Regular readers of Branding Strategy Insider know we welcome and answer marketing questions of all types. Today’s we hear from Karl, a business reporter with China Daily who asks these questions about the state of the discipline of brand management in Asia.
Do Chinese companies need to brand themselves and if so why? Branding allows organizations and their products and services to take on human qualities. Why is this important? Because human qualities allow for emotional connection with customers including shared values. This leads to brand loyalty and brand advocacy. Most decisions (including most purchase decisions) are made by people’s hearts, not their heads. Absent of brands, companies are just companies, products are just products and services are just services. Strong brands enable not only increased customer loyalty but also the ability to charge price premiums, the ability to attract and retain highly talented employees, better negotiating leverage with business partners, increased sales, increased market share, increased profitability, increased stock price and increased shareholder value. The financial value of many companies far exceeds the value of their tangible assets. This is especially true of Internet-based brands. While this additional value has several sources, a primary source is the strength of the brand.
Did the listing of Alibaba 18 moths ago in NY do anything for Chinese brands and if so what? It increased awareness of Alibaba in the USA. It also demonstrated that China is capable of creating some very large, substantial brands. It may have also set an example that will inspire Chinese companies to think brand.
What is holding Chinese companies back from investing in branding? Branding has taken decades to mature as a specialized profession in the USA. Despite the fact that almost everything – companies, not-for-profit organizations, schools, musical groups, municipalities, sports teams, individuals, etc. – seem to be branded in the USA, branding is still misunderstood by many people, including many business executives. Our culture, our markets and our increasing body of brand development and management techniques supports our very strong brands. This is not something that can be duplicated overnight.
A starting point for Chinese companies should be to think differentiation. Resist the temptation to copy competitors, instead focus on what makes their offering compelling and unique in comparison. Become value creators rather than simply competing for the value created by others.
Do South East Asian companies need to brand themselves and why? Ultimately, if they want to build global markets for their products and compete effectively against other global brands, they will need to build strong brands. This requires using all of the tools in a brand management tool kit, especially the brand research tools. Cultures vary across geographies so it’s important to understand what brand elements may remain constant across cultures and which must vary by culture to be understood and remain relevant.
Do Asian companies see any value in branding? This varies quite a bit. Some companies understand the power of branding, while others do not. I would say that Asia is just further behind the brand development curve than the USA. Eventually, more and more Asian companies will embrace the concept and discipline of branding. Branding is part art and part science. While there are very specific tools and analytics that help one manage brands, often the real breakthroughs come from understanding human motivations, especially on an emotional level. This is where I see many Asian companies falling short. Not only do they need to understand deep emotional triggers for their own cultures but also for foreign cultures. This requires well-designed, in-depth consumer research and a strong intuition about human behavior.
Why have Japanese and Korean companies been so successful at branding? There are several reasons. The Japanese have had an intuitive sense of consumer needs and they have conducted the required research to better meet those needs, especially in cultures outside of their own. When marketing consumer products, it is very important to build strong brands. Many of Japan’s most well known brands are consumer product brands (especially consumer electronics brands).
Japan and Korea also produce strong automotive brands. Automobile brands also require a strong understanding of consumer needs including their emotional, experiential and self-expressive needs. Many automobile brands are self-expression vehicles for their owners. Having said that, Japanese and Korean automakers have developed models that appeal to an unusually large cross-section of consumers.
Japan and Korea’s post war relationships with the West may have also influenced this success. Close business partnerships offered a clear view of best practices in brand building and management. Finally a determined focus on branding techniques and activities also led to strong brands from these countries.
Thanks for your questions Karl.
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