Branding for Survival
An Interview with Paul Temporal
Dr Paul Temporal, a leading global expert on brand creation,
development and management is the founder and managing director
of Temporal Brand Consulting. With over 25 years of experience
in consulting and training, Dr. Temporal is also a leading author
with several books on Asian branding including Asia’s Star
Brands (John Wiley & Sons, 2006) and The 22 Immutable Laws
of Marketing in Asia (John Wiley & Sons, 2003).
What are your thoughts about the "Asian"
Temporal: The pursuit of longevity has always been a powerful
part of Asian cultural thinking, and as there are no life cycles
for brands as opposed to products (now down to 6-8 weeks in some
cases), branding is becoming increasingly relevant as the world
enters a new era of unprecedented change, upheaval and uncertainty.
This change is strategic, unlike the incremental change of more
predictable times, and therefore requires a strategic response.
Brand building is exactly such a response. If successful, it can
be the strongest weapon in a company’s armoury and the best guarantee
of corporate survival. But Asian companies have not helped themselves
in managing their futures via the branding route. As evidence
of this, leaving Japan aside, there are hardly any truly global
Asian brands, except maybe Samsung from Korea. Even the Japanese
brands like Sony are suffering.
Temporal: First, many Asian businesses still suffer from strategic
myopia, often settling for complacency and short-term gains. Symptomatic
of this is the OEM (old economy model) trap, where companies build
components and end products, or assemble them for their customers,
who then place their own brand names on the finished products,
adding large price premiums to the production cost. The strategy
of relying on OEM business can reap rewards in good times, but
the same customers usually turn out to be fine weather friends,
disposing of the OEM companies services whenever an adverse
change to the demand curve occurs. Many companies in Asia have
been caught in this commodity trap; a problem that has contributed
significantly to the volatility and demise of their economies.
many Asian companies have joined the desperate pursuit of operational
efficiency through quality programmes, re-engineering, customer
service and other prevailing trends that promise success. Necessary
though these may be, they are not sufficient to help companies
differentiate themselves in this world of similarity. Long-term
survival and profitability depend on climbing out of the commodity
trap via the only route possible differentiation via branding.
truth is that for these reasons and more. Asian companies have
failed to create strong brands and to stand out from the crowd.
Faced with more deregulation from the introduction of AFTA (ASEAN
Free Trade Association) and WTO (World Trade Organisation) legislation,
Asian companies are now starting to adopt a more strategic focus,
centred on long-term survival and profitability via branding.
But governments have had to kick start the revolution.
You have said that the public sector plays an important role
in branding in Asia. Can you explain that?
Temporal : Yes. Interestingly,
it is Asian governments that have had to take the initiative in
focusing more attention on the power that brands can deliver in
achieving national objectives, and this has helped raise the awareness
level among companies of what branding can accomplish, and how
urgent it is. For example, significant financial grants and subsidies
are available to Singapore and Malaysia for companies wishing
to undergo branding activities.
wake-up call from governments, coupled with the outright fear
of even more intense competition from emerging economic players
like China joining the global hunt for markets, have caused a
growing commitment in Asian boardrooms to developing strong brands.
Asian companies are beginning to realise what branding really
means and the benefits it can bring especially in terms
of increased corporate worth and importantly, the consequences
of not pursuing it. Chinese companies are desperate to get into
the branding game, to the extent that they are buying Western
brands, as Lenovo has done with its purchase of the IBM PC business.
a brand is one thing, but developing and managing successful brands
is not an easy task. There is no quick fix solution, and many
companies do not have the relevant experience or knowledge necessary
to embark on this route. A whole new technology is involved. As
a Chinese Minister explained, we have low cost of production,
the latest technology and high quality products. The only thing
we do not know how to do is branding. And this is essential for
our future success.
you feel that Asian companies are ready to compete as global brands?
Temporal : Some people say that Asian companies will find
it incredibly difficult to build international and global brands.
Their reasoning is that most of the world markets and the product
categories in those markets are already dominated by powerful
global brands. Furthermore, they claim that Asian companies have
to overcome significant global consumer perceptions of sub-par
quality and other concerns relating to the country of origin of
is some truth in these comments, and it will be no easy task for
Asian companies to develop strong brands or their own, but it
is the very nature of the fast-changing business world that can
help them. There are no longer hard and fast rules, and innovation
no longer belongs to the privileged few. Sony relied on innovation
and quality but other players now offer the same at less cost.
Sony has paid the price for inadequate brand management.
there are Asian corporate leaders with the vision necessary to
harness technology and ideas, both of which are freely available,
and global niche markets are available to those who can move in
quickly. Samsung and LG Electronics do not bother to create costly
new technologies but instead take those technologies and beat
the developers to market. Speed and agility are not strengths
possessed by many of the existing global giants. Asian CEOs must
use market dynamics to exploit the weakness of the power brand
companies and establish new and innovative brands for the future.
for negative perceptions associated with the quality of Asian-made
products, Japanese companies have managed to overcome this issue
over the last 30 years, and companies in other Asian countries
are making similar strides forward. For example, the Chinese brand
Haier has made inroads into the highly competitive US market for
consumer durable white goods products. But it took a CEO who once
lined his factory workers up in front of defective products and
took a sledgehammer to each unit to impress upon them the critical
importance of product quality. He knew that a company could never
establish a strong brand without top class product quality.
up on quality and the brand image, profits and shareholder value
plummet. The Mercedes E Class was voted bottom in a quality survey
of over 800,000 people in the USA recently. Hyundai from Korea
was voted top. Mercedes is losing share, profits and market capitalisation
while Hyundai is gaining. Ten years ago, Hyundai was not on the
international radar screen for motor vehicle brands.
examples are few and far between unfortunately, and there are
many additional aspects of branding that Asian companies have
to improve upon in order to achieve international recognition.
What concrete steps must Asian companies take to build brand
Temporal : First, corporate thinking has to stop rigidly focusing
on short-term profits and concentrate more on long-term brand
building. Brands are assets that require investment, and there
has to be a better balance here. It all comes back to strategy,
and there is no doubt that brand strategy now drives business
direction in the New World. Petronas, the Malaysian oil and gas
company, started investing in Formula 1 ten years ago with the
aim of becoming a global brand, for example, and it is now known
around the world.
there has to be a top management mind-set change about what building
a brand really involves. A brand is not merely a logo, slogan
or advertising, as promised by many agencies offering these services.
Too many companies in Asia have made promises to consumers via
market communications that they could not deliver, with the result
that a great deal of money has been wasted and consumers disappointed.
is symptomatic of the fact that brand management is often inadequate,
and this is what the Western brands do so well. But times are
changing. Two Malaysian brands Pensonic Holdings Berhad,
a consumer household electronics company, and Opus plc,
an asset management and development consultancy are both
currently undergoing total organisational change in order to bring
their new brand strategies to life across multiple markets. They
are looking at all touch points with consumers in an effort to
gain an emotional association with them.
Dixon Chew, group managing director of Pensonic said, We
want all ranks in the organisation to live the brand from
the cleaner to the CEO. We are now planting the seeds of the Pensonic
brand in the entire organisation to build a strong brand culture.
We want all employees to carry and display the brand values in
their daily work. The whole organisation will be the future driving
force to elevate Pensonic into a powerful brand.
behind all corporate success these days are solid brand strategies,
with clearly defined brand visions, values, positioning statements
and plans for fulfilment. Brand management is holistic and has
to be done professionally. Brand strategies have to be brought
to life by people, and the development of a brand culture is vital
if companies are to deliver on the messages projected by market
communications. As brands are relationships that only exist in
peoples minds, those relationships have to be built and
nurtured with care. Brand successes and failures are linked directly
to levels of consumer satisfaction and delight.
although product quality has improved tremendously in Asia with
many companies having reached world-class standards, it remains
an indisputable fact that service quality needs drastic improvement.
What never ceases to amaze is that the generic personality of
Asian people promotes warmth, hospitality and caring relationships,
but this is rarely translated into service quality. Service brands
have got to work much harder on the consumer experience. Raffles
International, a company that holds both Raffles and Swissotel
branded hotel and resort chains, has gained global status because
it is fervently tackling the tough job of managing all consumer
touch points rather than just putting people in beds. Branding
is about great experiences.
are the benefits? How do you convince the board to make branding
Temporal : Many Asian CEOs tend to back away from brand investment,
but it need not be as high as many are led to believe. It is not
how much money a company spends but how well it spends it. Starbucks
evidently only spent US$20m in advertising and promotion in its
first 20 years some Asian mobile telephone brands spend
that in one year and do not even get out of their own country.
Focus is key, and now is the time to focus on building a brand
strategy for the future, and the escalating levels of competition
that lie ahead.
those companies that get it right, the benefits accruing to a
strong brand are nothing short of astonishing. Powerful brands
provide long-term security and growth, higher sustainable profit
and increased asset value because they achieve:
- Premium prices
- Higher sales volumes
- Economies of scale and reduced costs
- Greater security of demand
more than this, powerful brands are strategic and valuable assets
in their own right and are often worth multiples of the net assets
of the business they belong to. The attention now being paid to
the valuation of brands shows how substantial their contribution
to the profitability and worth of companies can be.
for Asian companies wishing to create sustainable, profitable
international and global market positions, branding is the road
to travel. This is the strategy that has been missing from many
boardroom discussions over recent years and one that could possibly
have saved a number of firms in the last two recessions. A strong
brand is essential for survival in the 21st century.
you so much.
Visit Paul Temporal 's site: www.temporalbrand.com
Sarkar is the managing editor of this site. He
is the founder and CEO of Double Loop Marketing LLC, an
online company specializing in demand generation and thought-leadership-based
campaigns. He specializes in ecosystem marketing.