DOI: 10.5176/2251-2038_IE13.32
Authors: Glen H. Brodowsky, Camille P. Schuster and Beverlee B. Anderson
Abstract: “Made-in-Japan” has undergone quite a metamorphosis over the past fifty years. When they first hit the US market in the 1960s and 70s, Japanese products were positioned as low-priced alternatives to well-established American brands. Japan leveraged its highly skilled but low cost labor force in the wake of the Second World War to dominate labor-intensive manufacturing industries such as electronics and automobiles. By the 1980s, Japanese branded cars and electronics were able to command high
premiums by leveraging their country-of-origin based reputation for high quality branded products.
South Korean brands have experienced a similar evolution. In particular, Korean brands such as Samsung and LG now compete head-tohead with premium Japanese brands. This is particularly true in the competitive LCD
television market. According to a report by Thomas White Global Investing, by 2010, South Korea’s Samsung Electronics raced past Hewlett Packard to become the world’s largest technology firm (http://www.thomaswhite.com/pdf/emergingmarkets- spotlight-south-korea-and-taiwanconsumer- electronics-march-2011.pdf). Their automobile brands, most notably Hyundai, are now competing with Japanese auto giants Toyota, Honda, and Nissan. These Korean firms, like their Japanese competitors, have realized a winning formula for dominating global markets. They follow a two-pronged approach. The first prong is to maintain their strong low cost positioning by outsourcing manufacturing link of the value chain to low labor cost countries like China). This first prong is followed up with a forward integration downstream on the value chain that focuses on strong marketing campaigns to build global brands.
Today, China outcompetes its neighbors and, indeed the world, by dominating the lowcost position on the production link of the value chain. It has yet to build strong brands that are identifiably Chinese. Many US-, European-, Japanese-, and Korean-branded products are made at least partly, if not entirely, in Chinese factories. Certainly, China stands to gain much market power if it begins to forward integrate and develop its own world-class brands.
Somewhere between Japan’s enormous branding success, Korea’s emerging world brands, and China’s low cost manufacturing leadership is another important Asian player, the Republic of China on Taiwan. Taiwan is a leader in research and development in mobile phone and computer technologies. Taiwanese brands have gained respectable shares of the notebook computer market (Acer and Asus) and HTC is strong competitor of Samsung and Apple in smartphones. Nonetheless, in the eyes of many, Made-in-Taiwan lacks the high quality cache of Made in Japan and Made in Korea and, in the eyes of many consumers, is positioned closer to the low-cost/low-quality position that China now dominates. While they are a dominant player upstream in research and development, recognized by many business customers as an excellent Original Equipment Manufacturer, OEM the Taiwanese still struggle to overcome a low-cost low-price stereotype. Today, the goal of many Taiwanese business leaders is to become recognized as an excellent OBM – Original Brand Manufacturer – like their neighbors Japan and South Korea.
This study looks how strongly electronic brands from each of the four countries – Japan, South Korea, China, and Taiwan-- are associated with their respective countries of origin. It further examines how these country-brand associations are related to consumer perceptions of particular countries’ abilities to produce high quality electronics. First, it investigates whether or not non-Asian consumers from the US and Europe recognize the country of origin for ten major electronics brands. Then attention turns to consumer evaluations of electronic products associated with each of the four countries.
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