Branding in the early 2000s: the new forces at work
As northern European companies strengthen in the 2000s, and
the People's Republic of China joins the WTO, how will branding strategies change
from the predominantly occidentalAmerican model? Will it be pushed gently
from Scandinavia into new areas and will the discipline be influenced by a need
to discover more about the mainland Chinese consumer? As a new world economy
emerges with governments being more cooperative after September 11, 2001, Jack
Yan examines how branding might look in the next few
yearsand how they might be remembered.
Jack Yan1
Jack Yan is founder and CEO of Jack Yan & Associates and
president of JY&A Consulting.
The new forces in branding
WITH recent events, including September 11, 2001, globalization, Swedish business
principles, the Nordic school of marketing thought, Asia and media integration
are likely to be major influences behind branding over the next few years.
With the exception of the events of September 11, none of
these are 'new', but the author believes that they will properly enter the branding
dialogue in a stronger way.
National branding and related topics such as country-of-origin
marketing have been discussed for many years, but identity and branding experts
did not pay attention to them in recent times until the BBC's The Money
Programme examined the branding of Britain. The idea caught on in Germany,
where ZDF commissioned a similar study from identity consultancy Wolff Olins.
Lately, aspects of national branding have become more important as a means to
differentiate products that are becoming more homogenous, and an awareness of
'the relationships between country, brand and product images on purchasing behaviour'
grows.2 In the 2000s, related concepts, namely
the behaviour of nations that must drive this branding, are bound to influence
branding.
Meanwhile, Sweden has been noticeable because some of its
products have carved a niche based on strong design. In CAP, Playsam
toys, the original Saab car and Swedish web pages have been mentioned in relation
to design. Scandinavian settings look exotic to the Anglo-American eye when
it casts itself over Latin letters in unusual sequences.
Online, Swedish businesses got noticed when boo.com collapsed,
a development regarded as inevitable by CAP Online.3
The magazine had been more confident of other Swedish businesses, however. Online
digital editions of Swedish magazines and newspapers, mail order companies such
as BC Company and fashion label Hennes & Mauritz came to our attention on
the web. They were marked by strong design and the latest developments: it was
no surprise that boo.com tried to stretch even further, because its origins
were in a country that was, and perhaps still is, one of the most ready to embrace
the possibilities of the web.4
It takes more than smart policies to encourage such growth.
One might think Sweden would not be a candidate, given her high-taxation social
welfare programme. Crainer says that taxes still account for 52·1 per cent of
GDP.5 But Sweden has two elements that make
her a strong nation: (a) her outward visions for international companies that
encourage it to listen and gain knowledge from its audiences; (b) a positive
country-of-origin effect that seems to transcend product categories successfullywitness
Absolut Vodka, Ikea, Saab and Volvo. Both contribute to the identities and brands
of the country's exporting organizations.
In the beginning of this decade, Swedish management and marketing
practices could become more prevalent. In the 1980s and 1990s, relationship
marketing ideas from the Nordic school began to make their way into the marketing
journals and the bookshelves,6 at the same
time another concept, that of brand equity, emerged from David Aaker.7
The internet has seen both become more important. Customer
service models were studied as etailers tried to find a way to create consumer
trust, which CAP had found, through anecdotal evidence, as almost paramount
in the digital arena.8 The one-on-one relationships
advocated by the Nordic school were made possible through database advances.
Brands had to stretch from offline ventures or be conceived to deal with the
addition of a new medium. Virtual organizations needed to be branded and their
relationships with allied firms, contractors and customers needed to be managed
using relationship marketing principles.9 In
the last five years, successful Swedish online ventures have built themselves
around these concepts.
While northern Europe begins to influence the rest of the
world, there may be an equal measure of change in branding and marketing strategy
as the People's Republic of China joins the World Trade Organization. Reports
seemed to question whether communism in a country still controlled by an oppressive
politburo would be buried. With WTO membership, the PRC could speed free-market
reforms10but could the same happen to
press freedoms, the cessation of alleged (and often denied) attempts to censor
the internet,11 the crackdown on corruption
or the advent of proper human rights?
In recent years, Chinese culture has permeated western society
more, especially in movie-making techniques and æsthetics.12
This has taken place largely after 1997, after the handover of Hong Kong to
the People's Republic. Companies have been enthusiastically trying to enter
China, with its promise of 200 million people with consuming power, for decades.
Therefore, unlocking Chinese concepts of "face" have played a part in marketing
and branding agenda, particularly as the Middle Kingdom's consumers begin to
attain affluence.
Given that the roots of marketing and branding strategy have
been based on American models, and that nine of the world's top ten brands are
American,13 then will the mould be stretched
by both west and east? The United States, in a more globally cooperative, post-September
11, 2001 mood, is more willing to embrace new cultures diplomatically. And in
reverse, too: Russia is willing to cooperate with the US. The economic isolationists
within the Bush administration have been silenced. Laws were passed rapidly
against terrorism and the money-laundering that often finances it, and, although
negotiations are far from smooth, there are likely to be biological and chemical
weapons' conventions.
Companies may well follow suit to prevent greater losses during
a recession. It potentially points to a new era of branding which is more sympathetic
to alternative marketing models.
Nations that listen
September 11, 2001 does not mark the first day of change in how companies brand.
The forces moulding and changing the field have been around for many years.
It may, however, have set off realizations that global change means a revised
approach to branding.
With nations beginning to examine brandingmost recently
the Philippines began considering it after a seminar by Philip Kotler there14
and New Zealand's influential Unlimited devoted a feature story to
its own national brand15companies may
find inspiration from nations, rather than the other way around, as the first
aspect to the new era.
Even the United States has questioned its image. Why was there
anti-American sentiment and why were McDonald's branches targeted by demonstrators
in Pakistan and Indonesia? A recent New York Times article by David
Barboza, already discussed in CAP, sought to discover the origins.16
Every nation wants to be portrayed as progressive, environmentally
conscious, a good place to do business, culturally significant and friendly.
No national branding programme will succeed if the image does not stand up to
scrutiny.17 Logically, the easiest foundation
is to base the programme on national culture, the strongest differentiator.
In brief, where the country of origin is not at odds with
the product category, there are grounds for saying that the former can be used
for marketing the product.18
If nine of the top ten brands are American, then American
culture is bound to influence the practice of branding in some way. It has already
influenced short-term selling: "buy American" and patriotic slogans were overused
by corporate America after September 11.19
Diane Brady recently wrote, 'Everything from bed sheets to underwear is suddenly
boasting images of Old Glory,' and General Motors adopted its 'Keep America
rolling' tagline.20
However, since the United States is so diversethe author
recently stated that it would be accurate to say 'As American as chop suey,'
in light of where the dish was first servedwhat binds her many cultures
together?
Since September 11, the United States has taken the opportunity
to cultivate alliances. This is a healthy move, because it sets an example for
others. With her isolationists silenced, the US could possibly pursue a policy
based around conservatism and federalism, respecting those nations that do not
have power, leading the world in a more democratic fashion and, as pointed out
by John Lewis Gaddis, consulting, rather than instructing, her allies.21
Are listening and respecting (one's own and others') freedoms not the foundations
of the American nation?
This more collaborative world atmosphere, based around listening,
not dictating, can feed through to organizations that had been run through edicts
from top management. With 19992000's many alliances and the rise in virtual
working during this decade, a fairer method of decision-making might become
more prevalent, sometimes out of necessity. The new awareness of overseas cultures,
recently highlighted by the press coverage of the strikes on Afghanistan and
the Bonn peace conference, and in some ways by the televised millennium celebration
coverage, also plays a part in championing differences of others' cultures.
On a more everyday level, President Bush stressed to Americans
in the wake of the attacks that Islam is a peaceful religion. By extension,
the United States did not want her citizens to see any differences between themselves
based on creed. The idea that the world is divided into the terrorists' ideals
of a pure Islam and the "great Satan" of the United States is what drove the
September 11 attacks. Unwittingly for the perpetrators, the attacks had set
off greater unity amongst people.
To the author, it has further highlighted that unity does
not come at the price of cultural destruction. The 2000s are likely to see globalization
but within that context, the uniqueness of individual cultures will emerge.
Each culture has unique aspects that can be claimed by anyone regardless of
colour or creed as part of a shared human heritage or experience, rather than
exclusively held on by one narrow group. The fashion industry has been doing
this for decades and is likely to continue. Most recently, Swedish fashion labels
H&M and BC Company showed collections inspired by American ranch life and
Latin flair.22 The result is often enriching,
although it can bring accusations of parody or that it was an unfaithful or
insensitive execution.
How Swede it is
On the face of it, the European Union does not appear competitive. Crainer,
citing the European High Level Expert Group on the Intangible Economy finds
that 'the US environment is at least 100 per cent more attractive than the [European]
Community.'23 Many German companies have embraced
American management techniques and even floated on the New York Stock Exchange.
However, branding is a discipline that often disagrees with economics and finance:
it is based more on consumer behaviour and has regularly produced economically
unexpected results.
Crainer examines Vin & Spirit AB, a state-owned former
monopoly that owns the successful, high-profile Absolut, the fifth-largest spirits'
brand worldwide. 'V&S has succeed largely because of its commitment to being
boldly different. …
'Senior management at V&S say state ownership is really
irrelevant in assessing the dynamics that drive this company,' he reports.24
Hardly the sort of behaviour commonly associated with a state-owned
enterprise.
Göran Lundqvist, Absolut's CEO, believes that Sweden
has succeeded because there has always been a start-up management style25
and an international perspective, well before Silicon Valley began its dot-com
rise. When the internet did come, the country's ventures seem poised. Export
nations are treated as home markets, although few could argue that Absolut does
not bring "Swedishness" into its marketing. There is no sanitized, dull "global"
culture to Absolut's imagery, but daring and risk-taking understood across its
markets.
Sweden's small size gives her an advantage as her many companies
must look toward export markets for greater success. A similar phenomenon was
found by the author in his analysis of Australian and New Zealand dot coms.26
Crainer rightly points out that this helps overcome national stereotypes, leading
to a new set of management skills that are suited to the global market-place.
The concepts hardly seem radical so it is a wonder that not
more companies practise them. The start-up management style means no hierarchies
and consensus, something that can be achieved today through virtual means. A
company can become more democratic because intranet technology is available
to tally votes on an issue, for instance. It minimizes internal opposition,
allowing an organization to present a more consistent face to its publicsone
of the necessary antecedents in best-practice branding.27
Other adventurous ideas have emerged from Sweden. Management
consultant Stefan Engeseth put forward an idea about serving Coca-Cola and milk
directly to consumers' homes, a year before that company trialled it in New
York. The first English edition of his Detective Marketing28
advocated marketing consistency and being at 'one' with consumers, bringing
them in to the development process or the culture. A milk brand, for example,
may find that urban consumers have no conception of its use of a cow for its
imagery, so a park could be converted into a make-believe farm. When Ericsson
did its product placement in the James Bond film Tomorrow Never Dies,
why not, he asked, have the firm send text messages to buyers, telling them
to pick up a secret package (a free gift) at their local retailer, getting them
in to the movie's spy culture? For his concept of 'one', Engeseth uses Napster29an
example where users have formed an organic structure which could, conceivably,
run the companyand The Late Show with David Letterman, where
the audience plays a part in shaping each episode.
Perhaps the roots of this can be found in Grönroos's
words:30
An integral part of service marketing is the fact that the
consumption of a service is process consumption rather than outcome
consumption, where the consumer or user perceives the service production
process as part of the service consumption and not only the outcome of a that
process as in traditional consumer packaged goods['] marketing.
Engeseth's ideas are radical 2000s' evolutions of the services' marketing tradition.
He also advocates an idea related to the author's "moral globalist":
companies can work for global advancement, rather than corporate finances. The
author had noted, in his article, Hennes & Mauritz's quick response to the
hint that it had used sweatshop labour.31
The arguments for that have been discussed elsewhere but the caring global organization's
emergence in the 2000s is more than likely.
It is not Sweden alone, but other Scandinavian countries such
as Finland, considered the most globally competitive by the Global Competitiveness
Report 2001 (Sweden comes in at number six; Denmark is eighth).32
Finland also leads the World Economic Forum's growth competitiveness table,
with Norway sixth and Sweden ninth.
Relationship marketing made possible through databases, being
not just one-on-one with consumers but one with them and a moral edgein
fact, the use of honour as a differentiatorare the northern European forces
that will evolve the branding model.
Crouching dragons
In the same report, Singapore is fourth on growth competitiveness and tenth
on current competitiveness. The author believes that Singapore represents one
of the few examples of Confucian business tradition.33
That city-state, South Korea, the Republic of China (Taiwan) and Japan34
may be better exponents of this very Chinese concept than the People's Republic.
It would, therefore, be useless for brand strategists to begin with Communist
China and discern ideas about face from her; it makes more sense to examine
democratic nations for that. As organizations marketing into Asia have been
doing that for many years, Chinese WTO entry is unlikely to change the profession.
On the competitiveness tables, the PRC slipped from 44th to 47th last year though
its growth competitiveness improved by one place to 39th.
Communist China's entry into the World Trade Organization
in late 2001 gave some commentators cause for celebration. Lee's headline in
The Examiner in San Francisco summed it up: 'Is China burying communism
for good?'35 Lee feels that WTO scrutiny will
force her to abide by market capitalism.
But without proper reforms within the People's Republic, such
as the acceptance of press freedoms and human rights, organizations will always
feel at risk in pursuing her 200 million consumers wholeheartedly. There are
indications little has changed since Pye wrote The Chinese Negotiating Style36
and usually involves the market entrant kowtowing due to fear of offending the
Chinese. The Chinese position seems to come from a knowledge that it has access
to consumer numbers that the entrant wants. But negotiations in Communist China,
even political discussions which the author has attended, are not about preserving
face. It can be about the exploitation and reinterpretation of a contract in
the others' favour; hardly a "Chinese" or Confucian concept about fairness and
a mutual exchange of duties.
In the wake of September 11, it is easy to forget the US Navy's
EP-3 incident of June 2001. In the dispute surrounding the air-traffic accident,
the PRC considered a stretch of airspace her own, while most of the world regarded
it as international. Internally, Chinese media propagandized how the Chinese
air force merely defended the nation's territory.
It is not unreasonable to expect that long-term commercial
potential to be unlocked only when other elements of a democracy are put in
place. Yet trade negotiators in the area of policy are scared to point out Communist
China's human rights' or environmental record. They fear pointing out, unlike
the author on one occasion, her alleged assistance with weapons' programmes
in questionable states. Corruption is not addressed by them, leading to scepticism
about just how privatized the People's Republic's state enterprises have become.
What of the 46 million workers apparently shed in economic reforms37has
this led to greater disparity between the haves and have-nots?
If Beijing is prepared to have negotiators run risks with
their own nations, then it is "Chinese" to expect that the other party runs
the same risks. Sadly, this expectation is unreasonable as is the hope that
economic progress will bring democracy and human rights: all need to be addressed
at the same time if all sides are to benefit. The author includes not only western
commercial interests succeeding in the market when per capita GDP rises in the
People's Republic, but the welfare and strength of the Chinese nation.
The author hopes that trade liberalization does bring freedom
and affluence to the People's Republic. Similarly, the author states that there
are ethical Chinese negotiators who are keen to preserve face. But the techniques
continue to be clouded by the entrants who go in with promises of huge markets
and find financial difficulties afterwards, because of a fear of walking away
from earlier negotiation stages. If the corporate market strategy for China
cannot be certain, what chance is there of refining the marketing and branding
strategies? The only solution for the marketer is to turn to Hong Kong, Taiwan,
Malaysia and Singapore, where there are Chinese populations and a greater preservation
of traditional behaviours. The marketer might even learn about selling to Chinese
Americans, for instance: with the proliferation of Chinese-language media in
the United States and noticeably different buyer behaviours.38
These studies have been done for some time and they are not likely to increase
in quantity in the short term.
The uphill battle faced by entrants in doing business with
Communist China does her citizens no favours. Products will be mistargeted,
sold with western influences, not Chinese ones. Home brands have the advantage,
undermining the optimism of Lee's headline. Of the top 10 brands in Communist
China, seven are domestic. Only McDonald's (seventh), Coca-Cola (ninth) and
KFC (tenth) made it in to the table.39 The
Chinese prefer to buy from firms that appear domestic so global, foreign brands
may be in for a tough ride.40 Hence, automobiles
often bear Chinese names, such as the French-designed, Chinese-market Citroën
ZX which has Chinese-language badging. The PRC has not really globalized and
her human rights' and environmental records are testament.
Ogilvy & Mather's Lily Pu states that the People's Republic
has a non-homogeneous population so her citizens should be thought of as consumers.41
Second, she predicts a rise in customer-relationship marketing and credits domestic
brands' success to application of this and other western management styles.42
The author believes that the Chinese consumer is more likely to move toward
existing models found in other parts of Asia.
As for the Chinese state, its greatest triumph will come from
the rediscovery and application of Confucian principles. True freedoms enjoyed
by the Chinese citizen will reflect well upon the government. It could encourage
unificationBeijing's want for years and, for a time after 1949, Taipei's.
WTO is only a tiny step, inconsequential to the branding debate this decade.
In 10 years' time, branding strategists can think again.
Cross-media influences
The last few years have already seen the web æsthetic influence print
and television design and vice versa. The author believes strongly that cross-media
influences will continue to affect branding, but more at the research and exposition
stages. Visions will be set with some awareness that they will be used across
media, but cross-media phenomena (e.g. potential customers examining a web site
prior to making a decision about a product) are not expected to shift them radically.
The rationale lies in an earlier paper on online branding,43
where the author concluded that consumer behaviour had not really changed: consumers
still demand trust. While there were behaviours in each firm in that study that
were arguably more entrepreneurial (the start-up management style alluded to
earlier), vision-setting remained broad, adaptable and not differentiating brand
strategies for each medium. Similarly, visions are not generally altered just
because the organization begins to have a television presence after years of
working in print. For the brand strategist, cross-media influences are mostly
confined to later stages.
The identity and branding model in the 2000s44
The key change to identity and branding is inclusiveness. By bringing new cultural
influences, adopting more of the behaviours of the Nordic school, taking opportunity
of the foreign policies of the United States and her allies and being open to
more radical ideas such as those outlined by Engeseth, vision-setting can be
more accommodating, global and allow for shifts in the market-place. The proliferation
of media and segmentation of markets continues to speed up and organizations
need to remain poised to capitalize on new opportunities.
The Nordic school, with its iterative theories, can be less
financial and more attitudinal, also fitting with branding developments, including
Olins's thought that brands can be differentiated through "attitude".45
Attitude, particularly in retail staff behaviour, will be a common thread in products that are customized, e.g. with the personal styles that can be expressed at Ikea.
The "moral globalist"46
will play an important role in the 2000s, especially after Klein's analysis
of the branding world47 which has been the
discipline's greatest recent wake-up call, in the author's opinion. If brands
have become ubiquitous as Klein says, where can differentiation be made? Scepticism
needs to be countered through honour, particularly with more knowledgeable consumers
who can see through "spin" and marketing gimmicks and information availability
(especially in developed countries).
That need for substance pushes organizations to learn more.
By welcoming inputs from across an organization regardless of location, department
or market, it can create more properly defined visions. The 2000s organization
should even welcome a willingness to admit mistakes from which it can learn.
Of course, a lot of the start-ups have been doing this from
the beginning with their flatter structures and tighter networks. Larger organizations
will want to adopt these behaviours. As more virtual organizations are founded,
these networks will grow in number along with these vision-setting techniques.
Research is likely to become more efficient, thanks not only
to technological developments but from a desire to be inclusive. Cross-divisional,
global research is becoming more possibleit is only when representatives
from across the organization at different levels are included that brands can
be planned.48 With the United States' soul-searching,
practices from other units can emerge. But as stated above, the author does
not see Chinese WTO entry as affecting the quantity of research much. Nonetheless,
this points to greater globalization.
The way a brand is exposed to its audiences depends on whether
an organization is aligned to global branding or local branding, pluralism that
will continue in the 2000s. Both are right, depending on the organizational
vision, culture and markets. However, the author believes the rationale for
the former will grow stronger because of the earlier processesbranding
is the result of vision-setting and research, not part of them. It will also
grow stronger with audience members' travel, which is why a Ford print advertisement
in England does not look different to one in Germany. While product positioning
may differ across nationsfor example, Ford's Galaxy minivan is regarded
more as a luxury vehicle for business users in England than on the Continentit
seems wise to have a global foundation (which could include the marketing collateral's
look and feel and all cross-media considerations) on which local adaptations
are made.
The Ford Motor Company is a good example of a company incorporating
the cross-media considerations across all its European web sites, print advertising
and television commercials for its Ford brand.
This saves costs on conceptualizing individual campaigns in
each nation. Such foundations become possible because of the inclusion of more
inputs.
This inspires greater brand equity, a consequence of the earlier
stages having been done well, and stronger business performance.49
Predicting the unpredictable
Predictions come with one major problem: there are unpredictable events. Engeseth's
thinking outside the square tries to minimize that; the author's moral globalist
is founded on a premise that differentiation can weather huge shifts in the
economy when founded on honour. September 11, 2001 perhaps highlighted how shocking
major events can be for a planet; it was the opposite to the celebration of
December 31, 1999January 1, 2000. Organizations need to be prepared to
act quickly on their feet. Sometimes, they only have themselves to blame when
trend forecasting is ignored or a significant event, regarded as insignificant,
is ignored and not reported to top management. There may still be faults in
interpreting data when there is greater inclusion and visions may be strategized
incorrectly, but the awareness of certain aspects can steel an organization's
brand to at least some small degree. The objective for today's brands is finding
that lasting attitudethe only real change in the early 2000s is the context
of how this is done. September 11, 2001, though not the day these changes began,
may be the visible milestone of this contextual shift to future historians.