All companies aspire to build brands that eventually get etched in the culture of the society and become cultural icons. But very few companies are able to achieve this iconic status. Contrary to popular perception, iconicity does not happen by chance, but rather has to be carefully planned and executed.

Branding enhances shareholder value, it can become a catalyst for better leadership, it enables to drive a shared vision throughout the organization, and it can help to balance short- and long-term perspectives and performance. But what makes an iconic brand?

A look at some of the most iconic brands in history such as Coca-Cola, Harley Davidson, Chanel, IBM, Giorgio Armani, L'Oreal, Louis Vuitton, Apple, Amanresorts and Singapore Airlines reveals some very common characteristics.

First of all, they have all been running profitable and very well-driven operations. Secondly, they used differentiation to build and defend solid market positions. Constant innovation was part of this and an integrated component of their company culture. But a third dimension, a strong emotional connection, made a huge impact. They have all been able to build and sustain very strong emotional bonds with their customer and stakeholders. A combination of these aspects will enable a brand to become iconic.

All of above brands fulfilled three important requirements of being an iconic:

Create an identity myth: For any brand to attain iconic status, it has to create an identity myth. Every society invariably goes through phases of prosperity and crisis. Brands that resonate and shows directions to the masses through the brand stories and brand activities gets etched into the culture. These brands, by creating an identity for themselves, provide identity to the whole society.

Psychological research demonstrates that brands are durable because people are cognitive misers. The modern society is overloaded with information, and the average person receives far more information than one can possibly digest properly. Therefore, people seek to simplify the world by relying on a variety of heuristics to minimize the amount of searching and information processing needed to make reasonable decisions. Once people believe a brand works for a certain purpose or reason, they are less likely to seek out new information that challenges the assumptions.

Sociological research also demonstrates why people are less likely to switch brands. Multiple elements like images, stories and associations are attached to a brand. As these elements are shared collectively by groups and networks of people, they form generally accepted conventions about brands. It is therefore relatively difficult for individuals to switch brands and thereby abandon these shared conventions.

The identity myth is therefore critical for brands, as they serve as a guiding aspect of past, present and future.

Involve multiple story tellers: Dissemination of brand information through the many participants of the society is critical for an iconic brand. The four major authors of these brand stories are: companies, the culture industries, intermediaries and customers. Each of these authors facilitates the brand to blend into the fabric of the society. By associating the brand and its identity with the prevalent events in the society, these authors create an iconic stature for the brands.

Weave powerful brand stories: Great brands always have resonating stories that touch the lives of consumers. These stories could be of the brand's unique history (Shanghai), myth (Jim Thompson), culture (Harley Davidson), fashion icon (Giorgio Armani), performance (Nike), and underlying service philosophy (Singapore Airlines). These brand stories offers consumers a good reason to elevate the brand beyond their mere utilitarian role in the market.

One of the important results of developing an iconic brand is the growth of brand communities. Brand communities are largely imagined communities that represent a form of human association situated within a consumption context. Brand communities are collections of active loyalists, users of a brand who are committed, conscientious and almost passionate. There is an intrinsic connection between members and the collective sense of difference from others not in the community. Members of the brand community practice rituals and traditions that perpetuate the community's shared history.

Brand communities are liberated from geography, commercial in nature, possess communal self awareness and are committed that facilitates the brand to attain long term acceptability in the society and ensures that the brand attains iconic state.

By being an important resource for consumers, brand communities provide wider social benefits to consumers through interaction and provide social structure to the relationship between marketer and consumer.

In the next 10 years, a rapid changing landscape will emerge in Asia where the opportunities for Asian companies to benefit from branding efforts will be larger than ever before. The growing emphasis on better financial value creation, competitiveness and differentiation through brand equity will move up the boardroom agenda. Brand leadership will become one of the most prominent management issues in Asia Pacific.

But before this new momentum shift can take place, changes are necessary. Asian companies and their management teams need to undertake 5 important steps to unleash and reach their untapped potential.

First, mindsets and practices need to change in the Asian boardroom. A complete shift in the way Asian boardrooms think of branding is needed: from a tactical view to a long-term, strategic perspective, from fragmented marketing activities to totally aligned branding activities, from a vision of branding as the sole responsibility of marketing managers to branding as the most essential function of the firm led by the boardroom.

Second, this new perspective must be steeped into a more acute perspective on the consumer behaviour patterns. Asia is not a homogenous entity. Even more importantly, Asian countries are more and more traversed by cultural flows permeating the region: cinema, music and fashion trends that are present extend beyond national borders to capture the imagination of millions. Branding and brands do not operate in vacuum, but are closely linked to developments in society, to people and to cultures.

Korean cosmetic firm Amorepacific and its 10 different brands is a great example of how Asian firms can create and sustain brands based on their own cultures instead of just replicating already established global brands. The Korean wave has paved the way for Korean firms to expand their brands across the region.

Third, managers wanting to succeed in Asia need to abandon the idea of an oriental Asia of the past. Asian consumers are all vying for an Asian type of modernity that has nothing to do with colonial imagery.

The trick is to balance legacy and vintage with modernity and contemporary edge. Think of the growth of Hong Kong-based fashion brand Shanghai Tang, and how the firm has built a strong franchise on its modern interpretation of Chinese culture.

Fourth, to create iconic brands, Asian managers will have to become trendsetters. The perspective is that, in order to be successful, Asian brands need to capture the spirit of the region, but they also need to lead the way by creating that spirit. It is therefore important that

Asian firms spend more on innovation, design and technology to become trendsetters. They are forced to move up the R&D value chain and to develop their own Intellectual Property and trademarks.

Finally, this shift can be achieved only if everybody in the company is convinced by the power of branding and if all strategies and actions are aligned around the brand. This must be led by the Asian boardroom, its CEO and executives.

Brand equity is the new asset in Asia
Branding enhances shareholder value, it can become a catalyst for better leadership, it enables to drive a shared vision throughout the organization, and it can help to balance short- and long-term perspectives and performance.

Brands can also help to recruit and maintain better talent, and it can expand a company's market reach and growth potential. The strengths of the Samsung and LG brands have made it easier to recruit and maintain global talents.

Complacency is the enemy of strong brands. The strongest brands are focusing heavily on innovation and quality in all aspects of their operations and maintain consistency. Banyan Tree and Starbucks never advertised but used many of the other customer touch points to create strong customer experiences, so the customers became brand ambassadors for the brand and helped the brands to grow.

The business landscape is changing almost every day in every industry. Hence the corporation needs to evaluate and possibly adjust the branding strategy on a regular basis. Obviously, a brand should stay relevant, differentiated and consistent throughout time, so it is a crucial balance.

The basic parts of the branding strategy are not to be changed often as they are the basic components. The changes are rather small and involve the thousands of daily actions and interpersonal behaviors, which the corporations employ as part of the brand marketing efforts.

But make sure complacency does not take root in the organization and affects the goal setting. The strong brands are the ones which are driven forward by owners whom never get tired of raising their own bars. They become their own change agents - and brand champions for great brands.

Brands play an important role in modern society. A role which cannot be denied in scope and scale. Think of the incidents starting January 2010 around the world's largest carmaker Toyota and its handling of the recall of 8 million Prius hybrid cars. It is a perfect case in crisis management of brands and a compelling one of how not to handle it.

Toyota had become a case of perfect management, The Toyota Way, involving lean manufacturing, continuous improvement, innovation and quality beyond imagination. Several global corporations aspired to learn from the Japanese company, and mirror some of their best practices in management. Anything in Japanese management was much in demand. So what went wrong with the Toyota brand the last weeks?

Leadership in time of crisis
Innovation is a fundamental building block of iconic brands. Toyota is a great example of how an Asian company rose quickly and taught the rest of the world about best practices. Leading brands create their corporate strategies with an inherent strategic element encompassing innovation. Such innovation is not limited to bringing new products to markets, but is expanded to innovation in communication with customers and other stakeholders.

But as management professor Peter Drucker said, the only two functions of any organization are innovation and marketing. Irrespective how innovative a company is, how committed the employees are, and competent the top management is, unless the company connects with the customer, success will be elusive. The top management should constantly evaluate their strategic decision in the context of customer feedback and how the customers can help the company in co-creating value.

Many brands before Toyota have been through similar crisis cases. The mineral water brand Perrier had to recall 160 million bottles in 1990 after traces of benzene. Firestone tires had to recall 6.5 million defective tires in 2000. The mother of all cases was the painkiller brand Tylenol which had to be recalled by Johnson & Johnson after traces of cyanide. Johnson & Johnson recalled 30 million packages. But the company acted fast, regained market share fast and remains the leader today.

There are 4 important steps for management in time of crisis and how to handle the issues to help protect their brands regaining their reputation and image:

Face the stakeholders: Modern global brands and companies do not operate in isolation. Stakeholders are deeply involved with brands and bond with them during all times.

Management must step up and reach out immediately. At this early stage, few people in the company would have the big overview and may lack insights. But communicating early builds trust and open lines of dialogue – which may in most cases be very useful later.

Act fast: The sooner the management can establish a dialogue with stakeholders, the better the outcome. The company has to showcase that it moves fast, is agile and is on top of the subject matter. It will prove that the brand is still in control and has not lost confidence in itself. This early move will also allow the brand to better control the messages and help galvanizing the company support networks.

Strategic roadmap: The best global brands have ready-to-go strategic roadmaps which outlines exactly what to do and who should do it in case of crisis incidents. A strategic roadmap outlines how management and the company seek to repair the damage, re-establish operations and lead the brand's way back to normal. As management gets more details about the incident, the brand roadmap will be adjusted.

Nurture the organizational culture: During times of crisis, many corporations tend to forget their most important and trusted stakeholder: the organization and its employees. It is the talent pool who is the back-bone of operations. They do not easily give up on things they trust, respect and identify strongly with. Management can benefit tremendously by involving the organization early and empower them to solve the crisis. Most management teams forget about this important resource.

Conclusion
Many Asian business leaders are yet to realize that building and sustaining iconic brands is a boardroom discipline. It involves skills and experiences in public communication and stakeholder issues management - it must engage with the public and take center-stage at any time. This is a critical point for Toyota, CEO Akio Toyoda and the leadership team.

Toyota is strongly linked to Japan Inc. so much is at stake for Japan and its reputation moving forward. The Toyota brand must step up actively on the global scene, and take control of the crisis. It is easier said than done successfully.

But Toyota represents one of the strongest brands in the world, and its brand equity will help the company steer through the rough waters. It is up to the boardroom and CEO Akio Toyoda to take leadership.

Most of the consumer behavior models that are used in Asian boardrooms today were developed in a handful of Western countries. Marketers still do not know very well how marketing techniques and theories can be applied to non-Western contexts.

Many models that are used by companies today are based on the assumption that, as the anthropologist Clifford Geertz puts it, the person is "a bounded, unique, more or less integrated, motivational and cognitive universe."

Most marketing and management theories rely on what we can call a Western perspective of the individual as an independent, autonomous identity, free to make decisions based on purely personal desires and affiliations, living life in accordance with Maslow's hierarchy: food, shelter and clothing are the most basic needs, after which might come high cuisine, decoration and fashion. Mankind universally, it would seem, operates as rationally.

Marketing textbooks still use this model to show how consumers move from the satisfaction of basic needs to higher-order goals such as self-actualization. This model, however, fails to consider cultural differences. In some third world countries, people may deprive themselves of food to buy a refrigerator to enhance their social class.

Clearly the hierarchy of priorities is quite different in an Asian context, where interpersonal relationships and social interactions are more valued, on average, than self-actualization needs. The Western's need for self-actualization, in the Asian context is replaced by social needs of status, admiration and affiliation. Autonomy and independence are not as important or at least do not have the same connotations as in the West.

The importance of in-groups in Asian cultures
Asian cultures have a very different conception of individuality, placing more emphasis on the way individuals are connected to the people around them: attending to others, fitting in and living in harmony. While in the West, individuals generally define themselves through certain individual talents, abilities and personality traits, many non-Western cultures do not value a strict separation of the self from the family unit and the community, what psychologists call in-group.

In many Asian cultures, people believe in the fundamental connectedness or interdependence of individuals within the same in-group. The importance of the in-group does not mean total social conformity though. L'Oreal's large sales of hair dyes in Japan testify to the importance of being different.

The importance of luxury brands in Asia shows consumers trying to differentiate themselves from other members of society through iconic brands such as Chanel, Louis Vuitton or Gucci. A large portion of the French luxury giant LVMH's turnover comes from Asia.

The differences between Western and Asian cultures are not black and white though. It would be too simplistic to label all Asian cultures collectivist and Western cultures to be all individualist. Within Asia, there are vast differences in the way the interdependent self is expressed. There is a tendency across the region to engage in socially engaging behavior but the form of this behavior varies greatly.

For example, the Japanese view of the self is evident in everyday episodes where Japanese emphasize the notion of "losing face", acting on the basis of these others' expectations and needs, blurring the distinction between self and others.

In contrast Indians' in-group is limited to their family and their ethnic community. With 18 official languages, drastic regional differences, religious feuds and extreme social class disparities, the ability for Indians to empathize with others becomes limited at best. Instead, in India the interdependent self means enduring loyalty and sense of belonging to a community defined by caste, language, geographic origin and social class. What constitutes the Indian in-group is very different from the Japanese or Chinese in-group.

Overall, though, it is important for marketers to realize the importance of the in-group for consumers who will seek advice, think of products and evaluate products within an in-group.

Societies in Asia are moving fast and the dimensions described above are not set in stone. Asian countries are increasingly connected to other countries within and beyond Asia. These connections only enhance and increase the rapidity of the Asian evolution. What remains though, are these connections between these different countries. Contrary to popular thinking, the biggest Asian companies do most of their business in Asia. To become astute marketers and understand Asian consumers, the corporate management of companies will first have to look within Asia.

Companies striving to build successful brands in Asia should understand this unique mosaic of cultures that Asia is. The region represents a blend of modernity and traditionalism. This indeed is a doubled edged sword for companies seeking to develop brands in Asia.

On the one hand, this presents a hug set of opportunities with diverse customer segments, latent rural demand, and an immense potential to weave exciting new stories. But on the other, it also compels companies to find a fine balance between varied scapes and flows to become local and regional at the same time.

Fine-tuning products and services to satisfy local tastes and preferences while also appealing to a pan Asian identity by leveraging the common underlying cultural underpinnings will be one of the possible ways ahead for companies in Asia.

Brands are built on the value proposition platform. The basic logic has been that in the ever competitive market place characterized by decreasing information asymmetry between customers and companies, increasing customer power allowed by the Internet, flattening of boundaries between economies, fragmented media and communication overload, branding is an effective strategy for companies to cut through the clutter, engage the customer and build both customer loyalty and the bottom line.

What do tough economic conditions do to branding? By focusing on superior quality and creating engaging customer experiences, brands have been commanding huge price premiums over similar private label products. The argument has been that customers buy not just for utilitarian consumption but also for the brands' symbolic value.

But tough economic conditions turn such equations upside down. Customers who were buying high end brands to symbolize prestige are finding that they can no longer afford such indulges. They start pruning their purchases of such symbolic products. Especially given the proliferation of store brands in literally every product category, which not only boast of comparable quality but also low prices, customers start reevaluating their buying behaviors.

They downgrade to the basic minimum which is offered by these private labels. As such, customers tend to migrate from purchasing brands to purchasing private labels. Even though much has been written about the captivating power of brands and how they can ward off competition from private labels, situations of economic downturn challenges such arguments.

The most common strategic mistake that most companies make is to try to retain their customers by competing with the private labels by slashing prices. Such a decision can prove very detrimental to the long term equity of the brand.

Engage the customer: Economic downturns can offer excellent opportunities for brands to engage customers in innovative ways. As customers are cutting down on consumption, brands can initiate measures that take customers mind off the difficulties of consumption and focuses on the worthy features of the brand. Such situations can prove to good times to initiate procedures to co-create value with customers.

A slightly related example is that Singapore Airlines' strategy during the deadly SARS that hit South East Asia. When customers were very scared of flying and airlines were flying their flight nearly empty, Singapore Airlines (SIA) started offering very innovative vacation packages. Such innovative options used to engage the customers helped SIA to minimize its losses. But more importantly, such measures ensured that SIA was successful in protecting its brand image and brand equity.

Create excitement in customer experiences: Brands should use all of their strategic arsenal to create exciting interactions with the customers. Such initiatives can range from special deals to surprise the customers, product bundling to enhance value, promotions with creative alliances (such as with celebrities, traveling etc) to rewarding customers for their loyalty through special gifts, brand credit and so on.

Such initiatives not only take the focus off of price but also reiterate the brands' commitment to engage and value customer patronage. Such initiatives also allow companies to experiment with new steps. For example, recently Starbucks advertised that customers who volunteered for local community work for two hours would receive a free coffee. What is interesting about this initiative is that this was not a corporate level initiative but rather a local initiative that a couple of stores in one city undertook. Such initiatives not only enhance the brand image in the eyes of the customers, but also create additional reasons for the customers to continue to patronize the brand.

Offer customers viable options: Market conditions during such economic turmoil also offers brands opportunities to test waters with some new offerings, which can be different product variants, new products, new service offers through brand alliances and so on. Brand can experiment using a distribution channel such as Wal-Mart for example, to reach broader customer segments.

Such new options serve two purposes. First, they allow the brand to carry out pilot studies of such new offerings in the market, gather customer reaction and test its own competence in the new situations. Second, and more importantly, such initiatives sends a very strong signal to customers that the brand cares about the dire economic conditions and that the brand is trying to reach out to the customers by creating new options for them. Creation of such goodwill will not only help earn customer loyalty in the present time but also will help companies to cement such relationships when the economy bounces back and customers start evaluating their options.

Conclusion
Branding is not viable only in thriving economic conditions but is also a very viable strategy during economic downturns. All those who have announced the demise of branding because of the global economic meltdown may after all be surprised by the staying power of global brands. By building on the platform of superior value propositions, enriching interactions and enjoyable experiences, brands have established a very strong relationship with customers.

Merry Christmas and a Happy New Year to all readers of Asian Brand Strategy. Stay tune for 2010 where new content, insights and perspectives will be provided.

We have new books in the making about the role of the Chief Marketing Officer (CMO) for 2010, and another on the importance of leadership and brand strategy, and how they interact in order to achieve optimal business performance and edge (2011).

If you like to know more about our services and how we can add value to your organization, please visit Martin Roll Company where you can also download our brochure (click here to download PDF >> ).

All the best! See you in 2010.

The Martin Roll Company team

http://www.martinroll.com/

Asian economies with its many countries, cultures, business practices and customer segments are much more complex than other any other region in the world, and these markets still demonstrate branding infancy. The mindset, the complexity of business structures, the diversity of demographic composition and the huge geographic extant requires certain unique brand strategy steps.

1. Create a strong differentiation: In many of the still developing countries, Western brands are still looked up to as people in these countries aspire to own the global brands. With many local companies striving to create similar products at lower prices, the Western brands would do good to create a strong differentiation by leveraging their brand equity. Similarly, local brands that aspire to make it big must tap into the unique cultural associations and local myths to weave the brand into the societal fiber.

2. Establish a strong distribution network: Emerging economies of South East Asia are very vast countries and distribution in these countries holds the key to success in many industry sectors. With an increased migration of consumer from the rural side into main stream economy, success in these rural areas will prove critical. Moreover, unlike the developed markets, distribution is not organized and centralized in these countries. Regional and fragmented distribution channels replace national channels.

Establishing strong distribution network is of paramount importance. Some major brands such as P&G and Unilever have benefited from such a focus in India.

3. Glocalize: As emerging economies mature gradually, they start developing a strong sense of individual consumption identity. This is evident from the increasing demand for products which are localized to suit the local preferences. Global brands must retain their brand identity at the strategic level but localize the tactical implementation such as the communication, product offerings etc. This combination of global brands with local products will allow the global companies to weave their brands into the fabric of the local society and make the brand a part of the community.

For example, given the religious beliefs of Indians, cow is not treated as a source of meat, but rather an object of worship. Understanding such sentiment, McDonald's have eliminated their beef items and have introduced India specific menu items that appeal to the Indian palate.

4. Leverage cross-border synergies: In spite of the many differences between the many South East Asian countries, companies can leverage the scale of operations and supply chain across borders to optimize profitability. The relatively lower cost of production offers companies a fine platform to serve the entire region. By standardizing the major part of the product and fine tuning the final offering to suit the local tastes, companies can minimize cost and gain scale.

5. Recognize and respond to the unique regional markets: Emerging markets are mosaics of cultures and rich heritage. Each country has a unique pattern of consumption. Companies should be careful not to generalize across them as a homogenous region by ignoring the glaring regional and national uniqueness. As each country is fast evolving and integrating with the global economy, none of these challenges and market situations are static. Businesses should develop the flexibility to quickly react to the changes in the market and adapt their strategies to successfully compete and survive.

For example, British India is a major successful apparel brand from Malaysia. However, given India's troubled past with the British occupation, British Raj does not bring out positive emotions to the Indian customers, and the brand stayed out of India.

6. Collaborate and co-create: Many global and regional companies entering new markets have collaborated and leveraged the resources of the local companies. The combination of strong brand equity, financial prowess and the business acumen of the global brands and the local networks, established distribution channels and the strong knowledge of local customers of the local companies would offer a winning scenario.

For example, Costa Coffee is one of the leading coffee brands from the UK. But when it entered the Chinese market, it successfully collaborated with the Yueda Group, to leverage the local partners' knowledge of the market and customers.

7. Leverage the unique local cultures: Companies that plan to build brands in the different South East Asian economies must leverage the unique local culture to relate to the customers. Every market has a very strong history and heritage that has for long influenced the local cultures and practices of both companies and consumers. Companies should tap into these specific details and incorporate them in their brand personalities and identities so that customers can be offered an authentic experience.

For example, the Malaysian government brand campaign "Malaysia, Truly Asia" attempts to capture the unique culture, practices and experiences of the country. This offers an excellent example of how companies building brands in the Asian markets can leverage the local cultural assets.

The Swedish employer branding agency Universum has made a Top-50 list of brands that young talents want to work for. It is remarkable that there are only 2 Asian brands among the global Top 50 - namely SONY and HSBC.

It emphasizes how important it is for Asian businesses to build and sustain more global brands in order to compete for future talents. Asian managers need to step up to the challenge and compete better for the future. Through strategic brand strategy efforts and through better employer branding.

Universum asked 120.000 students in 11 countries including US, England, Japan, China and Germany.

Top-50 for business students:

1. Google
2. PricewaterhouseCoopers
3. Microsoft
4. Goldman Sachs
5. Ernst & Young
6. Procter & Gamble
7. J.P. Morgan
8. KPMG
9. McKinsey & Company
10. Deloitte
11. The Boston Consulting Group
12. BMW
13. Coca-Cola
14. L'Oreal
15. Morgan Stanley
16. Sony
17. IBM
18. Johnson & Johnson
19. Deutsche Bank
20. General Electric
21. Citigroup
22. HSBC
23. Accenture
24. Nestle
25. Credit Suisse
26. Bain & Company
27. Unilever
28. UBS
29. Nokia
30. Intel
31. Esso/ExxonMobil
32. Kraft Foods
33. Shell
34. Hewlett-Packard
35. Mars (Masterfoods)
36. Pfizer
37. Siemens
38. Philips
39. Oracle
40. Bayer
41. Philip Morris
42. DHL
43. BP
44. Bosch
45. Cisco
46. Daimler
47. Ericsson
48. ABB
49. Novartis
50. Schlumberger
    

Top-50 for engineering students:

1. Google
2. Microsoft
3. IBM
4. BMW
5. Intel
6. General Electric
7. Sony
8. Siemens
9. Shell
10. Proctor & Gamble
11. Johnson & JJohnson
12. Hewlett-Packard
13. Cisco
14. Esso/ExxonMobil
15. McKinsey & Company
16. Schlumberger
17. BP
18. L'Oreal
19. Nokia
20. Accenture
21. Coca-Cola
22. Philips
23. Goldman Sachs
24. Nestle
25. Pfizer
26. Bosch
27. The Boston Consulting Group
28. J.P. Morgan
29. Deloitte
30. Morgan Stanley
31. GlaxoSmithKline
32. Ericsson
33. Ernst & Young
34. ABB
35. Bayer
36. Unilever
37. PricewaterhouseCoopers
38. Deutsche Bank
39. HSBC
40. Kraft Foods
41. Bain & Conpany
42. Citigroup
43. Alcatel-Lucent
44. Daimler
45. Novartis
46. Mars (Masterfoods)
47. KPMG
48. Credit Suisse
49. DHL
50. UBS
    

Source: Universum