Are Brands Becoming the Export 'Ideology' of the 21st Century?
"A good name is to be chosen rather than great riches." -- Old Testament
The wisdom of the Old Testament applies even today -- but with a twist. A good brand name will be the source of great riches precisely because it carries a good reputation. Brands, and their logos, have been around for ages. The earliest internationally used logo was the cross. In 312 AD the Roman emperor Constantine had a vision of the cross with the words "by this sign conquer" before the battle with his rival, Maxentius. He had the cross painted on the shields of his soldiers and won the battle. This first use of a logo had Christianity winning too -- it became an official religion of the Roman Empire and secured the theological equivalent of growing market share.
In the 20th century, the ideologies that were exported were communism with its hammer-and-sickle logo, fascism with its swastika and capitalism with, well, the logos of the likes of Coke and Pepsi, McDonald's and Mercedes, FedEx and KFC. As the 21st century started, capitalism had clearly won the battle for the hearts, minds, stomachs -- you name it -- of the world. Like Constantine's vision, these signs or logos did conquer. People liked having a choice: Democrats or Republicans? Tories or Labor? Nike or Adidas?
While the ideologies of the U.S. government with its armies in Iraq and Afghanistan and al-Qaeda with its armies of suicide bombers flounder before global public opinion, brands continue to flourish -- and are used as a way for countries to project themselves internationally.
According to Interbrand, of the top 100 brands, all but seven come from the West, suggesting that the West's global economic domination is following behind the banners of its companies' logos -- not unlike Constantine's soldiers. Of those seven remaining brands, all Asian, only one, Samsung, is non-Japanese. But that will change -- quickly -- behind the rapid economic growth that now seems entrenched in Asia.
Some of China's key companies have opted for a strategy of shortcutting brand creation, in which it takes years to build equity among consumers and customers, by buying and partnering with good names: Huawei with 3Com; Lenovo with IBM's PC unit; TCL with the television unit of the French company Thomson; Alibaba with Yahoo; Nanjing Automobile with MG Rover; CNOOC, with its unsuccessful attempt to buy UNOCAL; Haier, with its similarly unsuccessful attempt to buy Maytag.
Huawei competes by using a "digging where the dirt is softest" strategy, selling in African or Middle Eastern markets that don't interest its key competitor, Cisco. The cellphone manufacturer Ningbo Bird has launched in India. Haier has chosen a "difficulty first" strategy by targeting the U.S. and EU markets -- even going so far as discarding the cost advantage of manufacturing in China by doing so in the U.S. The Chinese government, lifting a page out of the playbooks of its historical competitors Japan and Korea, is actively working with more than a hundred top local companies to expand overseas. The economic power that China has quietly and effectively used since the 1997 Asian crash to build relations in the region has shown that by beating swords into plowshares, the country and its people have prospered and gained more influence than they have had in centuries.
Other Asian nations have also successfully been exporting their brands to positively influence the opinion of other countries. Singapore's leading beer brand, Tiger, from Asia Pacific Breweries, is now the leading premium beer brand in Vietnam. APB has investments in China, Cambodia, Thailand, Malaysia and New Guinea and is now exporting Tiger to the EU and the U.S. Singapore Airlines' equities of efficiency, great service and leading-edge technologies could be the equities of Singapore itself. Are the country and its renowned airline fraternal twins? Look at Malaysia Airlines' advertising for its award-winning service and leading-edge first- and business-class products and you can see them trying to replicate what Singapore Airlines has done -- for itself and its home market. It's an example of a country adopting a branding "best practice" from a competitive neighbor.
India's leading private airline, Jet Airways, is now expanding rapidly in Asia, presenting the face of a "new India" with its mint-condition planes and high level of service. Same with the luxury Taj and Oberoi hotel groups. Other prominent Indian companies such as the Reliance Group and Wipro are probably not far behind in visible overseas expansion. Even India itself, with its "Incredible India" campaign, is making its presence as a brand felt. At Davos, India conducted a very visible PR campaign, making sure that worldwide opinion leaders aren't considering only China when they think of great growth markets.
The perennial "sick man" of Asia, the Philippines, has a strong company and brand in San Miguel. It is rapidly expanding throughout Asia and Australia in a drive to become one of the top ten food and beverage companies in the region. Vietnam is a key area of expansion. So is Australia, where it recently bought National Foods.
In the U.S., people are worried about the loss of outsourcing jobs to India and manufacturing jobs to China. It's a political issue. Instead, they should be more concerned by the growth of strong brands in these and other markets. Because the power of these countries will ultimately be represented by the strength of their brands.
Kevin Roberts, CEO of Saatchi & Saatchi, has said that "for great brands to survive, they must create loyalty beyond reason." The brands being launched into the world by both emerging markets and the new economic powers of Asia have that -- and more. They have the pride and patriotism of their countries behind them.