branding of telecommunication service in china -china ... · chapter ii 7 branding of china...

BRANDING OF TELECOMMUNICATION SERVICE IN CHINA

-CHINA UNICOM'S CDMA MOBILE SERVICE

by

LEE CHI LEUNG, EDMUND

李子良 LIU LEI

柳蕾

MBA PROJECT REPORT

Presented to

The Graduate School

In Partial Fulfilment

of the Requirements for the Degree of .

MASTER OF BUSINESS ADMINISTRATION

TWO-YEAR MBA PROGRAMME

THE CHINESE UNIVERSITY OF HONG KONG

May 2002

The Chinese University of Hong Kong holds the copyright of this project. Any person(s) intending to use a part or whole of the materials in the project in a proposed publication must seek copyright relaease from the Dean of the Graduate School.

V A _V『丨ty "力j Yj^jbrary SYSTEM

APPROVAL

Name: Lee Chi Leung Edmund

Liu Lei

Degree: Master of Business Administration

Title of Project: BRANDING OF TELECOMMUNICATION

SERVICE IN CHINA

CHINA UNICOM，S CDMA MOBILE

SERVICE

Name of Supervisor: Prof. Jia Jian Min

Signature of Supervisor: .

Date Approved:

ii

ABSTRACT

In the past twenty years, China's economy has transformed from a state

planning system to one that is increasingly being driven by market forces. As

competition mounts, branding is increasingly being recognized as an important

intangible asset for a company.

China is now the world's largest ’s mobile telecommunication market and

dramatic growth is expected to continue in the future. Competition among service

providers is gathering momentum as the market moves away from monopoly to

duopoly and eventually to international competition.

Given the relative complexity and intangibility of telecommunication services,

strong brands are needed to help consumers navigate through the search process and

lead them to the purchase decision. At the moment, service providers' brand

building activities are focused on advertising.

China Unicom, the country's second largest telecommunication operator, offers

a comprehensive range of services. In January 2002, it launched Unicom Horizon,

China's only mobile service running on the Code Division Multiple Access (CDMA)

network and hopes to gain additional subscribers and raise its market share further.

iii

From the outset, China Unicom has tried to differentiate Unicom Horizon from

its own Global Standard for Mobile Communication (GSM) service and that of its

competitor, China Mobile. In order to attract high-spending subscribers, Unicom

Horizon is targeted at business users.

At the same time, Unicom Horizon is promoted as a lifestyle service for a

young and dynamic audience who can appreciate the high quality and

environmentally motivated service. Clearer voice transmission, lower drop call

rate, and lower radiation are the main attributes being trumpeted. From

advertisements to the physical decoration of retail outlets, the main theme "Entering

the New Horizon, Enjoy a New Life / 进入新时空’享受新生活” is echoed.

In our evaluation of China Unicorn's brand building efforts, a combination of

exploratory research based on publicly available information, focus group

discussions, site visits and descriptive research based on a survey conducted in

Guangzhou is used.

Our findings reveal that China Unicom is perceived least favorably in terms of

network performance when compared to its other brand attributes. Moreover,

Unicom Horizon's lifestyle-oriented promotions and youthful image do not resonate

well with business users who look for advanced features and business-enabled

capabilities.

i v

Our findings also expose that not many people perceive Unicom Horizon as a

service for business users. In fact most people think that it is suitable for both

business and personal use. China Unicom may need to refine Unicom Horizon's

positioning and develop a more coherent brand identity. It may be better to

position Unicom Horizon as a premium mobile service suitable for all types of users.

While majority of consumers recognize the China Unicom brand, they

associate the purchase of telecommunication service much more strongly with China

Mobile. Given that brand recall is the crucial stage leading to actual purchase,

China Unicom should focus on building the "China Unicom" brand name.

Lastly, mobile subscribers' purchase decision is largely based on the evaluation

of price versus quality. They look for value-for-money, maximum quality at

minimum price, above all things. Therefore, it should be the long-term brand

position of China Unicom. Promoting products or services with either a low-price

or a high-quality positioning is not sufficient.

V

TABLE OF CONTENTS

ABSTRACT ii

TABLE OF CONTENTS

LIST OF FIGURES viii

ACKNOWLEDGEMENT xi

CHAPTER 1 1

INTRODUCTION 1

1.1 Branding in China 1

1.2 Branding in Telecommunication Industry in China 4

CHAPTER II 7

BRANDING OF CHINA UNICOM'S CDMA SERVICE 7

2.1 China Unicom 7

2.2 Definition of Key Constructs 9

2.4 Branding of China Unicorn's CDMA Service 19

CHAPTER III 26

RESEARCH METHODOLOGY 26

3.1 Research Objectives 26

3.2 Research Design 26

3.3 Research Instrument Design 27

3.4 Sampling Procedures 29

CHAPTER IV 30

ANALYSIS OF FINDINGS 30

4.1 Focus Group Discussions 30

vi

4.2 Survey Findings 31

4.2.1 Questions on China Unicom 31

4.2.2 Questions on China Unicorn's CDMA Service 36

4.2.3 Questions on Consumer Behavior and Respondents' Profile 45

4.3 Research Limitations 52

4.3.1 Scale Ratings 52

4.3.2 Frame of Reference - Product Brand Names 52

4.3.3 Sampling Procedure 53

CHAPTER V 54

RECOMMENDATIONS 54

5.2 Focus on Customers 54

5.1.1 Target Premium Customers 54

5.1.2 Create Real Value-for-Money 55

5.1.3 Establish Trust in a Long-term Relationship 55

5.2 Build a Strong Service Brand 57

5.2.1 Enhance Brand Recall 57

5.2.2 Build a Strong Corporate Brand 58

CHAPTER VI 60

CONCLUSION 60

APPENDIX 1 62

QUESTIONNAIRE IN SIMPLIFIED CHINESE 62

APPENDIX 2 65

QUESTIONNAIRE IN ENGLISH TRANSLATION 65

APPENDIX 3 68

SUMMARY OF SURVEY RESULTS 68

APPENDIX 4 74

v i i

BACKGROUND OF CHINA UNICOM'S CDMA SERVICE 74

BIBLIOGRAPHY 77

BOOKS 77

JOURNAL PAPERS 78

WEBSITES 79

v i i i

LIST OF FIGURES

SECTION 1. China Unicorn's CDMA Service 80 FIGURE la: China Unicorn's CDMA Video Clip: "Entering the New

Horizon, Enjoy a New Life / 进入新时空，享受新生活”

based on the "Green Communication Concept." 80 FIGURE lb: A China Unicom branch office in Tianhe, Guangzhou is being

renovated to accommodate a store-in-store for the new CDMA service, Unicom Horizon. This picture was taken in March 2000, two months after the official launch 81

FIGURE Ic: By the end of March 2002, renovated is completed. A special area designated for selling the CDMA service is decorated in green 81

FIGURE Id: A signboard placed in front of the store with Unicom Horizon's tag line "Entering a New Horizon, Enjoy a New Life." 82

FIGURE le: Promotional materials, posters (lower left), and a signboard showing handset prices (lower right) all share a uniform look.

83

SECTION 2. China Unicom 84 FIGURE 2: Information leaflets on China Unicorn's CDMA service are

provided freely for customers in all retail outlets offering the service 84

FIGURE 3: A specialty store selling telecommunication products in Guangzhou is licensed to offer China Unicorn's CDMA service. The store has been redecorated to literally reflect the Green Communication Concept 85

FIGURE 4: An information kiosk in Guangzhou's subway station - another advertising avenue used by China Unicom to promote its CDMA service 86

FIGURE 5: Three half-page advertisements featuring China Unicorn's CDMA service appear on the same day in two major newspapers sold in Guangzhou 87

FIGURE 6: China Unicorn's outdoor billboard 88 FIGURE 7: A China Unicom branch office in Guangzhou is surrounded by

a number of small telecom shops 88 FIGURE 8: A China Unicom branch office at the Guangzhou East Train

Station. The new CDMA service is not offered here 89 FIGURE 9: A small China Unicom branch office in a residential district of

Guangzhou 90 FIGURE 10: A small telecom shop offering services from both China

Unicom and China Mobile 90 FIGURE 11a: Locations of China Unicom branch offices can be found in

Guangzhou's City Map displayed in the train station 91 FIGURE l ib : A close-up look of the map 91

ix

FIGURE 12: China Unicorn's advertisement for its GSM service, GSM 130, appears in many subway stations in Guangzhou 92

FIGURE 13: China Unicorn's light box advertisement in Guangzhou's subway featuring its prepaid cards for its GSM network 92

FIGURE 14: China Unicorn's advertisement for a new fixed line service placed in Guangzhou's subway. This service is said to be cheaper than the increasingly popular low-cost IP phones 93

FIGURE 15: A small telecom shop places a hand-written signboard outside the store to promote China Unicorn's GSM service, GSM 130. Since this shop is not authorized to sell China Unicorn's CDMA service, it can only provide referral service 93

SECTION 3. China Mobile 94 FIGURE 16: China Mobile's large outdoor advertising featuring the national

coverage of its GSM service, GoTone. These huge posters are placed on the walls of the Tianhe Shopping Centre in Guangzhou 94

FIGURE 17: China Mobile's outdoor billboard for its GSM service, GoTone, at a busy junction in Guangzhou. The advertising tag line is "Communication starts from the heart." 94

FIGURE 18: China Mobile's pervasive promotion of its GSM service, GoTone, can even be found in the entrance of a subway station in Guangzhou 95

FIGURE 19: An outdoor billboard in Guangzhou featuring China Mobile's Mobile Data Service offered through its GSM network 95

FIGURE 20: A small telecom shop in Guangzhou utilizing China Mobile's GSM service, GoTone brand in promoting its own shop 96

FIGURE 21: Another small telecom in Guangzhou selling China Mobile's GSM service, GoTone 96

FIGURE 22: A China Post branch office offering China Mobile's GSM service, GoTone 97

FIGURE 23: Guo Xin, a specialty chain store in Guangzhou selling telecom products. A light box featuring China Mobile's GSM service, GoTone, is displayed in front of the store 97

SECTION 4. Handset Suppliers 98 FIGURE 24a: Ericsson from Sweden 98 FIGURE 24b: Nokia from Finland 98 FIGURE 24c: Motorola from the United States 99 FIGURE 24d: Siemens from Germany 99

SECTION 5. News 100 FIGURE 25: 10-hour long service outage of China Unicorn's GSM network

is featured on the front page of Guangzhou Daily's Economy News 100

FIGURE 26: A newspaper article on CDMA handsets and price range from Yangcheng Wanbao published in Guangzhou. Shortage of handsets is said to be a major obstacle for increase in subscriber base 100

V

FIGURE 27: A newspaper article on China Unicorn's financial performance from Ming Pao Daily of Hong Kong. The company's CEO maintained that CDMA business would not suffer any loss and that the target to enroll 7 million subscribers by the end of 2002 remained unchanged 101

FIGURE 28: Another article on China Unicom from Ming Pao Daily. By the end of March 2002, three months after the initial launch. Unicorn's CDMA network had 0.8 million subscribers 101

FIGURE 29: A newspaper article on the merits of China Unicorn's CDMA service sound more like a paid commercial than an objective commentary 102

FIGURE 30: Various news clips on China Unicorn's CDMA service - China Unicom is not meeting its subscriber targets; a price cut is needed; the company is subsidizing subscribers by renting out CDMA handsets 102

xi

ACKNOWLEDGEMENT

We would like to express our gratitude to our supervisor, Professor Jia Jian Min, for

his guidance and advice throughout the project.

We would also like to thank all the volunteer researchers without whose help this

study would not be possible.

Edmund & Jacqueline

May 2002

1

CHAPTER I

INTRODUCTION

1.1 Branding in China

Western companies have long recognized the importance of brand equity.

However, until recently, their Chinese counterparts have paid little attention to the

creation of brand equities both at home and abroad. In the planned-economy era

(1949 to 1978), central directives, not market demand, dictated resource allocation.

Accumulation of physical assets was seen as the primary measure of success. Even

in the decade (1980s) after China introduced the open door policy, companies were

busy meeting pent-up consumer demand and felt little pressure to build brands.

They simply had to secure capital, source technology, and increase production.

Only in the early 1990s did China enter a stage of market-driven brand

consciousness - the era of hyper-competition. As factories used similar technology,

many products had comparable features. Distribution, sales, and after-sales service

were poor, and thus could not serve as marketing levers either. Price became the

last competitive variable. Ferocious price wars followed, especially in the market

2

for color televisions and other household appliances. Finally, after incurring huge

losses from the price wars, companies began to realize the importance of brand

equity.

According to the Beijing Brand Equity Evaluation Institute ranked Chinese,

there is a strong positive correlation between company size as measured by revenues,

and brand equity. Revenue of top brands grew in multiples. From 1994 to 1998,

the revenue of TCL, a manufacturer of electronic goods, increased 456 percent and

that of Changhong, China's biggest television producer, jumped 189 percent'.

While growing rapidly, annual revenue growth of brands has slowed down

recently, according to the Beijing Brand Equity Evaluation Institute. For example,

the annual growth rate of China's top 10 brands fell from double digits in the period

of 1994-96 to 8.3 percent in the period of 1997-98.

At the same time, branding is becoming increasingly difficult and expensive.

Companies need more than RMBIOO million to maintain a major brand in China'.

About RMB200-300 million per year is needed to establish a new n a m e �

In the upcoming era of "Chinese post-industrialism," pressures to develop strong

brands will mount. It will become more important for a company to build brands

for individual products. Local companies will not only compete with each other

‘Schlevogt, Kai-Alexander. "The Branding Revolution in China," The China Business Review. Washington, USA. May/Jun 2000.

but also with a slew of foreign firms. Branding will be the only way to survive

cutthroat competition with strong domestic players and Western giants.

Unfortunately, many Chinese firms also succumb to a number of pitfalls in

branding^:

• Misconception that a famous brand is a strong brand.

• Misconception that a high-end brand is a strong brand.

• Unclear brand positioning.

• Inconsistent brand positioning.

• Branding is a once-off effort.

• Short-term orientation.

• Over-extension of brand.

In addition, many firms still subscribe to the concept of saturation advertising.

Qin Chi Jiu, a Chinese white wine producer, and Idall, a VCD manufacturer, shot to

fame almost overnight when they became the "kings of bidding" for premium

advertising slots on the national television channel, CCTV. Their short-lived

success however illustrates the importance of well-planned and sustained brand

building rather than blinded spending on advertising.

More sophisticated local companies and their foreign counterparts now

2盧泰宏’《營銷在中國》’廣州出版社，2001年。

4

recognize brands as important intangible assets they must build, manage, and

leverage to create economic value. As consumers become more sophisticated and

demanding, companies have back up their brands with strength in quality, not

money.

1.2 Branding in Telecommunication Industry in China

China's mobile telecommunication market has developed enormously over the

past two decades. Starting from zero in 1980，the number of mobile customers

reached 85.3 million in 2000 (EXHIBIT 1). In July 2001, China became the

world's largest mobile telecommunication market with 120.6 million subscribers^.

If the 20 percent annual growth rate predicted in China's Tenth Five-Year Plan

(2001 — 2005) were to materialize, China will have more than 260 million

subscribers by 2005.

3 "Consumers are More Cell-Phone-Crazy than in US." Economist Intelligent Unit - Country Briefing: December 3, 2001. www.wireswire.com.

http://www.wireswire.com

5

EXHIBIT 1 - GROWTH IN MOBILE SUBSCRIBERS

Year Subscriber Base Growth (%)

1992 176,943 N.A.

1993 638,000 260%

1994 1,568,000 146%

1995 3,629,000 131%

1996 6,853,000 88%

1997 13,233,000 93%

1998 23,863,000 80%

1999 43,240,000 81%

2000 85,260,000 97%

Source: China Daily

Many factors drive the development in the mobile telecommunication market.

In addition to low penetration rate (19 percent among urban households according to

the China Statistical Yearbook 2000) and strong economic growth, positive changes

to the regulatory environment, new technologies and products are fueling the growth.

More importantly, lower prices of handsets and services have made mobile

telecommunication affordable to more people in the country.

In terms of service providers, China Telecom monopolized the market until

1994 when the Chinese government decided to create a second operator, China

Unicom. In 1998, China Telecom was broken up into four independent operators.

6

One of them was China Mobile, the country's largest mobile telecommunication

service provider. Now, China Mobile and China Unicom constitute a duopoly,

controlling 75 percent and 25 percent of the market respectively.

Historically, and in large part due to national security and sovereignty concerns,

China has banned foreign investment in this industry. After China joined the

World Trade Organization (WTO) in December 2001, the government will gradually

open the market for foreign participation.

At the moment, branding building efforts in the telecommunication market are

focused on advertising. According to AC Nielson, about 53 percent of total

advertising expenditure goes to newspapers, 45 percent to television, and 2 percent

to magazines. This pattern of expenditure is very different from that of other

products. The industry's reliance on the print media could be attributed to the

relative complexity of their product and service offerings. The print media allow

more detailed information to be provided for consumers in a cost effective manner.

7

CHAPTER II

BRANDING OF CHINA UNICOM'S CDMA SERVICE

2.1 China Unicom

China United Telecommunication Corporation (China Unicom) is a Chinese

corporation founded under the co-sponsorship of China's Ministries of Electronic

Industry, of Electric Power and of Railways and approved by the State Council.

The company has also received capital input from such enterprises as China

International Trust and Investment Corporation, China Everbright International Trust

and Investment Corporation, and China Resources Group.

As the country's second-largest telecommunication operator, China Unicorn's

main scope of business is to:

• Upgrade the existing private telecommunication networks of the Ministry of

Railways and the Ministry of Electric Power;

• Provide long distance telephone services;

• Provide local telephone services in areas where public telephone networks

cannot reach or there is a shortage of such services;

8

• Provide radio telecommunication services, including mobile

telecommunication services; and

• Provide value-added telecommunication services.

The company prides itself as the only service provider in China that offers a

comprehensive range of services including local and regional calls (如意通卡，南粤

卡)，long distance calls (193 长途)，Internet Protocol (IP) phones (17910 IP 电话)，

paging (联通寻呼，如意呼)，Internet dial-up (165 互联网)，and other value-added

services such as short messaging (短消息中心）and soccer news (联通足球信息机).

For mobile telecommunication service, China Unicom started its business

running a Global Standard for Mobile Communication (GSM) network. And, on

January 8th, 2002, it launched China's only Code Division Multiple Access (CDMA)

network in selected cities. The company's interest in building a second network

came from the need to ensure continued subscriber growth and high revenue per

person.

9

2.2 Definition of Key Constructs

Before we proceed to analyze China Unicorn's branding building efforts, we

need to define the major constructs of branding.

A brand is a "name, term, sign, symbol, or design, or a combination of them

intended to identify the goods and services of one seller or a group of sellers and to

differentiate them from those of competition'^." In our study, we take the view that

a brand is the total sum of consumers' perceptions and feelings about the products'

attributes and how they perform, and about the company associated with the

brand^"

Brand equity is a set of assets (or liabilities) linked to a brand's name and

symbol that add to (or subtract from) a product or service^. Consumers' brand

knowledge and a positive brand image, based on strong, favorable, and unique brand

associations are the keys to creating brand equity?.

The two major components of brand knowledge are brand awareness and brand

image. Brand awareness includes brand recognition and brand recall. Brand

4 American Marketing Association, www.marketingpower.com. 5 Berry, Leroard L. "Cultivating Service Brand Equity." Academy of Marketing Science Journal. Greenvale, USA; Winter 2000. 6 Aaker, David A. Building Strong Brands. New York: Free Press, 1996. 7 Keller, Kevin Lane. Strategic Brand Management: Building, Measuring & Managing Brand Equity. New Jersey: Prentice Hall, Inc., 1998.

http://www.marketingpower.com

10

recognition is consumers' ability to confirm prior exposure to the brand. Brand

recall reflects consumers' ability to retrieve the brand when given the product

category, the needs fulfilled by the category, or some other type of cue. Apparently,

consumers' ability to read or say the brand name is the necessary first step of brand

recognition or brand recall.

Moreover, brand image or identity is defined as consumers' perceptions of a

brand as reflected by the associations held in their memories. Brand associations

contain the meaning of the brand for consumers. More specifically, there are 12

categories of brand identity elements organized around four perspectives ^

(EXHIBIT 2). In reality, virtually no brand has associations in all 12 categories.

Typically, an effective brand identity requires six to 12 dimensions. Because a

large set is unwieldy, it is also helpful to provide even more focus by identifying the

core identity (the most important element of brand identity).

8 Aaker, David A. Building Strong Brands. New York: Free Press, 1996.

11

EXHIBIT 2 - BRAND IDENTITY SYSTEM

Scope I

� - � ^ Attributes I Brand as Product I Service I | 一鴻‘：，^^:一今二 Quality I Value I

Uses j

Users— I

of Origin |

i Brand Identity I Brand as Organization I Attributes j

“ Country of Origin I iiw i i_uif -rT-rrl

H i Personality j

I Customer / Brand | 'I-- * atfwwMgWJt?HUw .I _ __ I il

Visual Image & | MsteRhor�J

I Heritage |

While our natural inclination is to associate branding with goods, branding is

just as relevant to services. In fact, branding plays a special role in service

companies because strong brands increase customers' trust of the invisible purchase^.

They also reduce customers' perceived risks in buying services, which are difficult

to evaluate prior to purchase.

9 Berry, Leroard L. "Cultivating Service Brand Equity", Academy of Marketing Science Journal. Greenvale, USA; Winter 2000.

12

2.3 China Unicornis Introduction of CDMA Service

In April 1999, the Chinese State Council approved that China Unicom to be

solely responsible for the infrastructure and business development of China's only

CDMA network. In February 2001, China Unicom established an independent

subsidiary (联通新时空公司）to take charge of the business. (Please refer to

APPENDIX 4 for more information). According to Mr. Wang Jianzhou, Executive

Vice President of the China Unicom Group, and President and Executive Director of

China Unicom Ltd. ®:

"Our CDMA network ... will be built and operated by a subsidiary of

China Unicom Group independent of China Unicom Ltd. ... because inevitably

there will be some risks involved in developing our new CDMA networks, and

we do not want our listed company to be exposed to those risks...

[At the same time], we would like to avoid competition between the parent

and listed company. So after the network goes into service, if everything

works out well, the listed company will have the option to acquire the CDMA

network. We have promised that to our investors."

"China's New Regulatory Environment Spurs Unicorn's Subscriber Growth"; Telecommunication

Development Asia-Pacific: http://www.tdap.co.uk/uk/archive/interviews/inter(unicom_0012).html.

http://www.tdap.co.uk/uk/archive/interviews/inter(unicom_0012).html

13

In the first phase of infrastructure construction, which costs a total of RMB240

billion, was completed in December 2001, the network can accommodate 15 million

users spanning 320 large- and medium-sized cities across China. When the second

phase is completed in 2003, the capacity will increase to 50 million subscribers and

coverage will reach the whole country^ ^

China Unicom soft-launched the CDMA service in January 2002.

Specifically it hopes to secure 700 million subscribers by the end of 2002 and raise

its total mobile market share to 35% by 2005. Again, according to Mr. Wang

Jianzhou:

".. .if we set up a new CDMA network offering the same functions as

those already on offer from China Unicom GSM networks, the two operations

will just cannibalize each other. ...We will, therefore ... position our CDMA

network in such a way that the services it offers are differentiated from those of

the GSM network. To that end we have concluded that our CDMA network

should target high-end business users with robust wireless data capability

On the other hand, for voice users, GSM is fine."

China Unicom hopes to attract corporate clients running a monthly bill of

RMB200-300 to its CDMA network, which is more than double the expenditure of

“China Unicom website

14

its typical GSM subscriber who spends RMB98 per month. This will make China

Unicorn's ARPU (average spending per user) closer to that of China Mobile.

In terms of pricing, China Unicom runs a rather complicated scheme. Basic

service charges include a one-time payment of RMB200 for the network Card,

monthly rental of RMB50, and airtime charges of RMB0.4/minute for both

incoming and outgoing calls (EXHIBIT 3). Other services and value-added

capabilities such as call waiting, roaming, and short messaging are charged

separately.

15

EXHIBIT 3 - CHINA UNICOM'S PRICING SCHEME FOR CDMA SERVICE

Basic Charges of CDMA Service

Item Charge Notes

UTK Card RMB120/piece

Installation Free New subscribers

Basic Service Charges RMB50/month First month free for new

subscribers

Basic Airtime Charges RMB0.40/minute Two-way charges: incoming and

outgoing calls are charged;

airtime calculation is rounded up

to the nearest minute

Provincial Roaming RMB0.6/minute

National Roaming RMB0.6/minute

Source: Ghi门3 Unicom

In order to attract high spenders, CDMA will have to offer something GSM

cannot. CDMA technology probably excels in quality and transmission, but China

Unicorn's network rolled out so far is a narrow band one (like the company's GSM

network). The much-anticipated high-speed CDMA IX, which offers the

always-on Internet transmission capability will not be available until the third

quarter of 2002.

16

Regarding mobile handsets, initially, the government has assigned 18 local

firms to produce handsets for the CDMA network. While the plan aims to foster

the development of the Chinese handset-manufacturing industry, the growth of

subscriber base has been constrained by the high prices and limited supply of

handsets. In fact, some local producers have yet to manufacture suitable handsets

for the market. At the end of April 2002, 11 producers including Motorola of the

US and Samsung of South Korea are offering 18 models of handsets to the market

(EXHIBIT 4).

17

EXHIBIT 4 - LIST OF CDMA HANDSETS AVAILABLE IN THE MARKET

Handset Producers Models Offered

1. Motorola 摩托罗拉 V8060

2. Samsung 三星 SCH-A399�SCH-N299

3. H a i e r海尔地文星1000

4. Capital 首信 C 7 0 8 8 � C 7 1 8 8 � C 7 2 8 8

5. Konka 康佳 K C 6 6 � K C 8 8

6. HiSense 海信 C 5 2 0 � C 2 1 0 1

7. Bird 波导 BC - 638

8. Eastcom 东信 EX200

9. Da Tang 大唐电信 DT618

10. Pu Tian Wang Zhi 普天王芝 T118

11. ZTE 中兴通讯 Z T E 8 0 2 � Z T E 8 0 3 � Z T E 8 0 5

Source: China Unicom

As a result, take-up rate is low during the initial two months of the launch.

China Unicom has to offer various incentives to attract customers (EXHIBIT 5).

For example, it slashed the price of the network card from RMB 200 to RMB120.

In addition, each new subscriber gets RMB2000-3000 free airtime depending on the

model of handset purchased.

18

EXHIBIT 5 - INCENTIVE SCHEMES FOR CDMA SUBSCRIBERS

Handset Cost of UTA Payment Made Free Airtime Given

Handset Model Price Card by Subscriber to Subscriber

手机机型手机价格 UTK卡费用户支付金额用户获赠话费金额

(RMB) (RMB) (RMB) (RMB)

Motoro la摩托罗拉 2150 120 2270 2150

V8060

Eastcom 东信 2280 120 2400 2280

200

K o n k a康佳 2480 120 2600 2480

KC66

H a i e r海尔 , _ 2890 120 3010 2890

地文星 1 0 0 0 浪潮

3080 120 3200 3080 LG

Eastcom 东信 3180 120 3300 3180

280

京瓷 “ 3280 120 3400 3280

KZ610 Samsung 三星

3480 120 3600 3480

N299

Konka康佳 3680 120 3800 3680

KC88

南方高科 3980 120 4100 3980

9988

CEC626 4100 120 4220 4100

S a n y o三洋 4480 120 4600 4480

SCH600

HiSense 海信 4500 120 4620 4500

2101

Samsung 三星 4800 120 4920 4800

A399 Source: China Unicom

19

Subscription begins to pick up in March 2002. According to China Unicom,

an average of 10,000 subscribers join the network each day. By April 8, 2002, the

total number of subscribers reaches 800,000.

At the same time, China Unicom continues to offer new value-added services.

Short messaging capabilities connected to China Unicorn's GSM network and

roaming to Hong Kong and Korean are available. In future, more data services will

be available and roaming may be extended to the United States, Japan, Australia,

and New Zealand. Another gimmick used by China Unicom is to provide real-time

results of the 2002 World Cup in the form of short messages.

2.4 Branding of China Unicornis CDMA Service

China Unicorn's CDMA service is branded as Unicom Horizon (EXHIBIT 6).

The main branding tagline is "Entering the New Horizon, Enjoy a New Life / 进入

新日寸空，享受新生活.’，The New Horizon logo and its visual presentation, coupled

with advertising theme lines and symbolic associations all stem from the brand

message that China Unicom tries to covey.

In essence, China Unicom is trying to create green and fresh brand image that

blends with the Green Communication Concept 绿色通信新f旣念 that it is trying to

20

promote. This concept is originated from the CDMA technology's low radiation

feature.

EXHIBIT 6A - BRANDING OF CDMA SERVICE

_ “ 隱圓

21

EXHIBIT 6B - BRANDING OF CDMA SERVICE

22

EXHIBIT 6C - BRANDING OF CDMA SERVICE

—— " " " — 1 i

圓品牌世界：

联通新时空（UNICOM HORIZON )是中国联通专门为CDMA业务设立的子品牌，

它代表了年轻的、充满智慧的、具有创新精神的、充满活力的、有远见的品牌个性，

突出体现了新一代移动通信的特点。新一代的移动通信，代表着未来移动通信的发

展方向，是以在任何时间，任何地点，实现任何人与人之间的信息沟通为基础的新

网络，它将引领人们进入新的时空。"联通新时空"表明：中国联通将以满足新一代

通信市场需求为导向，根据用户的需要建立新的服务模式、创立新的通信概念，为

用户提供丰富多彩的新业务，引领新时尚。

； = � — � - � — � - 一

23

The Unicom Horizon logo resembles a planet emerging from the horizon and

appearing as an arc. All branding materials use bright green color scheme. This

is distinctively different from the blue corporate color scheme of China Unicom that

is also used for other products (see below).

0 8 8 0 ® 国联通 O O CHINA UNICOM

G ^ 130 Bmi^ism ^ G S M 1 3 0

BXH a/)^ —,…〜〜如、 ^ ^ n v 斯通寻D率，

长途193 7互联网165

China Unicorn's retail outlets selling the CDMA

service are renovated to reflect the new brand's presence.

Special areas decorated in green are designated for

selling the service. Service ambassadors wearing the

Unicom Horizon sash are on hand to answer customer

queries and provide other services. In order to attract premium subscribers, special

services like account management and club membership are available for selected

2 4

customers.

In order to create brand awareness, China Unicom has advertised heavily in the

print media as well as national television (Please refer to FIGURE la, 2, 4, and 5).

In terms of brand identity, China Unicom has positioned Unicom Horizon in

the following ways:

• Product Scope - Unicom Horizon is clearly a mobile

telecommunication service. However, China Unicom has tried to

extend it as a lifestyle product.

• Product Attributes - Primarily, Unicom Horizon is positioned to be a

service that provides clearer voice quality, lower drop call rate, and

lower radiation. Secondly benefits such as value-added services and

easy transition to the Third Generation of mobile telecommunication

standards are also promoted. In addition, fashionably small and

compact handsets are used to strength the position.

• Product Quality - Quality is said to be premium because of CDMA's

technological advantages.

• Associations with Use Occasion - The most common use occasion

depicted is social, usually involving a young man or young woman.

• Associations with Users - Users are depicted to be young, fashionable,

2 5

and attractive individuals living in the city.

• Brand Personality 一 Unicom Horizon's personality is positioned to be

young, dynamic, and intellectual.

• Visual Image & Metaphor - Advertisements, promotional materials

and in-store displays are all in green, a metaphor for China Unicorn's

refreshing and environmentally motivated service.

2 6

CHAPTER III

RESEARCH METHODOLOGY

3.1 Research Objectives

Having reviewed the China Unicorn's brand building efforts, we would like to

find out whether positive brand equity has been created. More specifically, the

research objectives are:

1. To estimate brand awareness of China Unicom and its CDMA service.

2. To evaluate potential and actual customers' perception of the brand

identity of China Unicom and its CDMA service.

3. To find out if the brand positioning of China Unicom and its CDMA

service is pertinent to consumer's purchase decision.

3.2 Research Design

As a first step, we focus on exploratory research in order to obtain a more

in-depth understanding of the industry and the issues involved. Both primary and

2 7

secondary sources of data are used for this part of the study. First, we go through

publicly available information such as newspapers, magazines, journals, books, and

websites. Next, we conduct focus group discussions with mobile

telecommunication users in Guangzhou, China to find out more about their

perceptions, preferences, and behavior.

Once we have gotten a clearer picture of the issues to be studied, we move on

to descriptive research. A questionnaire is used to measure the brand perception of

China Unicom and its CDMA service.

In addition, site visits to the company's retail outlets and licensed distributors

are conducted. We pose as potential subscribers of the CDMA service and make

enquiry. The purpose of this exercise is to investigate China Unicorn's

performance in delivering what it has claimed in its brand-building activities. A

total of four retail outlets in Guangzhou have been visited - three are China Unicom

outlets and one is an authorized distributor.

3.3 Research Instrument Design

A structured-undisguised format is used for the questionnaire. The questions

are presented with exactly the same wording, and in the same order, to all

2 8

respondents.

All questions are fixed alternative questions in which the responses are limited

to the stated alternatives. For a number of questions, an "Others" category is added

to gauge for possible responses not included in the fixed alternatives.

The questionnaire is divided into three parts:

Part Question Purpose

I. About China Unicom Estimate brand recognition, recall, and

customer perception on major aspects of brand

identity.

II. About China Unicorn's Estimate brand recognition, recall, and

CDMA Service customer perception on major aspects of brand

identity.

III. About consumer Find out major brand drivers and attributes

behavior and instrumental to purchase decision,

respondent's Find out if users with different demographics

demographic have different perceptions.

information

Please refer to the APPENDIX 1 for the Simplified Chinese version and

APPENDIX 2 for the English version of the questionnaire.

2 9

3.4 Sampling Procedures

The population of interest comprises of residents in the city of Guangzhou.

Guangzhou is selected because of it is one of the most prosperous cities in China

and with one of the highest mobile subscription rates. More importantly, it is one

of the first cities selected by China Unicom to launch its CDMA service.

The sampling frame consists of all residents of Guangzhou. Respondents

have to be residents of Guangzhou who have stayed in the city over the past three

months.

Convenience and snowball sampling are used. Respondents are given the

Simplified Chinese version of the survey to be competed on the spot. The data

collection process is carried out over three weeks by voluntary researchers who have

been recruited to help in this study. A total of 500 surveys are distributed.

3 0

CHAPTER IV

ANALYSIS OF FINDINGS

4.1 Focus Group Discussions

Focus group discussions are carried out in Guangzhou in March 2002, two

months after launch of Unicom Horizon. Generally, participants feel that China's

mobile telecommunication industry should be liberalized further. With increased

competition, they can enjoy better value and service from the network providers.

While all participants have heard of China Unicom, most of them use the GSM

service provided by China Mobile. The main reason for their negative perception

of China Unicom is its reputation for poor network quality (Please refer to

FIGURES 25-30 for press coverage on the subject). In addition, for some

participants, this sentiment also applies to the company's CDMA service.

When asked about Unicom Horizon, older participants (above 50 years of age)

are generally less aware of its existence compared to younger participants. Those

who know about the service have either seen its advertisements on television or

newspapers or heard about it from their friends. A few participants have also

31

found out about the service from the Internet. Since Unicom Horizon's

promotional materials are designed to appeal to young, dynamic generation, it is

natural that the service is less appealing to the older generation.

4.2 Survey Findings

A total of 410 completed surveys are collected and analyzed. (Please refer to

APPENDIX 3 for a summary of the results)

4.2.1 Questions on China Unicom

In terms of brand recognition, 99 percent of the respondents have heard of

China Unicom (Chart 1.1).

Chart 1.1 Have you heard of China Unicom?

No 1%

Yes 99%

However when it comes to brand recall on mobile service provider, only 15

percent of the respondents think of China Unicom first whereas 81 percent of them

32

name China Mobile (Chart 1.2).

Chart 1.2 Among mobile service providers, which

company comes to your mind first?

� . K, Others Did Not Chha None 哪 erb unicorn 30/0 A

广 M China J ^ ^ ^ ^ ^ M o b i l ^ ^ ^

In terms of impression of China Unicom, respondents are asked rate the

company, vis-a-vis China Mobile, in terms of six dimensions of brand identity

including network performance, value-for-money, promotion, customer service,

distribution network, and brand image as well as their overall impression of the

company. The average scores for all items are below three, indicating respondents'

favorable impressions (Chart 1.3).

33

Chart 1.3: What is your overall impression of China Unicom in terms of:

Overall .

Brand Image

Distribution Network |||||||||||||||||||丨

Customer Service “

Promotion ^ ^ ^ ^ ^ K K B t • ‘

BHHHHH . Value for Money H ^ m H H H I I ^ , .

Network Performance

^ ^ ^ ^ I 2 2.2 2.4 2.6 2.8 3

(Very Good = 1; Very Poor = 5)

If we rank the scores of the six dimensions of brand identity, China Unicorn's

network performance is perceived comparatively to be the worst.

According to the findings from focus group discussions and comments

provided by survey respondents, China Unicom is "famous" for its poor network

performance in term of coverage and drop call rate. Some respondents have even

switched from China Unicom to China Mobile because of this reason. For instance,

Guangzhou Daily featured prominently the 10-hour long service outage of the China

Unicorn's GSM network (Please refer to FIGURE 25).

Although the impression on network quality may be formed on the company's

GSM service, it will nonetheless impact the Unicom Horizon's brand image. Since

3 4

network performance is an important criterion in consumers' evaluation of mobile

services, as we will see later, China Unicom needs to improve this aspect and

turnaround this negative perception as soon as possible.

Taking a closer look of the ratings, the deviation of the ratings is actually quite

large, ranging from 0.672 to 0.851 (Chart 1.3a). Among the attributes, perception

of network performance varies the most. On the other hand, perceptions of

value-for-money and the company's overall performance are relatively more

consistent. These high deviations (except for overall impression) indicate that

respondents hold divergent opinions on the company.

Chart 1.3a. Deviation of ratings

Average Rating Standard Deviation

Network Performance 2 766 0 851

Value-for-Money 2.513 0.769

Promotion 2.554 0.821

Customer Service 2 579 0 779

Distribution Network 2 595 0 722

日rand Image 2.504 0.785

Overall 2.599 0.672

35

When respondents are asked to directly compare China Unicom and China

Mobile in terms of overall impression, China Mobile is the clear favorite (Chart

1.4). While 65 percent of them have better impression on China Mobile, only 12

percent of the respondents prefer China Unicom and 23 percent feel that there is no

difference.

Chart 1.4: Overall speaking, which company do you

have a better Impression on?

Did Not No , Difference Ansyen

23%

China Unicom ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ C h i n a

12� /� ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ Mobile ° 65%

In other words, majority of the respondents have heard of both China Unicom

and its CDMA service but China Mobile and its GSM service still take the most

dominant position in consumers' mind where mobile services are concerned.

Indeed, advertisements for China Mobile's GoTone 全球通 service appear

everywhere in Guangzhou, from subways stations to telecom shops all over the city

(Please refer to FIGURES 16-23).

36

4.2.2 Questions on China Unicorn's CDMA Service

In terms of brand recognition, almost 60 percent of the respondents have

heard of China Unicorn's CDMA service (Chart 2.1).

Chart 2.1: Have you heard of China Unicorn's CDMA

service?

No

^ ^ ^ ^ ^ m u m m i ^ ^ Yes

However, for brand recall on mobile service, only 8 percent of the respondents

name China Unicorn's GSM service as the brand that first comes to their mind.

Another 6 percent of the respondents name China Unicorn's CDMA service.

Majority (63 percent) of them cite China Mobile's GSM service as the first brand

that comes to their minds (Chart 2.2).

37

Chart 2.2: In mobile telecommunication service, which

brand name comes to your mind first?

Multiple � ^

二 r

China Unicom CDMA r - ^ • “ . : , . � - -- GSM )

6%

China U n i c o n ^ ^ ^ ^ H H ^ B ^ ^ B ^ ^ ^ ^ GSM 8%

The high level of brand recognition for China Unicom and its CDMA service

could be due to the following reasons:

• Majority (83 percent) of the respondents subscribe to mobile service.

• China Unicorn's position as the closest (in fact the only) challenger of

China Mobile is well known.

• China Unicom is active in the equity markets and frequently appears in

the news (Please refer to FIGURE 25-30 for samples of newspaper

articles on China Unicom).

• China Unicorn's heavy promotions. In fact, most respondents first

learn about the CDMA service through advertisements.

38

The challenge for China Unicom is to close the gap on brand recall with China

Mobile. The more likely that people think of it first in the product category

(mobile telecommunication service), the more likely that they will choose its service.

China Unicom needs to find out the factors affecting brand recall and catch up from

there.

In terms of brand extension effect (Chart 2.3)，i.e. effect of the introduction of

CDMA service on China Unicorn's brand equity, 51 percent of the respondents who

have heard of the service indicate that it has a positive effect on their impression of

the company. Only 2 percent of those respondents feel that the impact is negative.

46 percent of them indicate that their impressions have not changed.

Chart 2.3: Does China Unicorn's offer of CDMA service affect

your overall impression of the company?

Less No Change Favorable 450/�

More ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ Did Not Favorable ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ Answer

51% 1%

39

For China Unicom, it is indeed encouraging to see that the introduction of

Unicom Horizon has a positive effect on the corporate brand equity. Indeed, a

successful brand extension may have positive spillover effect for the company as a

whole.

In terms of brand communication channel (Chart 2.4)，73 percent of the

respondents first learn about Unicom Horizon through commercials (Please refer to

FIGURE la, 5, 6 for examples of the advertisements). 10 percent of them find out

about it from friends, colleagues or family members, 9 percent through the Internet,

and 7 percent from China Unicorn's retail outlets (Please refer to FIGURE Ib-le，3，

7-10).

Chart 2.4: Where did you first come across China Unicorn's

CDMA service?

Friends, Colleagues, Did Not

Family Answer 10% 1%

Internet 9%

Unicom Outlets 7% ^ ^ • • • • ^ • • j l ^ ^ P

^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ Commercials 73%

40

In terms of impression of Unicom Horizon (Chart 2.5), voice quality,

environmental friendliness, and brand image receive the best scores. On the other

hand, network coverage, handset price, and subscription charges are rated least

favorably.

Chart 2.5: What is your Impression of China Unicorn's CDMA service in terms of:

Overall • • • f c :

Brand Image .

Hmm IHHI HHSJ i ,'—, Distribution Network :广

Customer Service .’.::.�.:

Future Upgrades .

Promotional Offers | | ^ [ | | | | | [ | | | | | | | | | ^ ^ ^ : , / � : . . ' .

Subscription Charges m m i l l l l l l ^ l l l ^ ^ ^ ^ 、： ’二：.

Handset Price /

Handset Performance ||||[||||[|||||| ‘、::,.，

Value-added Service 复 .

Network Coverage .

^HHH •••Hip""

Environmentally Friendly J J ^ J U f / j j ^ : : :

Radiation

Voice Quality > .

2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3

(Very Good = 1; Very Poor = 5)

42

If we take a closer look at the ratings, the deviation again is quite large, ranging

from 0.695 to 0.990 (Chart 2.5a). In fact, the range of deviation for impression on

Unicom Horizon is larger than that for China Unicom (Chart 1.3a).

These even higher deviations may be due to the lack of actual experience with

Unicom Horizon (recall the fact that brand recognition for China Unicom is 99

percent while that of Unicom Horizon is only 59 percent).

In terms of usage situation (Chart 2.6), only 35 percent of the respondents who

have heard of the service feel that it is most suitable for business use; 17 percent

think that it is best for personal use and majority, 43 percent, think that it is

appropriate for both.

Chart 2.6:

Who would you consider China Unicorn's CDMA service most suitable for?

Did Not Answer

Neither 3% Ordinary Users 2% ^Usere^

17%

V i p i Both 43%

43

Furthermore, when we compare the respondents' perception and their own

profiles, we can see that business people consider Unicom Horizon to be more

suitable for both business and personal use (Chart 2.6a) while non-business people

consider it to be more suitable to business user only (Chart 2.6b).

Chart 2.6a: Business background people view on "What would you consider China Unicorn's CDMA service most

suitable for?"

Did Not Answer

Ordinary Users 0% Business 17% ” � Users

_ r ^ v ” ' �

Both 51%

Chart 2.6b: Non-Business background people view on "What

would you consider China Unicorn's CDMA service most suitable for?"

Did Not Answer

Neither 3% Ordina^Users i � / � Business

18/0 、 . 懂 , _ • , • . , • � U s e r s 42� /�

Both 36%

4 4

While the real reasons for such perceptions are unknown, it is possible that

most people use mobile service for both personal and business occasions and

therefore formulate their opinions as such. In addition, since the cost of Unicom

Horizon is fairly high, non-business people may think that it is more suitable to

business users with deep pockets.

Whatever the reasons are, the brand positioning targeting business users has

created a problematic situation. On one hand, people may not regard Unicom

Horizon as a supreme business tools. On the other hand, non-business people are

not likely to try the service because they feel that it is appropriate for business use

only. Nonetheless, if these findings turn out to be true for the whole population,

then the Unicom Horizon's promotion effort targeted at business users may have

created a major obstacle for reaching its target subscriber base.

Furthermore, while 47 percent of the respondents would recommend Unicom

Horizon to others, 52 percent would not. As we can see later from Chapter 4.2.3 -

Respondents' Profile (Chart 3.4), only 3 percent of survey respondents are current

users of Unicom Horizon. It is interesting to see that people actually would

recommend something to others without personal experience.

45

Chart 2.7: Would you recommend China Unicorn's CDMA

Service to others?

Did Not Answer

1%

Yes

No 52%

4.2.3 Questions on Consumer Behavior and Respondents* Profile

In term of the most important consideration factor for purchasing mobile

service, 57 percent of the respondents give one answer and 42 percent give multiple

answers (Chart 3.1). Interestingly, many respondents have no problem following

instructions except for this question. For some reasons, they decide to provide

more than one answer to this question.

Given the high tendency of survey respondents to cite multiple factors that

affect purchase decisions, we may say that such behavior is not based on any single

factor. Rather, a combination of factors may drive consumers' decision-making

process. This suggests that mobile service subscription (and also handset purchase)

is a high involvement process. Consumers are not easily influenced by promotions

alone.

46

Chart 3.1 ： When you choose a mobile communication service, what is your most important consideration?

Distribution

Customer „ . . N e t w o r k _ , Promotion n% nw Service ^ q� / . Did Not

Value for 3% \ ( �

Money Multiple 23% Answers

42�/�

Handset Price 7%

Subscription Network Brand Image

’ es Performance 5% 7/0 12%

Of those who provide a single answer, value-for-money comes first with 23

percent of the respondents citing it as the most important factor in their decisions.

Network performance comes second with 12 percent of the respondents giving the

answer. Subscription charges and handset price take the third and the fourth place

respectively.

This pattern is replicated with respondents who provide multiple answers. 20

percent of the responses go to value-for-money as the most important factor, 20

percent to subscription charges, 18 percent to network performance, and 12 percent

to handset price (Chart 3.1a).

47

Chart 3.1 a: Multiple Answers

Distribution Network

Promotion 3% Brand Image Customer 2% 10 � Network Service Performance

15% 18%

Value Money 20% Handset Price Subscription

12% Charges 12/0 20%

When asked about the most important source of influence on purchase

decision (Chart 3.2)，48 percent of the respondents rely on personal experience while

30 percent of them trust word-of-mouth recommendations.

Chart 3.2: When you choose a mobile communication service,

what influenced you the most?

Multiple Did NotAnswer Answers 孤

Other Factors 5% 2% ―慮 ,一 Personal

others' Opinion 30%

48

By all measures, value-for-money is the most crucial factor influencing

purchase decision. This may be due to the interpretation that value-for-money

incorporates quality (including network performance) and price (including

subscription charges and handset price), the two pertinent factors for consideration.

The use of such price-quality calculations shows that consumers are rather

sophisticated in their evaluations. Low price or high quality alone is not sufficient

to induce purchase.

In term of the importance of brand for mobile service (Chart 3.3)，82 percent

of the respondents believe that it is important. However, if we cross-reference with

Chart 3.1，only 10 percent of the respondents think that brand is the most important

aspect of their purchase decision. All things considered, the importance of brand

pales in comparison with value-for-money.

Chart 3.3: In your opinion, is brand Important for mobile

communication service?

Did Not Answer Not Important 2%

16% 。

Important 82%

Looking at the respondents' subscription pattern (Chart 3.4)，69 percent of

49

them are using China Mobile's GSM service, 11 percent are using China Unicorn's

GSM service, and 3 percent are using China Unicorn's CDMA service. The

remaining 14 percent of the respondents do not subscribe to any service.

Chart 3.4: Are you using any mobile service?

Did Not None Answer

China Unicom 14% 3� /�

GSM ^ • M i i m i f l M l i ^ V H l ^ ^ ^ 11%

China Unicom

^ ^ ^ ^ ^ ^ H ^ ^ ^ ^ h i n a Mobile 3% GSM

69%

50

In terms of gender distribution (Chart 3.5), 56 percent of the respondents are

female while 43 percent are male.

Chart 3.5: Gender distribution

Did Not Answer

1%

Male 43%

Female 56%

In terms of age distribution (Chart 3.6)，14 percent of the respondents are 20

and below, 52 percent are between 20 to 29 years of age, 19 percent are between 30

to 39 years old, and the rest are 40 years old and above.

Chart 3.6: Age distribution

60 & Above 50-59 <10/

fto/ 11�Did Not Answer b / � 30/0 20 & Below

40-49 14%

30-39 19%

20-29 52%

51

In terms of the highest education obtained (Chart 3.7)，respondents are

generally well educated - more than 70 percent have received post-secondary

education. The education level of the respondents is much higher than the national

average. This could be attributed to two factors: people in urban Guangzhou tend

to receive better education; the snowball sampling started with volunteer researchers

who are university professors and business professionals.

Chart 3.7: Highest education obtained

Primary Did Not 0% Answer Doctorate

Master 9% 1% Secondary

50/0 一 ! 15%

4 5 % 25/0

In terms of state of employment (Chart 3.8)，54 percent are working and 37

percent are students. The rest are either housewives or unemployed.

Chart 3.8: Employment

Did Not Answer

3% Student

Employed

,, , Housewife Unemployed 如!

3% 3/�

5 2

4.3 Research Limitations

4.3.1 Scale Ratings

While focus group participants indicated negative impressions on China

Unicom and its CDMA service, survey respondents rate them rather positively. A

possible explanation for such contradiction could have cultural roots. When it

came to evaluating others' performance, Chinese tend to err on the side of politeness

and are reluctant to provide negative feedback. Therefore, we should be careful

with our interpretation of survey finding. More in-depth research needs to be done

to discover the real reasons behind.

4.3.2 Frame of Reference - Product Brand Names

The questionnaire is first developed in English and then translated into

Simplified Chinese. As the survey is designed by students from Hong Kong and

contains marketing concepts of western origins, it is not clear if survey respondents

could completely appreciate the questions and respond appropriately. For instance,

5 3

the commercial name for China Mobile' GSM service is "GoTone 全球通” and that

of China Unicorn's GSM service is "GSM 130". The survey refers to "China

Mobile's GSM service" rather than "China Mobile's GoTone" and "China Unicorn's

GSM service" instead of “GSM 130.”

4.3.3 Sampling Procedure

Due to time and resource constraints, convenience and snowball samplings are

used. This is in effect a bias and non-representative sample skewed towards the

better-educated portion of the population. In addition, quality of the sample

obtained could not be evaluated objectively. Advanced statistical tools are also not

appropriate for analyzing results from such a sample.

5 4

CHAPTER V

RECOMMENDATIONS

5.2 Focus on Customers

5.1.1 Target Premium Customers

Survey findings have revealed that Unicom Horizon's most well received brand

attributes are superior voice quality, environmental friendliness and low radiation.

However, the environmentally friendly brand image is not completely aligned with

its intended audience i.e. business users who need advance features to help them in

their work. In fact, there is no promotion material solely designed for corporate

users.

From the company's prospective, it needs both high APRU (average spending

per user) and a relatively large subscriber base to be profitable. The notion that

business users are the only kind of premium users Unicom Horizon can target may

be incorrect. In fact, there are many high APRU users who are non-business

people. Therefore, it is recommended that China Unicom should reconsider its

5 5

market positioning. It may be better to position Unicom Horizon as a premium

mobile service suitable for all types of users.

5.1.2 Create Real Value-for-Money

Our survey results point to value-for-money as the key decision criterion for

Chinese consumers. Indeed, it may reflect their quality-to-price evaluations that

are actually their logical "bottom-lines." As such, the brand position of China

Unicom and its CDMA service should constitute value-for-money in the eyes of the

consumers i.e. maximum quality at minimum price. It is not sufficient to offer

either low price or high quality.

5.1.3 Establish Trust in a Long-term Relationship

Given the intangibility of mobile services, customers rely on their past

experience and word-of-mouth communications to evaluate what they are buying.

Our findings also confirm that user gained by the customers themselves or by people

around them is the most important determinant of purchase behavior. It is much

more credible than marketing communications and promotions, no matter how

5 6

effective they may be.

Because of the problems of its GSM network, China Unicom has a poor

reputation of network performance. The launch of the CDMA service represents a

second chance for the company to turnaround this negative perception and regain

consumers' trust.

Besides maintaining consistent network performance, China Unicom needs to

involve its employees in this trust-building effort. In particular, the company has to

rely on them to interact with customers and transform its brand vision into reality.

Just as negative customer experiences are difficult for a company to overcome,

superior customer experiences are difficult for competitors to imitate.

If China Unicom can deliver its promises on these two fronts, it can build

consumers' trust in the company. Even when Unicom Horizon is phased out from

the market, loyal customers will likely convert to other services offered by the

company.

5 7

5.2 Build a Strong Service Brand

5.2.1 Enhance Brand Recall

While majority of consumers recognize the China Unicom brand, they

associate the purchase of telecommunication service much more strongly with China

Mobile. Given that brand recall is the crucial stage leading to actual purchase,

China Unicom should first focus on building the "China Unicom" brand name

before positioning its products and services in divergent manners.

Moreover, in a market dominated by China Mobile and its GSM service, China

Unicom needs to carve out a niche for its CDMA service. Unicom Horizon can be

positioned as the market leader of premium mobile service. Instead of being just

another mobile service, Unicom Horizon should be the first brand that consumers

recall whenever they think of premium mobile service. The focus of marketing

communications should be shifted from the present fresh and youth image to a

first-class and value-added service experience.

5 8

5.2.2 Build a Strong Corporate Brand

Because of the special characteristics of service and technology, it is critical for

telecommunication service providers to build a strong corporate brand.

Firstly, in packaged goods, the product is the primary brand. However, with

telecommunication service, the company is the primary brand. Because of service

intangibility, China Unicorn's corporate brand becomes the key identifier for its

services.

Secondly, since technological developments are constantly pushing out new

products and services, the life cycles of many telecommunication brands tend to be

short. In the long run, it is more valuable because a strong corporate brand will

outlast all of it sub-brands and it can facilitate the introduction of new products and

services under its umbrella.

In the process, China Unicom needs to communicate a coherent identity

throughout. It has to be more consistent in terms of media selection, advertising

content and style, facilities design, and point-of-purchase displays. For example,

the company should prevent small telecom shops using hand-written signboards to

promote referral service for Unicom Horizon and in the process dilute the brand's

5 9

premium image (Please refer to FIGURE 15 for examples of such signboards).

Such consistency is especially important when China Unicom widens its distribution

for the full-scale national rollout. One possible solution is to distribute

standardized promotion materials such as posters to those small shops.

Also, China Unicom needs to manage its portfolio of brands carefully.

Looking at brands as stand-alone silos is a recipe for confusion and inefficiency.

On the other hand, China Unicom should coordinate the roles of its brands within

the portfolio and their relationship with each other. This will help to create clarity,

synergy, and leverage for the corporate brand.

6 0

CHAPTER VI

CONCLUSION

As competition intensifies in the mobile telecommunication market in China, it

is increasingly important for service providers to distinguish themselves early

through their brands. CDMA service gives China Unicom an opportunity to

expand its subscriber base, increase its market share, overcome its poor-quality

reputation, and strengthen its corporate brand equity.

From the company's prospective, it needs both high APRU (average spending

per user) and a relatively large subscriber base to be profitable. It should not just

consider business users as the source of premium subscribers. Doing so may

hinder the brand's development and constraint the increase in subscriber beyond the

minimum profitable base. Differentiation strategies targeted at high-end business

users should be reconsidered.

Unicom Horizon's most well received brand attributes are superior voice

quality, environmental friendliness and low radiation. Therefore, the company

should continue the current brand promotion efforts based on the Green

Communication Concept. It should focus on a broader customer base such as

6 1

lifestyle-oriented consumers' who appreciate a premium mobile service.

In addition, since customers' actual experience disproportionately shapes

perception and equity of a service brand, China Unicom needs to strengthen service

delivery and network reliability before Unicom Horizon's national rollout.

Otherwise, all the marketing efforts would be in vain.

Finally, brand building is an ongoing process with customers. The long-term

brand position of China Unicom should gravitate towards a value-for-money

experience. After all, a brand should not only stand for the company but also

its customers.

6 2

APPENDIX 1

QUESTIONNAIRE IN SIMPLIFIED CHINESE

中国移动通信服务问卷调查

我们是香港中文大学学生,正在进行一个针对中国移动通信服务市场的调究,贵请阁下回应此问卷，

谢谢。

第一部份 -关于中国联通（请在适当的空格内加上 0 )

1 .请问您有没有听说过中国联通？

• 有 • 没有

2.提到移动通信服务提供商,您首先到想的企业是：

• 中国移动通信 • 不知道

• 中国联通 • 其他,请说明：

3.相对于中国移动通信,您对中国联通在各方面的印象是:（不论您是否中国联通用户也请提意

很好好中等差很差

网络通信服务 • • • • •

性能价格比 • • • • •

市场推销 • • • • •

顾客服务 • • • • •

分销网点 • • • • •

品牌形象 • • • • •

整体表现 • • • • •

4 .总体而言,您对哪一间企业有较好的印象？

• 中国移动通信 • 没有差别

• 中国联通

第二部份 -关于中国联通C D M A服务（请在适当的空格内加上0 )

联通新时空（UNICOM HORIZON )是中国联通专门为CDMA业务设立的子品牌。"联通新时

空"表明：中国联通将以满足新一代通信市场需求为导向，根据用户的需要建立新的服务模式、

创立新的通信概念，为用户提供丰富多彩的新业务，引领新时尚。

6 3

1 .请问您之前有没有听说过中国联通的C D M A服务？

• 有 • 没有

2.提到移动通信服务网络，您首先想到的品牌是：

• 中国移动通信G S M服务 • 不知道

• 中国联通G S M服务 • 其他，请说明：

• 中国联通新时空网CDMA服务

3 .中国联通增加C D M A服务后，您对中国联通的印象有没有改变？

• 变好 • 无变化

• 变坏

4 .您是通过何种渠道知道中国联通的C D M A服务？

• 广告（电视、电台、报纸、杂志、 • 互联网

户外广告等） • 朋友、同事、家庭成员

• 中国联通经销网点 • 其他，请说明：

5 .和其他通信服务比较，您对中国联通CDMA服务的印象是：

(不论您是否中国联通用户也请提意见）

很好好中等差很差

话音质量 • • • • •

电磁辖射 • • • • •

绿色环保 • • • • •

网络覆盖 • • • • •

增值服务 (如漫游、短信息服务等） • • • • •

手机性能 • • • • •

手机价格 • • • • •

网络服务收费 • • • • •

优惠/促销活动 • • • • •

未来升级服务 • • • • •

顾客服务 • • • • •

分销网点 • • • • •

品牌形象 • • • • •

整体表现 • • • • •

6 . 您批得中国联通的 C D M A 服务最适合哪一类用户？

• 商业用户 • 两者都适合

• 普通消费者 • 两者皆不适合

6 4

7 .您会向其他人推荐中国联通的C D M A服务吗？

• 会 • 不会

第三部份 -普通问题（请在适当的空格内加上 0 )

1.当您选择移动通信网络服务时,下列哪一项会是您最主要的考虑因素？

• 品牌形象 • 性能价格比

• 网络通信服务 • 顾客服务

• 网络服务收费 • 市场推销

• 手机价格 • 分销网点

2.当您选择移动通信网络服务时,下列哪一项因素对您影响最大？

• 个人经验 • 推销活动

• 别人的意见 • 其他,请说明：

3 .您认为品牌对移动通信网络服务重要吗？

• 重要 • 不重要

4.请问您现在使用哪个移动电话通信网络？

• 中国移动通信GSM • 中国联通GSM

• 中国联通CDMA • 没有使用

5 . 性别

• 男 • 女

6 . 年龄

• 不到 2 0岁 • 4 0 - 4 9岁

• 2 0 - 2 9 岁 • 5 0 - 5 9 岁

• 30 - 3 9岁 • 超过 6 0 岁

7 . 最高学历

• 小学 • 学士

• 中学 • 硕士

• 文凭 • 博士

8 .就业情况

• 学生 • 待业

• 家庭主妇 • 在职

6 5

APPENDIX 2

QUESTIONNAIRE IN ENGLISH TRANSLATION

QUESTIONNAIRE ON MOBILE TELECOMMUNICATION SERVICE IN CHINA

We are students of the Chinese University of Hong Kong conducting a study about the mobile

telecommunication market in China. We would be glad if you can kindly response to our

survey.

Part I. Questions On China Unicom (Please 0 where appropriate)

1. Have you heard of China Unicom? • Yes • No

2. Among mobile service operators, which company comes to your mind first? • China Mobile • None • China Unicom • Others, please specify:

3. Compared to China Mobile, what is your overall impression of China Unicom in terms of (Please answer whether you are China Unicorn's customer or not):

Very Good Good Neutral Poor Very Poor

Network performance • • • • • Customer service • • • • • Value-for-money • • • • • Promotion • • • • • Customer service • • • • • Distribution network • • • • •

Brand image • • • • • Overall performance • • • • •

4. Overall speaking, which company do you have a better impression on?

• China Mobile • No difference

• China Unicom

6 6

Part II. Questions On China Unicorn's CDMA Service (Please 0 where appropriate)

1. Have you heard of China Unicorn's CDMA service? • Yes • No

2. In mobile communication service, which brand name comes to your mind first? • China Mobile's GSM • Don't know • China Unicorn's GSM • Others, please specify: • China Unicorn's CDMA

3. Does China Unicorn's offer of CDMA service affect your overall impression of the company? • More favorable • No change • Less favorable

4. Where did you first come across China Unicorn's CDMA service? • Commercials (TV, radio, newspapers, • Internet

magazines, outdoor ads) • Friends, Colleagues, Family Members • Unicom Outlets • Others, please specify:

5. Compared to other mobile services, what is your impression of Unicorn's CDMA in terms of:

Very Good Good Neutral Poor Very Poor

a. Voice quality • • • • • b. Radiation • • • • • c. Environmentally friendly • • • • • d. Network coverage • • • • • e. Value-added service • • • • • f. Handset performance • • • • • g. Handset price • • • • • h. Subscription charges • • • • • i. Promotional offers • • • • • j. Future upgrades • • • • • k. Customer service • • • • • I. Distribution network • • • • • m. Brand image • • • • • n. Overall performance • • • • •

6. Who would you consider China Unicorn's CDMA service most suitable for? • Business users • Both • Ordinary users • Neither

7. Would you recommend China Unicom s CDMA service to others? • Yes • No

6 7

Part III. General Questions

1. When you choose a mobile communication service, what is your most important consideration? • Brand image • Value-for-money • Network performance • Customer service • Subscription charges • Promotions • Handset price • Distribution network

2. When you choose a mobile communication service, what influences you the most? • Personal experience • Promotions • Others' opinion • Others, please specify:

3. In your opinion, is brand important for mobile communication service? • Important • Not important

4. Are you using any mobile service? • China Mobile's GSM • China Unicorn's GSM

• China Unicorn's CDMA • None

5. Gender

• Male 岁口 Female

6. Age

• Below 20 • 4 0 - 4 9 • 2 0 - 2 9 • 5 0 _ 5 9 岁

• 30 - 39 岁 • 60 & Above

7. Highest education obtained • Primary • Bachelor • Secondary • Master • Diploma • Doctorate

8. Employment • Student • Unemployed

• Housewife • Employed

6 8

APPENDIX 3

SUMMARY OF SURVEY RESULTS

Part I. Questions On China Unicom

Question 1: Have you heard of China Unicom?

Answer Number of Responses

Yes 404

No _6

Question 2: In mobile telecomnmnication service, which company comes to your mind first?


China Mobile _ 3 n

China Unicom 59

None 12

Others 4

Did not answer 1

Question 3: What is your overall impression of China Unicom in terms of:

Item Average Score (1 = Very Good; 5 = Very Poor) Rank

Network performance 2.766 6

Value-for-money 2.513 2

Promotion 2.554 3

Customer service 2.579 4

Distribution network 2.595 5

Brand image 2.504 1

Overall 2.599 NA

Question. 4: Overall speaking, which company do you have a better impression on?


China Mobile 265

China Unicom 50

No difference 94

Did not answer 1

6 9

Part II. Questions On China Unicorn's CDMA Service

Question 1: Have you heard of China Unicorn's CDMA service?


Yes 243

No 167

Question 2: In mobile telecommunication service, which brand name comes to your mind

first?


China Mobile's GSM

China Unicorn's GSM

China Unicorn's CDMA 7A

Don't know 73

Others 1

Multiple answers 12

Did not answer 7

Question 3: Does China Unicorn's offer of CDMA service affect your overall impression of

the company?


More favorable 125

Less favorable 4

No change 112

Did not answer 2

Question 4: Where did you first come across China Unicorn's CDMA service?


Commercials 147

China Unicom outlets 15

Internet 18

Friends / Colleagues / Family members 21

Do not answer 2

7 0

Question. 5: What is your impression of China Unicorn's CDMA service in terms of:

Item Average Score (1 二 Very Good; 5 = Very Poor) Rank

Voice quality 2.283 1

Radiation 2.520 5

Environmentally friendly 2.356 2

Network coverage 2.701 11

Value-added service 2.531 6

Handset performance 2.518 4

Handset price 2.775 13

Subscription charges 2.727 12

Promotional offers 2.621 9

Future upgrades 2.544 8

Customer service 2.541 7

Distribution network 2.672 10

Brand image 2.401 3

Overall 2.522 NA

Question. 6: Who would you consider China Unicorn's CDMA service most suitable for?


Business users 84

Ordinary users 41

Both ^

Neither 4

Did not answer 8

Question. 7; Would you recommend China Unicorn's CDMA service to others?


Yes 1_14

No ~ 127

Did not answer 2

7 1

Part III. General Questions

Quesion.l: When you choose a mobile communication service, what is your most important

consideration?


Multiple answers 171

Brand image 21

Network performance 48

Subscription charges 29

Handset price 27

Value-for-money 95

Customer service 13

Promotion 0

Distribution network 0

Did not answer 6

Question. 1: Multiple answers


Brand image 61

Network performance 107

Subscription charges 127

Handset price 72

Value-for-money 121

Customer service 93

Promotion 12

Distribution network 18

Question 2: When you choose a mobile communication service, what influenced you the

most?


Personal experience 195

Others' experience 122

Promotion 53

Other factors 10

Multiple answers 22

Did not answer 8

7 2

Question 2: Multiple answers


Personal experience 19

Others' experience 20

Promotion 8

Other factors 0

Question 3: In your opinion, is brand important for mobile communication service?


Important 337

Not important 66

Question 4: Are yon using any mobiles service?


China Mobile's GSM

China Unicorn's CDMA M

China Unicorn's GSM 44

None 58

Question 5: Gender Distribution


Male 177

Female 227

Question 6: Age Distribution


Below 20

20-29 209

30-39 n

40-49 22

50-59 ^

60 and above 6

Did not answer 11

7 3

Question. 7: Highest education obtained


Primary 1

Secondary 60

Diploma 104

Bachelor 185

Master 19

Doctorate 5

Did not Answer 36

Question 8: State of Employment


Student J ^

Housewife 12

Unemployed 13

Employed 221

Did not answer 13

7 4

APPENDIX 4

BACKGROUND OF CHINA UNICOM'S CDMA SERVICE

驅与CDMA:

为了适应我国移动通信市场的迅猛发展，1999年4月，国务院批准中国联通统一负责中国

CDMA网络的建设、经营和管理。2000年9月，国家发展计划委员会、信息产业部下发了《关

于启动CDMA移动通信网络建设有关事项的通知》，中国联通CDMA网络建设计划正式启动。

目前，我国CDMA网络的建设和经营由中国联通公司统一负责，这是国务院的重大决策。建

设CDMA网络有利于采用新技术，为移动与互联网的融合提供更好的技术条件，增强提供移

动数据业务的能力；有利于解决移动网高速发展所需要的频率资源，满足日益增长的业务需求；

有利于进一步打破垄断，在移动通信领域形成旗鼓相当、各具特色的竞争局面，适应中国加入

WTO后中国电信业对外幵放的全新竞争格局；有利于带动我国移动通信制造业的升级发展。

中国联通CDMA网络建设的基本思路是：以增强型 IS -95A系统为基础，用一年时间迅速建成

覆盖全国3 3 0个以上重要城市和地区，网络规模达1 5 1 5万户左右的C D M A网络。该网络能

够支持国际漫游、UIM卡方式（机卡分离），具备基本的智能网业务（如预付费业务），支持

移动互联网和数据服务的接入方法，并可在升级软件和仅更换信道板方式下向CDMA2000 1X

系统演进。在以增强型丨S-95A系统实现网络规模覆盖的同时，选择部分重要城市建设

CDMA2000 1X系统商用试验网，及时开展适应144Kb/S速率的各种新业务，配合各种CDMA

新型手机，使CDMA网络一推出就是覆盖广阔、网络质量良好、手机精美、业务新颖的精品

网络。

中国联通将在3年内逐步建成一个覆盖全国、总容量达5000万户的CDMA网络。目前正在建

设的一期工程容量为1515万用户，覆盖包括西藏在内的全国31个省、自治区、直辖市的300

个以上地级市，在经济发达地区，对地、市、县、发达乡镇及重要铁路、公路干线、旅游景点

实行全面覆盖；在经济中等水平地区，主要覆盖地区、市、县及重要乡镇，兼顾重要铁路、公

路干线、旅游景点等地区；在经济欠发达地区，则主要覆盖重点地市。一期工程不仅要建设中

国联通CDMA核心网、智能网、信令网、无线网、传输网、同步网及计费和网管系统，还要

建设中国联通专用移动汇接网。一期工程目前进展顺利，已于2001年12月建成网络并开始

7 5

设备调测、网络优化业务调测等各种放号前的准备工作。二期工程的总体目标是继续完善网络，

加强覆盖，增加容量，总的规模是再增加2000万户左右，达到3500-4000万户。到2003年，

总容量将达到5000万户。

在网络建设中，中国联通聘请了国内一流的科研院所，作为CDMA网络规划的强大技术支撑；

在频率规划、网络优化等方面，专门聘请国外著名的咨询机构，为CDMA网络建设提供咨询；

中国联通与韩国的S K �日本的K D D I和澳大利亚电信等公司建立了合作关系，同时还选派管

理、运营维护和技术人员到国外运营公司接受工程、运行维护和市场营销等方面的培训.为

CDMA网络的运营做好了准备。通过积极开展对外合作，目前，中国联通已与美国、韩国、日

本、墨西哥、香港等十余个国家和地区签订了漫游协议，网络开通时将实现与上述国家的国际

漫游。

在紧锡密鼓地展开CDMA网络建设的同时，中国联通不断加快CDMA终端市场的启动，已与

国内19家企业签订了终端订货协议。当中国联通CDMA网络开通运营之时，形式多样的CDMA

手机将会摆上柜台，供用户选择。

中国联通的CDMA业务将最大限度地利用和发挥CDMA网络和手机的优势，按照目标市场细

分的原则，有针对性地为不同的用户群提供不同的服务，最终实现现代通信与人类生活和环境

的完美结合。

除呼叫转移、呼叫限制等基本的业务外，中国联通CDMA网将着重提供基于移动数据和短消

息的无线上网、移动秘书、电子商务/移动购物、财经/黄页/交通信息、移动办公自动化系统、

可视电话、定位服务、娱乐信息广播/点播、网上下载音乐、图片传递和基于移动智能网的缩

位拨号、内部广播、移动会议系统等新业务。

中国联通目前是全国唯一经营移动通信、数据通信、固定通信、互联网与电子商务和无线寻呼

等多种业务的新兴综合电信运营商。

移动通信一直是中国联通的重点业务，目前中国联通GSM通信网颇具规模，容量已达到5000

万户。随着联通新时空CDMA网络的建成，中国联通将成为全球少有的、同时拥有两种主流

制式移动通信系统、经营两大移动通信网络的运营商。

联通新时空CDMA作为新世纪的移动通信网络，将继续稟承中国联通倡导的"用户至上“服务理

念，通过采用和推动新一代的移动通信技术，以反应快速的客户服务系统及客户管理系统为内

部支撑平台，以开放式的数据业务、新业务为增值业务平台，全面导入客户满意度标准，充分

7 6

利用中国联通作为综合电信业务运营商的优势，向用户提供多业务一体化服务，并按照用户个

性需求提供丰富多彩的通信外服务，带您全面体验新时尚、享受新生活。

Source: China Unicom website (http://cdma.cnuninet.coni/about/unicomcdma.html)

http://cdma.cnuninet.coni/about/unicomcdma.html

7 7

BIBLIOGRAPHY

BOOKS

1. Aaker, David A. Building Strong Brands. New York: Free Press, 1996.

2. Aaker, Davie A & Joachismsthaler, Erich. Brand Leadership. New York: Free

Press, 2000.

3. Keller, Kevin Lane. Strategic Brand Management: Building, Measuring &

Managing Brand Equity. New Jersey: Prentice Hall, Inc., 1998.

4. Peters, Tom. Building a Brand. New York: Knopf. Richards, Stan, 1997.

5 .盧泰宏，《營銷在中國》，廣州出版社， 2 0 0 1年。

7 8

JOURNAL PAPERS

1. Schlevogt, Kai-Alexander. "The Branding Revolution in China." China

Business Review, May-June 2000, p. 52-57.

2. Leonard, L Berry. "Cultivating Service Brand Equity." Academy of Marketing

Science Journal Greenvale, Winter 2000.

7 9

WEBSITES

1. China Unicom Guangdong

http://www.gdgz.c11uninet.com/pa2es/i11dex 1 .html

2. China Unicom

http://www.chinaunicom.net/

3. Full Presentation, China Unicom Limited, Jianzhou Wang, Executive Director

and President

http://www.senteco.com/tdecom/chinafull.htm

4. Unicorn's CDMA Gets APEC Trial

http://www.china.org.cii/english/BAT/2Q491 .htm

5. China's New Regulatory environment spurs Unicorn's subscriber growth

http://www.tdapxo.uk/uk/archive/interviews/inter(unicQm QQ12).html

6. Unicom select Shanghai to launch CDMA2000 IX

http://www.tdap.co.ukyuk/archive/interviews/inter(unicom sh 0106).html

7. National Bureau of Statistics of China

http://www.stats.gov.cn/

8. China Advertising Association

http://www.a.com.cii/

9. ChinaSite.com: Business & Economics

http://www.chinasite.com/Business/Business.html

10. 3see.com

http://www.gdgz.c11uninet.com/pa2es/i11dex

http://www.chinaunicom.net/

http://www.senteco.com/tdecom/chinafull.htm

http://www.china.org.cii/english/BAT/2Q491

http://www.tdapxo.uk/uk/archive/interviews/inter(unicQm

http://www.tdap.co.ukyuk/archive/interviews/inter(unicom

http://www.stats.gov.cn/

http://www.a.com.cii/

http://www.chinasite.com/Business/Business.html

80

SECTION 1. China Unicorn's CDMA Service

FIGURE 1a: China Unicorn's CDMA Television Commercial: "Entering the New Horizon, Enjoy a New Life / 进入新时空，享受新生活 ” based on the "Green Communication Concept."

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B R S ^ E ^ K i M ^ ^ f i H I i i n

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81

FIGURE 1b: A China Unicom branch office in Tianhe, Guangzhou is being renovated to accommodate a store-in-store for the new CDMA service, Unicom Horizon. This picture was taken in March 2000，two months after the official launch.

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n g a r a i i • • • • • r i H i H n i i i H i B i i a i — 麵

FIGURE 1c: By the end of March 2002, renovated is completed. A special area designated for selling the CDMA service is decorated in green.

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82

FIGURE 1d: A signboard placed in front of the store with Unicom Horizon's tag line "Entering a New Horizon, Enjoy a New Life."

H i i i s i i t e • •

83

FIGURE 1e: Promotional materials, posters (lower left), and a signboard showing handset prices (lower right) all share a uniform look.

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84

SECTION 2. China Unicom

FIGURE 2: Information leaflets on China Unicorn's CDMA service are provided freely for customers in all retail outlets offering the service.

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, ‘ • ‘ ‘ ‘‘ • “ 钱系 . " f B W i A . ifO**. Mihtfl ‘ ^ SM；B 奋Rn A A. aitntfVmAA. » « �� > . Klf l iEII 11*1 a^

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85

FIGURE 3: A specialty store selling telecommunication products in Guangzhou is licensed to offer China Unicorn's CDMA service. The store has been redecorated to literally reflect the Green Communication Concept.

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86

FIGURE 4: An information kiosk in Guangzhou's subway station - another advertising avenue used by China Unicom to promote its CDMA service.

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87

FIGURE 5: Three half-page advertisements featuring China Unicorn's CDMA service appear on the same day in two major newspapers sold in Guangzhou.

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如果你！^她,送台手机給她f - ^ , / ^ ^ ^ o i S ^ l s a E

；.^^^Bmnniii iiimbbmb ^^^^^^^^^^^^B^^^^^ iu ’ ; : - " .....

I,许*‘才民，，i^z不换am 手机

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88

FIGURE 6: China Unicorn's outdoor billboard.

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FIGURE 7: A China Unicom branch office in Guangzhou is surrounded by a number of small telecom shops.

89

FIGURE 8: A China Unicom branch office at the Guangzhou East Train Station. The new CDMA service is not offered here.

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• 彳酒 • 圓丨 i

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90

FIGURE 9: A small China Unicom branch office in a residential district of Guangzhou.

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FIGURE 10: A small telecom shop offering services from both China Unicom and China Mobile.

91

FIGURE 11a: Locations of China Unicom branch offices can be found in Guangzhou's City Map displayed in the train station.

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FIGURE 11b: A close-up look of the map.

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92

FIGURE 12: China Unicorn's advertisement for its GSM service, GSM 130, appears in many subway stations in Guangzhou.

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FIGURE 13: China Unicorn's light box advertisement in Guangzhou's subway featuring its prepaid cards for its GSM network.

93

FIGURE 14: China Unicorn's advertisement for a new fixed line service placed in Guangzhou's subway. This service is said to be cheaper than the increasingly popular low-cost IP phones.

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FIGURE 15: A small telecom shop places a hand-written signboard outside the store to promote China Unicorn's GSM service, GSM 130. Since this shop is not authorized to sell China Unicorn's CDMA service, it can only provide referral service.

11

94

SECTION 3. China Mobile

FIGURE 16: China Mobile's large outdoor advertising featuring the national coverage of its GSM service, GoTone. These huge posters are placed on the walls of the Tianhe Shopping Centre in Guangzhou.

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FIGURE 17: China Mobile's outdoor billboard for its GSM service, GoTone, at a busy junction in Guangzhou. The advertising tag line is "Communication starts from the heart."

95

FIGURE 18: China Mobile's pervasive promotion of its GSM service, GoTone, can even be found in the entrance of a subway station in Guangzhou.

FIGURE 19: An outdoor billboard in Guangzhou featuring China Mobile's Mobile Data Service offered through its GSM network.

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96

FIGURE 20: A small telecom shop in Guangzhou utilizing China Mobile's GSM service, GoTone brand in promoting its own shop

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FIGURE 21: Another small telecom in Guangzhou selling China Mobile's GSM service, GoTone.

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97

FIGURE 22: A China Post branch office offering China Mobile's GSM service, GoTone.

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FIGURE 23: Guo Xin, a specialty chain store in Guangzhou selling telecom products. A light box featuring China Mobile's GSM service, GoTone, is displayed in front of the store.

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B B B B h B B B P ^ ^ S B K I

98

SECTION 4. Handset Suppliers

Foreign handset manufacturers set up their own specialty stores around Guangzhou. So far, only foreign suppliers, Motorola and Samsung, are authorized to supply CDMA handsets to China.

FIGURE 24a: Ericsson from Sweden.

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FIGURE 24b: Nokia from Finland.

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99

FIGURE 24c: Motorola from the United States.

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FIGURE 24d: Siemens from Germany.

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100

SECTION 5. News

FIGURE 25: 10-hour long service outage of China Unicorn's GSM network is featured on the front page of Guangzhou Daily's Economy News.

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朕通“悔换” 10 小时 « ： f a B ' W mii «i E•寻.！! /」：备乂 1 业内人士指出,此次事件对电倌企业如何协调关系绅考意X .

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FIGURE 26: A newspaper article on CDMA handsets and price range from Yangcheng Wanbao published in Guangzhou. Shortage of handsets is said to be a major obstacle for increase in subscriber base.

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ffl l i l 「广 1 i i H i i ？ p i p g n a i

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101

FIGURE 27: A newspaper article on China Unicorn's financial performance from Ming Pao Daily of Hong Kong. The company's CEO maintained that CDMA business would not suffer any loss and that the target to enroll 7 million subscribers by the end of 2002 remained unchanged.

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和黃伙星资投愛爾籣3G牌 h i ^ j ^ l f i E e S P l

脚通： C D M A I I 费不軸上客量改善700萬目標不變 ^ ^ ^

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情8.由《受平•供雕»«輋»_纖»» " 會於GSM 岡？懼.0>«*«上《度肝棚今三月份已上躲.2萬级蟹季上

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FIGURE 28: Another article on China Unicom from Ming Pao Daily. By the end of March 2002, three months after the initial launch, Unicorn's CDMA network had 0.8 million subscribers.

【明《専瓶】W通（0 7 6 2 )公布，试運、 . . 營期内CDMA用戶總數連80»戶，其中36 HSSSSL ‘ yl'-«戶摊新增用戶。而CDMAW絡的二期據A^U 容;rSiiE在積®逝行中’覆《全》的cn- ^ * ，::.•. MA IX網略《叶到年底《成’並降描出-J c f b 各《移動教據祈衆》“ T l - f - J «至木月ft日止3個月內CDMA用戶itn數—••

R S O W S 戶 . i s 括城網轉網用戶 p r ^ i y A , 及36«新增用戶。不過聯通發哲人表\jUivin V

示，进個數字只反映粮體CDMAffl戶•上；！市公B]租用的〗2省拥裕用戶數宇’进於本 I I I . 月20日公布》 I I 1 ,.’.,f

三周新进28萬用戶 I — ^ 、步

W通的新M稿亦無提供CDMAffl戶的平 1 I I '•：.,' 均消� ( AlU'U )和通括R ( MOU )統計

脚通稱•拭a*初期用戶增拽》慢’但T = 1 = : raw乎機供《的》迪和市場推斯力度的增^^ I丨丨, 強•從3P1中BB始’ m戶播長大幅播加• ^ ^ g ^ 毎天《扱用戶數由開始的數千戶到趣遇丨>< 1 I 萬戶，最竊速2.5萬戶.從3月丨8曰到4月7 曰的三两內• CDMA新琳用戶達28萬戶。霣冒 «至3月K止•内地各生ffi廠家已投放 • I •

市場的CDMA手機巳有18抑®號’累肝稱 I J - 4 J … 數已速60萬部》 ^

102

FIGURE 29: A newspaper article on the merits of China Unicorn's CDMA service sound more like a paid commercial than an objective commentary.

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FIGURE 30: Various news clips on China Unicorn's CDMA service - China Unicom is not meeting its subscriber targets; a price cut is needed; the company is subsidizing subscribers by renting out CDMA handsets.

• 眺：《触 2 0 0 2年 3 月 2 2 日星期五胡也 _

l i i i l i l i i i i l l m — — — — — ilf [fii II .丄"""miiiiBh胁 IT…•‘广“则“"—————

職通 0 ) _ 增 _ 麵 . 无 I 明舰粗道 1•通 10如訓的糾CDMA用户I•腳戸月 i^^siÂrriîr^^.-^

t ; m 晰 • 心公服 • 令脚 . 二JJ^•；i嘛.細！^咖.邮陳剛他IS!：:

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• ¥ 财经新闻 • 襲闻 *通•裁李正茂：

r 一 " •勵細 I 奶 — 渐丨：送手机非补贴 K J S l i i X J i ! 1LK A lij^V/Hi M i J111 ' m . 上的 wa cdma wa；. m ..-iî K «a计.M向全wiKiaiuffl手机计畑‘

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他肿隨 “ 零机价 " 势掀减价战

中 I* 动《：來长: CDMA供开平机*hW的行动，并会怍电2，

im^并关入士认为W通这次在全实WU:fi“*机价-的粗併CDMA不机H•划•将 5�A*：战价战• ^ .

构外茂还表示,不拟心杯关，[！^ - « 批一枨 CDMA

^ ^ ^ 押揪,因为中R作跌通用进的

CDMA W 用的 ^ ^ • 900MK> _ 供•在

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