The Asian business landscape provides an interesting platform from which to view the rapidly changing nature of branding and its importance to modern organisations, especially in the emerging world. While companies in the region face developing global trends similar to other regions, Asia experiences things at a faster pace and in a more crowded environment. Asian consumers are getting savvier and travelling more frequently and foreign companies are coming in droves to muscle in on their turf.
The pace of change has left Asian businesses with legacy images as traders and commodity producers of low value items and that image continues to limit opportunities for them in the West and at home. There has been some progress for Asian firms in terms of moving away from a commodity producing and trading mindset to a more consumer focused one, but there is still a long way to go.
Asian organisations have typically approached brand building by skill-building, i.e. hiring outsiders and paying top dollar for training, and marketing what they already have. In the 1980s and 1990s, the market was so big and business so plentiful that there was plenty to go around. Brands didn’t matter like they do today, as the likes of Apple and BMW overshadow local companies by name alone.
This means two changes are necessary to get Asian firms to global branding prominence, which also holds lessons for firms elsewhere looking to gain prominence in emerging markets. Brand building now needs to shift from plugging skill gaps to empowering staff and making branding part of the organisation’s strategic growth plan.
Branding on the strategy agenda
Boards needs to make brand building a critical area of focus and drive its implementation through the organisation. The first step in this implementation process is to entrust someone with the responsibility. Different models of senior executive responsibilities around brand building are being adopted, which include CEOs taking on the role of brand builders, appointing Chief Marketing Officers (CMOs) or Chief Brand Officers (CBOs).
Samsung is a great example of an Asian business which embraced branding on a strategic level in the late 1990s, and employed a CMO.
In Asia, it is imperative that boards pay attention to the cultural context before deciding on the model and associated responsibility matrix for brand building in the organisation.
Define, allocate and empower
Brand building requires an organisational level mindset, which requires time and investment to create. The most effective way to achieve this is to define precise brand building objectives and associated responsibilities, allocate these responsibilities to the right individual and empower him or her to do all they need to do to meet the objectives.
This is a stage where boards can play a more effective role in empowerment by providing guidance and strategic direction to the individual around cultural and other organisational factors that need to be navigated successfully. Brand building is a medium-term (if not long-term) initiative that requires successful understanding and mitigation of not only external barriers, but also internal ones.
Market orientation mindset
Boards, through strategic and tactical initiatives, should help in the creation of a market orientation mindset within the organisation. Market orientation, in simpler words, is about understanding and having the ability to predict consumer needs and preferences. Having this ability is critical for effective brand building. A brand should be able to meet the functional and emotional needs of its consumers through effective positioning and excellent performance. Without knowing your consumers, these aspects cannot be achieved. This is where market orientation comes in, which I wrote about in “Building a Customer-Centric Mindsetâ€. It is very important that the vision and mission of making the organisation customer-centric comes from the board with the CEO leading.
Boards can help in getting this critical mindset in place by facilitating the implementation of an operating model that enables and delivers market orientation. This level of change can only happen when boards recognise the need for brand building and the associated capabilities that are required.
Market orientation is usually defined as organisation-wide generation, dissemination, and responsiveness to market and consumer intelligence. The principle of market orientation is built on three critical pillars – customer focus, coordinated marketing and profitability. Boards can empower concerned individuals with responsibilities for brand building, by implementing organisational systems that strengthen customer focus, inform marketing and thereby ensure higher profitability of brand building activities.
In sum, the role of boards in the creation of strong brands is growing substantially. In Asia, the old barriers of skill set gaps, trading mindsets and commodity producers are disappearing fast and cannot be used as excuses anymore. Asian businesses need strong, effective and clear leadership from the top on how to build strong brands. The need for action has never been stronger than now.
This article is republished courtesy of INSEAD Knowledge Copyright INSEAD 2014.
(Martin Roll is a business & brand strategist, and the founder of Martin Roll Company. He provides advisory and guidance on leadership, strategy and execution, and how to build and sustain high-performing, enduring brand-driven businesses and global, marketing-oriented organisations.)