Starting out at the top

'Flat world’ challenge

The "flat world effect", described by well-known author Thomas Friedman in his bestseller The World is Flat to describe the global market where historical and geographical divisions are becoming increasingly irrelevant, has also begun to undermine Western brands’ dreams to become high-end brands in China.

"It is getting harder to position higher than the original positioning, because customers are getting more and more informed," said Tan from Days Inn.

"Twenty years ago, Western brands could position themselves at whatever level they wanted in China, since there was not too much competition. Customers now know what brands mean and hence we cannot deviate too much from the original positioning," he said.

Jean-Michel Dumont, Asia chairman of Ruder Finn Public Relations, has a similar view.

"As companies mature and invest in R&D, it is a logical step for them to target the more affluent segments and raise brand awareness," said Dumont, adding that launching this repositioning in a buoyant market such as the Chinese one makes absolute sense.

"However, as this market also strongly recognizes brand value, unless the rest of the world eventually follows, the brand repositioning is doomed to long-term failure."

According to Dumont, Chinese consumers, who often blend travel and shopping as they plan a trip abroad, are especially astute at researching in advance.

"As consumers get more exposed to global markets, either through international travel or the Internet, brands have to be consistent globally in both their positioning and pricing. Gaps in either one of these fields will destroy the credibility of the brand."

Contact the writer at wangchao@chinadaily.com.cn