Chinese Mobile Brands and Cross-Cultural Consumer Behavior

Chinese Mobile Brands and Cross-Cultural Consumer Behavior

Expected Learning Outcomes

• Appreciate how the perceptions/the cultural and political contexts play a predominant role in viewing ‘foreign’ products/services
• Developing an overview of the factors responsible for a number of Chinese brands (government-owned companies as well as private companies) growing into global brands
• Understanding how foreign brands devise their communication and product strategies in a foreign country and how a latent consumer need can be translated into appropriate business value proposition

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I. Country of Origin, Country of Design and Country of Manufacture

1. What do the terms Country of Origin, Country of Design and Country of Manufacture mean to you? What is their significance from the point of view of Consumer Behavior?

2. Whenever you buy a foreign product, which is the most important factor amongst the following:

(a) Product (b) Price (c) Place (d) Promotion (e) Packaging (f ) Brand
(g) Country of Origin (h) Country of Design (i) Country of Manufacture

3. When you have to choose a product from the following countries, which one would you choose and why?

(a) German automobiles (b) Korean automobiles (c) Finnish automobiles
(d) Japanese electronics (e) Irish electronics (f ) Chinese watches

4. What does “Made In” signify to you?

5. ..................

II. China’s Global Brands and Global Consumers

1. Name any five Chinese global brands and analyze the same from the viewpoint of Country of Origin, Country of Design and Country of Manufacture i.e., how did these five brands go about building a global brand using either of the three (Country of Origin, Country of Design or Country of Manufacture) platforms?

2. Many argue that Chinese global brands have largely been built on the pent-up demand from China over the decades. Using Michael Porter’s Diamond Model, analyze the global acceptance of Chinese brands.

3. ...................

III. Chinese Mobile Brands in India

1. It is quoted in the base article that “For long, phones from across the border meant just one thing – cheap rip-offs of Apple and Samsung, with low build quality and poor design”. How do you think the four Chinese mobile phone brands (Xiaomi, Gionee, OPPO Mobile and Lenovo) have overcome the challenge?

2. How do you think these four Chinese brands (Xiaomi, Gionee, OPPO Mobile and Lenovo) are able to benefit from their “Chinese advantage”?

3. How do you think the four Chinese mobile phone brands (Xiaomi, Gionee, OPPO Mobile and Lenovo) are able to compete effectively with homegrown mobile phone brands (Micromax, Karbon, Lava, Celkon, Intex, etc.) and global brands like Samsung, Apple, Lumia, Motorola, Nokia, LG and Sony? How could these four brands differentiate themselves?

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Chinese Mobile Brands and Cross-Cultural Consumer Behavior

Synopsis

This case flyer offers an overview of the concepts of Country of Origin, Country of Design, Country of Manufacture and country brand strength. It further connects these concepts to China and demonstrates how the country has gained global recognition as a Country of Origin for several products, brands and also as a manufacturing epicenter. The case flyer further throws light on how certain Chinese smartphone brands have overcome the earlier negative perception associated with products emanating from China and have gained a strong foothold in the potentially explosive Indian smartphone market.

Prerequisite Conceptual Understanding (PCU)/ Before the Classroom Discussion

This case flyer presupposes an understanding of the Country of Origin and of country brand. The participants were asked to read the following chapter and articles to help them better connect the concepts:

• • Leon G. Schiffman, et al., “Cross-Cultural Consumer Behavior: An International Perspective”, Consumer Behavior, 10^th Edition, Pearson Education Inc., 2010 – To understand how Country of Origin affects other related concepts and relate the same to understanding cross-cultural consumer behavior
• • “Country Brand Index 2014-15”, http://www.futurebrand.com/cbi/2014 – To understand China’s Country Brand Equity
• • Michael E. Porter, “The Competitive Advantage of Nations”, Harvard Business Review, March–April 1990 – To understand the Diamond Model and how countries derive competitive advantage

Case Positioning and Setting

This case flyer can be used for the following:

• • In MBA Program: This case flyer can be used for Consumer Behavior course to understand the concepts related to Country of Origin and how perceptions of a country influence the demand for brands emanating from it.
• • In MDPs/EDPs: This case flyer can also be used in Management and Executive Development programs to demonstrate how brands have to undergo acculturation to gain acceptance in a foreign country.

Case Flyer Analysis and Classroom Discussion

Preamble to this Case Flyer Analysis

This case flyer is meant to introduce the participants/students to the idea/concept/notion of Country of Origin and how consumers from one country perceive the products/services from another country. Although this case flyer highlights how Chinese mobile brands have made inroads into the Indian market with their ‘aspirational’ value proposition, the participants should be directed towards broad basing their horizons on Country of Origin/Country of Design/Country of Manufacture taking a cue from this case flyer. Accordingly, the classroom orchestration of this case flyer can be conducted along the lines detailed in Exhibit (TN)-I.................

I. Country of Origin, Country of Design and Country of Manufacture

The purpose of the first segment/section is to help the students participants understand what the terms Country of Origin, Country of Manufacture and Country of Design connote in the real world and help them connect the contours of these concepts to consumer behavior.

a) Apple: Apple’s Country of Origin is the US as it widely known to be an American product. Apple’s Country of Design is again the US as all Apple models are developed in the US. One of the principal countries of manufacture of Apple’s products is China.

b) Lexus: Lexus’s Country of Origin can be considered to be Japan as the cars were made by Japan’s Toyota Motor Corporation. Lexus’s Country of Design can be said to be the US. It has multiple countries of manufacture.

c) Harvard Business Review: Harvard Business Review’s Country of Origin is the US as it is a product of the Harvard Business School located in the US. Harvard Business Review’s Country of Design is the US as the magazine is primarily written by professors and scholars in the US and the constituents of an issue are finalized in that country. Harvard Business Review’s Country of Manufacture is also the US (except Harvard Business Review Asia which is published by the India Today Group) as a magazine is shaped by its articles and ideas and the originators of many of these ideas and articles reside in the US.

d) The Economist: The Economist’s Country of Origin is the UK as the magazine was founded there and continues to be published from that country. The magazine’s Country of Design and manufacture are again the UK as the content of each issue is decided in this country though the stories are sourced from different countries.

e) The Wall Street Journal (WSJ): WSJ’s Country of Origin is the US as this was the country where the newspaper was started and which continues to be the main market for it. WSJ’s Country of Design can again be considered as the US as several important articles are sourced or the ideas for the same are sourced in the US. WSJ’s Country of Manufacture is the respective individual country where different issues are published.

f ) ......................

Exhibits

Exhibit (TN)-I: Classroom Discussion Dashboard

Exhibit (TN)-II: Relationship Between a Country of Origin Strength and Country’s Brand Strength

Exhibit (TN)-III: Process of Acquiring Country of Origin Status

Exhibit (TN)-IV: Tricomponent Attitude Model and Consumers’ Acculturation

Exhibit (TN)-V: Acceptance of Chinese Brands Globally Illustrated Using Michael Porter’s Diamond Model

Exhibit (TN)-VI: Framework for Alternative Global Marketing Strategies