With increasing globalization and flattening of the world, more Asian brands are venturing into newer markets and embracing customers in various cultures. Brands like AmorePacific, Samsung, Shiseido and Charles & Keith have taken the lead in expanding across their home borders to great success.
Given the diversity in the types of markets, the kinds of customers and the business landscapes, a global brand is now expected to have certain characteristics such as:
Create superior value: An Asian global brand is one that delivers superior value to the customer. Any brand can command a price premium either because it offers superior quality and value for the given price or because it offers some combination of value proposition that non-brands cannot offer. But such an expectation becomes even more crucial in the case of an Asian brand. Asia has not traditionally been known to produce global brands. Barring a handful of few brands originating from Japan (Sony, Toyota, and Honda) and South Korea (Samsung and LG), there are less than 10 Asian brands that are truly global. Given the traditional cost advantages that Asian economies have enjoyed for a long time, country of origin effect for many Asian countries still pose a tremendous challenge. As such, Asian brands will have to create a superior value over and above the minimum required threshold.
Offer memorable consumption experiences: One of the hallmarks of any global brand is its competence in engaging the customer and creating a memorable consumption experience. This is no different for an Asian brand that aspires to go global. But branding itself is an alien concept to many Asian countries. Given that many Asian countries are still developing (some are emerging), paying higher prices for branded products has not been a part of the culture for a long time. Branding is an acquired taste of Asian customers. As such, brands will have to come out of the Asian trading mindset and learn novel strategies to engage the customer and offer memorable experiences.
Weave into the cultural fabric: One of the trademarks of an Asian brand will be its cultural heritage. Not many in the Western markets are very well aware of Asian cultures. Asia, its myths and cultures offer a very mystic and mysterious experience to many Western customers. Asian brands will have to leverage such an inherent advantage in its branding strategies. Asian brands such as Singapore Airlines and Banyan Tree have very successfully leveraged the Asian service excellence in offering customers an unparalleled brand experience. More brands from Asia will have to figure out their unique Asian strengths when they venture onto the global markets instead of just replicating/copying what successful Western brands have already done. Furthermore, many Asian brands will have to customize their offerings to suit the market so that the brand becomes woven into the local culture and becomes part of the local folklore. Such a strong and wide buy in by customers would be a strategic win for the brand in newer markets.
Provide avenues for self-expression: A branded product/service is fast morphing into a highly preferred avenue for self-expression for customers. Brands can offer a very high symbolic value for its customers. Brands signify a wide range of lifestyle choices ranging from being cool, successful, and trendy to sophisticated, exclusive and elite. As such, more and more customers around the world are drawn toward those brands that can offer this symbolic value. Asian brands that aspire to go global will have to consciously cultivate these brand characteristics to attract and retain customers.
Enable global recognition: The flattening of the world has brought customers around the world nearer. The Internet has further helped to break barriers and connect customers through discussion boards, chat rooms, product reviews and virtual communities. A direct consequence of such a real time connection between customers around the world is the increased need for these customers to feel like global citizens. Brands play a major role here. Many global brands such as Nike, Starbucks, IKEA, Apple, and Sony offer customers a sense of connectedness with the rest of the world. Asian brands that aspire to go global will have to create this global recognition.
When Western brands enter Asian markets, they are usually at a disadvantage because of the sheer diversity of market structure, regulatory restrictions, local cultures, customer preferences and buying habits, distribution capabilities and cost pressures. Similarly, when Asian brands enter Western markets, they are usually at a disadvantage because of the highly saturated product categories, hyper competition, well entrenched incumbent brands, higher expected standards of quality and service, lack of a clear awareness of Asian brands, and the possible negative perception about the country of origin of Asian brands (especially those originating from China). As such, Western and Asian brand have some very fundamentally different challenges in executing their brand strategies.
Western brands face the challenge of a learning curve whereas Asian brands face the challenge of an education curve. In tackling the learning curve, Western brands will have to quickly learn the ways of operating in highly complex Asian markets, learn about the complexities of distribution (especially given the lack of well-established national chains), learn how to handle the regulatory authorities and their ways of working, learn how to establish implementable contracts with local companies in order to gain a better understanding of the customers and finally learn to customize the Western aspects of a brand to suit the local tastes and preferences.
Similarly, in tackling the education curve, Asian brands will have to engage customers aggressively to educate them about the brand, the value proposition of the brand, the brands’ point of parity and differences with the many existing Western brands, to allay fears of the negative effects of the country of origin, how the brand offers a very strong channel for Western customers to express themselves and how Western customers can expect more from Asian brands that are striving to establish a presence in the Western markets.
Given the fundamentally different nature of these challenges, execution of brand strategies will also be fundamentally different.
Whenever branding and Asia are talked about together, there is a sense of both optimism and disappointment. Asia is fast becoming the hottest market in the world and the opportunities are tremendous. But at the same time Asian companies are not willing to break out of their traditional trading mindset and capture value through branding. There are many reasons for such a lack of corporate initiative. Some of the more important ones are:
Branding as advertising: Branding is a complex corporate construct. Most of the time it is equated with marketing and advertising. Such a mistake would then lead corporate resources to be diverted elsewhere and branding relegated to middle level marketing managers who do not have a holistic view of corporate strategy. Finally, these chain events lead to advertising ruling the roost while brand management taking a beating.
Asian trading mindset: Asian companies have long enjoyed the benefit of low-cost advantages. Such an advantage has led companies to invest heavily in tangible assets such as assembly lines, manufacturing units and buildings. Furthermore, given the boom experienced during the massive Asian economic growth period since the 20th century until now, most companies have been singly focusing on meeting sales targets on a short-term basis rather than focusing on building long term strategic asset such as brand equity.
State of the economy: The level and extent of branding is invariably connected with the state of the economy. Most global brands come from the Western world, which is highly developed with thriving economies. Most of Asia is still developing. The booming economies of China and India are changing the landscape gradually. Given the myriad of other priorities in developing economies, the culture and the nature of the society has not necessarily demanded branding from corporations.
All these factors together have contributed to the lack of global brands from Asia. Though there is no easy solution to this, a very powerful beginning would be to elevate branding to the boardroom, where it is headed by the CEO and the corporate board. This can be achieved by having a chief marketing officer (CMO) or a chief branding officer (CBO) represent brand management at the boardroom level. Such presence can achieve a lot of important objectives: educate the top management team about the strategic importance of branding, align the branding strategy of the company with the corporate business strategy, place brands at the center of the strategizing process so that all internal company activities can be aligned around the grand brand charter and finally morph brand management to become the internal activity that integrates the myriad functions.
One of the biggest implications of globalization for companies seeking to expand to foreign shores is the task of balancing standardization with customization. From a branding perspective, this issue assumes even more significance. When some of the world’s biggest brands expand beyond their home markets, they are tempted to repeat their tried and tested formula in the new market as well. In fact, this has been the path followed by many brands. The assumption in such a case is that customers would be too eager to consume the great brand because of its authenticity, heritage and associations. But this tendency is gradually changing as global companies from the West are learning about the unique needs of the customers in different markets along with the pressures of lifestyle, economic and cultural conditions in Asia.
Glocalization – maintaining the brand logo, the key message and the underlying philosophy and localizing the brand elements to offer customers an authentic local feel – is increasingly becoming the preferred business model for global brands. By extending the unique brand experience through customized channels and offerings, global brands seem to be finding a middle path where they can maintain the global brand aura and still appeal to the customers in the authentic local way.
Once feared as the deal buster, the Internet has been a blessing for businesses and customers around the world. The Internet has been instrumental in making the world a much flatter place as compared to before the Internet’s advent. Companies today must consider digital branding in its overall strategic agenda and think of ways to effectively leverage on it. Notably, the Internet has offered benefits to both customer and companies.
For customers, the Internet has:
For companies, the Internet has:
Given these fundamental shifts in the way businesses have been forced to operate since the advent of the Internet, branding has also morphed gradually. Some of the prominent impact factors have been:
Co-creating the brand meaning with customers: For a long time, companies have had the luxury of creating the brands and communicating those brand meanings to the customer base. It was a one-way street then, but not any longer now. The emergence of many virtual brand communities on the Internet has challenged this traditional model. Companies have their representatives as participants in these communities to interact with customers real time, gain feedback, learn about possible avenues to engage the customers and finally to involve customers directly in creating the brand meaning.
Customer centricity as a model of engagement: Most of the companies have for long followed the brand centric or product centric model whereby all decision of the top management were made with the focal brand in mind. As such, customers were at the receiving end of the finished product. The Internet has altered this dynamic fundamentally. Companies are being forced to place the customer at the center of all corporate activities. This means that brand managers and brand strategists must design the brand offerings to boost the profile of the brand and also to serve the customer better.
Offer better value to fight price transparency: Brands have always had the problem of generic products and private labels eating into their margins and luring their customers away. The Internet has added yet another dimension to this age old problem. There are many websites and forums on the Internet which collect the minutest of details about brands, compares them across a myriad of product categories, tabulates them and presents these differences to users. Such a transparent system that allows access to customers will put more pressure on brand managers to better convey the value proposition to the customers. As such, brand managers must continue to innovate in how they communicate the brand proposition to customers.
The first step for brands to successfully globalize is to appoint a CMO to represent brand management at the boardroom level and put customers at the centre of focus. Once that is in place, the brand must align all organizational activities around the brand charter and then closely monitor customer feedback in order to co-create the brand meaning with customers and tweak their strategy as required.
Brands must utilize the five global brand success factors mentioned above as a key guiding principle in their journey towards globalization. Additionally, it will be essential for brands to incorporate digital into their brand strategy and find ways to translate the capabilities of the Internet into a better customer experience in order to enhance overall brand equity and brand value.
About the author: Martin Roll – Business & Brand Strategist
Download book chapter (PDF): Asian Brand Strategy – Martin Roll
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