Design & Branding Strategy for Chinese Fashion Brands

Introduction

Competition in China’s fashion industry is very fierce but most of the domestic companies still fail to understand that dividing the brands into segments and then, later on, aiming at winning the segmented consumers is the key to succeed in this kind of business. Through analyzing the western appeal for brands is good, it however cannot be used as the guide for the fashion industry in China but only as of the method through which the needs of the targeted consumers can be investigated (Bhat, et al., 1998).

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Fashion is regarded as a capitalized icon in China most of the time so the reference of owning a Lois Vuitton handbag or having to dress in Prada high-heeled shoes is associated with wealth (Kotler and Zhao, 2008 p1). The common question among the Chinese fashion designers is why the Chinese are buying western products rather than having to go for the Chinese brands even after a lot of effort has been put into advertising and distribution (Okechuku, 1994). Whether Chinese fashion design will see its mark in the streets of the western world after having successfully been branded for export remains a difficult question to answer and even the answer may also not be easily forthcoming (Chaudhuri, 1995).

Fashion in China

Besides merely creating and selling fashionable items, there are other ways that the fashion industry can still make money. Kotler and Zhao 2008 conclude that this is so because it is only a small subset of the entire apparel consumption and continues to affirm that there is fashion, luxury, unbranded apparel, and styling (1). They conclude that luxury in China is used mainly to represent already established wealth while prestige and heritage are used to signify power. Fashion on the other hand signifies new trends and a change of identity (Papadopoulos, et al., 1987). Though both are expensive, they appeal to different types of consumer segments (Kotler and Zhao, 2008 p2). Thus as luxury is used to express status, fashion has always been utilized to express new identity and taste (Dacin and Smith, 1994).

Though luxury does at times try to extend to fashion, this has always seemed to be very difficult as it has been shown that already established money power is highly conservative. Fashion brands always try to move up to the luxury level to appeal to the general wider segment of the tasteless wealthy who are just but interested in looking wealthy and not fashionable (Kotler and Zhao, 2008 p3). Kotler and Zhao give Zegna as a good example which was once a fashion leader and now enjoys the privileges of being a luxury brand. Though it does signify more wealth than new trends of identity, it has with time lost its edge in fashion and does sell well in China market where the consumers are more interested in luxury than in fashion.

Wealthy Chinese consumers have been shown to like luxury (Kotler and Zhao, 2008 p3). It is in this regard that they have been shown to always want people to know about their wealth and also have them for personal and business reasons as has been discussed in Kotler and Zhao’s article on branding fashion in China. There are several segments in the fashion industry that the designers can choose to work in and this will depend on how well fitting they are in that particular category. They can only be able to make a responsible decision on this subject if they fully understand the market trends and market segments (Kotler and Zhao, 2008 p4).

Every market has only a small segment of its members who can afford luxury goods and most of the people will buy a fashion product mainly for two reasons; First to express their social and personal identity and secondly, they understand that fashion depends on creative design rather than more on quality and thus it will mostly be priced lower than the luxury items (Kotler and Zhao, 2008 p4). The findings by Kotler and Zhao also did show that most people will also tend to style brands since styling which is the reduction of the creative fashion to a much lower cost is easily affordable to the middle class that forms the majority (5). China is well bestowed with creative talents and the operational know-how but only lacks as compared to the western counterparts the clear understanding of the investment in branding (Bhat, et al., 1998).

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Brand Strategy

This mainly comes in two categories. The elements that make brand integrity include but are not limited to brand position, brand research, brand story, brand identity, brand leadership, brand architecture, brand retailing, and brand promotion (Kotler and Zhao, 2008 p5). There are several market requirements if a brand has to enjoy recognition. The brand demands awareness as well as distinctiveness to outdo other similar brands in the market.

A brand can fail to be well esteemed but at the same time be well known. Though this is very well known to the Chinese companies, the top managers, as well as owners of these companies, fail to pay adequate attention to the marketing precepts as well as investing adequately in the brand strategy (Kotler and Zhao, 2008 p5). They easily become preoccupied with operations of the firm and finance and fail to see the importance of brand investment (Chaudhuri, 1995). They fail to appreciate the observed fact that brand is the only tangible thing that a consumer can perceive and anything else as operations and finance that preoccupy the owners are highly intangible to the consumers (Kotler and Zhao, 2008 p5).

Each segment in the fashion industry needs to be carefully researched and understood from its psychological and sociological aspects. As the famous old saying goes, “Clothes make a man”, appearance is of utmost importance (Agrawal and Kamakura, 1999). The main purpose of carrying out fashion research is to be able to determine the appropriate segments of the brand and understand the deep sociological and psychological trends that they will have on the consumer. The competition factor also needs to be well researched so that it is clear on who can be challenged or if some market sections are not being well-served (Beaudoin, et al., 1998; Fernie, et al., 1997).

Research question

In what ways do design and branding strategies for Chinese fashion brands impact the fashion market industry competition?

Research objective

The main objective of this study is to identify the possible assumptions that could be there in the Chinese fashion companies regarding branding and designing strategies. The study aims at providing sound research in this field of fashion with the most appropriate primary and secondary data to support the conclusions

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Hypothesis

H3: Consumers who are brand loyal will positively evaluate fashion brands irrespective of the brand naming strategies.

Research Design

The hypotheses were mainly assessed through the hypothetical and parent brands of a real luxury fashion brand that was generated through 3 naming strategies. This involved a pretest to first select one of the familiar fashion brands. This was then followed by the generation of a fictitious name that was to be given to both the quantitative pretests and the focus group (Dacin and Smith, 1994). “Armani” was the chosen brand with the “aspiration” as the fictitious name that was also used together with the brand name to form a sub-brand, “Armani aspiration”. The results for the brand were then benchmarked against those of the sub-brand and the fictitious brand. A total of 546 adults responded to self-administered questionnaires.

The questionnaires consisted of the five-item status consumption scale (0.07208) and brand loyalty scale (0.7404). The loyalty scale mainly focused on the behavioral intentions such as the probable intention by the respondent to keep on buying the brand and their preparedness to wait if the brand fails to be available. There were mainly two groups of respondents, status-oriented loyal, status-oriented non-loyal, and non-status oriented loyal consumers. The evaluation of these brands was measured by using the 7-point Likert-type statements for the brand image and product quality starting from poor to excellent and for the purchase intention from the most unlikely to the most likely (Fernie, et al., 1997).

The questionnaires addressed the following questions;

  1. How is the Chinese fashion brands overcoming barriers to compete internationally?
  2. Which are the crucial factors for Chinese fashion brands to be successful in the world.
  3. What are the current fashion consumers’ needs and wants?
  4. Are the China fashion products better than the international products such as those from Italy?
  5. Why would one choose to buy international fashion products as compared to Chinese ones?

Results

The results are tabulated in Table 1 below. The results show a mean score of how the status-oriented locals and the nonloyal consumers both evaluated the diffusion and the parent brands based on each indicator. The status-oriented loyal consumers showed no preference for the diffusion brands as they did for the parent compound. The status-oriented non-loyal consumers on the other hand evaluated some of the diffusion products as being better than the parent brand (Agrawal and Kamakura, 1999).

Based on the mean score, the loyal consumers had generally higher evaluations as compared to the non-loyal consumers towards most of the indicators in diffusion and parent brands. From the indicators used, a brand image had the highest mean score in the 7-point Likert scale for most of the brands while the lowest mean score was recorded in purchase intention indicators (Eastman, et al., 1999). To evaluate how china’s designs compete with the international fashions, responders were also asked to compare China’s fashion with that of Italy. Most of the consumers opted for the Italian product as compared to those from china except for purchase intention and brand image in the sub-brand (Phau and Prendergast, 2000).

The current perception of the Chinese fashion industry is hurting the entire Chinese enterprise. This however does represent a good opportunity for the fashion industry in china to redefine its brand. There is a need for Chinese brands to leverage dominance in the home market and take full advantage of low-cost providers. The current success of Chinese fashion brands is attributable to the business model that they use and much more success can be felt if their brand became more brand-oriented than is the case at the moment. It is in this regard that all of the Chinas’ companies in the fashion industry need to come up with a strategic plan that will create a localized brand name for all of its products (Eastman, et al., 1999).

These brands must compete even at the emotional level. The Chinese ought to come up with the kind of brands that people desire to be part of it and one that they are proud to be associated with. It is through the emotions that the brands can manage to achieve the loyalty of consumers mainly by tapping into human aspirations and values that do cut across the cultural differences (Phau and Prendergast, 2000).

Table 1: mean scores for the status oriented loyal and the non-loyal consumers.

Country of Origin: Italy Country of Origin: China
Brand Loyal Consumers
Naming
Strategies
Product
Quality
Brand
Image
Purchase
Intention
Product
Quality
Brand
Image
Purchase
Intention
Parent brand 5.18
(.907)
5.18
(1.181)
3.77
(1.412)
4.69
(1.289)
5.04
(1.536)
3.69
(1.668)
Sub-brand 4.89
(1.476)
4.81
(1.415)
3.69
(1.688)
4.56
(1.263)
5.44
(1.504)
4.19
(1.682)
Nested brand 5.15
(1.047)
5.38
(1.235)
3.58
(1.604)
4.40
(1.429)
5.05
(1.395)
3.60
(1.818)
Non-Brand Loyal Consumers
Parent brand 5.13
(1.088)
5.44
(1.263)
2.50
(1.897)
4.26
(1.408)
4.32
(1.668)
2.11
(1.560)
Sub-brand 5.06
(.854)
5.31
(1.401)
3.19
(1.721)
4.79
(1.048)
4.86
(1.329)
2.55
(1.572)
Nested brand 4.86
(1.099)
5.64
(1.336)
2.29
(1.684)
4.80
(1.398)
4.90
(1.524)
1.40
(.699)

Para thesis , indicates Standard Deviation.

Using the Multivariate Analysis on Variance (MANOVA), the results showed a significant difference between non-loyal consumers and status-oriented loyal consumers, (F=15.475, p=.000). This high significance was shown to be mainly contributed by purchase intention where F=42.659 and p=.000 were obtained (Rundle-Thiele and Bennett, 2001).

Brand Positioning

Brand communication and design have to be built on an unambiguous identity (Kotler and Zhao, 2008 p4). The brand story should be well designed to help the brand stick in the minds of the consumers (Dacin and Smith, 1994). Such questions as to how the company started, the original insight, and who built the company remain significant to the consumer’s taste. Brand leaders are supposed to move fashion into the new frontiers fast enough before the next release from the competitor catches up with them (Dekimpe, et al., 1997). Unfortunately, Chinese designers and makers have been busy with copying and producing already marketed fashions (Mason, 1981).

The industry has thus not cultivated a good culture of controversy and innovation to go along with the characteristic of fashion which is highly controversial as it changes faster than the culture itself (Eastman, et al., 1999). The fashion industry in China has to change from its current position and be upgraded to the level of owning its brand. Designers have to be proud of their brand and instill the same kind of confidence in the consumers to enjoy and experience a breakthrough in the domestic market. The brand needs to be promoted and taken out there to where the consumers are watching, living, shopping, playing, and even working (Kotler and Zhao, 2008 p5).

A brand requires several advertising strategies for it to compete well against other similar brands in the market. These advertisements can be in the media or magazines. Magazines are mostly preferred as they always seem to have customers who are specifically looking for a certain commodity and in this regard, therefore, having a magazine that is advertising the Chinese brands and one that is also well advertised can boost its circulation countrywide and even internationally.

There is traditionist’ who think that the Chinese fashion brand which carries the band “made in China” does not work well for the product and thus prefer to have a kind of sub-brand with another international market. This is not good for China as even the global brand practitioners have been shown to rate Chinese fashion industry products below the global standard (Dekimpe, et al., 1997).

This serves as a good indicator of the great need for the Chinese fashion industry companies to take up the challenge and thus become more advanced and sophisticated in terms of their branding strategy. The negative perception that the rest of the world has on Chinese fashion product quality is one that the designers need not ignore but rather examine the truth behind it (Eastman, et al., 1999).

These companies need to move from their usual low-cost products to creating a dominant brand that will be highly effective in competing against other global products. Fashion brands always try to move up to the luxury level to appeal to the general wider segment of the tasteless wealthy who are just but interested in looking wealthy and not fashionable (Kotler and Zhao, 2008 p3). Though the Chinese fashion products have been shown to compete well in terms of their highly affordable price, they would still be better placed against other products if the designers manage to inject some form of emotion and personality into the products (Agrawal and Kamakura, 1999).

Conclusion

The Chinese retailers and fashion designers have a difficult task ahead of them of making sure that their brands can not only compete in the domestic market but can also be ranked among the most competitive brands in the world. All of the global fashion brands can be found in china and the Chinese consumers thus can be fashionable with every global fashion and brand of their choice (Kotler and Zhao, 2008 p5).

The Chinese designer has to have more confidence in their product and be happier working in China than in other great cities such as New York to boost their confidence that Chinese fashion can indeed excite the consumers and make profits for the business. Great brands are seen by the consumers as a representation of great ideas since they hold a unique position to both the external and internal audiences. The fashion industry in China ought to make use of elements of advertising itself to uniquely position itself both within the country and even in the international market.

Reference

Kotler, Milton and Zhao, Kate. “Branding Fashion in China”. China Marketing. 2008: 1-5. Web.

Agrawal, J., and Kamakura, W. A., 1999. “Country of Origin: A Competitive Advantage?” International Journal of Research in Marketing 16: 255-267.

Beaudoin, P., Moore, M. A., and Goldsmith, R. E., 1998. “Young Fashion Leader’s and Followers’ Attitudes Towards American and Imported Apparel”. Journal of Product and Brand Management 7(3): 193-207.

Bhat, S., Kelley, G. E., and O’Donnell, K. A., 1998. “An Investigation of Consumer Reactions to the Use of Different Brand Names”. Journal of Product and Brand Management 7(1): 41-50.

Chaudhuri, A., 1995. “Brand Equity or Double Jeopardy?” Journal of Product and Brand Management 4(1): 26-32.

Cheong, E., and Phau, I. 2003, ‘Integrating Brand Extension Research Towards the Establishment of Diffusion Brands: Concepts, Methods, and Strategies’, in World Marketing Congress, Curtin University, Perth.

Dacin, P. A., and Smith, D. C., 1994. “The Effect of Brand Portfolio Characteristics on Consumer Evaluations of Brand Extensions”. Journal of Marketing Research 31:229-242.

Dekimpe, M. G., Steenkamp, J. E. M., Mellens, M., and Abeele, P. V., 1997. “Decline and Variability in Brand Loyalty”. International Journal of Research in marketing 5(14): 405-420.

Eastman, J. K., Goldsmith, R. E., and Flynn, L. R., 1999. “Status Consumption in Consumer Behavior: Scale Development and Validation”. Journal of Marketing Theory and Practice Summer: 41-52.

Fernie, J., Moore, C., Lawrie, A., and Hallsworth, A., 1997. “The Internationalization of the High Fashion Brand: the Case of Central London”. Journal of Product and Brand Management 6(3): 151-162.

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Okechuku, C., 1994. “The Importance of Product Country of Origin: A Conjoint Analysis of the United States, Canada, Germany and the Netherlands”. European Journal of Marketing 28(1): 5-19.

Papadopoulos, N. G., Heslop, L. A., Graby, F., and Avlonitis, G. 1987, Does Country of Origin Matter? Some Findings From a Cross-National Study of Consumer Views About Foreign Product, Marketing Science Institute, Cambridge, MA.

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Rundle-Thiele, S., and Bennett, R., 2001. “A Brand for All Season? A Discussion of Brand Loyalty Approaches and their Applicability for Different Marketers”. Journalof Product and Brand Management 10(1): 25-37.

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