Chapter 2Literature review
2.1 Definition of brand internationalization
‘More and more firms and other organizations have come to the realization that one of their most valuable asset is the brand names associated with their products or services. In an increasingly complex world, individuals and businesses are faced with more and more choices but seemingly have less time to make those choices. The ability of a strong brand simplify consumer decision making, reduce risk, and set expectations is thus invaluable. Creating strong brands that deliver in that promise, and maintaining and enhancing the strength of those brands over time, is thus a management imperative.’(Kevin 2003) Through this condition, if corporations want to increasing their competitiveness should have a strong brand with clear idea and great value.

Scholars have different views of brand. Aaker (1991) thinks that brand is a name, term, symbol or design utilized by corporations in order to offer information and the source of market supply to customers. Simon & Sullivan (1993) think brand equity is a product with brand name, which can make the present value of cash flow comparing with the product without brand name. Kotler (1997) thinks brand has 6 levels of meaning: attributes, benefit, value, culture, personality, and users. Johny & Ilkka (2005) think that brand contains product image factors (pattern, color), functional factors (function, quality), and consumer psychology factors (perception, cognition).

Some scholars do not agree with this view (Asker & Joachinsthaler, 1999; David & Erich, 2000). Brand internationalization strategy should meet the local needs in target countries (Motameni & Shahrokhi, 1998). Douglas et al., (2001) think this ‘strategy’ can realize the scale economy benefits brought by unionization and standardization and realize low cost operating. Wright (2002) thinks brand internationalization is a brand international marketing, and its purpose is making the brand to occupy the strong position in foreign countries (Gillespie et al., 2002; Quelch, 2003). Gelder (2005) defines brand internationalization in terms of region, and he thinks that brand internationalization is the corporations do business in many countries or areas.

2.2 Brand value
2.2.1 Improvement of brand value
Brands is an important part of corporations, a well known brand will be the significant intangibles for the corporation. ‘If your company has created a superior product offered at a price that delivers an outstanding value and supports the product by unparalleled service, but no one has ever heard of your company or its products, how many of those products are you likely to sell? Zero. That’s why awareness is so important. It is the cornerstone of strong brands.’ Basic on the high quality products and good customer service, increasing the brands awareness will be the major method to earn extend profit and improving the brand value. Brand awareness means a gauge of marketing effectiveness measured by the ability of a customer to recognize and/or recall a name, image or other mark associated with a particular brand.#p#分頁標題#e#

Nowadays, some ways to improve brand awareness in conventional media have been widely used like TV advertising, radio advertising and so on, in addition, on-site promotions also be used in stores by corporations. Why the corporation did these just because they want to catch the eyes of customers. But we are in the rapid developing world , the internet has been the important part of peoples’ life, some of us maybe do not watch TV all day, do not listen radio programs, do not go to the stores, they do all the activities in their home, include shopping, community, and business. So, the question is how to improve the brand awareness in the internet, then improve the brand value, this is the significant what corporation should be considered, improve brand awareness not only in TV, radio, but also in the internet, try to be the thing what customers must think about when they go to the internet.

Yahoo, one of the famous websites over world. Give out seven ways to build brand awareness online, ‘A good web site has the potential to sell products and promote your company's image. Find out how to make the most of the Internet by creating a web site that builds brand awareness.’ Those seven ways in summary is three important words, believe, remember and community.

Believing, “Do you so believe in what you’re creating that you would trademark it?” says Andrea Fitch, president and CEO of RedCarpet Creations, Inc., and national president of the Society for Marketing Professional Services, both based out of Alexandria, Va. Really consider what kind of brand could represent the business through the next decade. “Don’t have a logo that in five years you’re going to be tired of and discard for another,” she says.(http://smallbusiness.yahoo.com)

Remember, “A web site is not just a communication medium,” Manning says. “It is actually a channel that must deliver on the promise.” Essentially, a web site should embody the promise that it makes to customers. If, for instance, a business claims to be innovative, the web site should look fresh and modern.(http://smallbusiness.yahoo.com)

Community, pay attention to customer feedback about the site because, ultimately, it’s the customers’ opinion that counts. When it comes to building a brand, a company can incorporate everything from signature colors to catch phrases, but at the end of the day, it’s the consumer who decides what a brand is really worth. “It’s not what you say [about] yourself, it’s what others say of you,” Fitch says.(http://smallbusiness.yahoo.com)

2.2.2 Brand loyalty
Brand loyalty is the consumer's conscious or unconscious decision, expressed through intention or behavior, to repurchase a brand continually. It occurs because the consumer perceives that the brand offers the right product features, image, or level of quality at the right price, customer behavior may influence by the brand loyalty. Garth Hallberg said ‘what makes every strong brand strong is a core of loyalty, high value category buyers, who typically account for more than half of hand sales.’ Mark Earls, Ogilvy&Mather claimed ‘People are herd animals. We see this over and over consumers may settle on a brand for a while, and then something changes, some trigger happens, and suddenly the whole herd takes off and settles somewhere else, with some other brand. Sure, strong brands have more loyalty customers, but the real trick is to understand the triggers, to get to know how the herd behaves.’ And Jon Steel said ‘We talk about strong brands having loyal customers, but people aren’t stupid and this loyalty isn’t blind. If their needs change or something better comes along, and their brand does nothing to respond, they will be gone.’ Those authors give out the opinions of brand loyalty, so whether brand loyalty existing or not?#p#分頁標題#e#

Douglas(2004) draw on an ethnographic study of ESPN. He found this sports media company has three interdependent constituencies-customer segments that he call followers, insiders and feeders. He said the to how brand loyalty works  for iconic brands like ESPN is found in the interactions between these three constituencies.

According to the topic, what about the brand loyalty in computer industry. Apple, the famous computer manufacturer, the author find a report about Apple brand loyalty, ‘"Apple continues to command the strongest repurchase intent of any PC brand. More than four in five (81 percent) of households with Apple as their primary home PC plan to buy the same brand - Apple - for their next home PC," said Dan Ness, principal analyst at MetaFacts.’ From this sentence we can know the customer loyalty for the Apple. Another situation is ‘When shoppers sleep outside of stores just to be one of the first to buy an iPhone, it’s obvious that Apple Inc. is a company that enjoys fanatical brand loyalty. However, this brand success is not a result of dumb luck or forces beyond Apple’s control; it’s part of a well-thought-out plan to deliver strong products and create an Apple culture. Find out more about these and other strategies that Apple employs to achieve its tremendous customer loyalty.’  this is from a article named ‘ how apple creates brand loyalty’, in this article the author point out 12 aspects of how apple creates its brand loyalty, most people should have a look the advertisement of apple, the word ‘Are you a Mac’ may be give us a deep memory just like ‘ I’m loving it’ for McDonald's, it is not just a slogan, it also pass the concept of their products.

‘Are you a Mac?: Let’s face it, Apple is a hip brand. It pushes a strong identification with everything young, up-to-the-minute and smart. Consider Apple’s I’m a Mac campaign. The Mac guy is smooth and confident, while PC appears uptight and old. Once you’ve become smooth, would you want to go back to uptight?’(http://rpcevents.wordpress.com/2007/09/14/how-apple-creates-brand-loyalty/)

2.3 Review of brand internationalization modes
Scholars propose different brand internationalization modes in their research. This study summarizes three classic modes, including brand internationalization stage model (Cheng & Blankson et al., 2005), Asian corporations brand internationalization strategy model (Ewing et al., 2001), and international brand leadership component model (Aaker & Joachimsthaler, 2000).

(1) Brand internationalization stage model
The development of brand internationalization is mainly based on internationalization theory (Anderson et al., 1998) and brand marketing theory (Aaker, 1991). Cheng & Blankson et al., (2005) propose the brand internationalization development stage model based on summarizing the internationalization ‘five stages’ model (proposed by Anderson, 1998; Back & Seaker, 2004).#p#分頁標題#e#

In stage 1, the pre-internationalization stage, corporations should cultivate the strong brand in domestic market. Resource and environment conditions in home country have significant influence on the process of brand internationalization (Edrardsson et al., 1993). Quelch (1999) finds that the global brand must be the strong brand in home country market. So, in this stage, corporations should take survival as the primary objectives. In later period of stage 1, corporations should concentrate on developing the strong brand in home country.

In stage 2, corporations should realize the initial globalization. The main tasks of this stage are making products enter into three world markets (American, Japan and European Union market), and they should expand rapidly in order to establish the local brand advantages (Driscoll, 1995). As the success of stage 1 in domestic market, corporations should try to utilize the competitive advantages effectively in oversea market in order to expand the oversea sale (Gurau, 2002).

In stage 3, corporations can realize the brand internationalization. In this stage, corporations try to develop its own brand in international market, especially in the three main world markets. Corporations http://www.400190.com/Thesis_Tips/should reduce the OEM brand in this stage, because the brand internationalization development will bring negative effect on the brand potential in OEM market (Korbin, 1997).

In stage 4, corporations will realize the localization. In this stage, corporations try to adapt in target markets, considering more about local environment (political, economic, and cultural), in order to realize the localization and obtain sustainable development in the market.

(2) Asian corporations brand internationalization strategy model
This model is proposed by Ewing, Napoli & Pitt (2001) in their empirical research on corporate brands in Southeast Asian countries.
This model classifies managing style into two types: traditional management and modern management. In the traditional leadership style, corporations (mainly mean the family firms) do not want to enter into international market, because entry into international market means they lose the control to corporations. But traditional corporations may build their own brand in international market through different ways comparing with modern corporations.

According to the model, modern corporations are due to utilize the operating way of corporate alliance, and develop the main business through establishing distribution institutions, making promotion activities and building brand image. But, traditional corporations (family firms) occupy some advantages in home country primarily; and then enter into regional market which is entered into easier comparatively (building brand image and obtaining market share); finally, they realize the brand internationalization.#p#分頁標題#e#

(3) International brand leadership components model
This model is constructed by Aaker & Joachimsthaler (2000), which proposes the two necessary supports of establishing international brand, including brand components and support capacity. The model thinks that the establishment of international brand is not a single activity, but the result of effective integration of corporate operating activities. Corporations can investigate their own capacities through comparing with the indexes in this model, in order to improve the brand internationalization strategy.

Some other scholars propose the practical entry modes of brand internationalization, including ‘entry into developed countries market first,’ ‘entry into middle developed countries market first (eclectic modes)’ and ‘entry into undeveloped countries market first’. The following table summarizes these three market selection ways based on existing literatures (Fontes & Coombs, 1997; 2001; Gurau, 2002).

Most existing researches on brand internationalization is based on corporations which have realized international business, concerning on how to strength the business in local country market, developing considerable product brand to attract local consumers and building well brand image and brand reputation. Only a few researches have investigated how corporations select the reasonable brand internationalization modes according to their own resource conditions, especially to Chinese corporations.

Market selection Steps Advantages Disadvantages
Entry into developed country market first Firstly, to enter into developed country market; and then turn other developing countries market. ① Occupying the commanding heights of the market competition
② learning international experience in developed country market ① Large investment in initial stage of brand building
② Long cycle
③ High level of risks
Entry into middle developed country market first Firstly, to enter into undeveloped country market; and then turn to entry into middle developed countries market; finally, to enter into developed countries market. ① Lower level of entry difficulty
② Obtaining initial international experience
③ Less investment in initial stage of brand internationalization
④ Significant effects of brand internationalization ① Brand image is difficult to be transformed
② imperfect market system in undeveloped countries, high risks (political, social, economic)
Entry into undeveloped country market first Firstly, to enter into middle developed country market; and then turn to entry into developed countries or undeveloped countries market. ① Moderate level of entry difficulty
② Entry into other country market easier ① Lack of exact path of brand internationalization#p#分頁標題#e#

2.4 Theories and concepts
2.4.1 Brand management
‘Since a brand is a name with the power to influence the market, its power increases as more people know it, are convinced by it, and trust it. Brand management is about gaining power, by making the brand concept more known, more bought, more shared.’(Kapferer 2008)

In the book named ‘Brand Management’ the authors presented seven approaches of brand management, and they also found the brand management can be divided into three sections by analysis the data they studied in the period of time, the first period of time is 1985-1992, the second is 1993-1999 and the last one begins from 2000 and onwards. ‘In the first period, brand management focused on the company behind the brand and the actions the company would take to influence the consumer. In the next period of time, the receiver of brand communication is the  main point of interest and brand management adopts a human perspective on the nature of the brand. In the last period, it is the contextual and cultural forces behind consumption choices and brand loyalty .’(Tilde Heading, Charlotte F. Knudtzen and Mogens Bjerre 2009)

According to the this study, once Chinese corporations set up a international brand how do they manage it, what must be in the brand management? The manager should think about what when they are managing a brand? According those two questions, the key words in brand management will be reviewed in the table displayed in the next pages. (source from ‘Brand Management’ Tilde Heading, Charlotte F. Knudtzen and Mogens Bjerre 2009)

Key word 
Brand architecture Is the structure that organizes the brand portfolio, it defines brand roles and relationships among a company’s brands.
Brand audit A brand audit assesses the health of a brand.
Brand community Is a social entity where consumers interact socially with a brand as the pivotal point of their interaction.
Brand culture It sometimes refers to the organizational culture of the brand and sometimes to the brand as part of the broader cultural landscape.
Brand equity In financial understanding of brand equity, the concept is a way to account for how much value a brand holds. It is one of the intangible entries on the balance sheet.
Brand essence The brand essence is most often an abstract idea or sentence summarizing what is the heart and soul of the brand.
Brand extensions Extensions have many benefits, in the beginning, brand extensions were used as a strategic tool mainly to enter new market(Aaker and Keller 1990). Today, brand extensions are also used to underpin and develop the brand to meet market changes.
Brand genealogy Is a managerial mindset introduce in the cultural branding model(Holt 2004) where the brand manager goes back and uncovers the brand’s history.
Brand icon An iconic brand holds references that most people agree upon and it obtains that status by playing an active role in contemporary cultural.#p#分頁標題#e#
Brand identity A set of associations the brand strategist seek to create or maintain.
Brand image The goal of working strategically with brand image is to ensure that consumers hold strong and favourable associations of the brand in their mind. The image of the brand is the perception of the brand by consumers.
Brand loyalty Brand loyalty is the consumer's conscious or unconscious decision, expressed through intention or behavior, to repurchase a brand continually.
Brand personality Consumers display a tendency to endow brands with human-like personalities.
Brand portfolio New theories suggest that a brand portfolio should be analysed in the three-dimensional molecule system.
Brand positioning Is based on the assumption that consumers have limited mind space for commercial messages and that the most successful brands hence are the ones able to position themselves in the mind of consumers by adapting the most congruent and consistent commercial message.
Brand relation Brand relation is also part of the traditional brand identity models.
Brand revitalization The key for brand management when revitalizing a brand is always to start the process by identifying or reviving an existing brand vision and finding new and innovative ways of making that brand vision relevant once again for existing or new consumers.
Brand strategy The aim of a brand strategy is to enhance the internal and external opportunities of the brand.
Brand stretch When a brand is extended into new product categories, or joins co-branding ventures, its identity is stretched.
Co-branding Co-branding occurs when two or more brands are combined in a joint product or brand, this phenomenon is also called brand alliances or brand bundling.
Corporate brand In most literature on corporate branding it is assumed that the energy and inspiration of the brand stem form within the organization and that a branding strategy, in oder to be successful, requires the engagement of the whole corporation.
Employee branding Is defined as ‘the process by which employees internalize the desire brand image and are motivated to project the image to customers and other organizational constituents’(Miles and Mangold 2004)
Employer branding Relates to strategies for communicating about a company as an attractive employer to both current and potential employees.
Living and brand Is an end-goal in the process of engaging employees in the branding process.
Product brand Is a brand linked to the product and not to the corporation and describes a situation where each individual product has its own brand.
Service brand Are brands that sell services instead of products.

2.4.2 Competitive advantage
Definition of competitive advantage: Superiority gained by a firm when it can provide the same value as its competitors but at a lower price, or can charge higher prices by providing greater value through differentiation. Competitive advantage results from matching core competencies to the opportunities. Main factors of competitive advantage are government policy supply, technology development, and labor cost. Those three factors also very important for a international brand, because government supply could gain more opportunities, technology developing could improve the brand value by brand differentiation, reduce the labor cost to obtain more profit by a lower price than other competitors’ price.#p#分頁標題#e#

And here are two types of competitive advantage, cost advantage and differentiation advantage. ‘Competitive advantage is created by using resources and capabilities to achieve either a lower cost structure or a differentiated product. A firm positions itself in its industry through its choice of low cost or differentiation. This decision is a central component of the firm's competitive strategy.’(http://www.quickmba.com/strategy/competitive-advantage/) And this is the model of competitive advantage:

Review the competitive advantage use China’s textile industry as example:
‘A recent research report showed that in China's textile industry, two-thirds of companies are having an average operating margin of only 0.62%. If these companies fail, it will affect 15 million jobs. Textile is one of the most representative exports of China, with a trade surplus of US$150 billion last year. But the Chinese RMB has gone up 14% against USD since the currency reform, and the US subprime crisis is spreading to other countries. As a result, the whole Chinese exporting sector is surrounded by a pessimistic atmosphere.’(http://resources.alibaba.com) Textile industry have been the main industry in China, but this industry has failing recently as mentioned above, however the Chinese government as one of the stakeholders have considered change the export policy, for the textile export, the main point of the policy is increasing tax rebate from 11 to 13 percent, and the objective is help this main industry. ‘Facing the export surplus shrink, which is evident from the first-half Customs data, Chinese government may adjust the export policies to support the export business. It is believed that a proposal thrown by China National Textile & Apparel Council had been handed to the State Council, which suggested the tax rebate for textile materials will increase from 11 to 13 percent, and that of the garment sector will raise to 15 from the current 11 percent.’(http://www.bpovia.com/blog/tag/export-policy-change) In another word why the government give out this policy, there are two main reason, firstly the world economy environment, secondly the competitive advantage of China’s textile industry have reduced a lot compare with past time. Hence the government have to change the policy to encourage exports, but recently the financial crisis makes the world economy going worse, many textile companies in China have to reduce the production, in this situation wether the new policy can help this industry nobody knows. If the policy  works well and the export going to be stable, it is good news for the government, because this industry offer a huge number of opportunities for people to have a job. The employment is much important for the government.

Textile industry is the main issue of China’s export, and there are many many textile companies in China, whatever their production will export or not, ‘No one knows exactly the number of textile companies in China. The official statistics show that there are currently more than 40,000 companies with annual sales above 5 million yuan (US$660,000), based on export statistics. But China National Textile and Apparel Council(CNTAC) said that there are hundreds of thousands of smaller players. According to Mr Sun Huaibin, Director of China Textile Economic Research Centre, 80% of profits in the Chinese textile industry were contributed by 1/3 of the companies in 2007. These companies have a profit margin of 6%-10%, against the industry average of 3.9%. But even this profitable one-third is having a hard time now. "Due to various factors, long term sales contracts are no longer easy to get now," said Mr Sun.’(#p#分頁標題#e#http://resources.alibaba.com) According to the competitive advantage, China’s textile companies has been failing, and there is an important situation about the textile industry is how the small companies survive in this environment. As the world developing the competition become more brutality than the past time, chinese companies have to face more truble for export their production, such as the trade barriers, it maybe the main truble for China’s textile industry. Trade barriers make the export reduced it means the profit have been reducing, although China have signed the agreement with the WTO, but more and more different kinds of trade barriers what the China’s textile industry have to face. Hence, how to reduce the cost of produce and increasing competitive advantage should be an main course for China’s textile industry to make much more profit. Here are five key points the competitiveness of China’s textile industry:
*More support from the government
*More support from the banks
*Change the strategy and improve technology
*Small companies might be united
*Brand strategy and developing new market
Those 5 ways show the network to improve the industry’s competitiveness, if that, the competitive advantage of China’s textile industry will be more powerful in international trade market.

The government supply, technology development and labor cost, are the key for China brands to compete with other foreign brands.