The strategic management of brand equity in emerging markets

Over the past thirty years, the Asia-Pacific region has recorded some of the fastest real- Gross Domestic Product (GDP) growth around the globe. The majority of this growth has been generated by one country in the Eastern Asia sub-region ‚Äö- China. Driven by the 'Open Door' economic reforms in the 1970s, China's economy has grown by an average of 10 per cent (in real GDP terms) since the early 1980s, and has emerged as the second largest economy in the world. At the same time, major Western economies such as the US and the EU have both experienced significant financial downturns in their economies. The disparity of growth between the Chinese economy and the Western developed economies provide a strong motivation for Western organisations to seek growth opportunity outside their highly saturated domestic markets. As Western organisations continue to expand into Asian emerging markets as part of an accelerating globalisation phenomenon, the possession of a strong and well-established brand is viewed as an essential requirement. A critical issue therefore, is how can internationalising organisations establish, maintain, and develop their brand effectively in new emerging markets. Recently, there has been a call by Delgado-Ballester and Hernandez-Espallardo (2008) in the brand literature to develop a finer-grained understanding of the antecedent factors associated with the strategic management of Brand Equity, i.e. the specific resources and capabilities linked with 'Brand Awareness', 'Brand Association', 'Perceived Quality', 'Brand Loyalty', and 'Other Proprietary Brand Assets'. This thesis explored these antecedent resources and capabilities by undertaking a quasi-longitudinal analysis of Marriott's international entry into the emerging Chinese market from 1997 to 2012. A detailed history of Marriott's entry into China was constructed, and this was tested against a series of semi-structured interviews with senior Marriott executives that were involved directly in the process as it unfolded. The findings of this thesis indicated that the strategic management of Brand Equity required Marriott to develop and leverage eight specific resources ('Financial Capital', 'FDIs, 'Functional Business Areas', 'Internal Operating Systems', 'International Brand Reputation', 'Human Capital', Compatible Goodwill', and 'Domestic Stakeholder Relationships'). The findings also indicated that Marriott mobilised these specific resources through five critical capabilities (Define and Communicate a Desired Market Position; Conduct Brand Equity Audits; Accurately Define Resource and Capability Deficiencies in the Organisation; Overcome the Resource and Capability Deficiencies Identified; and Establish, Maintain and Develop the Desired Market Position). This thesis identified three key areas for future research. Firstly, the applicability of these findings to organisations in different industry settings and different emerging markets. Secondly, the impact different stages of an organisation's operating cycle may have on the strategic management of Brand Equity. Although this research broadly analyses the organisation's entry and establishment in an emerging market, it was unable to consider, inter alia, other stages such as 'decline' and 'divestment'. Thirdly, there is an opportunity to explore the concept of 'Compatible Goodwill' in terms of its composition and a finer-grained understanding of the role it plays in the strategic management of Brand Equity.