Profitable business through brand leadership
It is quite clear that this is going to be Asia's century. The opening of China, the rise of India and the resurgence of Asia make the region the most vibrant business playing ground in the world. There is a slow but steady shift in the Asian business mindset. Gone are the days when low cost and manufacturing prowess alone served as the only competitive advantages for the Asian companies. The Asian corporations must realize the importance of moving up the value chain.
One of the main ways to achieve that would be to create strong brands. This will not only serve as the main competitive advantage for these companies, but also enhance shareholder value in the medium and long-term. This is easier said than done, given the dominant Asian business mindset of trading and sales.
A substantial part of shareholder value of successful companies derives from their ability to successfully manage and leverage their most important intangible assets: their brands' equity. In turn, Asian companies will have to realize that branding must be led by the boardroom and corporate management. It is too important to be left to the marketing function alone. Brand management is a dynamic and continuous process which requires attention and involvement from the senior leadership. This requires the marketing function to be presented at boardroom and corporate management level.
Contrary to common perceptions in Asia, branding is much more than advertising and marketing communications alone. Nice company logos or modern design identities are not key ingredients for branding - only a tactical face to it. Instead, successful branding is strategic, involves all functions and aspects of a company and must be deeply embedded throughout the entire organization aligned around multiple touch points. This ensures a successful balance between brand promise and brand delivery.
In the future, this requires the Asian marketing function to become more cross-functional, to manage and measure their results through multiple marketing metrics, and work in teams to play an important part of brand building.
As more and more global and local companies enter the market in all possible categories, there will be an intense competition and an over-capacity in the market place. This will exert immense pressure on companies to resort to price wars to capture the market on a short-term basis. But Asian boardrooms need to take a strategic look and balance between short- and long-term financial performances. Corporations need to look beyond quarterly results, monthly sales figures and factory turnovers. This will be highly valued by shareholders and financial markets.
Financial resources spent on brand management must be treated as an investment rather than an expense. Boardrooms need to invest in sustainable intangible assets through branding strategies to survive, sustain and grow in the market.
As more Asian countries open their doors to global companies and attract foreign investments, building strong brands becomes not only an important strategy but also a matter of survival for many Asian companies. In the changing market dynamics, being a domestic market leader does not guarantee long-term success as global players entering the domestic markets, can easily challenge the local players with their business might.
A McKinsey study shows that the top ten Asian value creators derive more than 50% of their revenues on an average from outside their home markets. A case in point is India's software giant Wipro Technologies deriving more than 80% of its revenues from non-Indian customers.
Many global brands have established strong relations with local partners, invested heavily to build robust distribution networks, worked in tandem with the local authorities to establish a good working rapport and recruited local people to gain the crucial local "Asian" knowledge. As this levels the ground for local and global brands in terms of local market and customer knowledge, Asian companies will increasingly come under pressure to defend their traditional comparative advantage. This in turn again stresses the need for local Asian companies to invest in building resonating brands with compelling stories if they were to compete with global brands and survive in the market place.
Asian brands like Singapore Airlines, Banyan Tree Hotels & Resorts, HSBC, Samsung and Shiseido have demonstrated that it is possible for Asian companies to build brands on par with those of Western countries. They have also proved the fact that a strong brand will enable companies to sustain through difficult times and sustain their financial robustness.
A branding drive in Asia is progressively emerging and will change the global landscape in the next decades if taken seriously by Asian boardrooms and if managed properly throughout the entire organization.
As the management professor Peter Drucker once said: "Whenever you see a successful business, someone once made a courageous decision".
Asian cultures have always valued the long term aspects in almost any aspect of life. Let this unique strength influence the Asian branding efforts in the years to come. It is up to the Asian boardrooms to take courageous decisions.
One of the main ways to achieve that would be to create strong brands. This will not only serve as the main competitive advantage for these companies, but also enhance shareholder value in the medium and long-term. This is easier said than done, given the dominant Asian business mindset of trading and sales.
A substantial part of shareholder value of successful companies derives from their ability to successfully manage and leverage their most important intangible assets: their brands' equity. In turn, Asian companies will have to realize that branding must be led by the boardroom and corporate management. It is too important to be left to the marketing function alone. Brand management is a dynamic and continuous process which requires attention and involvement from the senior leadership. This requires the marketing function to be presented at boardroom and corporate management level.
Contrary to common perceptions in Asia, branding is much more than advertising and marketing communications alone. Nice company logos or modern design identities are not key ingredients for branding - only a tactical face to it. Instead, successful branding is strategic, involves all functions and aspects of a company and must be deeply embedded throughout the entire organization aligned around multiple touch points. This ensures a successful balance between brand promise and brand delivery.
In the future, this requires the Asian marketing function to become more cross-functional, to manage and measure their results through multiple marketing metrics, and work in teams to play an important part of brand building.
As more and more global and local companies enter the market in all possible categories, there will be an intense competition and an over-capacity in the market place. This will exert immense pressure on companies to resort to price wars to capture the market on a short-term basis. But Asian boardrooms need to take a strategic look and balance between short- and long-term financial performances. Corporations need to look beyond quarterly results, monthly sales figures and factory turnovers. This will be highly valued by shareholders and financial markets.
Financial resources spent on brand management must be treated as an investment rather than an expense. Boardrooms need to invest in sustainable intangible assets through branding strategies to survive, sustain and grow in the market.
As more Asian countries open their doors to global companies and attract foreign investments, building strong brands becomes not only an important strategy but also a matter of survival for many Asian companies. In the changing market dynamics, being a domestic market leader does not guarantee long-term success as global players entering the domestic markets, can easily challenge the local players with their business might.
A McKinsey study shows that the top ten Asian value creators derive more than 50% of their revenues on an average from outside their home markets. A case in point is India's software giant Wipro Technologies deriving more than 80% of its revenues from non-Indian customers.
Many global brands have established strong relations with local partners, invested heavily to build robust distribution networks, worked in tandem with the local authorities to establish a good working rapport and recruited local people to gain the crucial local "Asian" knowledge. As this levels the ground for local and global brands in terms of local market and customer knowledge, Asian companies will increasingly come under pressure to defend their traditional comparative advantage. This in turn again stresses the need for local Asian companies to invest in building resonating brands with compelling stories if they were to compete with global brands and survive in the market place.
Asian brands like Singapore Airlines, Banyan Tree Hotels & Resorts, HSBC, Samsung and Shiseido have demonstrated that it is possible for Asian companies to build brands on par with those of Western countries. They have also proved the fact that a strong brand will enable companies to sustain through difficult times and sustain their financial robustness.
A branding drive in Asia is progressively emerging and will change the global landscape in the next decades if taken seriously by Asian boardrooms and if managed properly throughout the entire organization.
As the management professor Peter Drucker once said: "Whenever you see a successful business, someone once made a courageous decision".
Asian cultures have always valued the long term aspects in almost any aspect of life. Let this unique strength influence the Asian branding efforts in the years to come. It is up to the Asian boardrooms to take courageous decisions.
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