{"id":2608,"date":"2015-11-16T16:21:49","date_gmt":"2015-11-16T10:21:49","guid":{"rendered":"https:\/\/bbf.digital\/new\/?p=2608"},"modified":"2017-09-09T22:40:33","modified_gmt":"2017-09-09T16:40:33","slug":"asian-brand-strategy-part-2","status":"publish","type":"post","link":"https:\/\/bbf.digital\/new\/asian-brand-strategy-part-2","title":{"rendered":"Asian Brand Strategy (part 2)"},"content":{"rendered":"

Following is continuation of an extract from chapter 1 of Asian Brand Strategy which\u00a0is written for boardrooms and corporate management teams. The book is aimed primarily at Asian business leaders and Western observers. It is written by\u00a0Martin Roll<\/a>\u00a0who is a\u00a0Business & Brand Strategist, and Senior Advisor at Martin Roll Company, Singapore.\u00a0<\/span><\/em><\/span><\/p>\n

A strong brand can differentiate a company from its rivals, make it stand out from the competition, successfully influence consumer purchase decision, build customer loyalty, and boost the company\u2019s financial performance. Asian Brand Strategy<\/a> explores these issues, with a focus on the Asian market environment and on attempts to build Asian brands.<\/span><\/em><\/span><\/p>\n

\"Asian<\/a>Major companies based in Asia and expanding outside their home market believe innovation and brand building will be vital to flourishing overseas. Accenture asked senior executives what they believed the source of their com-petitive advantage would be in three years\u2019 time. From 2012 to 2013, low- cost R&D slid in importance by 16 percent while low operating costs were down by 34 percent. Replacing them was an increase in importance for selling high- value, quality, branded, innovative products and services.<\/span><\/p>\n

However, Asia is still one of the world\u2019s biggest providers of commodity products, a production hub housing 47 percent of the world\u2019s manufacturing. Asian manufacturers mostly produce for other companies and the majority of these products are therefore non-branded. In other words, these are volume products without strong brand identities. Instead, the largest financial value is captured by the manufacturers\u2019 customers \u2013 the next player in the value chain \u2013 primarily driven by strong brand strategies and successfully planned and executed marketing programs.<\/span><\/p>\n

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The difference in the proportion of value captured between the Asian manufacturing price and the Western retail price serves as a good example. A branded sports shoe is produced in Asia at an estimated US$5, sold to the sports shoe brand for US$10, and the consumer buys it in the retail store for US$ 100 \u2013 in other words, a twenty- fold increase throughout the \u201c product- to- brand\u201d value chain. This leaves the Asian manufacturer with only a fraction of the substantial value that consumers are willing to pay for, in addition to the fact that the consumer never comes to know the name of the Asian manufac-turer who originally made the sports shoe.<\/span><\/p>\n

Since 2000, the number of distributors in the sports goods industry has declined more than 50 percent as many sports brands became distributors themselves. This is particularly the trend among larger brands. The sports shoe brand captures an estimated 40\u2013 95 percent of the entire financial value depending on its level of vertical integration.<\/span><\/p>\n

Successful global companies share certain common characteristics, including strong brand equity. Despite Asia\u2019s size and economic growth, it has not seen the emergence of many strong, international brands.<\/span><\/p>\n

Few Global Brands Originating from Asia<\/span><\/h3>\n
\"By<\/a>
New Toyota factory in Ohira, near Sendai, Miyagi Prefecture, Japan. By Bertel Schmitt (Own work) [CC BY-SA 3.0 (http:\/\/creativecommons.org\/licenses\/by-sa\/3.0)], via Wikimedia Commons<\/span><\/figcaption><\/figure>\n

In a 2014 Interbrand study measuring the financial value of worldwide brands, only 11 of the top 100 global brands originated in Asia.13 These brands are the familiar technology and automobile giants from Japan and South Korea, such as Samsung, Toyota, Honda, Canon, and Hyundai, and a single Chinese brand Huawei (ranked 94th) appeared on the global list for the first time. A simple question arises: What about the rest of Asia?<\/span><\/p>\n

Given the size and volume of Asian businesses today, it is evident that Asia could build many more prominent brands and capture more financial value through better price premiums and customer loyalty. Asia certainly has some of the world\u2019s largest companies. China is home to the world\u2019s three biggest public sector companies and five of the top 10 public sector companies in the world. With 674 members on the Forbes Global 2000 list of largest public companies coming from Asia, it is the most strongly represented region. Yet these companies lack the brand recognition and value which accompany most of America and Europe\u2019s largest companies.<\/span>Branding can become an important driver of shareholder value for Asian companies in the future, as this book will illustrate.<\/span><\/p>\n

Reasons for the Lack of Strong Asian Brands<\/span><\/h3>\n

There are many reasons why Asian companies have not developed many global brands until now. The appreciation of branding in Asian companies is primarily inhibited by the following five factors:<\/span><\/p>\n