The Star, Saturday September 9, 2006
BRANDS originating from the West such as Adidas, McDonald's, Coca-Cola and Ferrari have dominated markets worldwide, but how do Asian brands compare?
Hyundai, AirAsia and Osim may be recognisable in Asia, but are they as impactful in other parts of the globe?
This is one of the issues faced by Asia – the lack of big brands compared with the West.
Nevertheless, the mindset is changing, says author Dr Paul Temporal.
“People in Asia are beginning to realise what branding is all about and what is not. They are beginning to realise the only way to sustainable differentiation is through branding,” he tells BizWeek.
Products, services, technology or processes can be copied easily but not one’s brand image.
“That is the only one thing that is not replicable, so if you can develop a powerful brand image then it is sustainably different,” he adds.
Temporal, who is also group managing director of Temporal Brand Consulting Sdn Bhd, says CEOs of Asian companies have been preoccupied in improving the quality of products and services to be comparable with the West over the past decade or so.
“If you do not have a top-class product or service, you will never have a powerful brand.
“So this kind of real fervour to become operationally efficient and coming up with good quality product or service has been CEOs' concern,” he says.
Asian CEOs are unwilling to invest in brands as they have only short-term focus and cannot see the returns from investing in brands.
“They do not realise the long-term benefit of investing in brands as they are concerned about the monthly sales, and profits or losses in each quarter.
“As branding is intangible, CEOs are reluctant to invest in brands. They treat brands as a cost and not as an investment,” he adds.
Temporal views brand building as a strategic asset which can often be worth multiples of the net tangible assets of an organisation.
“Coca-Cola is a brand name worth US$70bil and Ford paid US$24bil for the Jaguar name, so the intangible aspect of the brand is worth a lot.
“There is a wave of change in Asia now where brands are recognised as not just a name or logo, but as strategic in its application for growing business,” he explains.
Although brands from Asia are still somewhat behind compared with the West, Temporal thinks they are catching up very fast, especially from developing countries on the rise.
The difference between a great global company and an ordinary one is how it brands itself.
“By building a lot of global brands recognisable worldwide, it reflects well on the national image. With a good national image, it helps to promote more brands from a country and it is a virtuous cycle,” he says.
In comparison, Temporal feels there are not many global brands from Malaysia.
“Not many people know where the country is and by creating more brands from Malaysia, people will know more about the country. This will bring in more foreign direct investment, enhance its image and attract tourists. As the national brand image gets more solid, it will help more companies to grow,” he explains.
One country that is doing very well in branding itself is South Korea. Temporal notes that the country's cabinet monitors the national brand image very closely as well as the brand images of big corporations such as Samsung.
Temporal says Asian brands are not doing anything different compared with those from the West.
“They (Asian brands) are learning to adapt techniques to their particular markets and I think the problem they face is understanding overseas market, which in reverse, is true for Western brands.
“They are learning the techniques used in the West, which revolves around emotional brand strategy. If you do not connect emotionally with consumers, then you leave them to judge and buy things rationally.
“Asian brands are now learning how to bring emotion into the heart of the brand, company and the way it is operating,” he says.
To manage brands better, a company should have a good strategy that is not just about developing awareness but also trust, preference, loyalty and desire; that is to have a compelling emotional association.
“When you build a brand, you build a relationship with your customers. The customers own your brand, not your company. If the customer gives up on your brand, then that is it; but if he decides to promote your brand, then it is great. So you are only as good as the last experience with the customer,” he adds.
In Temporal's opinion, there are not many star brands from Asia, but some are getting there.
“Some of the bigger companies, such as Petronas, are becoming international brands in terms of awareness. It is well known in Asia but not outside of Asia, so they have to work hard on their international image.
“Smaller brands, such as Pensonic, are doing the right thing. They are making a tremendous effort to change the whole of the company and to get behind the brand strategy. It has potential to be a regional brand,” he says.