Asian Brand Strategy

Identity Myths and Storytelling are Keys to Building Iconic Brands

2010-02-22T11:41:00.001+08:00

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.

Unleashing The Asian Brand Potential

2010-02-15T11:44:00.005+08:00

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.

Crisis leadership: Toyota brand lessons

2010-02-09T08:48:00.004+08:00

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.

Transforming the view on Asian consumer psychology

2010-01-10T12:33:00.003+08:00

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.

Branding during challenging times

2010-01-10T12:27:00.002+08:00

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 Happy New Year

2009-12-23T17:18:00.005+08:00

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/

Guidelines to Emerging Markets Branding

2009-12-20T19:34:00.004+08:00

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.

Future young talents want to work for global brands

2009-10-30T20:14:00.009+08:00

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:

Google
PricewaterhouseCoopers
Microsoft
Goldman Sachs
Ernst & Young
Procter & Gamble
J.P. Morgan
KPMG
McKinsey & Company
Deloitte
The Boston Consulting Group
BMW
Coca-Cola
L'Oreal
Morgan Stanley
Sony
IBM
Johnson & Johnson
Deutsche Bank
General Electric
Citigroup
HSBC
Accenture
Nestle
Credit Suisse
Bain & Company
Unilever
UBS
Nokia
Intel
Esso/ExxonMobil
Kraft Foods
Shell
Hewlett-Packard
Mars (Masterfoods)
Pfizer
Siemens
Philips
Oracle
Bayer
Philip Morris
DHL
BP
Bosch
Cisco
Daimler
Ericsson
ABB
Novartis
Schlumberger

Top-50 for engineering students:

Google
Microsoft
IBM
BMW
Intel
General Electric
Sony
Siemens
Shell
Proctor & Gamble
Johnson & JJohnson
Hewlett-Packard
Cisco
Esso/ExxonMobil
McKinsey & Company
Schlumberger
BP
L'Oreal
Nokia
Accenture
Coca-Cola
Philips
Goldman Sachs
Nestle
Pfizer
Bosch
The Boston Consulting Group
J.P. Morgan
Deloitte
Morgan Stanley
GlaxoSmithKline
Ericsson
Ernst & Young
ABB
Bayer
Unilever
PricewaterhouseCoopers
Deutsche Bank
HSBC
Kraft Foods
Bain & Conpany
Citigroup
Alcatel-Lucent
Daimler
Novartis
Mars (Masterfoods)
KPMG
Credit Suisse
DHL
UBS

Source: Universum

Brand reinvention through pioneering innovation: Case of Mercedes

2009-10-07T19:46:00.004+08:00

One of the fundamental tenets of building global iconic brands is to pursue consistency in strategy, identity, communications and positioning. Toyota, Google, the New York Times, Singapore Airlines, Apple, and IKEA are just some examples of global iconic brands that have followed this fundamental branding tenet. Given such religious following of this tenet, it is no wonder that when companies experiment with any aspect of their brand, it manages to catch everyone's attention. More importantly, such moves challenge this fundamental tenet of consistency.

Changes in the global brandscape have brought about rethinking among the global brands. No longer are brands confined to any one particular market. Different markets pose different challenges in terms of customer preferences, local practices, resident competitors and together a challenge to the global brand identity. As such, brands have continually adapted to different demands. However, changing the fundamental identity and positioning of the brand is completely different.

Consider the case one of the most well known brands, Mercedes. The Mercedes brand has consistently been known for luxury, premium pricing, cutting edge technology and superior quality. However, in distinguishing itself from another well known brand, the BMW, Mercedes has focused more on its quality and premium--evel than mere technological superiority.

Given such strong notions of premium, the primary target of Mercedes has long been the high flying executive or mid-career professionals who have a sense of professional achievement and personal status image. Despite the recent sporty models, Mercedes has consistently been touted as the luxury car of the grown-ups. Such a singular positioning although ideal in normal circumstances is proving to be tough for Mercedes in the face global recession, falling demand, tighter environmental regulations across Europe and increasingly in the US and the closing of the gap by competitors like BMW and Audi.

Should Mercedes change its positioning? Or should be it true to the fundamental branding tenet of consistency? And if Mercedes decides to change, how can it do so without negatively impacting the brand image and equity?

Brand consistency is important. But equally important is for the brand to be responsive to the changing conditions. Mercedes has chosen the route of both incremental and substantial innovation to make the brand ever more relevant. Mercedes' (part of Daimler) CEO Dieter Zetsche has instituted a number of companywide initiatives to move Mercedes in the right direction.

For starters, despite cutting budgets in every possible area, Zetsche has kept the R&D budget intact. Innovation in enhancing fuel efficiency, better platforms and better designs have formed the pillars of the basic strategy. On technological innovation, Zetsche has bet hugely on the yet to be proven lithium ion battery technology to kick start the hybrid range of cars.

The company has enlisted many partners including Tesla Motors in the US to build an electric-roadster in the near future. The market has reacted very favorably with Daimler stock rising 50% to US$34 from a low of US$22.

Another tactical innovation has been to break down every Mercedes car into different modules to make sure similar parts can be used across the different models, thereby enhancing efficiency and achieving scale. It is forecasted that the soon to be launched next generation C-Class will use this sharing strategy completely.

In addition to these tactical and incremental innovations, Mercedes is also involved in innovation is two other fronts - dealing with competitiors and responding to customer needs. In a rare turn occurrence, Mercedes and BMW are collaborating in procuring parts and leveraging commonalities. Such collaboration has not only garnered positive reaction from the market, but also is expected to help both brands minimize costs.

Additionally, Mercedes has finally decided to expand its portfolio to target young but affluent customers, who traditionally have preferred the much sportier BMW or Audi, by launching A and B-class models. Although such a strategy is never easier to pull off given the traditional associations with a brand such as Mercedes, the new push by CEO Zetsche is seen as a move to stop the declining trends of Mercedes. From earning of around US$8 billion in 2000 to a loss of US$4.8 billion in the first quarter of 2009, from a market share of 24% among luxury car brands in 2003 to losing the market leader position to BMW in 2008, Mercedes is under immense pressure to show a turnaround.

In such circumstances, iconic brands do not just change their entire strategies, betray their brand identity and start afresh. Rather, they adapt a clever strategy of pursuing simultaneously incremental innovation that would streamline their process and cost structure while also pursuing strategic innovation that positions them well. As such, although consistency is a fundamental brand tenet, it can only be effective when practiced along with strategic adaptive capabilities.

First-mover advantage and branding: Apple versus Blackberry

2009-10-07T19:42:00.003+08:00

Competition is a core characteristic of business. Corporations around the world strive hard to outsmart competition to achieve sustainable competitive advantage. Much has been researched about the how companies can formulate strategies that can narrow the gap between market leaders and new players. Similarly, much is discussed about how companies choose strategies depending on the specific competitive landscape.

A central feature of such strategies is what has come to be known as first mover advantage (FMA). First mover advantage refers to the phenomenon whereby companies can achieve a considerable lead time over their competitors by being the first in a host of activities such as entering a market, introducing a new product, launching a new service, creating a distinctive positioning, creating a unique community or developing an enticing web presence. The argument is that whoever does these things first will have a significant advantage over their competitors, who will be forced to imitate.

Consider the case of two of the biggest brands in the mobile communication industry: Apple's iPhone and RIM's Blackberry.

Blackberry was the first brand to introduce mobile email that was compatible with corporate requirements. Based out of Canada, Blackberry easily became the market leader, and has continued to dominate the market. Even though there have been many other makers of smart phones before Blackberry, Blackberry was the first brand to seamlessly integrate mobile communication, internet capabilities and corporate email into a convenient hand held gadget.
Not surprisingly, many competitors have since then tried to imitate those features in their own handsets. But since the introduction of Blackberry in 2002, it has been the market leader in smart phones till today.

Blackberry's stranglehold on smart phone market was strongly challenged by Apple with its introduction of iPhone in June 2007. Unlike many other competitors such as Motorola, Nokia, Sony Ericsson, and Samsung, that aggressively imitated many of Blackberry's features in similar looking handsets, Apple did the unthinkable. Apple created a totally new design with appealing features and build.

The iPhone was a very slim and handy gadget with a very large touch screen that lacked a physical keyboard. Furthermore, unlike Blackberry, it significantly improved the convergence of a mobile phone, a music player, an internet browser, a digital camera, and an in-built GPS. Furthermore, iPhone was efficiently connected to iTunes, Apple's online store to purchase music and movies. That way, iPhone not only bettered what Blackberry had done, but also created a new standard.

Challenge the conventional wisdom
This represents a classic case of challenging the conventional wisdom of FMA. Although it was Blackberry that created the industry standard for almost five years, iPhone seems to have changed those rules despite not having FMA. This begs a couple of very important strategic questions. First, is FMA sustainable or only temporary? Second, how can companies undertake strategic initiatives to sustain FMA?

Sustainability is a relative term. Nothing is sustainable forever. Even the mighty IBM had to bite dust and the once leader General Motors is struggling. However, sustainability is very important for companies. If all strategies were easily replicated, then competition would be ruthless and eventually lead to a zero sum game.

First mover advantage certainly creates a very significant advantage for companies depending on the underlying basis of FMA. Early entry into a market allows early penetration into different segments and market domination. Similarly, in this case, Blackberry was able to define the industry standard by being first. However, iPhone not only conformed to those standards by including all the features Blackberrys offered, but improved every single of them. As such, innovation and customer insight helped iPhone redefine the standard.

An even more important question is then, are companies that are not first are doomed to failure? The answer is certainly no. Companies can undertake certain strategic initiatives to overcome the FMA deficit.

As in this example, Apple initially conformed to the industry standard, but additionally practiced innovation. Constant innovation to improve the status quo always allows companies to overcome the FMA deficit. Additionally, building strong brands is an extremely important strategic necessity. Despite Blackberry's FMA, Apple's brand equity was so strong with cult like following among its customers, that it allowed iPhone to overcome its FMA deficit.

As such, strong brands can both be a cause and a consequence of first mover advantage. As companies formulate their strategies, they should clearly evaluate their FMA status and accordingly take strategic initiative to compensate for their FMA deficit. As has been consistently demonstrated by global iconic brands like Apple, brand equity provides one of the strongest and most enduring strategic assets to correct FMA deficit.

Challenges to iconic brands - Case of Starbucks

2009-09-22T16:38:00.004+08:00

It is a widely accepted notion that world is indeed flat. Economic boundaries are being demolished. Companies are no longer constrained to their national markets. Internet has become a great leveler of field between companies and customers. Price has yet again taken central stage. And brands are under increasing threats from private labels.

Given such a connected world, how can companies maintain their underlying brand identity in face of worldwide external shocks such as the current global recession? Should brands practice consistency or continually adapt?

Before answering those questions, take a look at one of the world's iconic brands - Starbucks. Starbucks is almost single handedly responsible for creating the concept of a third place between home and work where people can relax, enjoy a cup of coffee and experience the inviting ambience.

Since its founding days in the early 90s, Starbucks has strived to build its brand identity on offering customers a relaxing and enjoyable experience. In addition, Starbucks has also built its brand on things that tend to be out of the box, by consistently defying the conventional wisdom.

When companies were aggressively advertising, Starbucks decided not to advertise. When cost cutting was the dominant paradigm of the industry, Starbucks chose to emphasize non-routine procedures to create excitement among the baristas instead of streamlining procedures to minimize cost. Unlike most other companies, Starbucks made its employees its partners, by offering them stock options and health insurance.

As against rigorous customer surveys Starbucks chose casual and informal chats with customers to gather their overall mood. All these clever strategies have enabled Starbucks to build one of the most iconic brands that has continued to resonate with customers across the world for more than fifteen years. That was until the economic conditions started worsening.

Since early 2008, Starbucks has been forced to bite the dust and succumb to the aftermaths of the recession. Founder Howard Schultz returned as the CEO. Cost cutting and efficiency was made the guiding strategy. More than 800 Starbucks stores were closed in the US alone. For the first time Starbucks invested more than US$200 million in advertising. And for the first time in its history, Starbucks started price campaigns in select stores to lure customers away from other price competitors such as McDonald's and Dunkin Donuts.

These events beg the obvious question. Given such fundamental changes in the macro environment, should iconic brands like Starbucks stay true to their strategic brand vision or continually adapt to regain competitive advantage?

Regaining lost glory and recapturing global brand leadership should be a two-pronged strategy. Iconic brands should strategically manage the dual process of continuous innovation on the one hand and reinforce their guiding strategic brand vision.

Innovation drives strong brands
Innovation is a fundamental building block of iconic brands. 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) and innovation in implementing cost-cutting and efficiency enhancing strategies. Such continuous innovation serves dual purposes.

First, innovation enables iconic brands to refine and redefine their cores in line with the changing needs. Second, innovation allows iconic brands to continually adapt to the changing needs of customers, thereby protecting its competitive advantage.

Innovation should be practiced along with an organization wide brand vision, which acts as the strategic blueprint of the brand's path. Such strategic vision should not only delineate the boundaries of the brand but also should chart out the possible strategies of the brand in order to attain and maintain brand leadership. Commitment to such brand vision allows companies in tough situations to chart out different strategies (such as either cost cutting or enhancing value proposition) but will ensure that the brand does not deviate from its strategic charter. As innovation prepares the brand to adapt to changing circumstances, brand vision can guide the brand not to stray away from the core brand promises and dilute the core brand identity.

Iconic brands can effectively regain their brand leadership by implementing this dual strategy. Starbucks has already begun on this path. It is innovating in reaching its customers and enhancing efficiency but maintaining consistency in its core brand promise of providing an enjoyable experience.

The changing global economic environment has challenged many global iconic brands. This dual pronged strategy can not only help these brand protect their brand leadership but can also create a sustainable path to ensuring long term competitive advantage.

Branding and Marketing in Emerging markets

2009-09-21T16:11:00.004+08:00

A quick look at the major media outlets, be they newspapers, magazines, websites, professional conferences or consulting engagements, highlights the global obsession with emerging markets. The rather large bloc of countries in South America, Eastern Europe, and Asia make up the loosely coined term emerging markets. Despite the geographic separation of these clusters of countries they share some very dominant and distinguishing characteristics.

Most of these countries were either socialist economies or controlled capitalist economies. They were closed from the global economy for a long time. All these countries are also characterized by substantial population levels, improvements in physical, intellectual and financial capital. Many of these countries have opened their economies to foreign direct investment and thereby taken a step towards a fuller integration with the global economy. As such, emerging economies seem very similar on many important dimensions.

Although many economies such as Brazil, Dubai, Turkey, and Bulgaria are aggressively developing their economies, it is usually Asia that manages to capture the global attention. Although at first glance such obsession can be waved aside as yet another media frenzy by a curious onlooker, a deeper analysis of the hard facts presents the tremendous evolution happening in the most important of all these emerging markets - Asia.

Read the full article >>

Hyundai - A brand desperate to rebrand

2009-09-16T00:59:00.004+08:00

It is a well accepted fact within the corporate world that one of the most valuable corporate assets is the brand a company owns. As such, companies strive very hard to create brands that resonate with customers. For any brand to resonate with customers, it has to tell a compelling story, and offer value to customers that go beyond tangible features. It sounds too simple to be true.

Hyundai Motor Company has found out just this the hard way. Hyundai has been struggling with its brand for long now. When Hyundai cars were introduced in the US market, it had no prior brand value. To make matters worse, its quality was highly questionable. But realizing this, the brand made amends to the quality. Quality improved gradually to a level where it was rated much better than Honda and Toyota's quality by various consumer reports. Its quality lagged behind only that of Lexus and Porsche.

Consumer Reports included two of Hyundai's models in the top five "Most Impressive" models among the 2007 models. Riding this confidence wave, Hyundai introduced many high models such as the US$30,000 Azera sedan, and the Veracruz SUV, and the upscale US$35,000 sedan Genesis. But the company was in for a rude awakening as reports showed that only 23% of all new-car buyers even considered a Hyundai model as against 65% for Toyota's cars and more than 50% for Honda's cars.

The financial numbers are also not very impressive. Last year the company's earnings fell 34%, to US$1.6 billion and the operating profits fell from 9% three years ago to a meager 4.5% last year. The market signals and sales figure have been so disappointing that the company has revised its original goal of selling one million cars by 2010 to selling just 700,000 cars by 2010. What has gone wrong for Hyundai?

It has been often argued that in purchasing a car, which is of high value and hence a more rational purchase, quality and functionality are the most important factors apart from design and brand. Hyundai seems to have managed the three factors of quality, functionality and design.

But it has fallen short on the brand front. Recently Hyundai threw open its multi million dollar advertising account open to attract the best talents in the industry to create a new story for the Hyundai brand. This is yet another testimony to the fact that a strong brand identity and associations are the most important factors that can attract customers.

In addition to such proactive measures to enhance its brand appeal, Hyundai is also actively pursuing innovation on two fronts simultaneously. On the product innovation side, Hyundai will be the first automaker in the world to make LPG (liquid petroleum gas) hybrid cars to be sold US$16,200. Such innovation has tremendously helped the brand to be at the forefront of customers' awareness scales.

On the customer innovation side, Hyundai has been very aggressively courting customers through new type of assurances and promotions. One of the widely noted promotions was Hyundai's guarantee to sell gas at US$1.49 a gallon for one year to those customers who purchased a Hyundai car. An even more popular and strategically brilliant move was to offer an assurance to customers that they can just walk away from their car loans without any negative repercussions on their credit ratings in case they lost their jobs.

Such strategic brand moves have started to show some positive results. As against a mere 3.1% market share in the US, Hyundai's US market share has increased to 4.3% during the first six months of 2009. Furthermore, its shares have jumped to 84.2% at the end of the second quarter of 2009 from 74.4% for the same period the previous year. Overall so far, against the Kospi Index's 27% raise, Hyundai's stock has increased 92% so far in the year 2009.

As can be seen, in a relatively short span of time, Hyundai brand has experienced highs and lows. It will be interesting to watch how the newly gained success in constructing a new brand story can be sustained by Hyundai amidst harsh economic conditions.

Lenovo - Chinese brand or a global brand

2009-09-16T00:17:00.006+08:00

One of the most visible corporate activities is mergers and acquisitions. Acquiring another company has long been touted as one of the most popular avenues for corporate growth and also has been documented as one of the most challenging.

M&A activity has become such a staple corporate activity over the last few decades that hardly its spurs any major interest. But when Lenovo acquired IBM's PC division it created major global news. This was a special case where an up and coming Chinese computer maker made huge strides by acquiring a global icon.

This acquisition created news for many reasons. This was one of the first high profile acquisitions by a Chinese company on the global landscape. By this acquisition Lenovo became the third largest computer maker in the world. Because of the IBM brand name, Lenovo was expected to make great strides within the US and the broader Western market. Business observers and analysts talked about how a Chinese company would successfully morph into a global brand with power and respect. This was three years ago.

Things have not gone exactly as expected for Lenovo. In spite of the mighty IBM brand name, Lenovo exports only 14% of its total shipment to the US as against Acer's 14% and Toshiba's 32%. Even though Lenovo is the market leader in China - the world's second largest computer market - with a 16.4% of the market, a recent report commented that Lenovo does not even come in the top 5 computer makers in the US market.

Further, Lenovo's home market of China accounts for 34% of Lenovo's sales and a whopping 71% of Lenovo's profits. Given such a showing, it is only natural that industry observers, competitors and consumer ask the question: Is Lenovo a Chinese brand or a global brand? What went wrong with Lenovo's plan to emerge as a power player in the global market?

There can be many answers to that question. But the three most important reasons are:

A highly lucrative yet competitive home market
Lack of brand equity in the consumer computer market
Negative effect of "China Brand Effect" in the Western markets

A highly lucrative yet competitive home market: China is one of those rare cases which offers the double whammy of a thriving and highly competitive domestic market along with offering an excellent base for exporting to the global market.

Being a Chinese company, Lenovo has guarded its home turf very aggressively. Lenovo is the market leader with 16.4% of the Chinese computer market. But given its ambition to expand beyond the home turf, it has had to focus increasingly on the US and other Western markets.

Such a division of resources and strategic focus has allowed competitors to inch closer to Lenovo in China. Compared to 2007, all competitors have increased their China market share in 2008. Dell increased its share from 7.2% to 9.1%, HP increased its share from 13.8% to 15.1%, and Acer has gone from 5.6% to 7.2% of the market. This in turn poses increasing challenges to Lenovo and its brand. Till date, it has not been able to effectively do two things at the same time - thwart competition at home and take market share from competitors in their home market - the United States.

Lack of brand equity in the consumer computer market: When Lenovo acquired IBM's PC division, its main aim was to leapfrog to become one of the largest computer companies in the world. Lenovo became the third largest computer company in the world, but not necessarily the biggest in the consumer market. IBM's traditional strength was in the business segment. IBM's Thinkpad laptops were the gold standard in business computers. But Lenovo did not restrict itself just to the business market.

Over the last three years it has made a very aggressive entry into the consumer computer market with two new Thinkpad models and the new line of Ideapads. But given the recessionary economic conditions in the US, this move has not yielded any credible results so far. Furthermore, for a company that is still learning the rules of the global brand game in the computer industry, Lenovo has bitten more than it can possibly chew. Entry into the very highly competitive US consumer computer market where DELL and HP have a near strangle hold, leveraging IBM's brand name in the business market, building equity for the Lenovo brand and guarding the home turf in China have all together put Lenovo under immense stress.

The China Brand Effect: As one of the recent articles in a leading US daily reported, for US consumers Lenovo (even after acquiring IBM’s PC division) is still a Chinese brand. Given the general perception of China, Chinese products, controversies about China's counterfeit markets (and products), the questionable quality of "Made in China" products and the overall macro socio political sentiment towards China have heavily impacted the perception of Lenovo among the US and other Western consumers.

This reflects the lack of Lenovo's efforts in building a strong brand. Even though Lenovo had a golden opportunity to capitalize on IBM's co-brand name for three years, it has turned out that Lenovo has not managed to create a strong brand image among the Western consumers. While sales in China grew by 18% during the first quarter of 2008 compared to 2007's first quarter, sales in the US increased only by a paltry 3%. Furthermore, Acer's acquisition of Gateway has catapulted Acer's position within the US market and Acer is inching closer to Lenovo.

Given these apparently insurmountable challenges Lenovo faces both at home and in the Western markets, it is not surprising that Lenovo is taking a beating of its stock. In spite of reporting sales of US$3.74 billion and revenues of US$140 million in the first quarter of 2008, Lenovo's stock is down by 14% for the year 2008 as against a 15% drop for Dell and an 11% drop for HP. The same saga has continued in 2009 as well. Lenovo reported sales of US$3.5 billion for the June 30 quarter. This sales number is down 17.9% for the same period in the previous year.

Furthermore, Lenovo posted a loss of US$16 million for the quarter as against a net profit of US$119 million for the same period in the previous year. With competitors chipping away at its market share in China, Lenovo will have to aggressively build its brand in the US and European markets in order to survive long term. The strategy has to be carried out by management.

Brands - be true to the Asian roots!

2009-08-15T18:31:00.001+08:00

Some Asian brands are becoming successful well beyond Asia. But with two-thirds of the global population, growing economies, a rapidly growing middle class with an increasing disposable income, Asia still boasts only a handful of powerful brands which is a cause for concern.

Despite Asia's historical focus on manufacturing and trading activities, the global landscape could potentially face a wealth of new Asian brands in the coming years. Every country in Asia has its own list of aspiring brands just waiting to cross the local borders. In literally every industry sector, many companies are realizing the potential value creation that they might be forgoing due to lack of branding. These companies are gradually making a mark in the region having been inspired by the industry leaders. But yet not many have managed to attain international recognition.

To create iconic Asian brands true to their roots and origin, Asian managers will have to become trendsetters to a much larger extend than today. The future perspective for Asian businesses 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 time for Asian boardrooms to rid of the inferiority complex and focus more on what Asia actually has to offer when it comes to brand building.

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. Moreover branding and brands do not operate in vacuum, but are closely linked to developments in society, to people and to cultures.

The defining aspect of any brand is its identity. Brand identity is a brand's calling card to its customers. The identity of a brand not only differentiates the brand from the many other competing brands in the market but also offers the brand the distinct opportunity to create unique experiences that would entice the customers to the brand and build lasting relationships.

As such, the identity of a brand is very important. Given this, it would seem very obvious that Asian companies would benefit by maintaining their unique Asian identities when they expand globally. Companies will have to be carefully here not to generalize this too much. The level to which Asian brands maintain their Asian identities also depends on the type of industry the company belongs to.

In the hospitality industry, Asian players such as The Shangri-La, Banyan Tree Hotels & Resorts and Mandarin Oriental Hotels are classic examples of brands that have gained immensely by leveraging on the unique Asian service mindset. This also goes for Singapore Airlines which is truly Asian and have successful become the most admired and profitable airlines brand in the world.

As such, it makes sense not only to maintain the Asian identity but also to emphasize it in this case. It will be crucial for companies to weave their brands into the social fabric and make them a part of the community to ensure enduring success. Tapping into popular culture and society are two main drivers of successful branding.

On the other hand, consumer electronics is a sector where cutting technology and world-class designs are more crucial than the degree of Asian origin and culture of the company. As such, companies such as Sony, Samsung, LG, and Creative Technologies have emphasized the technological aspects of the brand more than the cultural aspects of being Asian companies. But moving forward, these brands will have to emphasize their Asian origin to create brand personalities that truly differentiate them from other global players.

Therefore, companies will have to make a careful examination of the relevance of maintaining the Asian identity of their companies in the context of the industry sector that they are in and then accordingly emphasize its importance.

Asian consumers and Asian manager have for long not valued Asia and its heritage and instead tried to emulate everything from the West. The Asian inferiority complex is diminishing and Asia will grow in importance as the key ingredient for brands over the next 10-15 years.

Rural and Low Income consumers in Asia

2009-08-13T22:34:00.003+08:00

An important segment that marketers cannot ignore in Asia is the bottom of the pyramid and those Asian consumers living in rural areas. The challenges that marketers face in trying to address these consumers are high and risky due to the fragmented nature of the rural market and the low margins of this trade. There is no denying though that rural consumers want to access brands, if only because they are a promise of quality. For Asian marketers interested in tapping the huge rural markets in Asia, there are important issues to consider,

First, rural consumers have less purchasing power. In China, the income gap between urban and rural residents, which is around 5 to 1, greatly restricts rural people's consumption of products. There is also a significant difference in the way wages are earned with a majority of the working population in rural markets being paid daily instead of weekly or monthly wages. This means that consumers in rural markets will generally spend their daily wage on necessities such as food, and have little left to spend on items for personal care and other relatively luxurious items.

This has driven companies like Unilever to sell sachets in rural China and India, instead of the normal sizes of detergent and shampoo. One-third of India's shampoo sales comes from sachets in rural districts, with Unilever, the British-Dutch company accounting for 70% of those sales of sachets. The company is increasingly relying on Asian rural markets to drive its sustained growth. Hindustan Lever, Unilever's Indian subsidiary, is now a major force in the Unilever network of subsidiaries with many strategies emerging from India.

For example, the company used the expertise of its Indian managers in the rural markets to help develop the Chinese market for shampoos and soaps. Another example is Coca-Cola which began to sell 200-milliliter bottles of Coke in India in 2003 to increase demand among consumers who cannot afford bigger portions.

The income disparity between rural and urban consumers can therefore drive companies to innovate to answer these differences.

A second element of difference between rural and urban consumers is density. The number of villages in countries across Asia is extremely high, pushing companies like to develop extensive distribution networks.

In the Indian market, the detergent maker Nirma adopted a strategy of developing a base in the hinterland and the rural areas before attacking the big metropolises. Nirma's founder knew chemicals well enough to develop an effective low-priced detergent of good quality but did so starting in his home state of Gujarat before launching in other regions. He called the yellow powder detergent Nirma after his daughter. He started by selling to his neighbours for a small profit and built his consumer base slowly. Because a strong distribution network is so important in emerging markets like India, he concentrated on widening his distribution network. Nirma began surfacing all over Gujarat, in small shops in the remotest villages.

Another great example of a company with rural expertise is the Indian company Asian Paints. The company has almost 50% of the market for house paints in India, despite the presence of major foreign multinationals. The company has succeeded among other things by developing a very extensive distribution network in the rural market. Its products are priced low and as such, have been very successful in other developing countries such as Nepal and Fiji. Asian Paints has developed an expertise in dealing with low-income, often illiterate consumers who only buy small quantities of paint that they later dilute to save money.

Companies like Asian Paints and Nirma have understood that the key to succeeding in markets like China and India is a good understanding of the rural consumer and a vast distribution network.

Overall, while Asian countries are very diverse and need to be understood in their own context, there are similarities and threads that cut across the region. Companies like Unilever, Asian Paints or HSBC have captured some of these similarities in the development of brands that address segments with similar needs in different countries. Consumers in rural China and India buying small doses of detergent or shampoo. Rural consumers in Fiji and India buying low-cost quality paints. Muslim consumers turn to Islamic banking.

As Asian companies venture into new markets and try to appeal to consumers from other Asian countries, an understanding of these similarities as well as the specificities of Asian consumer psychology, remain essential.

Profitable business through brand leadership

2009-06-11T17:33:00.002+08:00

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.

Asian Brand Strategy - Chinese version July 2009

2009-06-10T20:38:00.002+08:00

Asian Brand Strategy will be published in Mandarin by CEIBS Publishing in July 2009. Professor Philip Kotler has written the foreword to the Chinese version.

Top 10 brands in the Philippines

2009-06-07T22:45:00.002+08:00

The Wall Street Journey Asia has ranked the Top 10 brands in the Philippines:

Jollibee Foods
Ayala Corporation
Ayala Land
San Miguel
Bank of the Philippines Islands
Globe Telcom
Banco de Oro Unibank
Philippines Long Distance Telephones
SM Prime Holdings
Metrobank

Source: The Wall Street Journal Asia, June 2009

Banyan Tree - Branded Paradise from Asia

2009-06-06T12:14:00.003+08:00

From an early start in 1992, Banyan Tree Hotels & Resorts has grown into one of Asia's most successful hospitality brands with numerous international awards and accolades from publications like the prestigious Conde Nast Traveler and others.

Banyan Tree is one of the youngest chains of up-market and privately-held luxury boutique hotels and resorts. By successfully blending its environmental concern with the unique Asian traditions and heritage and the concept of individual luxury villas offering an intimate experience, Banyan Tree has emerged as one of the leaders in the hospitality industry.

Branding has been part of the strategy from the early start, and was born out of a necessity to differentiate a traditional overseas Chinese family business. Banyan Tree wanted to escape being overrun by cheaper competitors from Indonesia and China on the one hand, and to take the focus away from tough pricing on the other.

These have been the typical challenges for many Asian businesses trying to compete in the new environment and building competitive advantages. It proved to be a successful way of breaking away from an Asian commodity business and changed the focus onto higher value-added revenues.

Banyan Tree is founded by Singapore-based Ho Kwon Ping, who named the brand name after a place in Hong Kong where he and his wife spent idyllic days when he was a reporter and editor for an Asian magazine. In 1994, the couple opened the first Banyan Tree resort in Phuket, Thailand.

Given the inevitable turmoil of the volatile hospitality industry, Ho Kwon Ping was convinced from the beginning that a strong focus on branding would give Banyan Tree a sustainable competitive advantage. This was proved right as Banyan Tree withstood the repeated crises of 1997/98, the events of September 11 and the Iraq War.

During the SARS outbreak in Asia in 2003, the company still emerged profitable by achieving average occupancy rates of 65-67%.

The company has based its brand on the two main beliefs of the organization. Banyan Tree resorts would become a 2romantic escape for couples" and Banyan Tree would be an environmentally sensitive and a socially responsible organization.

Branding has started right from the locations of the Banyan Tree resorts and has been consistent through the designs, the facilities offered, and the ambience created in each of the resorts. The resorts offer a unique experience for the visitors by providing them a luxury holiday complete with self-indulging and pampering experiences like the Banyan Tree Spas which offer traditional treatments and fresh ingredients.

The company operates a training academy in Phuket in Thailand where all spa therapists must go through the compulsory 400 hours of training, which is above the industry standard.

Concern for the nature and environment surrounding the resorts has been a trademark of Banyan Tree. Many environmentalists appreciate their efforts to nurture and protect the surroundings of their resorts. True to its belief that environmentally sustainable and socially responsible tourism is compatible with making profits, Banyan Tree has established the Green Imperative Fund to extend financial assistance to environment conservation and community projects.

Brand Communications
Banyan Tree initially resorted to advertising to build awareness in the market, but the advertising budget was soon cut to save costs. In fact, the overall marketing budget of Banyan Tree has been 7% of the total revenue, with 60% allocated for trade and 40% allocated for consumer promotions. The entire brand communications strategy has been based on third party endorsements, word-of-mouth and public relations.

Editorial coverage combined with word-of-mouth recommendations from customers and co-branding activities with strategic partners have since the launch of the company served as the major channels for brand communications. The media coverage has helped build the brand's international awareness and credibility.

The strong belief in branding by Banyan Tree's corporate management has started to pay off, and the Banyan Tree brand equity has enabled new revenue streams for the organization. It has enabled Banyan Tree to come out with a brand extension in the form of Angsana Resorts (launched in 2000), targeted towards young families and at different price points - typically 20-30% lower than Banyan Tree resorts themselves. It also operates stand-alone Angsana Spas.

The latest line extension has been Colours of Angsana, a sister chain of resorts under the Angsana brand, which opened in 2003. The hotels are launched in more remote areas of the world including UNESCO's World Heritage sites.

These measures not only allow Banyan Tree to increase its awareness in new markets and gain international momentum, but also create a strong platform for a portfolio of sub-brands that can be a source of long-term revenue generation.

The future strategy of the Banyan Tree Company is described as "to string a necklace of resorts around the world. It’s not about being everywhere, but having a presence in chosen places. It is not about quantity but building quality jewels that form a chain".

The future challenges
Distinctively Asian versus developing a global image: With plans of expanding beyond Asia, Banyan Tree faces the typical dilemma of any Asian brand to find a balance between being distinctively Asian and developing a more globally-oriented image.

Consequences of brand extensions: This is a challenge which goes to the very foundation of the company - management of the brand and allocation of resources. Though Angsana has a lower price point and is targeted primarily towards family guests, these resorts still have much of the typical Banyan Tree feel. The challenge is to balance two distinct brands and differentiate them without diluting the leading brand Banyan Tree.

Keep innovating and avoid copycats: The market is crowded with many entrants running similar branded resorts in the upper-end. Particularly in Asia Pacific, where Banyan Tree has its stronghold and traditional base, new entrants are facing only small barriers-of-entry other than huge capital requirements and availability of good locations.

Fiji Water: The exotic water brand

2009-06-06T12:08:00.004+08:00

Fiji Water is one of the newer examples which testify that competent branding can elevate even the simplest commodity to a celebrity status. In a category dominated by France's Evian, Coca Cola's Dasani and Pepsi Co's Aquafina, Fiji Water has come to occupy the fourth place within the short span of 10 years and has grown its sales rapidly.

By following non-traditional methods of marketing, a very distinct positioning, and a high end pricing level against competitors, Fiji Water has been able to establish strong brand equity amongst the top tier market segment including celebrities, Hollywood stars and the best restaurants of New York and California.

Fiji's Background
Fiji Water, the company that owns the Fiji Water brand, was founded in 1988 in Basalt, Colorado by Gilmour, a businessman with interests in hotels, real estate and gold mining.

The Fiji Water brand came into life in the early 1990s when David Gilmour secured a 99 year deal with the Fijian government to tap the aquifer discovered by government contracted geologists and market the water under the Fiji Water brand name. Fiji Water has extensively made use of product placements in leading Hollywood movies, high profile events and exclusive restaurants to include the brand in the elite community.

Branding Philosophy
One may say all water tastes the same. This means branding in this category is not product focused, but story focused. The company, which tells a better story and backs it up with credible facts, thereby creating an exciting myth, wins the day. Fiji Water seems to have understood this underlying truth extremely well. The Fiji Water brand is built on three pillars: creating an exciting myth, precision marketing (including personal relationships and product placements) and a controlled distribution strategy.

As the physical attributes of the product cannot be differentiated in itself, Fiji Water has resorted to creating a very powerful story around the product coming from a 332-island nation in the South Pacific. This physical inaccessibility has provided Fiji Water to create the story of this water being extracted from a virgin ecosystem far from acid rain, herbicides, pesticides and other pollutants, and that is filtered naturally for years through layers of silica, basalt and sandstone, as is communicated through its packaging.

This story provided customers with something unique to sit up and take notice of. The story was backed by the credible fact, that Fiji is an unexploited land full of tropical forest surrounded by coral reefs, unpolluted by the modern world’s necessary evils and was protected by nature as it were. This created a very strong myth about the brand amongst the customers.

The myth creation was backed by precision brand marketing. Fiji Water did not resort to the usual mass media advertising for its product launch. It formulated a two-pronged strategy:

Building personal relationships with the chefs of leading restaurants, resorts and spas to promote the buy-in of the brand
Placing the product in leading Hollywood movies and other high-profile events to attract attention and to create buzz

Gilmour used his contacts in the hotel industry to pitch his product to the top-end hotels, resorts and restaurants. By coming out with an award-winning slippery silver bottle design, Fiji water has been able to replace Evian in many of the top-end restaurants.

Fiji Water has resorted to product placement as a major channel of promotion and brand building. By hiring Creative Entertainment Services, a Hollywood marketing consulting firm, Fiji has been able to fit in Fiji Water bottles in scripts of many major Hollywood movies. Fiji Water has also sponsored many local events such as golf tournaments, sailing regattas, and musical events.

Another important aspect of Fiji Water's branding philosophy has been its controlled distribution strategy. In line with its positioning of a high-end product, Fiji Water has ensured that it is available at the best hotels, resorts and spas used by the leading stars and managed to get chef's recommendations.

Future Challenges
The biggest challenge for Fiji Water going ahead would be to sustain this level of interest in its brand. The problem of basing the brand heavily on such a myth is that it does not create any barriers for any new entrants to come up with some other equally exciting myth.

Given the low level of involvement of customers in selecting water, customers would be willing to try out newer and more exciting brands as and when they come up. In this regard, Fiji Water should focus on formulating a strong customer loyalty and retention drive in the light of impending competition.

Though Fiji Water has managed to get Forbes include it in a list of things "worth every penny", it would indeed require much more than a strong story to carry it through in the future.

The Chief Marketing Officer - A New Boardroom Role Needed

2009-06-05T10:14:00.002+08:00

The Chief Marketing Officer (CMO) has become one of the more commonly talked about corporate designations in recent years. Given the tremendous marketing potential offered by the new media and proliferation of distribution channels, companies have begun to realize the huge potential of marketing in guiding corporate level strategies and substantially contributing to the financial bottom line.

In spite of such an understanding, it is startling to note that the average tenure of a CMO is merely 23 months compared to a CFO that typical lasts 4-5 years on average. Further, not many companies have a senior marketing representative in their C-suite. This begs the question - do companies need a CMO or is the role of a CMO a mere hype?

As the business landscape evolves, marketing also evolves into an organization wide strategic discipline. Given marketer's knowledge of the customers, it is imperative that the CEO and the corporate board have a representative of the customer to continually educate them. Additionally, companies need a strategic CMO to benefit from:

Align marketing with the corporate business strategy
Newer technology, powerful channel partners, and empowered customers have made the competition highly intense and marketing a very involved and strategic discipline. Marketing can no longer be confined to the 4P framework. Marketers, with their in-depth knowledge about markets and customers, should act as a major resource for strategy formulation.

In all issues of corporate strategy - what markets to compete in, what segments to target, what entry mode and strategy to adopt, which partners to strategically ally with - marketing offers substantial information. In order to convey these holistic perspectives, it is imperative the marketing is represented by the CMO in the corporate boardroom who can speak to the directors and the CEO in their language.

A classic example is of the iPhone from Apple. Given the tremendously successful iPod and iMac, Apple could have become complacent. But the marketing acumen of the executives recognized the need to constantly excite the customers. Further, they built their growth strategies on satisfying the unmet needs of the customers. Marketing played a crucial role in guiding Apple's corporate strategy.

Connect the corporate boardroom with the customer
As 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 - what do the customers' value and how can the customers help the company in co-creating value.

CMO plays a crucial role in constantly updating the boardroom and the CEO about latest customer preference, how well the corporate resources are aligned to meet hose evolving customer needs. Companies such as Levis Strauss, Sony, Toyota, Nike and Singapore Airlines are some of the pioneering companies that manage to constantly feel the pulse of their customers. As such, the marketing takes a central role in guiding the corporate strategy by having the top management team and the CEO regularly updated about customers and markets.

Create a customer centric organization
Given the innumerable choices that customers have, ensuring long term customer loyalty and sustainable competitive advantage becomes highly challenging. The difference between the successful companies that achieve those objectives and those who fail is the corporate orientation. Customer oriented companies design and operate every aspect of the company with the customer in mind.

To build a customer centric organization requires a highly concerted effort of all functions within a company along with every employee becoming a customer champion. These issues deal with organizational culture, organizational structure and corporate policies. The CMO can influence the boardroom and the CEO to implement measures that would allow to build a customer centric organization.

Banyan Tree Hotels and Resorts is a classic example that showcases such a customer centric philosophy. The founder has managed to instill a culture that allows constant interaction between marketing and other functions with the company. Such an emphasis has resulted in world class resorts that always manage to delight the customers.

It is evident that CMOs are strategic requirements of any corporate boardroom. But in spite of such a significant role played by the CMO, companies have not completely embraced the concept of a CMO.

Asia has an unprecedented opportunity to elevate marketing to the boardroom level, so that the CMO can take center-stage in shaping and executing the corporate strategy leading to better shareholder returns.

Profitable business through brand leadership

2009-06-04T22:40:00.002+08:00

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.

Asian Brand Strategy - 2nd edition to be launched in 2010

2009-05-06T16:00:00.003+08:00

Asian Brand Strategy will be launched in a 2nd edition in early 2010. We will keep the current structure and content, but everything will be updated. New case stories will be added also.

Some of the current cases and references are:

Accenture, AC Nielsen, Acer, Adidas, Air Sahara, Akai, Alcatel, Apple iPod, Asian Paints, Audiovox, Banyan Tree Resorts, Bausch & Lamb, BMW, Bossini, Cadbury, Chang Beer, Chanel, Cisco, Citibank, Coca-Cola, Creative Technology, Datacraft, De Beers, Disneyland, Esprit, Epson, Etude, Everton, Fiji Water, Gallup, Giordano, Giorgio Armani, Gillette, Gucci, Hang Ten, Harley Davidson, Haier, Hasselblad, Hero Honda, Honda, HSBC, IBM, ICICI Bank, Indian Airlines, Infosys, INSEAD, Kawasaki Bajaj, Lenovo, LG Electronics, L'Oreal, Louis Vuitton, LVMH, Maersk Sealand, McKinsey, McDonald's, Mercedes, Motorola, NASDAQ, Nike, Nirma, Omnicom Group, Oral B, OSIM, Pantech, Pepsi, Prada, P&G, Ralph Lauren, Red Bull, Reliance Group, Rolls-Royce, SAB, Singha Beer, SK II, Shangri-La Hotels, Sony, Shiriro, Starbucks, Star Cruises, Tag Heuer, TCL, Thai Airways, Tiger Airways, Thompson, Toyota, Trung Nguyen, Unilever, Virgin Group, Watson Wyatt, Wipro, Zen Micro and Yue Sai Kan.

Which other cases would you like included? Write us at: contact@asianbrandstrategy.com

Thanks for your contribution!

The world's most admired companies 2009 - where is Asia?

2009-04-10T11:01:00.019+08:00

In a recent March 2009 FORTUNE article, the magazine ranked the world's 50 most admired companies in collaboration with the Hay Group management consulting firm. Stability, strong strategy and structure are key factors - the research found that less admired companies change structures and strategies far more often than the most admired companies.

The research also illustrated that the most admired companies are doing better during times of crisis, and that they are most inclined to expand globally with success despite a challenging environment for marketing programs and brand leadership.

The list of the world's 50 most admired companies from:

1. Apple (US)
2. Berkshire Hathaway (US)
3. Toyota Motor (Japan)
4. Google (US)
5. Johnson & johnson (US)
6. Procter & Gamble (US)
7. FedEx (US)
8. Southwest Airlines (US)
9. General Electric (US)
10. Microsoft (US)
11. Wal-Mart Stores (US)
12. Coca-Cola (US)
13. Walt Disney (US)
14. Wells Fargo (US)
15. Goldman Sachs (US)
16. McDonald's (US)
17. IBM (US)
18. 3M (US)
19. Target (US)
20. J. P Morgan Chase (US)
21. PepsiCo (US)
22. Costco Wholesale (US)
23. Nike (US)
24. Nordstrom (US)
25. Exxon Mobil (US)
26. Bank of America (US)
27. United Parcel Service (US)
28. BMW (Germany)
29. American Express (US)
30. Hewlett-Packard (US)
31. Cisco Systems (US)
32. Honda Motor (Japan)
33. Singapore Airlines (Singapore)
34. Starbucks (US)
35. Caterpillar (US)
36. Intel (US)
37. Marriott International (US)
38. Nestle (Switzerland)
39. Sony (Japan)
40. Boeing (US)
41. Deere (US)
42. Nokia (Finland)
43. Northwestern Mutual (US)
44. Best Buy (US)
45. General Mills (US)
46. Toyota Industries (Japan)
47. Lowe's (US)
48. AT&T (US)
49. Accenture (Bermuda)
50. Samsung Electronics (South Korea)

Source: FORTUNE magazine, March 2009

One overall issue is stricking: Where are the Asian brands? Out of the 50 most admired companies, only 10 origins from outside the US. Asia represents 6 brands out of the 50 most admired brands, namely Honda Motor, Singapore Airlines, Nestle, Sony, Toyota Industries and Samsung Electronics. Those brands are well-established and have been at the forefront and a showcase of what Asia has to offer the world.

But where are the rest? Asian brands need to step up their efforts and take on the global markets. It is time for Asian shareholders and Asian top-management teams to build and sustain strong brands in order to be able to compete more effectively on a global scale.

Brand leadership needs to be elevated to the boardroom level and become a strategic discipline along the lines of all the other important issues in the executive toolbox. Not until then, will the Asian companies be able to compete globally in a more sophisticated way as opposed to the traditional focus on manufacturing and relatively low price.

It is time for Asian companies to get rid of their trading mindset. Asian executives need to enhance their marketing and brand leadership capabilities, and move up the value chain to compete for the future.