The Cultivation of High-tech Enterprises' Industrial Cluster Brand

The Cultivation of High-tech Enterprises' Industrial Cluster Brand
JIA Lijuan1, LIU Lianhuan2
1. School of Business Administration, Hebei University of Economics and Business, P.R China, 050061
2. School of Finance and Taxation, Hebei University of Economics and Business, P.R China, 050061
[email protected]
Abstract: China’s economy has entered the age of competing with brand power, in which small and
medium-sized high-tech enterprise clusters must build largely influential brands to improve their
competiveness and achieve sustainable development in the future. On the basis of the exposition of the
concept and features of cluster brand and the contributions it has made to the development of high-tech
industries, this thesis puts forward strategic selections for Cultivating high-tech Enterprises' Industrial
Cluster Brand, and it is of great theoretical and practical value for reference for the small and
medium-sized enterprises SMEs in the high-tech districts in China to cultivate cluster brands and
improve their competiveness.
Keywords: brand, cluster brand, high-tech Enterprises' industrial cluster, Cultivating
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1. Introduction
At the present, brand studies, mostly existing in the theories of marketing management, only concentrate
on the building of specific brands, and little attention has been paid to the study of abstract brands
against a regional background abroad. In China, the vigorous development of industrial clusters in
different areas recent years has brought much attention, and both the government and the academic
circles have begun to carry out researches on regional brands and cluster brands. On December 24th,
2005, the national Cluster Brand Summit Forum was held in Shengzhou County, Zhejiang Province, and
it was the first time that Cluster Brand had become the key word in a summit forum in China. Experts
present at the forum conducted pioneering discussions in terms of both the theory and practice of
Cluster Brand. They believed that the new trend of building Cluster Brands emerged along the coastal
areas marked that the development of China’s industrial clusters had stepped into the stage of
sophistication, and that building cluster brands was the absolute course that all industrial clusters had to
adopt to get rid of competitions at the lower level and strengthen their competiveness.
2. The Concept and Features of Cluster Brand
2.1 The concept of cluster brand
In a broad sense, cluster brand means any brand that has close relationships with an aggregation. In
economic management, it specifically refers to the brand of an industrial cluster. It is a group of
identical name, terms, marks, symbols or pictures or the combinations among them that can be gathered
together and owned by complementary or competitive enterprises and their branches. It is most
commonly represented by a regional name and the name of the industry.
2.2 The features of cluster brand
2.2.1 Cluster brand represents the overall development level of the industrial cluster
Cluster brand, which is the comprehensive performance of cluster enterprises, represents the
concentration of various enterprises’ brands, and it has a broader and more sustainable effect than
enterprise brands.
2.2.2 Cluster brand is a kind of compound brand
Cluster brand includes not only the brand of the products, but also enterprise brand, industry brand and
the common brand shared by the enterprises in a certain cluster, making it a combination of brands, as a
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result of this, cluster brand is always used in a compound way.
2.2.3 Cluster brand possesses public goods properties
As the cluster brand is generated in the common production sector shared by the enterprises in a certain
cluster, once formed, it can be used by all of them. Therefore, cluster brand is a kind of public goods,
and it is non-exclusive, non-exhaustive and externally economic. A good cluster brand has positive
external effects, which will contribute a lot to the growth of enterprise brands within the cluster.
2.2.4 Cluster Brand is persistent
Cluster brand will not disappear due to the disappearance of a certain enterprise. Excellent clusters that
develop gradually through competitions will always be the driving force to push forward the
development of the cluster brand. A cluster brand will have a long-lasting effect as long as there is no
recession or transition caused by technology, demand and their conditions.
2.2.5 Cluster brand has abundant cultural connotations
Regional culture and local culture are at the core of cluster brands. Through the extraction of regional
culture, industrial culture and enterprise culture, especially the excavation and preservation of the local
historical heritage, a certain cluster brand can be widely accepted and publicized so as to provide not
only spiritual enjoyment but fashion and material satisfaction for the consumers.
3. Great Significance of Striving to Cultivate High-tech Enterprises' Industrial
Cluster Brand
High-tech Enterprises' industrial cluster is a kind of flexible cluster in a certain geographical region
formed by a large number of interrelated high-tech enterprises and their branches in accordance with the
division of labor based on specialization and collaboration.
In the high-tech Enterprises' industrial cluster development process, it turns out to be the inevitable
course that cluster enterprises should strive to foster an integrated brand and rely on its effects to expand
their radiometric force and improve their competiveness. The significance of Cultivating high-tech
Enterprises' Industrial Cluster Brand, is mainly reflected in the following aspects:
3.1 Enhance the competitiveness of small and medium-sized high-tech enterprises within the
cluster
On the one hand, the operating cost of the high-tech enterprises in the cluster is reduced. A cluster brand
is generated through the common efforts of all the cluster enterprises, and the expenses of publicity and
promotion are shared by all of them, which will surly help to reduce the fund obligation of each
individual the small and medium-sized enterprises. When the cluster brand becomes popular with the
public, the effects it has brought will contribute a lot to promoting the development of the whole
industrial chain, such as packing, storage, transportation, etc. On the other hand, according to cluster
brand strategy, all the enterprises within the cluster should act for the benefit of the community and
cooperate to build a regional brand in order to share the common interests. As a result of this, cluster
brand contributes a lot to avoiding the price war among enterprises and can help many operators change
from emphasizing “divide the cake” to “make the cake”
3.2 Improve the added value of high-tech SMEs products
Although cluster brand is one kind of brands, compared with enterprise brand, it takes less time to build
and has a more influential and persistent effect, so its brand value can be extended to the maximum, in
addition, the added value of the products can be increased efficiently.
3.3 Make high-tech Enterprises'industrial cluster more vigorous
On the one hand, the economic effects of the cluster would become more and more influential through
polymerization, which can help to maintain its low cost competitive advantages; on the other hand, it is
easy for brand cluster, which is characterized by capacity-optimized polymerization, to cultivate its
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regional brand features to be distinguished from other brands in the market, creating its own competitive
advantages due to cognitive differences.
3.4 “Cluster Brand” can bring significant marketing advantages to the high-tech enterprises
within the cluster
First of all, every enterprise would benefit a lot from the “cluster brand” effects, which would reduce the
advertising costs of each individual enterprise and push them to take an active part in marketing
campaigns. Secondly, “cluster brand” is the concentration and refinement of many enterprise brands, so
it is more stable and can be lasting for a longer time than a single enterprise brand. In addition, it can
help the cluster enterprises create marketing advantages and increase their intangible assets. Thirdly,
enterprise brands and the cluster brand can cross-promote the growth of each other. For example,
high-tech product brands like Lenovo, Founder and Unis have closely connected themselves to
Zhongguancun, which, as a cluster brand of high-tech products in Beijing, has brought prominent
marketing advantages to the enterprises within it.
4. The Strategic Selections for Cultivating High-tech Enterprises' Industrial
Cluster Brand
4.1 Establish a long-term goal to build the cluster brand
High-tech enterprises within the cluster should strengthen the cluster brand awareness, establish a
long-term goal, invest a certain sum of funds for brand promotion through large-scale advertising
campaigns and take a reasonable share of the costs according to their scale and turnover. In May 2006,
many well-known enterprises in the industrial park such as Baidu, Kingsoft, Sina, Huaqi News and Sohu
spontaneously formed the Z-Park Brand Innovation & Development Association Beijing. In adherence
to the objectives of “independent innovation, national brand and industry to serve the country”, they are
ready to cooperate with each other in order to make the “V815” national brands and the cluster brand
more well-known to the world.
，
4.2 Much attention should be paid to the building of strong enterprise brands within the cluster
By the means of group management, brand licensing, commission business, supervision and
anti-counterfeit towards technology and quality and developing industry standards, efforts should be
made to strengthen the brand building of the core high-tech enterprises with strong capacity and a good
reputation within the cluster so as to promote the formation and stability of a symbiotic network of
enterprise clusters. Small and medium-sized enterprises could make good use of the brand effects of
more influential enterprises within the cluster through OEM and ODM. Meanwhile, the “core
enterprises” should play a leading role in helping the small and medium-sized enterprises to build an
export network. All of these could also be seen as a metamorphosis method of cluster brand strategy.
4.3 Ensure good quality of the products
Small and medium-sized enterprises within the cluster should realize that better quality could bring them
more clients and higher profits, and boost quality awareness to ensure good quality and honest trade so
as to maintain the cluster brand image. Moreover, cluster enterprises should give much importance to
the ISO9000 and ISO14000 management system certification and conduct a coordinated management
in the product quality, which means that the management in the purchase of raw materials, processing,
storage, transportation and sales should be performed through the establishment of technical process and
examining standards during the different stages of production. And only through these ways can they
ensure a high product quality and foster the credibility and popularity of the cluster brand.
，
4.4 Local governments should take an active attitude toward improving both the tangible and
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intangible environments for cluster enterprises to build their brands
Firstly, Local governments should accelerate the construction of the transportation network which
ensures the industrial parks to have close connections with central cities, seaports, airports, railways and
highways. Secondly, local governments should speed up the “digital network” construction, promote the
popularization of the high-speed broad band network and improve the comprehensive service function
of the Internet to provide a good environment for the construction of the cluster enterprise brand. Thirdly,
professional markets should be built to facilitate the flow, publicity, supervision and management of the
high-tech products in the region. Professional markets, with largely influential effects, are both a sales
and an exhibition platform of the products. Take the Zhongguancun electronic market in Beijing for
example, it has not only promoted the smooth flow of local products but also attracted many products
outside the region. The frequent contacts of various enterprises in the professional market could
gradually form an invisible supervising force and create a good environment for competition.
In terms of building the intangible environment, the governments should create a favorable policy
environment, market environment and service environment for brand building. First of all, the
government should guide the cluster enterprises to strengthen self-discipline and set standards for
service and product quality, which should be implemented under supervision. In addition, they should
increase the cost on dishonest operation behaviors. The illegally operated enterprises should be punished
to a certain extent, so that the images of those high-tech Enterprises' industrial cluster brands could be
well protected. Secondly, relevant local laws and regulations should be made to crack down fake and
shoddy products, besides; more importance should be given to the management and supervision of the
illegal commercial behaviors to keep the cluster brand market in order. Thirdly, much attention should
be paid to the trade-mark proving work of the high-tech Enterprises' industrial cluster brands. Forth, the
government should effectively organize the forces and resources from the relevant departments, so as to
form a joint-force to promote the cluster brand building. For example, a joint-meeting system for
building cluster brands can be established which consists of the branch departments and other relevant
functional departments under the leadership of local governments. Each department does their own work
according to the joint-work system and their duties, and cooperates with each other to deal with the
specific issues during the development of cluster brands. Fifth, local government should adopt a series
of supporting policies, such as setting aside funds for the strategic development of famous brands,
allocating special funds to support the development of high-tech Enterprises' industrial cluster brands,
encouraging and guiding more enterprises to take an active part in establishing their own brands, and
attaching more importance to publicizing the leading enterprises so as to lay a solid brand foundation for
building famous brands. Sixth, in order to avoid decision-making mistakes the government should
enhance the service awareness and provide information service for the implementation of famous brand
strategy, especially on the industrial development. Seventh, the government should promote the
development of high-tech industries and their ancillary industries.
，
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4.5 Non-governmental forces should be guided to promote the building of high-tech Enterprises'
industrial cluster brand
A number of high-standard intermediary agencies closely related to the construction of the cluster
brands should be established as soon as possible. Further more, consulting service agencies and
industrial associations related to brand building and development should be established at the same time.
The governments should also support and encourage various non-governmental forces to take part in the
building and implementation of cluster brands through marketization.
5. Conclusion
Striving to cultivate high-tech Enterprises' industrial cluster brand could help the small and
medium-sized high-tech enterprises within the cluster to improve their competitiveness and the added
value of the products, and make the cluster more vigorous. As a whole, “cluster brand” would bring
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outstanding marketing advantages to the high-tech enterprises within cluster. In the course of Cultivating
the high-tech Enterprises'industrial cluster brand, the cluster enterprises should set a long-term goal and
ensure good product quality. On the one hand, enterprises should be regarded as the main force in the
process of brand development; on the other hand, the government should play a guiding role, leading all
the non-governmental forces to promote the implementation of cluster brand strategy.
Author in brief Acknowledgment:
1. Jia lijuan (1962), female, School of Business Administration, Hebei University of Economics and
Business, Professor, Master, The main research direction: Management, Industrial economics.
2. Liu Lianhuan, (1962), female, School of Finance and Taxation, Hebei University of Economics and
Business, Professor, Master, The main research direction: Finance and Taxation management.
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Beijing: Economic management press,2008:252 275 in Chinese
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