward Brown Optimor BrandZ survey released the top 100 most valuable global brands in 2010 (BrandZ, 2010). From this list it can be seen that six Chinese brands rank with world famous brands such as Coca-Cola, BMW and IBM (Table 5.1). Four out of the six are financial institutions, one is China's leading mobile service provider and one is a Chinese search engine, Baidu.

Table 5.1 Chinese Brands in Top 100 Most Valuable Global Brands 2010

Brands Rank Brand Value 2010 ($m)

China Mobile 8 52,616 ICBC (ASIA) 11 43,927 Bank of China 24 21,960 China Construction Bank 27 20,929

Baidu 75 9, 356

China Merchants Bank 90 8,236 Source: Millward Brown Optimor BrandZ (2010)

In the Financial Times‘ top 100 global brands (by value), all the above 6 Chinese brands feature in the list. Additionally, another four Chinese bands are in the Financial Times‘ list, including China Life Insurance, The Agriculture Bank Of China, Ping An Life Insurance and China Telecom (Financial Times, 2011).

ICBC, Bank of China and China Construction Bank are three of China's 'Big Four' state-owned commercial banks. Meanwhile, China Merchants Bank is the first share-holding commercial brand to be owned by corporate legal entities. China Mobile was listed on the New York Stock Exchange and Hong Kong Stock Exchange on 22nd and 23rd October 1997 respectively. It is the world's largest mobile network with the largest mobile customer base. Most of these brands are state-owned or possess the advantages and privileges of monopolies.

According to BrandZ（2010）, as the largest Chinese-language search engine Baidu has grown rapidly and its profits have increased by 42 percent to

$217.6m. It achieved a 63.9% share in the Chinese search engine market at the end of 2009, much higher than Google China with a 32.3% market share (iResearch, 2010). However, the majority of shares in Baidu are held by American companies. Although it is debated whether Baidu should be characterized as a Chinese or an American company, it is actually rooted in Chinese consumers' demands and does not have sufficient influence in the global market to be compared to Google or Yahoo. Without a minimum level of awareness recognition and sales all over the world, as Quelch (1999) argues, it is not a global brand.

It seems that more and more Chinese names are appearing each year on the Global Top 500 brand list. For example, the 'Global Top 500 Brands' of the World Famous Brand Assembly 2009 was announced in Tokyo. Based on the companies' performance in operations, management and brand improvement, the world's top 500 brands in 2009 were collaboratively chosen by organizations including the World Brand Organization (WBO), the US-China Economic Trade & Investment General Chamber of Commerce and the US World Union of VIP Enterprises. It included 79 Chinese brands from the Chinese mainland, but most of them are state-owned (Global Times, 2010; China Daily, 2010).

The World Brand Lab's top 500 global brands ranking is in accordance with the three key indicators of brand influence: market share, brand loyalty and global leadership. There were 18 Chinese brands in its top 500 list in 2009 (World Brand Lab, 2009).

Interbrand, voted one of the three most influential benchmark studies by business leaders, publishes ―Best Global Brand‖ annually in partnership with Business Week. Interbrand ranks brands based on the following criteria: substantial, publicly-available financial data; one third of the brands' revenues

to be from outside the country of origin; the brands must play a significant role in consumers' purchase decisions; positive Economic Value Added (EVA) and a broad public profile and awareness (Interbrand, 2010). In its top 100 Best Global Brands 2009, Chinese brands simply did not feature. In 2011, Chinese brands did not feature again in Interbrand‘s top 100 best brand list (Interbrand, 2011). As the UK‘s leading brand valuation constancy, Brand Finance (2010) has also ranked the most valuable 500 brands in the world based on a brand rating (a benchmark study of the strength, risk and future potential of a brand relative to its competitors) as well as brand value (a summary measure of the financial strength of the brand). There were more than 20 Chinese brands on its list in 2010 (Table 5.2)

Source: The Global Finance-Global 500 (2010)

Table 5.2 Other Chinese Brands in Top 500 World‘s Most Valuable Brands 2010 China Mobile 8,673 SOE *

ICBC 12,083 SOE

China Construction Bank 12,076 SOE Bank of China 9,6 SOE China Telecom 7,0 SOE China United Network 6,444 SH* Agricultural Bank of China 6,032 SOE China Unicom 5,704 SH Petro China 4,879 SOE

Sinopec 4,152 SOE

China Life Insurance 3.714 SH

SAIC 3,651 SOE

China State Construction 3,459 SOE Bank of Communication 3,269 SH

Ping An 3,237 PH*

China Merchants Bank 2,212 PC*

BYD 2,065 PC

Midea 1,992 POC*

CSR 1,987 SOE

Shanghai Pudong development Bank 1,962 PC

*

SOE: State-owned enterprise SH: State- holding

PC: Public company

Although we can see an increasing number of brands appear on these ranking lists, the credibility of these ranking systems such as WBL (World Brand Lab) and WBO (World Brand Organization) is doubtful, as they are part of multinational advertising groups.

In 2010, Chinese brands performed well, especially those in the financial sector (The Brand Finance, 2010). However, most Chinese brands on these different rank lists are SOEs, or enjoy a certain level of monopoly of resources and privileges. The similarities of these brands are that they are 'large' in scope and rely on a massive domestic market size. Most of their income comes from this domestic market. One could argue that China has no real global brands yet. Similarly, more and more Chinese companies enter 'The Fortune 500' list; again, most of those Chinese enterprises are state-owned.

In the interview with top Chinese branding consultants, most interviewees confirmed that those Chinese brands on global brand ranking lists were those with a monopoly within China, or benefited from state ownership support. This was thought to be a result of China‘s current economic system. They believe that these brands do not have any intrinsic value.

These brands relying on a huge domestic base of consumers with limited choice are of little value. The establishment of brands of genuine consumer products has stalled at a certain point in the process of raising their visibility. Interviewee G

Furthermore, Smith and Scorell (2010) point out that most of the 34 Chinese enterprises in the Fortune Global 500 are B2B firms, and it is much harder for them to build brand recognition than consumer enterprises. They argue that,

'given their current position, Chinese brands are unlikely to be dominant any time soon - even if China's economy becomes the world's biggest'. There is a clear contrast between the Chinese SOEs on the list and companies from other countries that are all privately owned.

In his interview, one individual interviewee has another understanding of the phenomenon of the state-owned brand domination of those ranking lists. He believes that private companies are not strong enough at present, and those

select state-owned or supported brands on the global list may improve the status of national brands, and also pave the way for private companies when

they go global with their brands in the future.

These SOEs first secured a good image for Chinese companies in the international market, and this benefited the establishment of ‘national brands’. This will also be of great help to those privately-owned businesses

seeking to gradually begin the process of globalization. Interviewee K