Chinese brands are coming, for these two reasons | Dominique Turpin | LinkedIn

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Chinese brands are coming, for these two reasons

About 10 years ago the Chinese government invited me to give a talk in Beijing on global brands. Afterwards a government official came up to me and predicted that by the 2008 Beijing Olympics, there would be at least five Chinese companies in Interbrand’s list of the top 100 global brands.

He was wrong in 2008, and he’s still wrong today. Six years on from the Beijing games, there is only one Chinese brand in the top 100. That’s Huawei, a telecoms equipment maker, which has just become the first Chinese company to enter the top 100 and is at number 94 in Interbrand’s new 2014 list.

Some of the current chatter is not encouraging. Late last month I was at the World Marketing Summit in Tokyo with top marketers from around the globe, and there was very little buzz about Chinese brands.

Why the relative silence? Largely it’s because Chinese products, rightly or wrongly, are still often perceived as being low-quality copycat versions of better products elsewhere. Sportswear company Li-Ning is struggling to develop a global brand because its products are not seen as being innovative or distinctive enough. So it finds itself squeezed between cheap local brands and big global ones such as Nike and Adidas. Likewise, consumer electronics firm Aigo is often regarded as a Samsung imitator rather than an emerging brand with its own distinctive story.

But the entry of Huawei into the top 100 this year is significant. I think the Chinese brand breakthrough is coming. And I think it will come sooner rather than later, for two reasons.

First, China’s economic weight and competitive strength are simply becoming too great for the country not to have global brands.

China will soon overtake the US as the world's largest economy on some measures, and Chinese firms are investing billions to compete overseas with established western brands. The recent $25bn initial public offering (IPO) in New York from Chinese e-commerce group Alibaba was the biggest ever. And, symbolically, Chinese insurance group Anbang is now buying the Waldorf Astoria hotel in Manhattan for almost $2bn.

At some point, all this Chinese economic muscle will translate into the soft power of brands. In fact this is already happening. Some of you reading this might use a Lenovo PC, have a Haier refrigerator at home and drink the occasional Tsingtao beer, for example.

Second, Chinese companies can’t keep relying on low-cost production of standard products for their competitive edge. As manufacturing shifts to lower-cost locations such as Vietnam and Bangladesh, Chinese firms need to add more value and beef up their branding.

As I wrote in a previous post, the next big global brands will come from companies that follow five rules: having a clear product focus; making it different and meaningful; investing in communication; innovating constantly; and staying in touch with customers and staff. Underpinning all this are guts and plenty of emotion, which separate brands from mere products.

Global brand-building is a tough business and takes time. Just ask Japanese and South Korean companies, which took decades establishing themselves on the world stage. Or ask the handful of emerging-market brands that have made it big in the past 10 years or so, such as La Martina, the upscale polo company from Argentina, and my old favorite Havaianas, the Brazilian flip-flop sandal maker.

Now it’s the turn of Chinese brands. Xiaomi Technology, a Chinese mobile phone maker, was only founded in 2010 but has quickly built a strong brand at home. The company co-develops its operating system with its keenest users via online forums, and as a result its new product launches are like rock concerts. Xiaomi is one to watch, for sure, and there will be others too.

Huawei is now in the top 100, and other Chinese brands are knocking at the door. In fact they might go global faster than other emerging-market brands because of China’s economic strength and the urgent need for its companies to shift away from a low-cost focus.

The government official I met 10 years ago probably won’t be wrong for much longer.

What’s your view? Which Chinese companies will be next to enter Interbrand’s top 100 list? Which sectors are most likely to be disrupted by the entry of Chinese brands? What might hold Chinese brands back?

Beloved Brands Connect Emotionally to Lead the Pack

The emotive aspect of branding in product ideation is often overlooked. When people "feel" connected to a group or a place or in this case a brand, they can become fiercely loyal brand ambassadors. Apple and Walt Disney are perfect examples of this. Take some time to digest this well written article on the subject.

-Max Daves

CEO (idea)ology group

Beloved Brands Connect Emotionally to Lead the Pack http://www.entrepreneur.com/article/237890

Beloved Brands Connect Emotionally to Lead the Pack At the end of the day, and at the end of your positioning statement, your brand must rest on an emotional benefit.

Sure, functional benefits are important because they outline what your product will do for your customer, which is critical to your success. They get you in the door of your customer, but they won’t keep you there.

The problem is that any product in a given category generally offers the same functional benefits. It’s very hard to differentiate based on a product attribute.

You may temporarily have a competitive claim that you can hang you hat on, but only until your competitors match it. It’s very easy to play catch up.

Take a look at the skin-care category. Virtually every single moisturizer in the world will hydrate your skin, minimize fine lines and wrinkles and even out texture. Every brand has a way of serving up those features differently, and that’s important, but at the end of the day they are all kind of the same.

In almost any industry, it’s about the same phenomenon.

To really differentiate, you have to go beyond product attributes and connect emotionally with your customers. That’s when you move beyond selling a product and becoming a brand.

It’s the “so that” in our classic positioning statement that we’ve been formulating.

The emotional benefit is ultimately what differentiates your brand and positions it in people’s mind. The emotional benefit is how you want people to feel about your brand, whether they use the product or not. The emotional benefit is what allows a brand to expand across product categories and customer targets. The emotional benefit is what gives the brand legs.

Take a look again at the skin-care category. While brands like L’Oreal, Neutrogena and Olay have much the same “product line” and functional benefits, the emotional benefits and the brand positioning for each couldn’t be farther apart. Take a look at their advertising messages:

L’Oreal: Because I’m Worth It (confidence, self-esteem) Neutrogena: #1 Dermatologist Recommended (security, best available) Olay: Your Best Beautiful (control, determination) While these product lines may differ, the fundamental product attributes and benefits are nearly the same -- but the brands couldn’t be farther apart.

By using emotional benefits to differentiate, each brand is positioning itself to appeal to its target audience and aligning to what’s most important to them.

It’s the emotional benefit that puts the finishing and magical touch on your positioning. Without it, you’d simply have a product, instead of a beloved brand.

From www.idea-ology.com (via Instapaper)

Maverick or Maintainer?

Maverick Or Maintainer? 

Some of Americas brightest minds... Most brilliant inventors and foremost creative people are lost to public and private sector organizations because of institutional arrogance, prideful leadership and bureaucratic red tape which creates a culture of mediocrity. That manner of organizational mindset always leads itself blindly towards a special kind of peril... One in which it's varicose structures are found wholly incapable of the creative maverick like thinking which is necessary to navigate the stormy waters of history. It has been said that you can always count on America to do the right thing after they have exhausted everything else first. I would say that the complacency (maintenance thinking) that allows status quo managers rather than visionary leaders into positions of power and influence, actually create the opportunities for the great ones to rise up when the ineptitude of those preceding them have been rattled loose from their controlling mediocrity. This does not come without travail. For mediocrity does not breed inspiration but inspiring people breed inspiration and those people are anything but mediocre. They are the mavericks. No one has made a lasting positive impact upon human society by following the crowd and playing it safe. 

When a public or private sector organization devolves into the dialectic of "maintenance thinking" it becomes rigid, hyper predictable and brittle. This alone creates the conditions for competitors to exploit its unseen weaknesses. Instead of taking risk and breaking the cycle of dysfunction to course correct, far too often these organizations fall into the organizational OCD death spiral constructing more bureaucracy. This of course only causes more problems feeding the exponential quotient. When they should be taking more innovative risk they actually do the opposite which locks out the very mavericks they need to right the ship. 

When a nation, an organization or a people don't take risk, they by default cede their opportunities to those who will rise up and take the necessary risk in the time of disruption when fear grips and tears at those who merely tried to maintain their positioning. Innovation and creative solutions are fearful things to those who have become slaves to their maintenance of present position. Such static thinking creates its destruction by denial mechanisms meant to "maintain" over "move forward." Nothing in this world is truly static. Everything is dynamic and ever changing. When business or government or individuals settle for "maintain" they are actually choosing  the dynamic of loss instead of gain. As the organization is disrupted it either adapts to changing conditions or it perishes. 

But alas this is when those visionaries... Those mavericks rise to the occasion and seize the day. Every great victory is preceded by years of agonizing failures and setbacks. But are they really failures and setbacks? No they are part of the crucible which makes the maverick into who they really are. So too this can be with organizations. 

Are you a maverick or a maintainer? Does you organization and it's leadership exhibit maverick or maintainer tendencies? 

Does your professional DNA admire or loath mavericks? Your survival in the new economy may depend on how you and your organization answer that question. Are you willing to accept the mavericks? Because they won't stop being mavericks even if you don't trying stop being in their way. They will succeed. They will rise and one day you will need those unknown mavericks to step up whether you like it or not. They are here and they are coming in greater numbers. You can bet they will bring real change to you and your organizations. Or they will replace them. Better a friend than a foe. 

A few thoughts to ponder from an American Maverick. Think it forward now. 

-Max Daves

CEO (idea)ology Group

Co-founder Safe Haven Strategic

(futurist | serial innovator | global strategist | visionary | socially conscious entrepreneur | radical solutionist | status quo disruptor | chief idea-ologist)

"Break the rules they taught you in business school. If it really worked they wouldn't have been teaching them to you... They would have been proving it works by doing it. Now let's go think up something new and make it happen." 

If you are interested in learning how to take yourself, your ideas or your organization "maverick" email max@idea-ology.com or visit www.idea-ology.com