Friday, January 27, 2006

Wahaha - Taking the fizz out of the giant cola brands!

When Zong Qinghou, a Chinese farm worker, started a company of beverages and ice creams with two retired teachers in 1987, hardly anyone could have imagined that this company could give sleepless nights to global giants such as Coca-Cola and Pepsi Co. But the new company, Wahaha, the pride of many contemporary Chinese consumers, has managed to do just that.

Wahaha, one of the leading homegrown Chinese beverage brands, had revenues of US$1.37 billion (11.4 billion yuan) and profits of US$162.7 million (1.34 billion yuan) in 2004.

Wahaha, which is meant to mimic the sound of a baby laughing, demonstrates clearly what great brand stories are made of. The company started small, and in 1991, it merged with the state-owned Hangzhou Canning Factory. The 1996 joint venture with the Danone Group gave the company foreign investment to the extent of US$45 million. After dabbling in many product categories, it launched its trademark brand the 'Future Cola' in 1998 to compete against the global cola giants. Today, Wahaha's product portfolio includes milk and yogurt drink, purified and mineral water, carbonated soft drink, fruit and vegetable juice, sports drink, and iced tea including cognee (rice porridge), canned food and health products.

Wahaha has been careful in its strategy to compete against the global cola and food giants. As the fashion conscious Chinese consumers seem to prefer the global colas in the larger costal Chinese cites, Wahaha has till now focused on rural and semi-urban Chinese areas. Further, the Wahaha brand has generously used home grown celebrities for all its products. This is in line with its overall strategy to position Wahaha as a patriotic company and to tap into the patriotic fervor of the Chinese consumers.

By projecting Wahaha's products as China's own, the Wahaha brand has carved out a clear positioning in the market against the global brands. But whether this strategy will work in the long run is a million dollar question and will require constant efforts to balance the brand promise and its careful delivery in a hostile and increasingly competitive Chinese market place.

Wednesday, January 25, 2006

Bangkok Airways - Asia's boutique airline brand

Bangkok Airways traces its origins back to Sahakol Air in 1968 as the first private aviation company established in Thailand. Sahakol Air was initially an air taxi service operating a twin-engine, ten-seat aircraft during the Vietnam War. Bangkok Airways started operations in 1986 as the first privately owned commercial domestic airline in Thailand.

The Thai airline brand has come a long way flying to around 20 destinations spread across eight countries in Asia. Positioned as Asia's boutique airline, Bangkok Airways flies to those destinations meticulously selected for their rich local culture and history, but not easily accessible to a main stream tourist.

The underlying brand theme of Bangkok Airways is to excite its customers onboard with innovative features, in line with the excitement of flying them to exotic locales across Asia. One of the features that Bangkok Airways has introduced is the Boutique Kid Sets, which ensures that the children on board are entertained with good food of their choice and with some fancy toys.

Another example is the departure lounge at Bangkok Airport which is equivalent to First Class or Business Lounges at other airports. The difference is that the lounge is available to all passengers.

As a testament to its service quality, Bangkok Airways has been awarded the World Airline Award twice in a row from the international airline magazine Skytrax for the Asian regional airlines category.

The airline industry, especially in Asia, is getting extremely competitive with full service airlines and the budget airlines fighting it out for customers. As flying distances within the Asian region is around 4-6 hours on average, budget airlines are even wooing the traditional full service customers with incremental services. In such a scenario, Bangkok Airways, by shifting the focus away from price to the exotic locales, seem to have taken the first step in the right direction. But this alone might not be enough in the long run to sustain the excitement in the brand.

With the emergence of airlines such as Jet Star Asia, ValuAir and Tiger Airways which are mostly hybrids between the traditional full service airlines and the budget airlines, the Asian airline industry seems to have another round of very tough competition. The emergence of these airlines has created a new segment where the airlines offer moderate services at competitive prices.

Given this new scenario, Bangkok Airways cannot depend solely on its routes and themes. In spite of these developments, what would ensure the long term success of Bangkok Airways is the clear differentiation that it can create through its brand. An unrelenting investment in its brand and a constant innovation to delight its customers will be the first step in this direction. Bangkok Airways must ensure the brand balances carefully between a strong promise and spotless delivery.

Tuesday, January 10, 2006

Mandarin Oriental - a leading Asian hospitality brand

Mandarin Oriental is one of the leading luxury hotel groups in the world and operates 23 luxury hotels in different countries across the globe. The Mandarin Oriental brand was started in 1963 in Hong Kong and was born out of collaboration between The Mandarin of Hong Kong and The Oriental of Thailand. Both these hotel brands were landmarks and had a reputation for offering excellent service. In 1985, these two hotels were merged into a single organization and brand under the name Mandarin Oriental Hotel Group.

Mandarin Oriental has built its brand on service excellence with a stated mission to delight the customers. The core of the Mandarin brand is steeped in offering customers an unforgettable experience by blending local cultures, exotic art, lively ambience and breathtaking vacations. Every hotel under the group offers the unique oriental feel and ambience including the taste, smell and the friendly service.

The fact that Conde Nast Traveler USA rated Mandarin Oriental Hotel Group the number one hotel in the United States in 2005 is a testament to the hotel brand's success of delivering Asian service even in the Western world.

Mandarin Oriental has been running a consistent and long-term global advertising campaign based on top-notch celebrities endorsing the brand. The campaign has featured celebrities like Vivienne Tam, Kenzo Takada, Isabella Rossellini, Jerry Hall, Lance Armstrong, Michelle Yeoh, Frederick Forsyth, Vanessa Mae, David Tang, Elle MacPherson, Bryan Ferry and I. M. Pei among others.

But as more and more Asian hotel groups such as Banyan Tree, Shangri-La and other brands expand around the world, creating a strong brand and a tangible differentiation becomes very important in the hospitality industry. What will earn these hotels the loyalty of customers and sustained profitability is a sustained and consistent adherence to the brand promises of service and quality.
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