Try to remember the last time you
went out for a walk. What do you remember seeing? Probably the buildings,
vehicles, trees and so on. Yet another thing that will come up in your mind is
the advertisements you saw. Advertisements are the most visible method used in
branding. Yet it is nothing new. Branding dates back to the ancient days where
men used to brand the cattle and the sheep and since then Brands have evolved
into some what it is today, something that actually matters.
The branding world has been
dominated by western brands over the past years. However it is noticed that
this domination is shifting gradually from the west to the east. Samsung, a
South Korean smartphone brand provides the best example as it holds the highest
market share in the smartphone industry outclassing stiff competition from the
more established brands of the Economic north. Similarly the world is
witnessing the rise of new brands especially from the ‘Tiger Economies’ of East
Asia and the Latin American innovators. We will take an insight view on the
branding possibilities of the emerging markets.
What is a brand?
“A brand for a company is like a
reputation for a person. You earn your reputation by trying to do hard things
well.” – Jeff Bezos
Philip Kotler, author of “Marketing
Management” defines a brand as a name, term, symbol or design or a combination
of them, which is intended to signify the goods or services of one seller or
group of sellers and to differentiate them from those of the competitors.
To put it simply it is the unique
identity of the good or service in the market.
Why do we need branding?
The brand name is the identity or
the personality a specific good or service holds in the consumer market and it
is what that urges the consumer to choose that specific brand over the other
similar brands. Over the years the world
has globalized in such a way that consumers around the world seek for brands
which have established themselves as leaders in their specific industries.
Therefore it is essential for firms to brand themselves.
Evolution
Branding is not a new concept in
the human civilization, yet branding as we know began to evolve in around the
16th century. The British ceramist Josiah Wedgwood and the French
designer Rose Bertin are acknowledged for the establishment of the earliest
known brands. And since then brands have come a long way. In the status quo
brand names holds more value than the tangible assets of the company, as it was
for Kraft in 1988 when Philip Morris paid most of the 75% investment on the
intangible assets on the powerful brand names of Kraft. The economic boom and
sophistication of lifestyles began through the industrial revolution which
spread from the Great Britain to Europe and the US. And since then the Western
world has managed to hold a tight grip in the world’s top brands. However with
the success of the emerging nations as serious contenders in the global market
many Asian and Latin American brands have managed to establish themselves as
top companies. Samsung, Toyota, Concha y Toro and Prada can be introduced as
few of the brand from the emerging world which is threating the more
established brands. It is a known fact that the companies which have managed to
brand themselves in the markets have managed to be more innovative as well as
risk taking, and each day the emerging and the developing markets are
introducing brands which challenges to status quo.
Recipe for Emerging Brands from the Emerging World
The global markets have been
dominated US and European brands for the last couple of centuries. However the
many researchers have noticed a shift in this trend. When we study the markets
we can clearly identify that developing countries have managed to produce
brands that are challenging the more established brand names.
Establishing yourself
There different paths to
establish new brands in the international consumer market. Firstly firms tend
to follow the trend set by Toyota, by releasing good enough products cheaply
and then allowing them to raise the price as well as the quality. Another is to
target Diasporas of their mother countries. Indian business giant Reliance
launched a highly successful cinema chain in USA which facilitated Bollywood
Blockbusters attracting the Indians living in USA. The wide ranges of cuisines
hailing from different parts of the world have been part of this branding
strategy where companies such as Jollibee used to promote their own food
cultures globally.
It is crucial that the developing
nations of these emerging brands manage to develop a good reputation about the
country as the firms need to escape the image of the developing world in being
of poor quality. Firms as well as the governments should use ways to improve
the image of the country in the international community. Brands also attach themselves
to the unique local cultures as well to the natural beauty of the developing
countries.
Building up the brand
A brand which hopes to succeed in
the higher echelons among the international brands needs to stabilize and
establish itself in the domestic market. Amitava Chattopadhyay and Rajeev
Batra, authors of “The Emerging Market Multinationals” introduce four
strategies for building markets for new brands. It insists that these brands exploit the
advantages of economies of scale and local knowledge to establish their brands
among the local consumers. The economies of scale lead to a reduction of costs
in the long run which allows the expansion of firms. Also the local knowledge
gives an insight to the firm to create opportunities for it to insert its
influence to attract the domestic consumer basis.
Secondly, the firms should focus
on developing and promoting market strategies which will address the specific
market segment which will allow it to be world class. For example, Lenovo which
is cited as an upcoming brand initially targeted the corporate clients before
addressing to the necessities of the general consumers, thus targeting a
specific group of clients that are more likely to be favorable towards their
brand gave Lenovo the edge to become an emerging brand in the global economy.
The third strategy is innovation. They rightfully argue that the brands from
the emerging world needs to innovate new paths to climb the ladder of success
as it is not a simple task to challenge the more established brands from the
developed world. FastCompany a leading progressive business media brand ranked Safaricom, a Kenyan web based company as
the ninth most innovative company in the world in 2013 above the likes of more
renowned brands such as Apple and Coca-Cola. It has given the poverty stricken
Kenyans an opportunity to call one-on-one with doctors and is recognized for
bridging the health care gap with telecom.
The final ingredient is to engage
in traditional brand-building, through marketing and advertising. The marketing
strategies should be to attract the eyes of the consumers using marketing as we
know it and promote the brand. It may be through using the company name as IBM
or Toyota does or through the names of different brand under the parent company
like Procter & Gamble who promotes individual brands from Gillette to
Duracell. The emerging companies can merge with existing brands or even buy
prevailing brands in order to establish themselves. Tata’s acquisition of
Jaguar is one such example.
Globalization and new brands
There is little doubt on whether
globalization has actually begun to alter the course of the human civilization.
The rapid development in the field of Information Technology along with the
liberalization of world markets has laid an interconnected and interdependent
web entwining the whole of humanity together. The emergence of brands from the
emerging world is seen as an inevitable result of globalization. The process
has given way for prevailing multinational brand to access the labour and
resource markets in the developing world. The prevailing successful brands
sought to outsource production of good and services to emerging markets with
cheaper labour resources and thus created opportunities to the local firms to
develop. These outsourced companies initially became financially stabled and
later began to develop on its own. The globalized market structure allowed
these emerging brands to establish themselves through promoting their
innovations to the global consumers. Samsung, HTC and Lenovo are few such
brands from the emerging markets that have found themselves up the ladder and
are now climbing the steps.
The domination of western brands
is gradually decreasing with the emergence of new brands from developing
countries and they progress to increase their market share in the world. The progress of these brands provides a
formidable foundation for the rise of the domestic economies of the developing
countries. The innovative branding techniques followed by them will play a
crucial role in establishing a new order in the global market. This rise of the
fresh brands provides hope for the dependent economies of the developing
countries to surface as stable and independent economies.
This article was published in the "Exposition" magazine published by the Department of Industrial Management of the University of Kelaniya, Sri Lanka
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