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Branding
https://www.linkedin.com/today/post/article/20141014071001-3458678-chinese-brands-are-coming-for-these-two-reasons?_mSplash=1
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?
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)
Why Your Brand Should Appeal to Sustainability-Friendly Millennials | Inc.com http://www.inc.com/maureen-kline/why-your-brand-should-appeal-to-sustainability-friendly-millennials.html
Metrics show sustainability is catching on fast among consumers, investors, and companies. Don’t get left behind. Advertisement Sustainability leaders gathered in Boston at the Sustainable Brands New Metrics ‘14 conference to crunch numbers, aggregate data sets and measure everything from social impact to organic food sales. They unveiled new scorecards, measurement models, data streams, web-based tracking tools and social progress indices. Practically the only thing they left to economists to figure out (and they are!) was how to measure happiness.
What did they find?
Companies are leading great environmental and social change in the world. Sometimes they are innovative and forward-thinking. But today, all it takes is having a marketing department that responds to sustainability-focused consumers, or a finance department that responds to sustainability-focused investors.
Two consumer segments in particular are driving the change: millennials, and a rising middle class in developing countries. Data cited at the conference showed consistently that brands associated with green, sustainability, and trust sell more products than brands that don’t stand out as “good.” And millennials not only are capable of seeing right through “greenwashing,” or false promises; they actively punish “bad” brands or brands simply not doing any good.
A Nielsen study released in June 2014 showed that a global average of 55% of consumers surveyed said they were willing to pay more for products and services from companies committed to positive social and environmental impact. But the data point that should really make brands wake up was this one: the 55% figure represented a 10% increase over the same measure only three years earlier. “The trend is growing very fast,” said Amy Fenton of Nielsen.
Entrepreneur Alexander Gillett and his brother Arthur, who founded the food ratings company HowGood, tested whether consumers really would pay more for products perceived as more sustainable. HowGood does research on food products, looking into ingredients, sourcing locations, food policy, environmental policy, labor rights and food processing. They give each product a score. On the highest scoring produce, rated ‘great,’ they noted an increase in sales of 26%, sustained over a four-month test period.
Tom LaForge, Director of Human and Cultural Insights at Coca Cola, said people choosing which brand to buy are now thinking, “The good I want to see in the world is possible if I partner with the right people.” Trust has become fundamental, and companies can lose consumers’ trust much faster than it took to earn it. Of course, it can be devastating for a brand to lose its reputation.
But corporate leaders are starting to realize sustainability needs to be a given, built into company strategy as much as quality or any other basic value. Time for everyone to get on board.
IMAGE: REB Images/Flickr Last updated: Sep 30, 2014
@kline_maureen
MAUREEN KLINE
Maureen Kline writes about corporate sustainability and social responsibility. She is in charge of Public Affairs and Sustainability for Pirelli Tire North America. She lived in Italy for 23 years and is a former correspondent for The Wall Street Journal Europe, Business Week and Breaking Views. She can be reached at maureenkline@gmail.com.
(via Instapaper)