When it comes to building strong brands in Asia, you’ll find a consistent strategy repeated again and again. And it’s very different from how Americans tend to approach brand strategy.
Brand strategies by companies in Asian countries tend to look like this: Introduce a single brand, and go extremely wide with it and sell everything (including the kitchen sink) under the brand name.
Laura Ries, who has been doing some work in China, describes the situation in China like this:
“Everybody makes everything. Just like they do in Japan.”
She goes on to describe Chunlan, which used to be the largest air-conditioner manufacturer, but has expanded into motor vehicles and heavy machinery. Ries says,
“Then they expanded into motorcycles, automobiles and heavy equipment. And after three years of negative revenues and losing 400 million Yuan last year, they were delisted from the stock market. It would be like Harley-Davidson making fork lifts, cars and air-conditioners. It would sound crazy in America, but it is happening every day in China.”
Why do Asians continue to approach brand architecture with this strategy?
It could be simply a fact that they see things differently as a whole. Ian McKee of writes of a research study done at the University of Michigan where a picture was shown to both North Americans and Asians. The North American students were drawn to a single image in the foreground, usually something bright or rapidly moving. The Asians on the other hand took their time taking in the scene as a whole.
See any parallels? Americans viewed the picture in the same way we tend to build brands, with focus. Asians seemed to find more value in absorbing everything in the picture, which tends to be their more products for more value formula for branding.
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Either that or this just shows how ADD all Americans are.
What do you think?
Very interesting. Is this a nature vs. nurture question?
Are Americans more attracted to the singularity rather than the harmony because we are culturally trained to look for it?
I don’t know.
A brand that makes everything seems very BIG BROTHER to me. Remnants of Totalitarianism perhaps? (Uniformity is usually pretty big under that kind of system.) Would the same test show Eastern Europeans reacting the same way as the Chinese and Japanese test subjects?
Hello,
I will try to answer the question “Would the same test show Eastern Europeans reacting the same way as the Chinese and Japanese test subjects?” as far as I am an Eastern European. 🙂
In my opinion, we are very different from Chinese, but still there is a big brand confusion in my country. Even big and well known corporations practice brand extension (Nestle is the name which first comes to my mind), which to me is not right, but still they do it.
Sooner or later, a time will come when differentiation and focus will start playing more serious role in our local markets. Chinese do brand extension because they see the potential of doing very large sales volumes, and because they have some strong competitive advantages. In the future, when eventually those advantages are not so strong, Chinese will be forced to start thinking about focus, too.
wouldn’t necessarily agree that building brands in Asia or from Asia is any different from how America or Europe have been building brands for a long time. the core of it – ‘establishing a strong relationship with consumers’ – remains the same. the differences we experience here when building Chinese brands is that Chinese brand owners often expect a very quick return on their investments. the most exhausting part of this job is to find a mutual understanding of what ‘a brand is’, ‘what branding is’, and ‘how long the process may take before it adds value (and money!)’ to the company. but once this has been agreed there is so much room for creativity creating (untouched) Chinese brands. it’s extremely exciting!
In Asia, especially China, a certain level of ignorance surrounds brands. I have seen people put BMW stickers on Corsas and people will believe it is a BMW. But that contradicts why companies would fail if they expand into new territory. We would see it as a bit odd for a company like in your example, Harley making fork lifts, but in China no one would care or even notice. It seems only well established brands are recognised and respected in China like Suning or JOC.
A lack of focus for a business will confuse customers. By focusing on one thing you can build a lot of strength, but trying to do everything will dilute your brand. This would also make the business as a whole much more difficult to manage. Successful business is about finding a weakness in the market, not doing what everyone else is doing to a low standard because your business makes everything from cars to food products.