« January 2005 | February 2005 | March 2005 »
A growing number of Chinese consumer goods manufacturers are relying upon an alternative two-way approach to accelerate attempts to gain global market share. The first is by acquisition of existing brands to acquire brand equity within markets targeted for entry. The second is by selling products as generics to companies with established retail brands and distribution systems, such as Wal-Mart and Target.
According to Oded Shenkar, a professor of international business at Ohio State University, these efforts have just begun, as reported in the New York Times:
A Chinese company’s plan to acquire I.B.M.’s personal computer division is just one example of current Chinese efforts to buy or build recognizable brand names in the United States….
Two Chinese companies, Haier and Kelon, are looking to establish brands for appliances in America. As recounted by Professor Shenkar both “started with niche products, such as small refrigerators used mostly in offices…. They already are opening manufacturing facilities in the United States.” He speculates either company could purchase General Electric’s appliance business unit, or might target a company such as Maytag or Whirlpool. He continues:
“[Chinese companies are] entering [the U.S.] market at a much earlier phase of development than the Japanese or Koreans. They are looking for a shortcut, which is where this brand acquisition strategy is coming from. Instead of developing your own brands, which takes many years and costs billions of dollars, you buy an existing brand. The idea is to use the acquisitions to leapfrog.
“[Many] Chinese companies start as no-name makers of generic products. If you lack marketing capability and distribution and don’t have a global supply chain, which is the situation most Chinese companies face, you sell to Wal-Mart or Target and they will do all that for you. That [market entry] capability didn’t exist when the Japanese entered [the U.S. market]. Sony had to build a brand name [in America]. They didn’t have a choice.”
Of course, both strategies work if a company’s market capitalization or balance sheet permits growth by acquisition, or if the company prefers to risk margins that may be sacrificed through a relationship with super-retailers.
However, we respectfully disagree with Professor Shenkar, as developing a brand need not take many years and cost billions of dollars. In the absence of the two brand-building options he describes, the best, quickest and smartest way to grow a company or product line is to create an evocative and memorable brand strategy for a target audience.
In any market around the globe, world class brand thinking leads to a brand that will [1] provide separation from your competitors, [2] demonstrate to the world you are different, [3] create a positive and lasting engagement with your audience, [4] be unforgettable, [5] propel through the world on its own, becoming a no-cost, self-sustaining PR vehicle, [6] provide a deep well of marketing and advertising images, [7] rise above the goods and services you provide, and [8] completely dominate your industry.
Whether for an early stage organization yet to build a significant balance sheet or a Fortune 500, crafting effective brand strategy is the business of creating balance sheet assets to drive topline sales.
It’s the business of being smarter in connecting with your audience and creating separation from your competitors, at a far smaller Yuan cost than that of an acquisition.
The Korea Times contains this story lauding government efforts to build a global brand with this headline: ‘Dynamic Korea’ Image Goes Global. Here’s the story:
[T]he…government has been focusing its overseas publicity activities on enhancing the national image of the Republic of Korea….
[A brand attracts] foreign capital and tourists, thereby bolstering the nation’s industrial competitiveness and elevating the credibility and standing of the nation.
In November 2004, the Korean Overseas Information Service (KOIS) commissioned a…polltaker, Korea Research, to conduct a survey on the national image of some 3,000 people in the U.S., Germany and Japan.
The image survey concerned the three major entities including “Korea” as a country, “Koreans” as a people, and “Korean products.” The popularity rating of “Korea” stood at 65 percent and the approval rating at 62 percent. The popularity rating of “Koreans” was as high as 72 percent compared to the approval rating of 64 percent….
The opinion poll conducted in December found that seven out of 10 foreigners cited “Dynamic Korea” as the best slogan to define Korea.
For Korea’s branding effort, opinion polling is a waste.
An opinion poll is useful if tactical information is needed about an established brand. For example, a brand manager wants to know what others think about a well-known established brand, where little has changed within the competitive environment.
An opinion poll technique is NOT useful if information dependent on memory recall is needed, or if the brand manager does not know the relevant market drivers for capital investment or tourism, or includes the need to provide answers to questions such as:
- What frame of reference do people use when thinking about Korea?
- What detailed thoughts and feelings are pulled to the surface when reflecting upon the nation of Korea?
- What are the mental dimensions of a visit to [or life within] the nation of Korea?
- Why do people prefer one destination brand [or nation] over another? For tourism reasons? For capital investment reasons?
Korea’s leaders must look beyond what is readily articulated, and instead dig into the human subconscious to uncover what people don’t know they know. Only then are the critically important drivers behind market decision-making identified.
And, these same leaders must directly confront and deal with the South Korea/North Korea thing — in research, in world market perception, and in development of the brand architecture. Referring to the country as Korea for reasons of national pride is a good strategy IF the target market is South Korea. However, if the global market knows the country as South Korea, a brand strategy that positions the country as Korea becomes a point of enormous market confusion. Korea is left to explain what it is, rather than demonstrating value as a destination brand. For any effective brand, explaining is death.
The Korea Times story goes on to say:
The…government has been exerting considerable efforts to publicize the national brand “Dynamic Korea” that was chosen at the time of the 2002 FIFA World Cup. England has been launching a “UKOK” campaign, Malaysia a “Malaysia, Truly Asia” campaign, and Thailand an “Amazing Thailand” campaign in a bid to enhance their own national images….
Many international public relations experts also agree that Dynamic Korea is flawless as Korea’s representative brand; they suggested that at least ten years should be spent for extensive publicity.
Flawless? We previously addressed the opportunity Korea faces in building a global brand. Korea’s leaders may be falling into a predictable trap of relying upon public relations experts for branding. The difference between experts in brand strategy and those practiced in public relations is sizable. Both professions perform different functions.
Branding differentiates one brand from all others. Public relations communicates that difference.
Branding demonstrates the answer to Why Should We Care About You? Public relations assumes a reason exists.
Branding is the mental short cut to identifying the first choice. Public relations is the long road.
Branding is the point scorer. Public relations is the cheerleader.
Dynamic Korea is a brand without the strategy. It’s a public relations approach that speaks as a cheerleader more effectively to those inside Korea than those outside.
Dynamic Korea says the SAME thing as Amazing Thailand, or Malaysia, truly Asia or Hong Kong: Asia’s World City. Each explains their place is better/more wonderful than the next, rather than demonstrating their difference. By relying on this public relations approach, rather than an effective brand strategy, Korea becomes indistinguishable from its competitors.
What Korea instead needs is to develop a unique brand promise demonstrated in the experience Korea provides to the market. This unique brand promise must project a compelling attitude, in an authentic voice, with a relevancy instantly understood.
Korea must look at what Malaysia is not doing, what Hong Kong is not demonstrating, what Thailand is not promising, what Japan does not voice, and go to that place, a place no competitor now occupies within the mind of the market.
Korea cannot talk about how they are a better Japan or a more wonderful Hong Kong. They must instead frame a new way of talking about themselves, something radically different, to shift the conversational paradigm from dynamic to breakthrough.
Korea can create new mental real estate, and thereby claim a long-term competitive advantage. Korea’s leaders need only refocus their efforts to find it.
The late Speaker of the House of Representatives in the United States, “Tip” O’Neil, once declared “All politics is local.” Whatever one thinks of his politics, Speaker O’Neil voiced a truism of multinational brands. As global companies are reminded each day in marketing within different cultures, all branding is local. Whether in Louisville or London the brand must offer consumers a compelling relevance.
As reported in the International Herald Tribune, a number of American companies have become uneasy with trumpeting their national origin in Europe:
For years, American corporations…have faced anti-American sentiments from Europeans. But with the war continuing in Iraq and discomfort growing over United States dominance…companies have been forced to further adjust how they do business in Europe.
At a Starbucks on Friedrichstrasse in downtown Berlin, for example, coffee fans will not find an American flag or other overt cultural references to the home country of the company, which is based in Seattle. The souvenir ceramic mugs sold at the store bear logos of German tourist destinations like Cologne, not American cities….
According to…[an] annual “trust barometer” [issued by Edelman Public Relations], a survey of 1,500 opinion leaders throughout the world, 32 percent of Europeans polled in January said they were less likely to purchase products made by companies in the United States because of disagreements with American culture. The Coca-Cola brand, for example, was “trusted” by 69 percent of respondents in the United States but by only 45 percent in Europe and 46 percent in Canada. 74 percent of Americans but only 44 percent of Europeans trusted Procter & Gamble products, which include Vicks, Folgers, Charmin, Clairol and Pampers brands.
For any brand to be compelling it must evoke a personalized one-on-one relevance to the consumer. The task is not about selling millions of cups of Starbucks coffee in Europe, but rather selling one Starbucks cup of coffee to one Berliner, one Londoner, one Parisian, and successfully repeating the transaction millions of times. Market success is doomed if Europe is seen as if a single, homogenous culture.
Relevance is different from culture to culture. The reason is due to subconscious imprints developed at an early age. Imprints are the equivalent of memories capable of recall later in life if the appropriate sensory trigger is experienced.
These imprints vary by culture. To use a familiar example, an American child will play with an assembly toy, such as a puzzle or Legos, attempt to put it together, then break it up again with pieces scattered for play again later. The same toy in the hands of a German child will be meticulously assembled, set on a shelf to admire and left there, while moving on to the next assembly toy. The reason is due to cultural difference, and the value sets imprinted at an early age. While German families are more likely to stress order by, for example, following directions and methodically completing the puzzle, America families are more likely to stress fun, creativity and individual choice. Thus in America, consuming a Starbucks coffee is an exercise of doing something for you, while in Germany the same Starbucks may be positioned as a shot of energy to enable staying on task.
Understand these cultural differences and unlock the key to compelling relevance wherever the market, from Berlin to Baltimore.
Sendo International Ltd., a United Kingdom company, serves wireless network operators in over fifty countries with products ranging from branded phones to dedicated service software to fulfillment programs. Earlier this week the company issued a press release with this breathless headline:
Sendo reveals daring new global identity
Let’s see if the news lives up to the hype:
Using a creative theme based around cherries, Sendo’s aim is to highlight its dedication to choice and build on its commitment to operators and consumers. Launched at 3GSM, this sweeping move focuses on a new and consistent global identity and messaging together with innovative execution.
Sendo’s original look and feel features a black cherry in amongst a mass of red ones. It is through the use of this simple yet striking image that Sendo will differentiate its products and illustrate its dedication to cater for operators specific needs, through choice and customisation. Along with a new identity, Sendo is also revealing its new way of thinking.
“We feel that this is a really important step forward for Sendo as a company and for its products,” said Kevin Lawless, Global Marketing Director for Sendo. “…[W]e feel that now is the time for a coherent global initiative to promote Sendo products and endorse the Sendo name with a consistent position for our range of phones that will reinforce Sendo’s market differentiators.” The YOU CHOOSE TM theme underlines Sendo’s ongoing customisation philosophy.
And those differentiators would be?
While we wish Sendo well, their new brand identity is nothing more than a high production value brand strategy, absent the brand strategy. When this occurs, you end up with a glossy brochure, or an interesting art image, rather than an evocative brand offering a compelling connection with a target audience and separation from competitors. Over the long-term the approach will prove ineffective in accomplishing what good brand strategy should accomplish for Sendo.
How often have we seen this, the ineffective message glossed over by high-production-value creative offered up as a branding solution? It’s the equivalent of hiring an accomplished interior architect to select surface paint colors. A waste of time for all involved.
Any branding project is really a positioning project – first determine the brand positioning, and the brand strategy must be developed to support the positioning. Drill down to the single best point of difference, compared to your competitors, and use this key differentiator as the beginning point for the construction of a world-class brand.
Later in the same release Sendo offers this interesting nugget:
[The name] Sendo, the Sendo logo, the Sendo “D”, YOU CHOOSE and ‘the cherries’ are trademarks or registered trademarks of Sendo International Ltd.
Regrettably for Sendo, there is absolutely nothing in this cache of intellectual property transformable into a balance sheet asset for the company. Made up name with no basis in human experience + graphic art image + interesting photograph + undifferentiated tagline does not add up to a world-class brand. As for breaking new ground by adopting a cherry theme, they seem to be conveniently hoping that their fellow citizens will forget the other big fruit in the UK telecomm space, Orange, or the maker of all those ubiquitous juicy little iPods, Apple.
Sorry Sendo, life is not a bowl of cherries.
Guys, in honor of the date set aside to honor St. Valentine, and if your culture recognizes the date, you might want to run out and grab a bottle of Mekhong [PDF product sheet], a Thai rum, for your special someone. The reason? The Mekhong brand is about to be repositioned, as indicated by this headline in the Bangkok Post:
Mekhong to be Positioned as Cocktail Mixer to Lure Women
Good luck.
With DaimlerChrysler AG announcing the collapse of year-over-year profits with the company’s Mercedes-Benz brand, they would do well to listen to this quote from a funds manager with the German firm Activest:
“The results are clearly below expectations, and the main problem is Mercedes,” said Karl Huber, who helps manage 2.5 billion euros at Activest. “Mercedes is fully dependant on the brand image… The car has to deliver what the brand promises.” [Emphasis ours.]
We could not have said it better ourselves. But, we will say it again anyway: The product must deliver what the brand promises.
A brand is a promise. For Mercedes-Benz or any other brand, keeping that promise means everything.
Break the promise and sales tank. Offer a compelling promise relevant to your consumer that you deliver through each brand touchpoint, and you are on your way to #1 in your industry.
Bayerische Motoren Werke AG offers a good example of how to do it, with introductions of new models such as the 1-Series and the X3 sport-utility vehicle. BMW is fast closing the gap with their chief competitor for the title of World’s Largest Manufacturer of Luxury Cars.
And, who would their chief competitor be? Mercedes-Benz, of course.
New Century Financial Corporation [NYSE:NEW] is in search of a brand strategy. The company is one of the largest non- or sub-prime mortgage lenders in the United States, and today announced their first corporate branding effort with the tagline, a New Shade of Blue Chip:
As a “New Shade of Blue Chip,” New Century will update the traditional view of a “blue chip” company by emphasizing not only strong results, but also how those results are achieved…
“A New Shade of Blue Chip” will launch with an integrated marketing communications program including advertising, direct marketing, special events and Internet communications. Watch for bold advertisements beginning today. The ads will appear in major financial, trade and regional business publications including The Wall Street Journal, Barron’s, American Banker, Orange County Register and the Orange County Business Journal, among others. In addition, New Century management will celebrate th launch of “A New Shade of Blue Chip” by ringing the opening bell at the New York Stock Exchange at 6:30 a.m. PST on February 10, 2005.
New Century seeks Wall Street respect through this campaign. However, casting themselves as a New Shade of Blue Chip demonstrates that New Century should stick to their core business of sub-prime home lending, rather than attempt their own brand strategy.
Any effective brand strategy effort is an exercise in brand positioning. For positioning to be effective, it must be authentic, provide a relevant connection to the target market, and create separation from competitors. In short, effective brand positioning must create new mental real estate. Ownership of new mental real estate is a powerful business driver, whether attracting the favor of investment capital or an increase in topline sales.
A brand position relying upon an overused cliché such as “blue chip” creates nothing new within the mind of a target audience, just as advertising “New” does not create NEW mental real estate. If not staking out new and unique territory, a brand lacks a compelling reason to be committed to memory, and instead becomes part of the white noise of popular culture. If the brand is not memorable, brand positioning devolves to a Chase-The-Audience game, institutionalizing heavy year-over-year advertising expenditures to support the positioning.
In contrast, New Century could save enormous advertising dollars by pushing the brand position further. Answer the question of WHY they are a new kind of blue chip, and New Century has the makings of a captivating, memorable, and self-propelling brand. The clear leader by far in this sector is Fannie Mae’s We’re in the American Dream Business, where the aspiration is at a level so far above the mere goods and services being offered.
Up-front investment in crafting the best brand strategy is money saved later in the middle of the P&L. The more connective and memorable the brand, the less the advertising spend, and the faster the brand grows as a balance sheet asset.
A surefire way to attract respect on Wall Street.
New Zealand has a branding opportunity. Its flag.
Whether Southern Hemisphere or Northern, Pacific Ocean or Atlantic, variations on the British Union Jack are the flags of countries around the world. The New Zealand flag is one of these, undifferentiated and indistinguishable to the world audience.
From the Prime Minister to party leaders, politicos across New Zealand are weighing in on the issue of changing the nation’s flag. As reported in the New Zealand Herald, many recognize the flag as a branding tool:
Act Party head Rodney Hide said…the New Zealand flag…is an emblem…. “It represents all that is New Zealand….”
The national ensign is…not at all too British, said Mr. Hide. “Our history is British and it reflects that history.”
Changing the flag is back in the public arena following the launch…of a campaign by the nzflag.com trust, to get a referendum on the issue.
Green leader Rod Donald said: “…I believe New Zealand needs a flag that clearly establishes our identity as a nation in our own right.” [He went on to say] a new flag would also help New Zealand from a business perspective, by providing the country with a distinctive brand.
With all due respect to the Honorable Act Party leader, Mr. Hide, we disagree. For branding purposes the New Zealand flag is indeed too British. And too Tuvalu too:
Rather than a symbol that is sort of British, the New Zealand flag must instead be all New Zealand, giving up a symbolic tie to the Union Jack and other competing graphic elements in favor of something extraordinarily new and evocative.
Expertly conceived brand strategy works in the same way. To reach solutions new, compelling and memorable, competing elements are jettisoned to enable the brand to elevate above competitors by projecting one key evocative difference. Executed well, the solution creates what we refer to as new mental real estate, a virtual guarantee your target audience will remember you as the first choice in your industry. A brand that owns mental real estate self-propels through contemporary culture. Whether through increased sales or growth in foreign investment, a favorable financial effect ALWAYS follows.
A nation’s flag is a key brand element. As illustrated at Nzflag.com Trust, work has begun in advance of a potential national referendum on the issue of changing the flag.
New Zealand through a new flag is faced with an opportunity to create new mental estate. Spot on.
« January 2005 | Home | March 2005 »
