The COO Effect in the International Brand Positioning : A Qualitative Study of Chinese Companies

Sammanfattning: Chinese companies have been an important issue in the world economy development, since China belongs to the group of emerging countries that had been gaining prominence in the last years. To gain market, ranges of companies are going abroad, aiming to develop their brands internationally. Brand positioning plays an important role when the goal of the company is to gain competitive advantage and to be positioned in the consumer’s mind. Furthermore, when Chinese companies decide to internationalize, they have to deal with the COO (country-of-origin) effect, which might influence the consumer’s perception when purchasing a product. The aim of this study is to examine how the effects of COO influence brand positioning of Chinese firms when going international, and how they deal with these COO effects. In this context, a theoretical framework presenting the brand positioning drivers with the combination of the COO effect is developed. A qualitative case study that incorporates four interviews in two different Chinese companies with subsidiaries in Brazil, called JAC Motors and ZTE, are settled. The findings from the case study are compared and contrasted with the theoretical framework, developing a cross-case analysis, identifying and complementing the elements of the theoretical framework. In this regard, it was identified that Chinese companies position their brands with a cost-benefit approach, due to the COO effect caused by different general attributes from China. The brand positioning drivers, in a certain way, are defined taking in consideration the COO effect, although the drivers were not totally affected by the COO. In order to deal with the COO effect, most drivers oppose a negative effect of the COO when it is caused by the perception of lack ofquality from Chinese products; or the COO effect is highlighted in the strategy, when it is caused by the perception of low price. These findings are eventually depicted by a theoretically anchored and empirically guided model, which allows the authors to describe the international brand positioning of Chinese brands and how they deal with the COO effect in its international brand positioning.