The FINANCIAL — (Tbilisi, Georgia) The courier has just delivered my dream clothes ordered from Victoria Secret, from the United States, having crossed oceans and borders. I unwrap them and see the label – Made in China. My clothes have travelled a long way before arriving in Georgia, first of all being designed in the US, then manufactured in China, shipped to a warehouse in the US and later delivered to me in Georgia. My new clothes are better travelled than me, having been across three continents.
Many foreign companies have already adopted the approach of making products in China, with the low cost labour force and high-edge technology, then selling them throughout the world and themselves operating in developed countries like America or EU countries.
This consequently means that American companies are mainly working on promotion and branding of the product, and do not involve themselves in the manufacturing. Other countries and populations who order the products are sure of getting American developed brands.
The FINANCIAL has studied the idea of making a China made US brand. It’s about the creation of a small business group in charge of providing development of a concept, making it a global brand. That includes registering the brand in the United States or Europe for better publicity and image, which in turn generates higher sales when the choice comes for an American developed brand or that of another country.
The branding and in general marketing field is one of the newest concepts in Georgia which need further specialization and educational background. Currently, biz schools in Georgia have a special direction in their BBA major – marketing. Small groups of talented MBA or BBA students might create a good base for branding the new product, and registering their companies in Western countries.
We addressed an American expert to better understand the advantages and disadvantages of the concept.
“I know how creative Georgians can be – so I have no doubt that we can excel at this,” said R. Michael Cowgill, President of Georgian American University, Vice-President of AmCham. “But I wanted to make sure it is understood that the process is much more than just branding – it is coming up with a creative idea (product) and then taking it to market.”
“It needs to be clarified that it is not just the development of that “middle marketing channel”.”
“What has been successful is that there first has been a creative concept (product) – which has come from the originating country – that can then be manufactured with a reasonable level of quality and at a lower price in China.”
“I know that it is the dream of most of my students to start their own company. I have seen what they can do in this area. They have the creative talent and motivation. I believe the limiting factor is a practical one – in that it is difficult to develop those relationships (partnerships) in other countries without first meeting and gaining each others’ trust. Unfortunately, often travel is difficult due to costs and visa issues and it is often very risky to try and do these types of activities solely over the internet,” Cowgill said.
You are probably wondering what services and directions could be developed further.
Cogwill recalls the old saying – Necessity is the Mother of Invention. “If you find something you need – most likely others need it too. A well thought-out concept together with the proper financial and marketing analyses are key to success. As in most start-up situations, the simpler the better,” Cowgill added.
Cowgill believes that the main advantages of the project are obvious. “We expand exponentially our target markets outside of Georgia. As for the disadvantages, going outside of the country (off-shore) for manufacturing just exacerbates our lack of employment within Georgia.”
“Often proper risk analysis is not done in a start-up situation. In marketing terminology, it is called a SWOT analysis which looks at internal strengths and weaknesses and external opportunities and threats – and how those either assist or inhibit meeting a company's marketing objectives.”
“Each product or concept is different. However, some obvious issues are: Georgia's geographical location; language issues (although the current move to making English as the 2nd language will be very helpful), travel issues, intellectual property rights (IPR) within Georgia and how to best protect those creative ideas.”
The lesson for beginners is that your original brand or concept must be registered and protected by the law of the country you are entering.
Whether this is an IT service, retail chain, restaurant chain, services or products, one should consider the options of working overseas and in different countries.
Nicole Jordania, Executive Director of AmCham believes Georgia can be a place where everything could be manufactured, from quality to equipment. “I am American, I go to America and I go to stores where the quality I find there is high and is made in Kyiv, Istanbul, the Czech Republic. I believe the product needs be associated with a larger campaign of the country and brand,” Jordania said.
So, you have already thought of a concept and summarized your future plan of starting up your business. The next question arises – where should I register my company? Which countries in America and Europe are the best for registering businesses for promotion, branding and for sales?
“This is a difficult question as each product will have its own target market. I will repeat here what I tell my students – you are not just competing with the person sitting next to you in class – you are competing with those students in America, India, China, Europe – virtually the entire world. This is the reality of this generation as the concepts you discuss in this article are open to all,” Cogwill said.
Indeed, many will read the article and think of developing the process. However, do not forget it’s the concept which in the end makes your business unique and product demanded.
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