Many Japanese brands are household names worldwide, but companies in other Asian countries have traditionally been low-cost producers of basic products. Now they are waking up to the need for brand awareness.
One increasingly popular solution to the identity crisis: a global corporate image campaign.
Seoul-based LG Electronics recently awarded a $40 million corporate account to D'Arcy Masius Benton & Bowles, New York, based on that agency's experience building global brands for marketers such as Procter & Gamble and Mars. A TV and print campaign breaks worldwide in July.
Similarly, South Korea's Samsung Electronics-like LG among that country's three biggest chaebols, or conglomerates-picked Vogt-Wein, Westport, Conn., to send out its image.
"The LGs and Samsungs were associated with basic commodity industries," said Jim Johnson, president-CEO of corporate identity agency Anspach Grossman Portugal, New York. "Now they are moving up the value chain. Where they made components for cars, now they make cars."
Part of the problem is the wide range of products these companies sell under a single name. Samsung expects to launch its first car in 1998-in addition to existing lines of satellite dishes, microchips, computers and cameras. Samsung said it will spend $13 billion to become one of the world's top 10 automakers by 2010.
Asked Mr. Johnson, "How can you use a single brand for a car and a hair dryer?"
In DMB&B's upcoming ad campaign, LG will focus on conveying company values such as customer service, said Peter Greene, DMB&B senior VP-worldwide account group director. "Many consumers and business leaders simply are unaware of the company," he said, especially since it shortened its name from Lucky Goldstar in 1994. LG markets consumer electronics, including TVs, VCRs and refrigerators, as well as owning oil, chemicals, construction, stock brokerage and trading companies. LG's extraordinarily ambitious growth program, Leap 2005, calls for the company to increase its 1995 sales of $65 billion by 35% to 40% a year for the next decade.
The bulk of LG's sales are still in Korea and Asia. "They realize that in order to grow, they need to do so on a worldwide basis and be known as a major competitor," Mr. Greene said.
Typically, South Korean marketers have an in-house ad agency that follows them overseas, often acting as a liaison between the South Korean client and local agencies. LG transferred Senior Account Supervisor D.W. Lee from its in-house agency, LG Ad, in Seoul to an LG electronics plant in Englewood, N.J., earlier this year essentially to work in the client role with DMB&B.
For South Korean agencies, it is an opportunity to pursue their own international growth plans. Samsung's Cheil Communications has 12 overseas offices and will open in Paris this summer.
SAMSUNG'S CORPORATE IMAGE
Cheil will buy media for the Vogt-Wein campaign. Samsung expects the creative to hit print and broadcast media after July.
"To survive in the future and lead the industry, Samsung needs to establish a long-lasting identity that's true to the corporate mission," said Serena Jordan, a Vogt-Wein exec.
Samsung's future in the car industry will help widen the company's awareness among consumers, said Hans Mastenbroek, Samsung's marketing director for Western and Central Europe. "We'll try to create a particular image-if you go for high-end autos and low-end microwaves, that would cause some conflicts."
ASIAN PLAYERS ON GLOBAL FIELD
Taiwanese computer marketer Acer Corp., the world's seventh largest, is one of the few to succeed as a global player. Acer seeks to build a long-term strategy, said Patrick Lin, director of consumer business. "It's necessary never to stop promoting the brand image. But aside from some companies, like Samsung or Toyota, there don't seem to be many other Asian companies doing a really good job of this."
Porro, a Hong Kong computer marketer, tried to take a place on the world stage in 1990 but could not break Westerners' perceptions of low quality. The marketer now focuses on China. And the company has no plans to go international again.
Hong Kong fashion and luxury goods marketer Shanghai Tang sees Asians-consumers of 25% of all luxury goods products sold in the world-as its best customers. But Tang's strategy is to appeal to them by first creating a global image.
Its plan is to expand this year into Europe, the U.S. and Shanghai, followed by Japan and Singapore. The company's socialite founder, David Tang, hired M&C Saatchi, London and Hong Kong, as its first global agency last month. The goal is to emphasize Chinese manufacturing origins, generally downplayed by other marketers, to set itself apart.
"A brand needs to be accepted worldwide before it's accepted in Asia," said Jeremy Trump, CEO-managing director, "and this is particularly true of China."
Contributing: Todd Pruzan, Chicago; Helen Deal, Hong Kong; Laurel Wentz, London.