The branding challenges of asian manufacturing firms
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Transcript of The branding challenges of asian manufacturing firms
Sameer KumarSoubhik Kumar BardhanChaitanya Banala
The branding challenges of Asian manufacturing firms
Why branding ?• Asia: Manufacturing hub due to low labour costs
• Low returns yielded by manufacturing alone
• Focus shifting towards design, marketing and customer service (Branding)
• Low margins in electronic, retail and other manufacturing services
• Brand owners gain significantly more on products than their manufacturing counterparts
Asian brands among Interbrand’s 2008 Best Global Brands2008 rank Brand Country of origin Sector6 Toyota Japan Automotive20 Honda Japan Automotive21 Samsung Republic of Korea Consumer
Electronics
25 Sony Japan Consumer Electronics
36 Canon Japan Computer Hardware
40 Nintendo Japan Consumer Electronics
72 Hyundai Republic of Korea Automotive78 Panasonic Japan Consumer
Electronics
90 Lexus Japan Automotive
Asian brands among Interbrand’s 2015 Best Global Brands2015 rank Brand Country of Origin Sector6 Toyota Japan Automotive
7 Samsung South Korea Consumer Electronics
19 Honda Japan Automotive
39 Hyundai South Korea Automotive
40 Canon Japan Computer Hardware
49 Nissan Japan Automotive
58 Sony Japan Consumer Electronics
65 Panasonic Japan Consumer Electronics
74 KIA South Korea Automotive
88 Huawei China Technology
100 Lenovo China Technology
BRANDING CHALLENGES
MARKET –LEVEL CHALLENGES• Lot of competition from well-oiled branding machines who have
been around for decades. So no scope for experimenting for a considerable time period
• Global platform available to customers who have a variety of options to choose from (domestic + international)
• Customer care and customer services are an integral part to how product companies are perceived in the modern age
FIRM-LEVEL CHALLENGES• Infested trading mentality which focuses mainly on high turn-over
and low margins– Adoption of a push strategy (sales) : short-term benefits– Should go for pull strategy instead (brand positioning): encompasses
innovation which promotes a long-term view on business
• Management by fiat– More frequently observed in family owned firms where the top leaders
dictate their decisions– Top-down approach is more commonly observed in Asian firms (except
Japanese and Korean)– Bottom- up approach needs to be encouraged
• Reluctance to invest in market-research– Harder for firms to acquire the skills to become successful at
branding– Reason being the owners/top-managers do not feel the need to
invest in strategy consulting services– Reason may also be the trader-mentality with a low margin
business model, making them reluctant to spend on projects with long-term return
Avenues to Branding
• Acquisition• Lenovo’s acquisition of IBM’s personal computer division• BenQ’s purchase of Siemen’s mobile handset division• Acquisition of Jaguar and Land Rover by Tata Motors• Acquisition of Corgi Classics by Zindart
• Partnership• TCL established joint ventures with Thomson of France
• Organic brand building• Indian Videocon• Chinese Haier• Singaporean OSIM
Successful Vs Non-successful firms
• Customer Orientation
• Long-term Orientation
• Focus on quality and innovation
• Communication and follow-up
Customer Orientation• Employees need to view the brand and customer experience from the
perspective of clients
• Characteristics of successful firms:• Segmented models.• Segmented value proposition.• In-depth market research.• Regular touch point audits.• Investing heavily in training and recruiting the employees• Excelling in strategic marketing, brand management, pricing and market
research
Long-term Orientation
• Importance of consistency in behavior over time rather than
priorities that change on a weekly/monthly basis.
• Avoid the “quick fix branding” strategy
• Align the product portfolio
• Consistent execution across all customer touch points
• Avoiding an opportunistic trader mentality
Focus on Quality and Innovation
• Constant effort to improve quality and to innovate in terms of features, designs and services.
Communication and follow-up• Employees’ association with the brand
• Free flow of information in a bottom-up approach
• Usage of Key Performance Indicators to track brand and
customer experience.
• Following up on agreed actions
• Employees’ appraisals
• Incentive schemes
Overcoming the branding challenges
• Individual mentalities.
• Branding as a strategic concern
• Long term orientation
• On going process
• Consistency of customer experience
Mindset
Strong brands never happen by accident. Yet many companies do not take a disciplined approach to brand planning and execution
• Only 53% of the companies say they have a long term brand strategy in place.
• While 80% of advertising and marketing professionals say they are strongly aware of their company’s brand positioning…… only 1/4th of them “…can clearly articulate their brand position to clients, customers or prospective clients.”
Prophet, Best practices survey, 2002
Louws Management Corportation Survey , 2007
Mindset
• Develop a through market and customer understanding .
• Strategic marketing mindset – Absent in firms with heavy manufacturing focus.
• In-house ownership of trying to understand the market and customers.
• Brand Positioning Statement.
• Articulation of tangible and measurable proof for the brand to ensure that promises made are not just empty words.
Define the Strategy
• Positioning : What a company seeks to be AND does not seek to be.
• A good positioning should be used as a yardstick to guide the activities of the firm.
• Organizing the brand portfolio : 1. A master brand with all propositions under one brand 2. A portfolio brand with vague corporate brand and strong brands for each
product. 3. A hybrid brand with different product ranges under one brand umbrella.
Define the strategy
• Defining the offering • Products and services the company seeks to offer based on market
research.• Not the end of process. Taking the perspective of prospective customer
across all touch points• Aligning all touch points leads to a consistent brand experience. • Cross functional teams are critical in conducting feasibility studies of what
it takes to deliver the offering. • Underlying quality and performance of the brand is high in success of the
brand which requires high degree of cross functional collaboration.
Define the strategy
• Requires strong project and program management capabilities.
• HR is often a critical function at the implementation stage
• Aligning all marketing communications activities across the customer touch points to be consistent with target positioning.
• Post implementation : Monitor and manage customer experience
Implement the strategy
• What is in it for me ?
• Workshops and discussions around “on brand” behavior.
• Internal surveys about the brand to measure change.
Embed the brand internally
• Difficult to remain as a credible contract supplier while the brand is being built.
• Separate the two businesses into different units. • Asus ( using Asus for its own brand and Pegatron for OEM )
• Focusing the contract and branded business areas towards different customer segments.
• Differentiate the functionality between the products.
• Geographic segmentation – DoPod by HTC in Asia.
• Introduction of complimentary products. • Esys is Singapore based PC components contract player while starting to provide branded
systems integration services under its own brand.
Separate business
• Manufacturing is no longer the same high margin business.
• Many Asian companies are trying to re-define theselves and follow in the footsteps of Japanese and Korean firms which have already made the transition.
• Success is possible but it requires a strong customer orientation, a long term view, a focus on quality and innovation, and constant communication and follow-up.
Final thoughts