Martin Roll Speaks At Skolkovo About Building Global Russian Brands

Martin Roll Speaks At Skolkovo About Building Global Russian Brands

Martin Roll delivered an executive program on 26 February 2018 at the Moscow School of Management Skolkovo in Russia about business strategy, effective brand building and globalizing Russian brands. The session was attended by MBA and EMBA students.

Founded in 2006, the Moscow School of Management Skolkovo is one of the leading private business schools in Russia and the CIS. The business school offers programs for businesses of any type and size – from startups to large multinational corporations. This includes MBAs, EMBAs, entrepreneurial and senior executive programs to accelerate current projects or start new businesses, practicum for directors and solution development workshops.

Martin Roll opened up the executive program with a powerful quote by Infosys founder and mentor Narayana Murthy: “To succeed in the global bazaar requires a global mindset”.

During the interactive 1-day executive session which included breakout discussions, Martin Roll discussed what it takes to globalize a Russian brand, how to strategically transform a company for global expansion, and how branding and marketing can help Russian companies to maneuver new markets.

Globalizing local Russian brands

Before a brand can successful globalize itself, it needs to have a few ingredients present within the DNA of the organization:

Next generation leadership: Leadership is rising up the management agenda in the age of brand building today. Leadership in the 21st century will be influenced by constant change, geopolitical volatility, technological disruptions, and economic and political uncertainty. Therefore, Russian companies aiming at building and sustaining successful brands must ensure that next generation leaders are well-equipped to navigate these major forces of rapid and influential global change.

Strategic branding drivers: Successful brands always need to display 3 strategic branding drivers:

  • Strong mindsets & beliefs from the top
  • Having the right skills in the organization
  • Having the right resources available to support brand development

Companies must ensure that everyone in the company is properly aligned with the brand values with the right mindset and belief. The entire company and its multiple and cross-functional actions and activities should be channeled towards this goal. The CEO and the entire executive management team are very important stakeholders to make this happen successfully.

Giving the Chief Marketing Officer a seat at the boardroom: The role of the Chief Marketing Officer (CMO) continues to evolve as the marketing function becomes more strategic but also equally complex and challenging. Traditionally, most brands have faced the problem of being run by marketing departments and being too focused on marketing as a functional and executional role. Brands must be run at the boardroom level and be an integrated part of all strategic issues.

Running a purpose-driven business: Next generation boards need to drive an “outside-in” market engagement approach. Traditionally, businesses used to only analyze the market and determine an offering. Today, that alone is insufficient. Companies need to also establish a purpose – a clear view of what it will bring to the world, why it will matter, how it will deliver on that promise. This means creating clarity of the brand’s core mission, defining a shared vision and leading relentless execution of the brand strategy.

Nonetheless, achieving the above is not a position that comes easily. It requires full attention and hard work over a long period of time and attention to every detail. LEGO’s turnaround towards becoming the most valuable global toy brand is a good example.

Besides having good internal practices, it is also important for businesses to consider the external environment. One important consideration is the impact of nation branding. Nation brands can be boosted through:

  • Export branding (export of goods associated with a nation)
  • Generic nation branding (through governmental efforts, promoting brands that boost a country’s national image, etc.)
  • Internal nation branding (building a talented and productive workforce)

When a nation has a strong and positive brand in the international arena, it will be more attractive to tourists, skilled workers, and investments. It will also be more resilient to financial crises and be better able to sustain higher prices. Businesses will also benefit from positive country-of-origin effects, a halo effect on its products, and an increased ability to export.

Martin Roll discussed the example of Swedish furniture & home accessories brand IKEA. The iconic Swedish company founded by Ingvar Kamprad is doing more for the image of Sweden than any governmental efforts combined. Another example is the admired Thai destination brand (referred to as “Amazing Thailand”) that is a result of bold Thai governmental decisions to invest in and build the tourism ecosystem in the country over several years. Amazing Thailand has had a profound impact on the country’s economy.

How to strategically transform a brand towards global markets

Martin Roll introduced the global business strategy framework where long-term value is created by business and brand drivers. Business drivers include structure, strategy and execution while brand drivers include intangibles, a brand narrative and good brand governance. Supporting all of these drivers is the role and importance of good leadership. Understanding what drives the creation and transformation of brands is key to evolving and maturing them.

A classic example of brand transformation is how Asian companies used to be known for manufacturing consumer goods cheaply for Western companies. Today, many Asian products are no longer associated with low-cost and considered inferior to Western products and brands. In the past 10 years, Asian firms have realized that they need to move up the value curve and one way to do that is to build their own brands and even premium brands. To do this, Asian brands have to truly differentiate themselves from the other brands in the global marketplace.

There are a handful of Asian brands which have managed to gain sophistication and succeeded in competing effectively on the global level. Asian brands like Singapore Airlines, Huawei, Uniqlo and Samsung have done well in global markets and should serve as inspiration for other Asian companies aiming to go global.

Martin Roll explained 10 characteristics that make up a strong brand:

  • The brand drives shareholder value
  • The brand is led by the boardroom and managed by brand marketers
  • The brand is a fully integrated part of the entire organization, aligned around multiple touch points
  • The brand can be valued in financial terms and should be treated as an asset in the balance sheet
  • The brand can be used as collateral for financial loans and can be bought and sold as assets
  • Customers are willing to pay a substantial and consistent price premium for the brand
  • Customers associate themselves strongly with the brand, its attributes, values and personality
  • Customers fully buy into the concept which is often characterized by emotional and intangible relationships
  • Customers are loyal to the brand and would actively seek it and buy it despite other cheaper options
  • A brand is a trademark and marquee (logo, shape etc) which is fiercely and proactively protected by the company

Martin Roll gave a few examples of Asian companies who have managed to successfully achieve breakthrough – Jim Thompson, the Thai Silk Company originating from Thailand. The brand, built on a strong myth with a modern twist, has been able to maintain its differentiation. It is perceived to be highly authentic, to have high quality and a strong heritage.

French luxury brand Hermès has an uncompromising attitude towards quality and is a very high-end, authentic brand with a strong legacy and heritage. The aura of exclusivity around the brand is a result of its philosophy and aim to always remain “ultra-premium luxury” – to be afforded by only the very few and not be easily available.

Korean beauty company Amorepacific is also another Asian company on the way to becoming a global beauty behemoth with a brand portfolio competing on innovation, quality, marketing and authentic Korean cool. Similar to how Paris and New York are symbolic global capitals of beauty, so much of Amorepacific’s rapidly evolving brand equity is due to its country of origin. One major reason being that Korea is now very much perceived by Asian women to be the role model for Asian beauty.

The role of branding & marketing in navigating new markets

Martin Roll believes that there will be 5 strategic themes that will permeate Asia in the next decade:

  • Asia will be the future global leader
  • Ashift away from Western capitalism which reigned for the last 200 years
  • Redefinition of economic globalization with huge political and economic perspectives
  • A shift of the West to become an adjusting partner
  • More Asian cities will be included in top 50 global city GDP rankings

For an organization to truly be brand focused, it needs to start a journey to launch brand management initiatives and track the outcomes of related efforts. This can include a branding or brand process alignment workshop, examining the internal and external brand communications, aligning employment policies to the brand, running training and development programs, and more. The bottom line is that brands are strategic assets for successful companies and it is vital for companies to start their journey towards sustaining a commitment towards branding.

One Asian brand that understands the importance of branding and has reaped the fruits of its labor is Singapore Airlines (SIA). It is one of the most iconic Asian brands with technology and service as its key drivers. It is a great example of how the brand promise and brand delivery has been well-balanced and managed since the airlines’ inauguration in 1972 in Singapore. The brand promise of “A Great Way to Fly” with its emphasis on service and technology excellence has long served the airline very well and has been consistently communicated since the start.

In addition, Singapore Airlines runs one of the most comprehensive and rigorous recruitment and training programs for cabin and flight crew in the industry to make sure the SIA brand experience is fully and consistently delivered. The training program for new crew is 15 weeks long – twice the length of the typical programs in the industry. This has resulted in numerous awards and recognition for its service excellence and well-trained staff at all levels.

10 key drivers of global brand excellence

Martin Roll summarized his executive program by explaining the 10 key drivers of brand excellence that Russian brands can consider in their journey to build their organizations into some of the most admired and profitable global brands:

  • Global brands are driven by a strong purpose
  • Global brands provide strong financial results
  • The CEO leads the brand but everyone remains involved
  • Strong brands drive constant innovation
  • Global brands are customer centric
  • Global brands have excellent insights and intelligence processes
  • Technology is a key business enabler
  • Business performance and brand equity are measured
  • Strong culture brings iconic global brands to life
  • Global brands drive constant change

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About the author: Martin Roll – Business & Brand Strategist

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