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Evolution of Brands in Transitional Economies: The Case of China in 1993-1998
Yigang Pan, David K. Tse, and Xiaolian Li
Yigang Pan is Professor and Director of the Center on Global Brand Leadership at Hong Kong University, and Scotiabank Professor of International Business at York University, Toronto, Canada for 2000-2002. David K. Tse is Professor of International Marketing at the University of Hong Kong. Xiaolian Li is a graduate research student at the School of Business, University of Hong Kong. Please address correspondence to Yigang Pan at School of Business, University of Hong Kong, Pokfulam Road, Hong Kong. Tel: 852-2857-8345, Fax: 852-2857-5614, email: [email protected]
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INTRODUCTION
Brands have long been recognized as the single most powerful marketing asset of the
firm (Aaker and Joachimsthaler, 2000). It takes a huge amount of resources over a long period
of time to build strong brands in the market place (Aaker and Joachimsthaler, 2000; Keller,
1993). Brands such as Sony, Kodak, American Express, Mercedes, Ford, and IBM have taken
dominant market positions not only in the developed markets but also in many emerging
transitional economies. As transitional economies open their markets to global competition, one
of the challenges facing local firms has been how to build indigenous brands. Before we
understand how to build strong brands in a transitional economy, it is useful for us to know how
brands evolve over time in such a market (Batra, 1997).
In this study, our primary goal is to examine the evolution of brands in a transitional
economy, i.e., China over a period of six years (1993-1998). Specifically, we investigate how
consumer’s brand perception and brand purchase behavior change over time. More importantly,
what factors are associated with such changes?
This paper begins with a review of brand equity literature, and the growing literature on
marketing and branding in the emerging markets. It then follows with the characteristics of
transitional economies. Drawing upon these two streams of literature, we propose the research
hypotheses. The method section presents the database and variables. The results are discussed.
The paper concludes by pointing out the contributions of this study as well as its limitations.
LITERATURE REVIEW
Brands are among the most important assets of a firm. A strong brand commands a high
acceptance rate in the market place and a price premium compared to weaker brands. A strong
brand has a loyal customer base that stick to the brand in good and bad times. John Stuart, once
the Chairman of Quaker Oats Ltd., stated, "If the business were split up, I would take the brands,
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trademarks, and goodwill, and you could have all the bricks and mortar-and I would fare better
than you" (Dyson, Farr, and Hollis 1996).
Brand equity has been defined as a set of brand assets and liabilities linked to a brand, its
name and symbol, that add to or subtract from the value provided by a product or service to a
firm and/or to that firm's customers (Aaker 1991). Brand equity thus refers to the differential
effect of brand knowledge as a result of the marketing of the brand. Brand knowledge, in turn,
consists of brand awareness (brand recall and recognition) and brand image/associations (Aaker
1996). One of the most important associations is quality. Brand management thus includes the
key tasks of selecting a viable brand name, surrounding the brand with appropriate symbolism
and associations, and enhancing consumers' perceptions of quality.
Keller (1993) formally introduces the perspective that brand knowledge is a collection of
associations. Brand knowledge is conceptualized as consisting of a brand node in memory to
which a variety of associations are linked. The relevant dimensions that distinguish brand
knowledge and affect consumer response are the awareness of the brand (in terms of brand recall
and recognition) and the favorability, strength, and uniqueness of the brand associations in
consumer memory. Brands exist in the minds of their potential consumers and that what those
consumers associate with a particular brand determines the value it has to its owner. A brand's
foundations are, therefore, composed of peoples' intangible mental associations about it.
Brand awareness is the rudimental first step of building the brand knowledge. It
indicates the strength of the brand node or trace in memory, as reflected by consumers' ability to
identify the brand under different conditions (Percy and Rossiter, 1992). Brand awareness relates
to the likelihood that a brand name will come to mind and the ease with which it does so when a
consumer makes certain purchase considerations. Brand awareness consists of brand recognition
and brand recall performance. Brand recognition relates to consumers' ability to identify a brand
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when given the brand as a cue. In other words, brand recognition requires that consumers
correctly discriminate the brand as having been seen or heard previously. Brand recall relates to
consumer's ability to retrieve the brand when given the product category. In other words, brand
recall requires that consumers correctly come up with the brand themselves from their memory.
Existing research suggests that brand recognition and recall are important for consumer's choice
of brands (Hoyer and Brown 1990).
Brand attitudes are consumers' overall evaluations of a brand. Brand attitudes are
important, because they are related to beliefs about brands (Zeithaml 1988). The overall belief
of a brand thus is the basis for the overall brand image, which is stored in consumer's memory.
The presence of strongly held, favorably brand image will make the brand more readily
accessible and retrievable from the consumer's memory. The strong brand image will help
consumers to differentiate the brand from its competitors and will be more likely to be chosen as
the final purchase item.
CONCEPTUALIZATION
While research on brand equity has gone a long way, research that focus on branding in
the transitional markets has just started (Batra 1997; Tse, Belk, and Zhou, 1989; Schmitt and
Pan, 1994; Schmitt, Pan, and Tavassoli, 1994). In this section, the developments in the
transitional economies that would affect the evolvement of brand equity are examined. Forces
that lead to the upcoming of indigenous brands and the relative weakening of foreign brands are
of particular interest to this study.
Nature of Transitional Economies
Beginning in the late 1970s, the world has witnessed the collapse of the former-planned
economies. Countries such as China, Vietnam, the former Soviet Union, Poland, Hungary, the
Czech and Slovak Republics, and others have embarked on the journey to transform their
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economies to a market economy. The process of transition has been gradual for many countries,
thus, there is a term to refer to these economies as "transitional economies," (Batra 1997).
Before the reform, consumers in China had little to choose from, regardless of daily
necessities or luxury items of that time. The need for branding was nothing more than the need
of tracking which item was sold. When the door was opened to the West in the late 1970s,
waves after waves of Western goods poured into China. Chinese consumers were caught by
surprise by the inflow of so many Western brands, Marlboro, Coca-Cola, Sony, Toshiba,
Chrysler, and so on. They were stunned by the fact that almost all of them were superior to the
local Chinese offering.
Along with the increased exposure of consumers to global media, depictions of Western
lifestyles in local media, and most importantly, the fast rising of living standards, there emerges
a global consumer culture in China (Alden, Steenkamp, and Batra, 1999). Chinese consumers
have increased their desire for quality branded goods and services. Technology and
feature/functionality expectations were rising. Very quickly, many of the old traditional local
brands died out. They were replaced by the global foreign brands. A severe shortage of
competitive new brands from the local firms existed. Further, many of the product categories
that consumers were buying were new to them, and their low levels of knowledge about these
product categories lead them to rely on brand name cues. Many Chinese consumers associated
new foreign products with superior quality.
In short, there are two dramatic changes taking place from the consumer’s perspective.
One is the explosion of product offerings. In the former planned economies, consumers had
little to choose from and thus needed not to spend time to compare goods. Knowledge of
products and brands was at a negligible level. Along with the market competition, dozens of
brands in each product category appear in front of consumers. It becomes a daunting task for
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average consumers to know brands and to assess the best value for their own purpose.
The other dramatic change is the explosion of disposable income. In the planned
economies, individuals were given a nominal salary that covers most food. Housing, medical
services, pension, education, transportation and so on were either provided or heavily subsidized
by the state. In the 1970s, a short bus ride in Beijing cost five cents (RMB), now it is twenty
times more. Individuals now get much higher pay, but they also have to take care of many
expenses like consumers in the West. What brand is a best buy becomes an important decision.
As consumers know more about brands, they develop a brand knowledge base.
Brand Evolution in China
The evolution of brands in China passed through four distinctive eras: central planning,
catching up, hyper-competition, and post-industrialism (Schlevogt, 2000). In the first two eras,
firms focused on production and supply, while in the last two eras, firms have paid more
attention to consumer preferences.
In the planned-economy era, production, not market demand, dictated resource
allocation. There was no need to build brands. In the catching-up era, firms began to understand
the importance of product quality, but still lack the true appreciation of brands. In the early years
of reform, companies could sell most of what they produced due to the huge pent-up demand.
By early 1990s, China entered the era of hyper-competition. Market demand began to
slow down. As competition intensified, firms looked towards the high-price and high-demand
that some strong foreign brands command in China. They began to appreciate the value of strong
brands (Pan and Schmitt, 1995). A survey by the Central China Television (CCTV) revealed that
the 38 percent of Chinese consumers who buy Coca-Cola do so because of its famous brand,
while only 19 percent make the purchase based on price. The survey also revealed that television
commercials are the most influential factor in the purchasing decisions of 57 percent of
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consumers. According to a survey by Beijing Meilande Information Co., only 16 percent of the
women in Beijing stated that they do not pay attention to brands.
In their efforts to build brands, many Chinese firms work on improving product quality.
In a Gallup survey, 62 percent of respondents held positive opinions about the quality of Chinese
products. Interestingly, the Gallup survey shows that Chinese consumers began to like Chinese
brands. Local brand names like Bank of China and TV set maker Changhong enjoy strong
recognition. Competition between foreign brands and local brands has intensified. Local-
branding becomes a strategy for foreign firms. Whirlpool Corp. sells its washing machines in
China using Kelon brand name and Maytag uses its partner Rongshida's brand name.
Purchasing Ideal Brand
According to the theory of brand choice, consumers have an awareness set of brands
(Shocker et al., 1991). That is all the brands that they are aware of and this awareness set
comprises the most number of brands. Among the awareness set, there are brands that are
regarded the best in quality in the mind of consumers, such as Sony in the consumer electronics.
However, in the market place, the best quality brand often charges the highest premium price.
Most average individuals can not afford to buy this brand even they are aware of it. Thus, in the
actual deliberation of which brand to buy, consumers often have a set of brands called
consideration set (Lehmann and Pan, 1994). In the actual purchase, consumers would balance
between their financial resources and the price that a brand charges. Often they end up buying
the brand that is not the most ideal in their mind.
As mentioned above, one unique feature of a transitional economy is the ushering in of
market competition. Firms, both foreign and local, invest resources to build brands through the
product quality enhancement and brand image. Consumers, on the other hand, actively engage
in a learning process to acquire knowledge about brands. Within a short period of time, the gap
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between brands widened, and consumers know which brands are ideal in most product
categories. At the same time, the majority of consumers see their disposable income rising in a
much slower fashion than their knowledge about brands. They may know which brand is of the
highest quality, but their income does not allow them to buy that brand. They have to balance
between quality and price to achieve the best value for their money.
At the early phase of transitional economy, there will be more consumers that could not
afford to buy the most ideal brand in their mind. It is hypothesized that as transitional economy
grows, more consumers will be able to purchase the brand that they regard as the most ideal.
Thus, we hypothesize:
H1a. As the transitional economies grow and purchasing power of consumers rises, the percentage of consumers who purchase their ideal brand increases.
Brand Competition
When consumers in the transitional economies know little about brands, they tend to rely
on the image of the brands. Thus, brands that sit on the top of the product category pyramid
often command an overwhelming consumer base. What happens as consumers in the
transitional economies gradually acquire the knowledge about brands? They are able to tell the
differences between brands. They will depend on the actual performance of brands in judging
the brands, instead of relying on the perceptions. At the same time, firms engage in the fierce
competition. The quality of brands tends to improve and the gap in quality between the top
brand and the follower brands is narrowing. As the competition among brands increases, the
ability of top brands to dominate the market decreases. In other words, the differences in the
mind of consumers between top brands and the rest of brands were more visible in the early
phase of transition, but less substantial as market progresses.
Thus, we hypothesize:
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H1b. As the transitional economies grow and purchasing power of consumers rises, the dominance of top brands in the product category decreases.
Effect of Product Category
How expensive a product is to average consumers plays a role. The more expensive a
product is, the more involved a consumer will be in pursuing the knowledge, and searching for
the brand that best fits the needs. As consumers spend more time and resources investigating the
brands in a more expensive product category, they will become more expert in choosing among
brands. In other words, their choice will be less driven by overall perception that exists in brands
only. They will be able to compare the specifications of brands and choose the brand that
satisfies their needs the best. Thus, we expect that for expensive product categories, such as air
conditioner, the role of brands is smaller.
As a planned economy transforms itself to a market economy, consumers will have
access to new products that they have never consumed before, such as motorcycle and
automobile. Even though they learn which brand in these expensive product categories is the
most prestigious, the majority of them have to settle for a brand that is better value to buy. Thus,
due to the limited disposable income, most consumers will not be able to buy the most ideal
brand in their mind for those products that are expensive.
At the same time, consumers in the transitional economies do want to indulge themselves
from time to time in consuming the top brand products. When it comes to less expensive
product categories, most of them can give themselves a treat by picking the most ideal brand.
They don’t want to be left out in the transformation of a society that brands matter. This partly
explains why Coco-Cola and Procter & Gamble enjoy tremendous popularity in China even
though they are more expensive than local brands. In these less expensive product categories,
most consumers can afford to pay for the most ideal brand and they want to have such a feeling
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that they are riding on top of the changes taking place in the society.
Taken together, we expect that
H2a. Consumers in the transitional economies are more likely to purchase their most ideal brands when the product categories are less expensive.
Following the same reasoning, we expect that consumers spend less time and resources
in searching for the best buy in less expensive product categories. They rely on the brand name
heuristics to make the choice decision. As such, it is easier for the top brands to take a lion’s
share of the market, and it is harder for other brands to challenge that market leader position.
For more expensive products, consumers will study and compare the actual performance of
brands in choosing the brand. As such, it is easier for competing brands to be known and
considered. Thus, we hypothesize:
H2b. Top ideal brands are more likely to dominate the market when the product categories are less expensive.
Effect of Foreign Brand Competition
An important part of the reform in the planned economies is to allow foreign brands to
compete in the local market. These foreign brands come in with proven products and proven
marketing strategies, not to mention the powerful resources. When they enter the local market,
they can quickly establish the high brand image in the mind of local consumers (Leclerc, Schmitt
and Dube, 1994). Foreign brands, especially those brands of global firms, come into a
transitional economy with powerful brand image (Shocker, Srivastava, and Ruebkert, 1994).
However, given that they are generally priced at much higher rates, foreign brands are by and
large taking only a small market share. In other words, they may be regarded as most ideal in
the mind of consumers, but when it comes to actual purchase, foreign brands are less likely to be
the best value, holding all factors the same.
Therefore, the entry of foreign brands in a particular product category will lead to a
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clearer brand positioning in which some brands (most likely foreign brands) stand out. However,
most consumers will not be able to afford these top brands. Thus, the gap between most ideal
brands and actual purchase brands is larger in product categories with foreign competition than
without.
H3a. Consumers in the transitional economies are less likely to purchase their most ideal brands when foreign brands compete in the product categories.
Furthermore, the entry of foreign brands will lead to a more fierce state of competition
among brands in the product category. Though it may take some time, local brands will grow
and gradually take on the challenge of foreign brands. This intensified inter-brand competition
means that brand dominance is harder to achieve and maintain. As such, we are less likely to see
the market dominance by top brands in product categories where foreign brands have entered the
local market.
H3b. Top ideal brands are less likely to dominate the market in product categories where foreign brands have entered to compete.
METHOD
Sample
The sample comes from an annual large-scale survey of brands in China. Since 1993,
China Enterprise Management Association, in collaboration with other institutions and with
approval from State Planning Commission, has conducted an annual nation-wide survey of
brands. The survey questionnaire was published in a national newspaper from which ordinary
people can fill in and mail in. Respondents are entitled to lucky draw of prizes. For instance, in
1998’s survey, respondents can win 1 prize of RMB 3,000, 2 prizes of RMB500, 100 prizes of
RMB100, and 1,000 prizes of small gifts. Thousands of people participated in the survey every
year.
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The survey lists 50 categories of consumer products (34 categories for 1993), such as
electronics, household appliances, food and beverages, personal hygiene products, and so on.
The survey asks each respondent to name (unaided self-report) one brand as the ideal brand and
one brand that he/she purchased for that product category. After the survey, China Enterprise
Management Association publishes the results of the survey. That is where our sample came
from.
For each product category, the top three ideal brands were listed along with the
percentage of respondents identifying the brand as their ideal brand. For instance, in 1998, the
top three ideal brands for PC were Legend (29.90%), Great Wall (17.52%), and IBM (8.45%).
Also for each product category, the top three purchased brands were listed along with the
percentage of respondents buying the brand. In 1998, the top three purchased brands for PC
were Legend (24.35%), Great Wall (15.80%), and Hai Xin (8.29%). These percentages are
market share statistics based on the people participating in the survey.
Dependent Variable
Purchase ideal brand. We focus on the top purchased brand. If the top purchased brand is
also the top ideal brand, this variable is coded 3. If the top purchased brand is the second top
ideal brand, it is coded 2. If the top purchased brand is the third ideal brand, it is coded 1. If the
top purchased brand is not in the top three ideal brands, it is coded 0. This dependent measure is
called Likelihood of Purchasing Ideal Brand.
Brand dominance is measured in two ways. First, we measure the dominance of the
single top brand in each product category. We calculate the advantage enjoyed by the top brand
in both ideal preference and actual purchase. For both ideal preference and actual purchase, we
calculate the percentage difference between top brand and the average of two follower brands in
each product category. Therefore, we have the second dependent measure called, Top Brand
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Advantage in Ideal Preference, and the third dependent measure called, Top Brand Advantage in
Actual Purchase.
Second, we measure the dominance of top three brands in consumer’s actual purchase in
each product category. This is precisely the market share of top three brands in each product
category from consumer’s purchase information. This fourth dependent variable is called Market
Share of Top Three Brands.
Independent Variable
Level of Consumption. The annual total consumption in China (excluding consumption
by governments) was used as the indicator of level of consumption. We borrow from China
Economic Almanac (1999) for the six years of 1993, 94, 95, 96, 97, and 98.
Expensiveness of Product Category. It measures how costly each product category is.
We measure this in two ways. One is to estimate the product category price based on expert
opinion. For instance, the price for air conditioner is 2500 RMB and that for soda is 3 RMB.
The other is to group product categories into four subgroups of most expensive, moderately
expensive, slightly expensive, and inexpensive.
Foreign Brand Competition. It measures the extent foreign brands compete in each
product sector. It is coded 3 if all the three top brands were foreign brands, 2 if two of the three
top brands were foreign brands, 1 if only one foreign brand, and 0 if all three were local brands.
Analysis
The sample was analyzed using multivariate analysis of variance (MANOVA) and
univariate analysis of variance (ANOVA). The analyses test the significance of the relationship
between the four dependent variables and three explanatory variables. The MANOVA results
show that gross consumption affect the four dependent variables significantly at
[F(5,273)=21.51, p<.001], category price is significant at [F(4,270)=20.68, p<.001], and foreign
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brand competition is significant at [F(4,272)=9.76, p<.001]. The univariate ANOVA results are
reported in the following.
FINDINGS
Level of Consumption
As reported in Table 1, as the level of consumption grows along with the rise of
disposable income, more consumers choose their ideal brand to purchase. The ANOVA result
shows that level of consumption has a significant relationship with the increasing purchase of
ideal brands (F=3.33, p<0.01).
---------------------------------------------
Insert Table 1 about here
---------------------------------------------
With respect to brand preference, Top Brand Advantage in Ideal Preference is
significantly associated with the rise of gross consumption (F=12.03, p<0.001). The percentage
difference between the top brand preference and the average of the two follower brands shows a
decreasing pattern with the exception for 1993. Specifically, the highest was in 1994 at 26.62
percentage points and down to 14.39 percentage points by 1998. This supports that hypothesis
that as transitional economies grow and consumption rises, the dominance of top brand in the
product category decreases.
With respect to actual purchase, Top Brand Advantage in Actual Purchase is also
significantly associated with level of gross consumption [F=5.75, p<0.001). Similar to the brand
preference, the lead of top brand in actual purchase diminishes as gross consumption rises with
the exception for 1993. The highest lead was 19.85 percentage points in 1994, and down to
11.97 percentage points. This supports that as consumption rises, the dominance of top brand in
the product category decreases.
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Market Share of Top Three Brands is significantly associated with changes in the
consumption level [F=14.77, p<0.001]. However, the relationship appears to be less monotonic.
In 1994, 60% of correspondents surveyed said that they had purchased one of the top three
brands, and only 34.12% said that they had done so in 1993. For other years, this percentage
fluctuates between 54% and 60%.
Taking together, it appears that the rise in consumption is associated with a decrease of
the top brand in each product category. Evidently, as competition gets tougher, it is harder for
the top brand to hold on to the top position. As with the total of top three brands, the pattern is
less clear, again suggesting the fierce competition among brands.
Expensiveness of Product Category
For ease of reporting, we group the product categories into inexpensive, slightly
expensive, moderately expensive, and expensive in Table 2. The finding is that as the product
category becomes more expensive, few consumers choose their ideal brand to purchase. The
ANOVA shows that the expensiveness of product category has a significant relationship with the
decrease of purchase of ideal brands (F=51.11, p<0.001).
---------------------------------------------
Insert Table 2 about here
---------------------------------------------
With respect to brand preference, Top Brand Advantage in Ideal Preference is
significantly associated with the expensiveness of product category (F=10.40, p<0.001). The
percentage difference between the top brand preference and the average of the two follower
brands shows a decreasing pattern. This supports that hypothesis that as product categories
become more expensive, consumers spend more time knowing about brands and will be less
depending on the overall brand name.
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With respect to actual purchase, Top Brand Advantage in Actual Purchase is also
significantly associated with the expensiveness of product (F=4.93, p<0.05). Similar to the brand
preference, the lead of top brand in actual purchase diminishes as products become more
expensive.
Market Share of Top Three Brands is significantly associated with the expensiveness of
the product category (F=128.57, p<0.001). For inexpensive products, 62.80% of correspondents
surveyed said that they had purchased one of the top three brands, but only 43.77% said that they
had done for expensive products.
Taking together, the findings strongly support that for inexpensive products, like Coco-
Cola, consumers like and buy top brands. They are less motivated to spend time learning about
other brands. They also want to indulge themselves in consuming the best brand when they can
afford. But, when the product category becomes expensive, like a PC, consumers are less likely
to rely on the brand name alone. The dominance of top brand diminishes rapidly as product
category becomes expensive.
Foreign Brand Competition
As reported in Table 3, as the level of competition from foreign brand increases,
consumers are less likely to purchase their ideal brands. The ANOVA result shows that level of
foreign brand competition has a marginally significant relationship with the purchase of ideal
brands (F=2.25, p<0.08).
---------------------------------------------
Insert Table 3 about here
---------------------------------------------
With respect to brand preference, Top Brand Advantage in Ideal Preference is marginally
significantly associated with foreign brand competition (F=2.16, p<0.1). With respect to actual
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purchase, Top Brand Advantage in Actual Purchase is not significantly associated with foreign
brand competition.
Market Share of Top Three Brands is significantly associated with foreign brand
competition (F=6.76, p<0.001). However, contrary to our hypothesis, the increase of foreign
brand competition is associated with a higher level of dominance by top three brands.
Thus, it seems that the entry of foreign brands means more competition among brands. It
also means that consumers are more eager to learn about brands and hence rely less on the brand
image alone to purchase the brand. It also means that when the top three brands are taken by
foreign brands, the top three brands’ market share increases, indicating the possibility that local
brands are having a hard time surviving in such product categories.
DISCUSSION
In this study, we explore the nature of evolution of brands in a transitional economy,
China, for a period of six years (1993-1998). We found that as the level of consumption grows,
consumers are more likely to purchase the brand that they deem ideal. We also found that as the
level of consumption grows, the level of competition among brands also increases. This is
explained by the possibility that as consumption grows, consumers learn more about brands and
thus know what each brand offers in terms of best value.
We also found that the expensiveness of a product category is correlated with brands. For
inexpensive product categories, consumers are more likely to purchase the brand that they deem
most ideal. Apart from the income effect, our explanation also comes from the fact that
consumers in a transitional economy often like to indulge and have a feeling that they are part of
the booming brand economy. As such, it is easier for top brands to dominate inexpensive
product categories. For expensive product categories, consumers are less like to purchase the
most ideal brand, because other brand may be able to offer better value for money. It is also less
18
easy for top brands to dominate expensive product categories.
Finally, we found that foreign brands brought in a high level of competition into the local
market, and there are signs to suggest that by the time foreign brands have taken the top three
position, they can master a total of 61.6% of market share. Foreign brands pose severe
challenges to local brands.
This study has its limitations. First, it does not have in-depth information about
consumers given that it uses published archival data. The lack of consumer side of information
prevents us from gaining insight into why and how they purchase brands. Second, the period of
time of six years might be short to portrait a true pattern of evolution of brands in transitional
economies. Third, the lack of information on what firms do or didn’t do with regard to their
brands severely limit our ability to understand how to build a brand in a transitional economy.
We point out these shortcomings with the hope that they can be addressed in future studies.
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Table 1
Longitudinal Tracking of Brand Preference and Purchase Across 50 Product Categories
Variables 1993 1994 1995 1996 1997 1998 Purchase ideal brand 0.44 1.54 1.88 2.64 2.58 2.69 Ideal brand leadership 7.85 26.62 21.72 19.33 18.71 14.39 Percent brand leadership 7.30 19.85 15.63 16.30 14.58 11.97 Top brand dominance 34.12 60.53 54.51 55.65 59.71 57.49 Annual gross consumption US$ 191.2 253.8 328.6 390.1 425.1 450.3 RMB 1568.2 2080.9 2694.4 3215.2 3485.5 3692.1 Note: Purchase desired brand is coded 3 if the top purchased brand is the top brand preferred, 2 if it is the second top brand preferred, 1 if third top brand preferred, and 0 if it is not in the top brand preferred.
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Table 2
Expensiveness of Product
Variables (Inexpensive) 0 1 2 3 (Expensive) Purchase desired brand 2.49 1.88 1.59 0.35 Percent of preference for top brand over two followers 22.68 13.99 18.01 12.02 Percent of purchase for top Brand over two followers 18.29 10.55 13.85 8.36 Total percent of purchase for top three brands 62.80 46.81 48.81 43.77 N 139 88 39 17 Note: Purchase desired brand is coded 3 if the top purchased brand is the top brand preferred, 2 if it is the second top brand preferred, 1 if third top brand preferred, and 0 if it is not in the top brand preferred.
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Table 3
Competition from Foreign Brands
Variables Number of foreign brands in top three brands in each product category 0 1 2 3
Purchase desired brand 2.59 2.09 1.77 1.11 Percent of preference for top brand over two followers 17.76 18.93 18.65 21.51 Percent of purchase for top brand over two followers 13.87 16.23 14.84 15.28 Total percent of purchase for top three brands 52.61 54.36 54.81 61.60 N 111 33 103 36 Note: Purchase desired brand is coded 3 if the top purchased brand is the top brand preferred, 2 if it is the second top brand preferred, 1 if third top brand preferred, and 0 if it is not in the top brand preferred.
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