High-speed branding

China is intent on building worldwide goods - but how easy is it to create a truly iconic brand in just a few years?

by World Business
Last Updated: 23 Jul 2013

The West is struggling to come to grips with China's rapid arrival as the low-cost manufacturing engine of the world's economy. The concern is valid: in order to avoid social unrest, China needs to move 200 million more agricultural workers into industry over the next decade, so it is not likely to price itself out of the market. But tough as this situation is, this is not the main issue. China is determined to capture more of the value from the goods it produces by building its own brands rather than supplying goods to foreign companies, which then badge them with their own brands and thus capture nearly all the value. This is official: in the new Five Year Plan, each region is told to produce its own 'famous, international brand'.

Since China is a nation in a hurry, these brands are meant to be created and built quickly - very quickly. But how realistic is this? The conventional wisdom in the West is that it takes many decades and a lot of money to build global brands. The idea of 'high-speed branding' is regarded as fatuous by the experts. However, a surprising number of iconic global brands have been built very rapidly. We have identified 17 brands that have become true global brands in less than 15 years once they left their home market.

This is not an exhaustive list - some are examples of a category such as Star Wars, representing a certain type of blockbuster film. We have not limited ourselves strictly by size and we have let some small businesses slip in (for example, Skype with revenues of only $7m in 2004) because they are doing something interesting from which we might learn. Some highly successful global brands, such as Starbucks, have failed the test because they weren't quite fast enough.

Certain drivers have created the opportunities for all the brands we have identified. Some are tangible, some psychological, but certainly no less important for that. The eight we have identified are:

Convenience - The proliferation of choice has added to the sense of 'time-deprivation' among the relatively affluent (Amazon).

Simplicity - Conversely, too much choice has led to confusion in certain sectors and we will see more 'low-specced' goods (but not at a pro rata discount) and choices made for the consumer. 'Less is more' (Lexus), 'Too much information - help me!' (Google).

Community - Globalisation, the EU, technological change and a lack of faith in political leadership have led to uncertainty and a feeling that people need to belong to something, such as new communities of interest made possible by the internet (eBay and Friends Reunited).

Celebrity - The current obsession with celebrities appears to be a global phenomenon and is a huge driver in the media and entertainment sectors (David Beckham).

Health - Health (and energy) are growing concerns for an ageing population worried by pandemics and by the ability of health services to cope. Feeling good is as important as looking good (Viagra, Red Bull).

Control - The consumer now expects a high degree of control. 'Rank the best buys'; 'time shift the programmes'; 'eliminate the advertising'; 'change the ending of the programmes'; 'create your own music programme'; 'write your own journals' (blogs); 'I'll communicate with whoever and whenever I like' (Nokia).

Environment - Our part in climate change is increasingly accepted by consumers. Activists come in many different forms (Body Shop). We see this trend as not just damaging to existing brands, but creating new ones.

Entertainment - Once one moves beyond the fight to survive, entertainment becomes more important. An increasing amount of money is going into entertainment and media products, often at the expense of other established sectors (Tomb Raider, Big Brother, Star Wars).

These are the conditions that create the environment for today's high-speed global brands. But it still needs outstanding companies to grab those opportunities and turn them into a global success. So what are the ingredients needed for high-speed global brand-building? We have highlighted nine ingredients, falling into three principal areas: customer engagement; communications efficacy (the ability to spread awareness very quickly); and business capability (ability to see opportunities and act on them quickly).

CUSTOMER ENGAGEMENT

1. TAPPING AN UNMET CUSTOMER NEED:

- A cure for impotence (Viagra)

- A marketplace without boundaries in which consumers can trade anything (eBay)

- Carry your record collection around with you (iPod)

- A legal, but cool, energy hit enabling you to stay up all night (Red Bull)

- Affordable luxury in the car market (Lexus)

- High-quality, low-cost technology (Dell)

- High-speed, affordable fashion (Zara)

This unmet need must generate enough following that customers become advocates of the brand.

2. CUSTOMER POWER

Closely linked is the empowerment that these brands give their customers, allowing them to do things they only dreamed of doing before. eBay is one the most striking examples of this, giving consumers and businesses a platform to trade with an audience of millions for minimal investment. The fact that an estimated 150,000 people have given up their jobs to trade on eBay shows that this is a life-changing brand.

Meanwhile, iPod (through its accompanying software, iTunes) enables every music fan to fulfill their dreams of being a DJ; the iMixes function gives users the option to put their own mixes online for the world to hear. Similarly, Amazon has given book buyers unimagined choice and thousands of would-be literary critics a platform through promoting customer reviews of titles.

The option for users to put their own Podcasts online takes the same principle even further, giving users an outlet to express their opinions or show off their comedy skills. Podcasts also give users control over content; unlike terrestrial and digital radio, podcasts are time-shifted, so that listeners have control over when and where they hear their favourite programmes. This is a trend that is far from over.

Arguably, the global reality TV brands such as Big Brother and Pop Idol give customers even more control by allowing them to manipulate the direction of the show through voting characters in and out of the programme.

3. CREATING DISCIPLES

Most global fast brands go beyond the traditional benchmarks of customer service (quality, reliability, trust) and inspire real devotion in their customers, ensuring greater loyalty and word of mouth in the process.

The energy drink Red Bull is a great (and much imitated) example of how to build a cult around a brand. Its sponsorship of youth culture and extreme sports helped develop a cult following among marketing-wary 18-30-year-olds who perceived it as an 'anti-brand'. Rather than follow the traditional route of sponsoring an existing popular sport, Red Bull focused on giving emerging extreme sports, such as kite-boarding and sky-diving, a platform. In the process, the brand built a hardcore following of enthusiasts.

For others (Google, eBay), it is the role that it plays in people's lives that is important. Other brands have created disciples just through their nature; for media brands (Star Wars, Big Brother), it's the characters and the content; for Beckham, it's a combination of looks, skill and celebrity allure. Even a computer-generated character can inspire this type of feeling: note the petition sites on the internet protesting against the proposed reduction of Lara Croft's breast size for the latest instalment of the gaming phenomenon (Lara Croft Tomb Raider: Legend).

COMMUNICATIONS EFFICACY

4. SELF-PROMOTION

An element of self-promotion is a critical ingredient for rapid brand-building; driving awareness and taking some of the pressure off the marketing budget. Courting controversy is one of the most effective routes for selfpromotion. Beckham has proved most adept at this both unconsciously (getting sent off in the quarter finals of the 1998 World Cup) and consciously challenging what is acceptable in football culture by wearing a sarong in public and still remaining cool.

Red Bull, meanwhile, allowed fanciful myths to circulate about its effects; for example, that each can contains an excessive amount of caffeine to give its drinkers a real 'hit' (in reality, a can contains the same amount of caffeine as a cup of ordinary filter coffee). More memorable still was the rumour that the principal ingredient, taurine, was derived from bull's semen - in order to boost testosterone levels.

Most recently, Big Brother has generated reams of free publicity through an unsubtle but potent combination of sex, abusive language and character manipulation to sustain audience interest levels. Big Brother also benefits from another self-promoting agent - mass visibility.

Perhaps the most powerful self-promoting agent of all is a viral promotional model. Skype is the most vivid example of this with its business model of free calls between users, no matter where they are in the globe. Customers are thus instantly converted into sales staff, helping explain Skype's current growth rate of 160,000 users a day. Google has taken a more exclusive approach to the launch of its email service 'Gmail' - each user has to be invited to join by an existing member.

5. BECOMING THE GENERIC

Google - 'Google it' is the solution for myriad problems from students looking for essays to people looking for cures to ailments. Dave Gorman, a UK comedian, even has a popular show, the Googlewhack Adventure - a Googlewhack is when two words are entered into Google and it comes back with just one match.

Skype - While the business press and technology analysts speculate about the growth of VoIP (Voice-over Internet Protocol) technology, many users simply talk about 'skypeing'.

Red Bull - As the first energy drink to make real inroads into the club/bar sector, vodka & Red Bull stands as the edgy alternative to vodka & Coke, G&T, etc.

iPod - Podcast was declared Word of the Year by the New Oxford American Dictionary in 2005, and is defined as "a digital recording of a radio broadcast or similar program, made available on the internet for downloading to a personal audio player". The word is derived from a combination of 'iPod' and 'broadcasting'.

Business capability

An early foothold in an explosive market (Skype, Google, Yahoo!, Nokia, iPod) and ease of distribution (Skype, Google, Yahoo!, eBay) are two of the most obvious traits of recent fast-growers. But who seizes that opportunity?

6. ON A MISSION

In almost all cases, fast brands have a driven, entrepreneurial individual, possibly two (but, interestingly, not more) at their core. The benefits typically are twofold: providing momentum through vision and sheer force of personality; and sending a clear signal to the outside world of the brand's values.

The relentless activism of Body Shop's Anita Roddick has given the retail chain reams of 'on-brand' coverage, generating ethical publicity coups. The danger is if that individual's vision becomes polluted in the eyes of customers; Roddick's methods are now being turned on the Body Shop itself following its proposed sale to L'Oreal; international 'days of action' protests are now being directed at the group's store network.

Apple's co-founder and CEO Steve Jobs is another larger-than-life character, who adds to the allure of the Apple and iPod brands. The tale of his ousting in 1985 and the revival in company fortunes following his reinstatement in 1996 makes Apple's success a riveting story. A listing in the Guinness Book of Records as 'the world's lowest paid CEO' for working for an annual salary of $1 is confirmation of the passion and commitment of the man.

A degree of subversiveness is another common trait of these founders/visionaries - Michael Dell and Steve Jobs were both college drop-outs, while Amazon founder, chairman and CEO Jeff Bezos boasts a CV featuring two years in juvenile detention and a gangsta rap record.

7. EASE OF DISTRIBUTION

Start-up brands such as Skype, Google, Yahoo!, Amazon and eBay have benefited from the power of the internet for rapid distribution, and the backing and scale of an established, global parent company have helped Lexus, iPod and Viagra.

8. REINVENTING THE BUSINESS MODEL

- Cut out the middleman, where the middleman adds little in terms of knowledge (Dell)

- Cut out the charges (Skype)

- Unrivalled selection and prices with no physical overheads, although the ability to grow the bottom line, as opposed to the top line, is still unproven (Amazon)

- High-rating programmes with no investment in actors, script development or even sets (Big Brother and Pop Idol).

- Create a distribution system that reduces lead times to three weeks, allowing 'fast fashion' on a global basis (Zara)

- Build longevity into celebrity - Beckham's establishment of a football academy on an international scale means his name (and brand) will continue well beyond his playing career (his company already has a 75% profit margin)

Many of the global technology brands are based on a new model where the intermediary has been cut out, leaving the consumer to do most of the work, yet feel empowered as a result. But the old business model shouldn't be forgotten where it works well. Retailers have the advantage of: closeness to the consumer; immediate measurement of sales; ability to continuously test (by comparing stores); a major, permanent poster campaign (their shop fascias); and a large cashflow to fund expansion (Zara and Body Shop).

Major movie makers launch 30-40 new products a year and each year at least one will become a global brand. With a well-oiled distribution and marketing system, these brands are normally created from scratch within three years (Toy Story; Star Wars; Shrek; Ice Age).

9. BUSINESS PARTNERSHIPS

Some brands have been built by partnering (and sometimes piggy-backing) other businesses. For example, Beckham has benefited from the huge marketing budgets of companies such as Gillette, Adidas and Vodafone. Brands benefit from the savvier, stable celebrities (such as Tiger Woods or Beckham), as well as from movies in which they place their products (eg, the James Bond films). We believe the principle of partnerships will become more important. Most markets are moving much faster and the stakes are much higher, so alliances will no longer be seen as a sign of weakness. 'Collaborating to compete' is a good description.

CONCLUSION

It is clear that we are already surrounded by high-speed global brands. The 17 we have identified are examples only - we estimate that some 50-70 brands would qualify for a comprehensive list. We chose 15 years as a key criterion on the basis that impatient Chinese entrepreneurs would not wait any longer to produce a global brand. If the criterion was 10 years, no retail brands would qualify, and if it were under five years, the list would be dominated by technology, media and entertainment brands.

So those Western marketers who sneer at the ambition of the Chinese to create global brands in double-quick time are wrong. Our analysis is not the complete story - it shows what Western companies have done in high-speed branding. Chinese companies may lack experience at management and marketing at this level, but they have the advantage of an enormous home market that is ferociously competitive. They will emerge from China already big and battle-hardened.

Chris Ingram is a founding partner and Neil Barrie is strategist at brand and communications strategic consultancy Ingram.

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