【正文】 D institutes pioneering innovation. Skyworth has unveiled a “Green TV” and Xiahua launched a variable frequency TV. 　　Price cutting wins more share of lowend markets, while new product and technology offensives always win at the high end where brand value and long term advantages are created. Phillips and Sharp use China as the first market to launch new stateoftheart TV models, like rear projection TVs and plasma panel TVs. Focused Ramp。D and marketing innovation found in the world’s leading “built to last” panies.　 　　The Marketing Environment in China: 　　In present day China, market research and marketing information systems are in their infancy. Brand awareness and brand preference are in their adolescence, but growing quickly. Product quality must be improved and improved product innovation capabilities are needed. Distribution management needs investment and stronger legal enforcement to lower costs and improve efficiency. Price wars must cease to be a national passion. There are many areas for marketing improvement.　 　　As the Chinese economy grows and diversifies, customer preferences and behaviors will inevitably change. Already, in the more wealthy cities, the levels of brand awareness are beginning to approach the levels we see in the United States. US consumers can typically name seven brands in a given category without any aid. In the pharmaceutical category, for example, Beijing consumers can name almost five brands without aid, while in trendy Guangzhou, consumers can name almost nine (TC Market Research). 　　In the key barometers of market change, young people, we can see both hopeful and troubling signs for Chinese panies. Foreign brands have captured much of the “aspirational” purchase intention of the young, with brands like Sony, KFC, Nike and Levi’s believed to be the best for those who have the money to spend on occasional luxuries. Chinese brands like Lining and Spring Zhang Lumei have good reputations with young people, but loyalties are weak and price, “l(fā)ook,” and quality considerations are still the strongest motivators of purchase. As brand preferences emerge, Chinese brands should represent more than just acceptable quality at a good price. 　　The remarkable fact is that the Chinese market for domestic and foreign panies is growing internally and externally at 8%, and has reached a GDP of $1 trillion. While that is onetenth the . market today, the next decade will see a narrowing of the difference. Today the . economy has the strongest marketing engine in the world. China is building its marketing engine. If Chinese producers follow the science of modern marketing management they will get their share of the market’s $10 trillion destiny. 　　Let’s look at some of the marketing issues facing China today.　 　　Branding: 　　The traveler to Quingdao sees thousands of balloons emblazoned with the Haier logo lining the road from the airport. The City Hall is a showroom for Haiers refrigerators, dishwashers, puters, flatscreen TVs and mobile phones (NYTimes July 23, 2000). Mr. Zhang Ruimin deserves high marks for building great awareness for the Haier brand. Haier refrigerators in 2000 achieved an awareness rating of 41%, beating its next petitor Hualing by 35 points and Electrolux by 39 points. Mr. Zhang wants to spread that awareness throughout the world. Advertising and promotion are essential ingredients to branding. But they are not sufficient.　 　　Motorola has opened three highconcept Motorola Towns in Guangzhou, Shanghai and Chengdu. These stores are modeled after Nike Town in the ., a pioneer in retail entertainment, and attract 4,000 customers a day.　“Motorola’s latest phones are displayed in glass cases like jewels. They look less like munications devices than like lifestyle accoutrements” (NYTimes November 24, 2000). Customers spend hours in the carnival atmosphere of the store, and indeed may go down the street to buy a preferred phone for 10% less. But it doesn’t matter, because a manger says,　“Improving the image of Motorola is more important than how many phones [they] sell.’’ 　　Motorola has a clear strategic aim to capture and retain the highend customer. They realize that Chinese petitors like Konka and ZTE will pete on price for their lowend market share. Profitability, however, rests in mastery of technology and design innovation for the highend market, where margins are higher and petition less severe. Motorola is focusing its branding on the profitable highend customer segment.　 　　Both Haier and Motorola are successful panies, but their behavior illustrates a difference in their approach to branding. For Haier, branding is a mass promotional campaign…putting Haier on everyone’s lips. For Motorola, branding is a strategic campaign to build perceived value and brand preference in selected target segments. Haier is tactical. Motorola is strategic.　 　　It is speculated that by 2005 only 23 domestic brands in China will pete with the foreign majors, like Electrolux, in household appliances. After swings in the preeminence of domestic or foreign brands, foreign brands are making a formidable eback. After entertaining the idea of fleeing from the China market, as did Whirlpool, Electrolux decided to stay. Electrolux rebuilt its distribution system by learning from Haier, and it introduced its worldclass afterservice. Electrolux now occupies a promising market position. And Whirlpool is back in the game.　 　　Strategic branding is not just building brand awareness. Very well known names can lose their vigor. Where is Pepsident toothpaste or Chesterfield cigarettes in the .? What happened to Robert Hall, the largest chain of men’s apparel shops? Howard Johnson’s, Burroughs, Wimpies, Hallicrafter, Lifeboy, TWA moribund brands are legion. All of these were welladvertised and promoted names, but they lost the fight to bring superior value to target customer segments. Their petitors, like Mar