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Asia needs to fill its brand deficit

by Anthony Fensom

ASIAN BRAND STRATEGY by Martin Roll, Palgrave Macmillan, 2005, 272 pp., $42.50 (cloth).

Shizuka Arakawa’s graceful spins and spirals enthralled a nation as she won Japan the gold medal in women’s figure skating at the Winter Olympics. But few would have cheered more loudly than Tokyo rice producer Toyorice Co., which became flooded with orders thanks to Arakawa’s appearances in TV commercials for its Kinmemai golden sprouted rice.

A fortuitous combination of sporting and business success, Toyorice should benefit from its celebrity endorsement as long as Arakawa’s fame endures. But while Japan also boasts the world’s baseball champion and its second-biggest economy, the nation and Asia as a whole are still minnows in branding terms compared with the West’s brand behemoths.

In BusinessWeek magazine’s 2005 survey of top global brands, Toyota was the only Asian company to crack the top 10, while only two others — Honda and Samsung — made the top 20. Despite having two-thirds of the world’s population and a quarter of its wealth, Asia is punching well below its weight in this class of economic performance — a serious issue when considering that brands are estimated to account for 37 percent of average market capitalization.

Redressing this brand deficit is the aim of brand strategist Martin Roll’s first book, “Asian Brand Strategy.” Written in a concise style that is light on jargon but heavy on content and illustrations, the work provides a straightforward guide to developing a brand in an Asian context.

Industry veterans will find few surprises, but Roll’s work is not aimed at them. Instead, the Singapore-based CEO of strategic branding consultancy VentureRepublic aims squarely at those he sees as crucial to the branding effort — Asian business leaders. And with editions planned for China, South Korea and Vietnam in the near future — a Japanese translation is expected as early as yearend — the book should truly have an Asian audience.

The mathematics of branding is clearly exemplified by Roll: A branded sports shoe is produced in Asia for $5, sold to the sports shoe brand for $10 and then purchased by the consumer for $100, leaving the Asian manufacturer with only a fraction of the brand value.

“Gone are the days when low cost and manufacturing prowess alone served as competitive advantages for Asian companies,” the Denmark native writes. Instead of competing on razor-thin margins with other suppliers, Asian companies can escape commoditization of their products and start charging a premium by developing their own brands, he argues.

Despite Japanese successes such as Shiseido and Sony, building an internationally competitive brand is no easy task. Anyone doubting the challenge in competing with Western brands need only look at how Apple’s iPod has conquered consumers amid a mass of around 400 competing portable music players.

When Singapore’s Creative Technology launched its Zen Micro MP3 player in 2004, the company offered it virtually free to anyone surrendering their iPods. Only 20 took up the offer. In Japan, domestic models offered by Sony and Matsushita Electric face the same lack of pulling power compared with Apple’s seductive brand.

Roll also clearly shows the need for the CEO to drive the branding process, instead leaving it to the marketing section, a common Asian practice. As he points out, the marketers lack the authority that top management has when it comes to fixing problems with a brand, such as poor service or recruiting practices.

Among other case studies, Roll identifies Singapore Airlines as being successful in maintaining its brand consistency — and profitability — despite changes at the top. Japan Airlines, take note.

For Western companies, getting it right in Asia requires customizing their products to the local market, as seen in McDonald’s teriyaki burgers and Starbucks’ Matcha Tea Latte. It is a delicate balancing act, however, as Italian fashion house Giorgio Armani found when it discovered Chinese customers hated the red Chinese-style lacquer door on its Beijing outlet.

But while the West may have the upper hand for now, Roll sees Asian brands coming to the fore within the next two decades in line with continued economic growth. And it’s not only about money: Anyone who believes that branding is all about advertising need only look at Amanresorts, an Asian resort chain acclaimed as the world’s best that has relied solely on word of mouth for promotion.

The author’s book is not the complete picture though, and those wanting a more detailed examination of the art of branding should consider more scholarly works by such authors as David Aaker or Kevin Keller. Roll’s upcoming book on making branding part of management should add missing pieces to the jigsaw puzzle, however.