Transformation of marketing strategy

Among those who play traditional Chinese instruments, Dun Huang is a brand that is universally known. But only a few years ago, the 56 year old Shanghai No.1 National Musical Instruments Factory which produces the Dun Huang instruments was on the verge of becoming a furniture or toy manufacturer. Yet in 2013 it managed to turn the tide and harvested 210 million yuan in sales with a profit of 26 million yuan.

The secret lies in the company's change of marketing strategy. A normal pipa, sometimes called the Chinese lute, will sell at most for a few thousand yuan. But a pipa produced by Shanghai No.1 National Musical Instruments Factory can be worth as much as 400 thousand yuan due to the precious wood it is made of and the works painted on it by famous Chinese artists who have entered into agreements with the factory.

"The key point is to raise the cultural value of the instruments," says Wang Guozhen, who initiated the new strategy in the factory.

Lao Feng Xiang, a jewelry brand that dates back to 1848, has also been the beneficiary of effective cultural marketing. In 2001, Lao Feng Xiang's operating income was 710 million yuan, with its book profit standing at only 5.4 million yuan. In 2013 the company's operating income topped 30 billion with a profit of 1 billion yuan.

"There is this basic principle that we've been stressing in our marketing – that is we don't just sell jewelry, we sell art as well," says Shi Lihua, general manager of Lao Feng Xiang Jewelry, explaining the company's success.

Change of strategic objectives

86 year old yarn producer Heng Yuan Xiang is a well-remembered brand name in China for its catchy advertising slogan on television.

After successfully sponsoring the 2008 Beijing Olympic Games, Heng Yuan Xiang became a partner of the Chinese Olympic team in 2012 and has secured a sponsorship slot in the 2016 Games as well.

"Good sponsorship for the Olympic Games usually lasts as long as five years, which proves that brand management is a long-term thing. You have to pave the way now for greater development in the future, which is the essence of brand management," says Chen Zhongwei, general manager of Heng Yuan Xiang.

"Basically, we don't allow products to appear in our ads; only the brand's name is there," Chen says. "Our goal is to become a brand management company rather than simply a product manufacturing company," he adds.

The 73-year-old Forever Bicycle is undergoing a major new phase in its history as well – namely the transformation from a transportation vehicle to the synonym of a lifestyle.

With the rise of the car, the bicycle has been edged into the shadows for some time.

"In the past, people rode bicycles to get from one place to another; today, riding a bicycle has become a statement that expresses your attitude towards life - and we want to represent that statement," says Chen Haiming, general manager of Forever Bicycle.

Thanks to the strategic transformation, Forever now boasts 3,000 stores across the world, selling 1.5-2 million bicycles per year. It has also opened its own cigar and apparel stores, and is developing a new model of remote-control bicycle, remaining the bellwether of the industry.