Brand new success for China's firms (3)

14:00, May 10, 2010        Andrew Moody

Dominique Turpin, professor of marketing and strategy at IMD, the international business school based in Lausanne, Switzerland, said the company demonstrated just what brands from emerging markets could achieve.

  "At the center of Havaianas' success was the formula used by most other successful new brands, wherever they are based - a dedicated, persistent and committed group of people created an innovative brand that is genuinely meaningful to customers," he said.

  Turpin agreed new technologies did enable brands from emerging market countries to promote their brands but they are insufficient on their own.

  "Of course you can use viral marketing and other forms of communication but there is a minimum amount of traditional communication that you need to have, whether it is advertising or public relations," he said.

  "The only way you can create awareness of a product or service is to put a bit of money behind it."

  Roll at VentureRepublic said emerging market brand owners are always having to some extent play Western companies at their own game.

  "Marketing is actually a Western concept. It is largely an American idea and I think some of the best marketers you find worldwide come out of America for very good reasons. To be successful, you have certainly got to be professional," he said.

  Roll said many Asian companies still fail to see the importance of brand marketing, regarding it as something of an add-on rather than being core to the entire proposition.

  "They really need to change their mindset that branding is not an appendix or a luxury but a necessity that is going to be one of the key drivers of your business," he said.

  He added one of the problems in Asia, in particular, is that businesses tend to be started by technocrats or people with a financial background, rather than with any experience of marketing.

  "They tend to be very manufacturing driven as a result. This kind of experience serves you very well when it comes to running tight supply chains but it doesn't help in finding out what resonates with global customers," he said.

  He added the real Asian success stories such as Korean electronics manufacturer Samsung have managed to dominate global markets because they have grasped the importance of investing in marketing.

  "In Samsung you find the chief marketing officer at the very highest level within the organization. Marketing people do need to be elevated to the boardroom and not hidden somewhere in the third or fourth level of the organization," he said.

  Turpin at IMD said that without this sort of focus on marketing, brands from emerging markets are likely to be seen as second rate and encounter a lot of prejudice.

  "If in a lucky dip you won a free trip to Hawaii and had the choice between flying with Lufthansa or, say, Azerbaijan Airlines, which one would you pick? Even for people who haven't flown with Azerbaijan Airlines a certain stereotype comes to mind," he said.

  "This is something China comes up against with people thinking their goods are cheap and relatively low quality. It is something the Japanese and Korean companies whose products were once thought of in this way have managed to overcome over time," he said.

  Heimowitz at Hill &Knowlton said one of the difficulties for Chinese companies was dealing with international perceptions about quality control that can have an impact on all brands.

  "Companies are still having to rebuild from problems China had a year or two ago with contaminants in milk and other products," he said.

  "I think this impacts more on China food products than for companies like ZTE or Haier, for example."

  He is confident Chinese brands will be able to overcome negative perceptions over time.

  "Once consumers become familiar with Chinese products and Chinese manufacturers become more consistent in their ability to manufacture and distribute quality products then China will move up the quality and brand chain as well," he said.

  Heimowitz said whatever form of communications they used to raise the profile of their brands, those from emerging markets had many advantages over established western companies.

  "They can start from a blank sheet of paper almost. If you were an established middle market cosmetics brand, for example, it is very difficult to convince people you are a luxury brand. As a Chinese brand going into a particular market you have a chance to position yourself where you like so long as you can stand behind the claim and deliver on it," he said.

  Roll at VentureRepublic believes brands from emerging markets will use all the communication methods at their disposal to become increasingly global players over the next few years.

  "Emerging market companies are increasingly looking at building and sustaining their own brands," he said.

Source: China Daily

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